**Exhibit 10.13**

 

SETTLEMENT AGREEMENT

 

This SETTLEMENT  AGREEMENT (this “Settlement Agreement”)is made and entered into as of November 12, 2004 (the “Effective Date”)by and between, on the one hand, Polycom, Inc., a Delaware corporation,having offices at 4750 Willow Road, Pleasanton, CA 94588 (“Polycom”),and, on the other hand, Avistar Communications Corporation, a Delawarecorporation, having offices at 555 Twin Dolphin Drive, Suite 360, RedwoodShores, California 94065 together with its wholly owned subsidiaryCollaboration Properties, Inc., a Nevada corporation, having offices at555 Twin Dolphin Drive, Suite 360, Redwood Shores, California 94065****(collectively, “Avistar “) (Polycomand Avistar are individually referred to herein as a “party,” and collectivelyas the “parties”).

 

WITNESSETH

 

WHEREAS, Avistar has filed claims againstPolycom for patent infringement in an action styled Collaboration Properties, Inc.v. Polycom, Inc., Case # 02-CV-04591, pending in the UnitedStates District Court for the Northern District of California, and Polycom hasasserted counterclaims for, *inter alia*,patent infringement, invalidity and unenforceability, against Avistar (the “Litigation”);

 

WHEREAS, Polycom denies that it does now orhas ever infringed any of Avistar’s patents or committed any act that wouldentitle Avistar, under the law of any jurisdiction anywhere in the world, toany of the relief it is seeking in the Litigation against Polycom;

 

WHEREAS, Avistar asserts that Polycom doesinfringe the Avistar patents asserted in the Litigation, that those patents arevalid and enforceable, and that it is entitled to the relief it is seeking inthe Litigation against Polycom;

 

WHEREAS, Avistar and Polycom are concurrentlyentering into that certain Patent Cross-License Agreement of even date herewithand attached hereto as Exhibit C (the “Patent License Agreement”);and

 

WHEREAS, Avistar and Polycom desire to avoidthe time and expense of litigation, and in compromise of the disputed claims,to fully and finally resolve and settle the Litigation through the exchange ofmutual releases, licenses and other valuable and adequate consideration as setforth in this Settlement Agreement and the Patent License Agreement.

 

NOW, THEREFORE, in consideration of the aboveand the mutual covenants and promises hereinafter contained, the parties agreeas follows:

 

# **ARTICLE I – DEFINITIONS**

 

As used in this Settlement Agreement, thefollowing terms shall have the following meanings:

 

## 1.1                                 “AvistarPatents” shall have the meaning set forth in Section 1.1 of the PatentLicense Agreement.

 

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## 1.2                                 “Person”shall have the meaning set forth in Section 1.10 of the Patent LicenseAgreement. 

 

## 1.3                                 “PolycomPatents” shall have the meaning set forth in Section 1.14 of thePatent License Agreement.  

 

## 1.4                                 “Subsidiary”shall have the meaning set forth in Section 1.13 of the Patent LicenseAgreement. 

 

## 1.5                                 “Third Party”shall have the meaning set forth in Section 1.14 of the Patent LicenseAgreement.  

 

## 1.6                                 “VotingPower” shall have the meaning set forth in Section 1.15 of the PatentLicense Agreement.  

 

# **ARTICLE II – RELEASES**

 

## 2.1                                 Releases byAvistar.

 

### (a)          Subject to ARTICLE V below,Avistar, on behalf of itself and its Subsidiaries, irrevocably releases,acquits and forever discharges (and will cause its Subsidiaries to irrevocablyrelease, acquit and forever discharge) Polycom and its Subsidiaries and its andtheir respective officers, directors, employees, agents, predecessors,successors, assigns, representatives, and attorneys from and against any andall causes of action, actions, rights of action, suits, judgments, liens,indebtedness, damages, losses, claims, liabilities, obligations, attorneys’fees, costs, expenses and demands of every kind and character (i) arisingfrom, included in or relating to the Litigation, or (ii) which otherwiseaccrued against Polycom or its Subsidiaries prior to the Effective Date orarises out of any act or alleged act done prior to the Effective Date, whetherknown or unknown, suspected or unsuspected, disclosed or undisclosed, up to andas of the Effective Date, including misappropriation of trade secrets, unfairbusiness practices, anticompetitive acts, and infringement of any AvistarPatents, including Patents asserted by Avistar in the Litigation, whetherdirect, contributory or by inducement, and whether or not willful.

###  

### (b)                                       Subject to ARTICLE Vbelow, Avistar, on behalf of itself and its Subsidiaries, irrevocably releases,acquits and forever discharges (and will cause its Subsidiaries to irrevocablyrelease, acquit and forever discharge) Polycom’s and its Subsidiaries’ directand indirect manufacturers, distributors, dealers, resellers, customers(including OEM customers), and end users, (each direct and indirectmanufacturer, distributor, dealer, reseller, customer (including OEM customer),and end user is a “Purchaser”, and all are collectively “Purchasers” for thepurposes of this section and section 2.2(b) below) from andagainst any and all causes of action, actions, rights of action, suits,judgments, liens, indebtedness, damages, losses, claims, liabilities,obligations, attorneys’ fees, costs, expenses and demands of every kind andcharacter, whether known or unknown, suspected or unsuspected, disclosed orundisclosed (i) arising from, included in or relating to the Litigation,or (ii) arising from infringement of Avistar Patents, including Patentsasserted by Avistar in the Litigation (whether direct, contributory or byinducement, and whether or not willful) based on acts prior to the EffectiveDate that would have been licensed under the Patent License Agreement ifconducted after the Effective Date.  Forthe avoidance

 

----

 

### ofdoubt, this release extends to a Purchaser only with respect to their permittedmanufacture, sale, distribution, import or use (as the case may be) of productsof Polycom or its Subsidiaries, and does not extend to any other actions oromissions of a Purchaser that may give rise to a claim or cause of action byAvistar. The foregoing shall not be construed as limiting the covenants not tosue set forth in the Patent License Agreement, which the parties acknowledgeshall apply to products of Polycom and its Subsidiaries (and subject to thelimitations set forth in Section 4.2 of the Patent License Agreement, tonew Subsidiaries) whether sold prior to or after the Effective Date.

 

## 2.2                                 Releases byPolycom.

 

### (a)                                        Subject to ARTICLE Vbelow, Polycom, on behalf of itself and its Subsidiaries, irrevocably releases,acquits and forever discharges (and will cause its Subsidiaries to irrevocablyrelease, acquit and forever discharge) Avistar and its Subsidiaries and its andtheir respective officers, directors, employees, agents, predecessors,successors, assigns, representatives, and attorneys from and against any andall causes of action, actions, rights of action, suits, judgments, liens,indebtedness, damages, losses, claims, liabilities, obligations, attorneys’fees, costs, expenses and demands of every kind and character (i) arisingfrom, included in or relating to the Litigation, or (ii) which otherwiseaccrued against Avistar or its Subsidiaries prior to the Effective Date orarises out of any act or alleged act done prior to the Effective Date, whetherknown or unknown, suspected or unsuspected, disclosed or undisclosed, up to andas of the Effective Date, including misappropriation of trade secrets, unfairbusiness practices, anticompetitive acts and infringement of any PolycomPatents, including Patents asserted by Polycom in the Litigation, whetherdirect, contributory or by inducement, and whether or not willful.

###  

### (b)                                       Subject to ARTICLE Vbelow, Polycom, on behalf of itself and its Subsidiaries, irrevocably releases,acquits and forever discharges (and will cause its Subsidiaries to irrevocablyrelease, acquit and forever discharge) Avistar’s and its Subsidiaries’ directand indirect Purchasers from and against any and all causes of action, actions,rights of action, suits, judgments, liens, indebtedness, damages, losses,claims, liabilities, obligations, attorneys’ fees, costs, expenses and demandsof every kind and character, whether known or unknown, suspected orunsuspected, disclosed or undisclosed (i) arising from, included in orrelating to the Litigation, or (ii) arising from infringement of PolycomPatents including Patents asserted by Polycom in the Litigation (whetherdirect, contributory or by inducement, and whether or not willful) based onacts prior to the Effective Date that would have been licensed under the PatentLicense Agreement if conducted after the Effective Date.  For the avoidance of doubt, this releaseextends to a Purchaser only with respect to their permitted manufacture, sale,distribution, import or use (as the case may be) of products of Avistar or itsSubsidiaries, and does not extend to any other actions or omissions of aPurchaser that may give rise to a claim or cause of action by Polycom. Theforegoing shall not be construed as limiting the covenants not to sue set forthin the Patent License Agreement, which the parties acknowledge shall apply toproducts of Avistar and its Subsidiaries (and subject to the limitations setforth in Section 4.2 of the Patent License Agreement, to new Subsidiaries)whether sold prior to or after the Effective Date.

###  

## 2.3                                 GeneralReleases. The releases between Avistar and Polycom in thisSettlement Agreement include an express, informed, knowing and voluntary waiverand relinquishment to the

 

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## fullestextent permitted by law of rights under Section 1542 of the CaliforniaCivil Code, which reads as follows, and under any similar or comparable lawsanywhere in the world:

##  

## **A general release does not extend to claims which the creditor does notknow or suspect to exist in his favor at the time of executing the release,which if known by him must have materially affected his settlement with thedebtor.**

##  

# **ARTICLE III – DISMISSAL OF LITIGATION**

#  

## 3.1                                 Dismissal.  In accordance with ARTICLE V below,Avistar and Polycom shall cause their respective counsel to execute and file astipulation and order in the form set forth in Exhibit A dismissing withprejudice all claims and counterclaims in the Litigation. The parties shallcooperate in taking any and all additional procedures needed to dismiss theLitigation with prejudice.

##  

## 3.2                                 No Admission.  The parties agree that the settlement of theLitigation is intended solely as a compromise of disputed claims andcounterclaims.  Neither the fact of aparty’s entry into this Settlement Agreement nor the terms hereof nor any actsundertaken pursuant hereto shall constitute an admission or concession by anyparty regarding liability or the validity of any claim or counterclaim in theLitigation.  

##  

## 3.3                                 Attorneys’ Feesand Costs.  Except asset forth in Section 4.1, The parties agree that they shall bear their owncosts and attorneys’ fees relating to the Litigation and settlement thereof,including expert fees and court costs, and the preparation, negotiation andexecution of this Settlement Agreement and the Patent License Agreement. 

##  

# **ARTICLE IV – CONSIDERATION**

#  

## 4.1                                 Polycom shallpay to Avistar a total of twenty-seven million five hundred thousand U.S.dollars (US$27,500,000) in accordance with ARTICLE V below, some of whichis related to Avistar’s attorneys’ fees. Such payment shall be made by check or wire transfer of immediatelyavailable funds to a bank account designated by Avistar at execution.  Such payment shall be the sole and exclusivepayment required to be made by Polycom and its Subsidiaries in connection withthis Settlement Agreement and shall be Avistar’s sole remuneration hereunder.

##  

# **ARTICLE V – CLOSING PROCESS**

#  

## 5.1                                 Closing.  The closing of the transactions contemplatedby this Settlement Agreement and the Patent License Agreement (the “Closing”)shall take place on Friday, November 12, 2004 at 9:30 am Pacific Time atthe offices of Wilson Sonsini Goodrich & Rosati, 650 Page MillRoad, Palo Alto, California, or at such other place and time as the parties maymutually determine.

##  

## 5.2                                 Deliveries atClosing.  At the Closing, the partiesshall execute and deliver this Settlement Agreement, the Patent LicenseAgreement, and the stipulation and order in the form set forth in Exhibit A.  Polycom’s counsel shall hold the executedstipulation and order pending payment as described in Section 5.3.

 

----

 

## 5.3                                 Payment.  At the Closing or within one (1) businessday after the Closing, Polycom shall pay to Avistar the amount set forth in Section 4.1in the manner set forth therein.  Uponsuch payment, the releases, licenses and covenants and all other rights andbenefits of both parties under this Settlement Agreement and the Patent LicenseAgreement shall become fully effective.

##  

## 5.4                                 Filing ofDismissal.  Within two (2) courtdays after the date of payment as described in Section 5.3, Polycom shallcause its counsel to file the executed stipulation and order delivered pursuantto Section 5.2.

##  

# **ARTICLE VI – MISCELLANEOUS PROVISIONS**

#  

## 6.1                                 Representationsand Warranties.

##  

### (a)                                        Each of the parties heretorepresents and warrants that it has the right to grant the releases granted bysuch party under this Settlement Agreement. 

###  

### (b)                                       Each of the parties heretorepresents and warrants that (i) it has the right to grant releases of thefull scope set forth herein with respect to all Patents owned by such party andits Subsidiaries as of the Effective Date, including all Patents asserted bysuch party or its Subsidiaries in the Litigation; (ii) no Third Party hasany right to enforce or obtain damages for past infringement of any Patentsowned by such party or its Subsidiaries as of the Effective Date (includingPatents asserted by such party or its Subsidiaries in the Litigation), (iii) neithersuch party nor any of its Subsidiaries has any parent, affiliate or jointventure (other than such party or its Subsidiaries under this SettlementAgreement) who owns or controls any Patents as of the Effective Date; (iv) neitherit nor any of its Subsidiaries has assigned or otherwise transferred to anyother Person any rights to any claims, counterclaims, causes of action, damagesor other remedies relating to the Litigation; and (vi) neither it nor anyof its Subsidiaries has assigned or otherwise transferred its rights to anyPatents in the one (1) year period prior to the Effective Date.

###  

## 6.2                                 Confidentialityof Terms.  Neitherparty shall disclose the terms of this Settlement Agreement without the priorwritten consent of the other party except:

##  

### (a)                                        In the pressreleases as set forth in 6.3 below, or any republication of those pressreleases;

###  

### (b)                                       to Subsidiariesof the parties in confidence;

###  

### (c)                                        to anygovernmental body having jurisdiction and specifically requiring suchdisclosure (in confidence to the extent allowed);

###  

### (d)                                       in response toa valid subpoena or as otherwise may be required by law (in confidence to theextent allowed);

###  

### (e)                                        to the extentrequired, for the purposes of disclosure in connection with the SecuritiesExchange Act of 1934, as amended, the Securities Act of 1933, as amended, andany other reports filed with the Securities and Exchange Commission, or anyother filings, reports or disclosures that may be required under applicablelaws or regulations, provided however, that in the event either partydetermines it is necessary to disclose any terms beyond those included in the

 

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### pressreleases attached hereto as Exhibit B or that it is required to publiclyfile this Settlement Agreement or the Patent License Agreement, the disclosingparty agrees to use commercially reasonable efforts to receive confidentialtreatment for information deemed sensitive and shall give the other partyreasonable prior notice of its intention to disclose such information; 

###  

### (f)                                          to a party’saccountants, legal counsel and other financial and legal advisors, subject toobligations of confidentiality;

###  

(h)                                       as requiredduring the course of litigation, subject to protective orders or other similarprotections as applicable; or

 

(i)                                           to a ThirdParty’s outside counsel in connection with a potential merger or acquisitionby, of or with the party provided that such disclosure shall be (i) on astrictly limited, need-to-know basis, (ii) when such transaction isreasonably certain to take place, and (iii) on terms applicable to themost confidential information disclosed by such party in connection with suchtransaction provided such terms are at least as restrictive as set forthherein;

 

provided, however, that prior to any suchdisclosure pursuant to paragraphs (d) and/or (h) hereof, the partyseeking to make such disclosure shall notify the other party and takereasonable actions in an effort to minimize the nature and extent of suchdisclosure.

 

## 6.3                                 Press Releases.  At approximately 5AM Pacific Time on November 15,2004, each party shall issue its corresponding press release regarding thisSettlement Agreement and the Patent License Agreement, the content of which isset forth in Exhibit B hereto. Except as expressly authorized in Section 6.2 hereunder, or in thePatent License Agreement, neither party shall issue any other press release orother public communication regarding this Settlement Agreement or the PatentLicense Agreement without the prior written consent of the other party.  

##  

## 6.4                                 Notices.  All notices required or permitted to be givenhereunder shall be in writing and shall be delivered by hand, or if dispatchedby prepaid air courier or by registered or certified airmail, postage prepaid,addressed as follows:

##  

| If to Avistar: |   | Avistar Communications Corporation |
|----------------|--------|------------------------------------|
|           |   | Attn: Chief Financial Officer      |
|           |   | 555 Twin Dolphin Drive             |
|           |   | Suite 360                     |
|           |   | Redwood Shores, California 94065   |
|           |   |                               |
| If to Polycom: |   | Polycom, Inc.                 |
|           |   | Attn: General Counsel              |
|           |   | 4750 Willow Road                   |
|           |   | Pleasanton, CA 94588               |

 

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| with a copy to: |   | Polycom, Inc.            |
|-----------------|--------|-------------------------------|
|            |   | Attn: Chief Financial Officer |
|            |   | 4750 Willow Road              |
|            |   | Pleasanton, CA 94588          |

 

Such notices shall be deemed to have beenserved when received by addressee or, if delivery is not accomplished by reasonof some fault of the addressee, when tendered for delivery.  Either party may give written notice of achange of address and, after notice of such change has been received, anynotice or request shall thereafter be given to such party as above provided atsuch changed address.

 

## 6.5                                 Assignment.  Neither party may assign this SettlementAgreement or any right or obligation under this Settlement Agreement withoutthe prior written consent of the other party, except to a successor-in-interestof all or substantially all of its business or assets, whether by sale, mergeror otherwise. Subject to the foregoing, this Settlement Agreement shall bebinding upon and inure to the benefit of the parties and their permittedsuccessors and assigns.

##  

## 6.6                                 Governing Law.  This Settlement Agreement and mattersconnected with the performance thereof shall be construed, interpreted, appliedand governed in all respects in accordance with the laws of the United Statesof America and the State of California, without reference to conflict of lawsprinciples.

##  

## 6.7                                 DisputeResolution.  If adispute arises regarding this Settlement Agreement, or the interpretation,breach, termination or validity thereof, the senior management of both partiesshall meet to attempt to resolve such disputes. If the senior management cannot resolve the dispute, the parties agreeto meet for one (1) day with an impartial mediator to attempt to resolvesuch dispute.  If the dispute is notresolved by such mediation, then the parties agree that such dispute shall beresolved by binding arbitration in San Francisco, California before three (3) arbitratorsin accordance with the rules of the International Chamber of Commerce (“ICC”)in effect as of the Effective Date of this Settlement Agreement. The parties,their representatives, other participants and arbitrators shall hold theexistence, content and result of arbitration in confidence, except as otherwiserequired or advisable in connection with securities filings or otherwiserequired by law.  The award of thearbitrators may be entered in any court having jurisdiction thereof.  This Section 6.7 shall not be construedas restricting or limiting either party’s ability to immediately assert alicense or other defense in any litigation or other proceeding against suchparty, such party’s Subsidiaries, or its or their products or the resellers,distributors or customers of such products, regardless of jurisdiction orvenue.

##  

## 6.8                                 Further Acts.  Each party to this Settlement Agreementagrees to perform any further acts and to cause its Subsidiaries to performsuch further acts, and execute and deliver and to cause its Subsidiaries toexecute and deliver any further documents that may be reasonably necessary tocarry out the provisions of this Settlement Agreement.

##  

## 6.9                                 Severability.  If any provision of this Settlement Agreementis held to be illegal or unenforceable, such provision shall be limited oreliminated to the minimum extent necessary so that the remainder of thisSettlement Agreement will continue in full force and effect and be

 

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## enforceable.The parties agree to negotiate in good faith an enforceable substituteprovision for any invalid or unenforceable provision that most nearly achievesthe intent of such provision.

##  

## 6.10                           Entire Agreement.  This Settlement Agreement, together with thePatent License Agreement, embodies the entire understanding of the parties withrespect to the subject matter hereof, and merge all prior discussions betweenthem, and neither of the parties shall be bound by any conditions, definitions,warranties, understandings, or representations with respect to the subjectmatter hereof other than as expressly provided herein.  No oral explanation or oral information byeither party hereto shall alter the meaning or interpretation of thisSettlement Agreement.

##  

## 6.11                           Modification;Waiver.  No modification or amendmentto this Settlement Agreement, nor any waiver of any rights, will be effectiveunless assented to in writing by the party to be charged, and the waiver of anybreach or default will not constitute a waiver of any other right hereunder orany subsequent breach or default.

##  

## 6.12                           Construction.  Any rule of construction to the effectthat ambiguities are to be resolved against the drafting party will not be appliedin the construction or interpretation of this Settlement Agreement. As used inthis Settlement Agreement, the words “include” and “including,” and variationsthereof, will not be deemed to be terms of limitation, but rather will bedeemed to be followed by the words “without limitation.”  The headings in this Settlement Agreementwill not be referred to in connection with the construction or interpretationof this Settlement Agreement. 

##  

## 6.13                           Counterparts.  This Settlement Agreement may be executed incounterparts or duplicate originals, both of which shall be regarded as one andthe same instrument, and which shall be the official and governing version inthe interpretation of this Settlement Agreement.  This Settlement Agreement may be executed byfacsimile signatures and such signatures shall be deemed to bind each party asif they were original signatures.

 

 

[The remainder of this page hasbeen intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto havecaused this Settlement Agreement to be signed below by their respective dulyauthorized officers.

 

 
| **Avistar Communications Corporation** |                                      | **Polycom, Inc.** |   |
|----------------------------------------|-------------------------------------------|------------------------|--------|
|                                   |                                      |                   |   |   |   |
|                                   |                                      |                   |   |   |   |
| By:                                    |                                           |                   | By:    |  |   |
|                                   |                                      |                   |   |   |   |
| Name:                                  | WILLIAM L. CAMPBELL                       |                   | Name:  | Michael R. Kourey |   |
|                                   |                                      |                   |   |   |   |
| Title:                                 | VICE CHAIRMAN & CHIEF ADMIN OFCR |                   | Title: | CFO |   |
|                                   |                                      |                   |   |   |   |
| Date:                                  | 11/12/04                                  |                   | Date:  | 11/12/04 |   |

 

 

**Collaboration Properties, Inc.**

 

 
| By:    |                          |   |
|--------|--------------------------|--------|
|   |                     |   |
| Name:  | WILLIAM L. CAMPBELL      |   |   |
|   |                     |   |   |
| Title: | President & CEO |   |
|   |                     |   |
| Date:  | 11/12/04                 |   |

 

----

 

**EXHIBIT A**

 

**Stipulationand Order**

 

 

 

SIMPSONTHACHER & BARTLETT LLP

GEORGEM. NEWCOMBE (202898)

JEFFREYE. OSTROW (213118)

HARRISONJ. FRAHN IV (206822)

JONATHANC. SANDERS (228785)

3330Hillview Avenue

PaloAlto, California 94304

Telephone: (650)251-5000

Facsimile: (650) 251-5002

 

SIMPSONTHACHER & BARTLETT LLP

HENRYB. GUTMAN (admitted *pro hac vice*)

JEREMYS. PITCOCK (admitted *pro hac vice*)

425Lexington Avenue

NewYork, New York 10017

Telephone:  (212) 455-2000

Facsimile:  (212)455-2502

 

Attorneysfor Plaintiff/Counterdefendant

COLLABORATIONPROPERTIES, INC.

 

UNITED STATES DISTRICT COURT

 

FOR THE NORTHERN DISTRICT OF CALIFORNIA

 

SAN FRANCISCO DIVISION

 
| COLLABORATION  PROPERTIES, INC., a  Nevada Corporation | )  ) | Case  No.C02-4591 MMC (EMC)              |
|--------------------------------------------------------|------|------------------------------------------|
|                                                   | )    |                                     |
| Plaintiff,                                             | )  ) | **STIPULATION  AND ORDER OF  DISMISSAL** |
| v.                                                     | )    |                                     |
|                                                   | )    |                                     |
| POLYCOM,  INC., A Delaware corporation,                | )    |                                     |
|                                                   | )    |                                     |
| Defendant.                                             | )    |                                     |
|                                                   | )    |                                     |
|                                                   | )    |                                     |
|                                                   | )    |                                     |
| POLYCOM,  INC., a Delaware corporation,                | )    |                                     |
|                                                   | )    |                                     |
| Counterplaintiff,                                      | )    |                                     |
|                                                   | )    |                                     |
| v.                                                     | )    |                                     |
|                                                   | )    |                                     |
| COLLABORATION  PROPERTIES, INC., a                     | )    |                                     |
| Nevada  corporation and                                | )    |                                     |
| AVISTAR  COMMUNICATIONS                                | )    |                                     |
| CORPORATION,  a Delaware Corporation,                  | )    |                                     |
|                                                   | )    |                                     |
| Counterdefendants.                                     | )    |                                     |
|                                                   | )    |                                     |

 

 

STIPULATION AND ORDER OF DISMISSAL

CASE NO. C02-4591 MMC (EMC)

 

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The parties hereby stipulate, by and through their respective counsel,that (1) the claims set forth in Collaboration Properties, Inc.’sComplaint in the above-captioned action and (2) the counterclaims setforth in Polycom, Inc.’s Second Amended Answer and Counterclaims in theabove-captioned action are dismissed with prejudice pursuant toRule 41(a)(ii) of the Federal Rules of Civil Procedure.

 

Each party to bear its own costs.

 
| Dated : November    , 2004 |   | SIMPSON THACHER & BARTLETT LLP                                                                      |
|-----------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------|
|                                                |   |                                                                                                         |
|                                                |   |                                                                                                         |
|                                                |   | By:                                                                                                          | /s/ George M. Newcombe |   |
|                                                |   |                                                                                                         | George M. Newcombe |   |
|                                                |   |                                                                                                         |
|                                                |   | Attorneys for Plaintiff/Counterdefendants  COLLABORATION PROPERTIES, INC.  and AVISTAR COMMUNICATIONS  CORP. |
|                                                |   |                                                                                                         |
|                                                |   |                                                                                                         |
| Dated : November    , 2004 |   | KEKER & VAN NEST, LLP                                                                               |
|                                                |   |                                                                                                         |
|                                                |   |                                                                                                         |
|                                                |   | By:                                                                                                          |   |   |
|                                                |   |                                                                                                         | John W. Keker |   |
|                                                |   |                                                                                                         |
|                                                |   | Attorneys for Defendant/Counterplaintiff                                                                     |
|                                                |   | POLYCOM, INC.                                                                                                |
|                                                |   |                                                                                                         |
|                                                |   |                                                                                                         |
| SO ORDERED:                                         |   |                                                                                                         |
|                                                |   |                                                                                                         |
|                                                |   |                                                                                                         |
| Dated : November    , 2004 |   |                                                                                                         |   |
|                                                |   | Maxine M. Chesney                                                                                            |
|                                                |   | United States District Judge                                                                                 |
|                                                     |        |                                                                                                              |  |  |  |

 

 

STIPULATION AND ORDER OF DISMISSAL

CASE NO. C02-4591 MMC (EMC)

 

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**EXHIBIT B**

 

**PressReleases**

 

Avistar Press Release

 

 

 
| ** ** | **Contact:**       |
|------------|--------------------|
|       | Robert J. Habig    |
|       | CFO - Avistar      |
|       | 650-610-2900       |
|       | bhabig@avistar.com |

 

**Avistar Announces Cross-Licensing Agreement with Polycom, Inc.**

##### ***Avistar agrees to settle patent litigation against Polycom***

 

**Redwood Shores, Calif. — November 15,2004. **Avistar Communications Corporation (NASDAQ:AVSR), a provider of business video collaboration solutions, andCollaboration Properties, Inc. (CPI), its wholly owned subsidiary, todayannounced that they have reached an agreement with Polycom, Inc. (NASDAQ:PLCM), wherein the companies have cross-licensed each others’ patentportfolios. Additionally, Avistar has agreed to dismiss its pending lawsuitagainst Polycom regarding infringement of four Collaboration Propertiespatents. In addition, both companies intend to pursue other businessrelationships.  

 

Under the terms of the patent cross-licensing and settlement agreement,Polycom has agreed to make a one-time payment of $27.5 million dollars toAvistar in exchange for a fully-paid up license to Avistar’s patent portfolioand settlement of CPI’s claims.  Net ofAvistar’s contingent legal fees related to the litigation, the payment amountsto approximately $21 million dollars.  

 

“We are extremely pleased withthis initial licensing of our patent portfolio,” said Gerald Burnett, CEO ofAvistar. “We believe the technology covered by our portfolio is important toaccelerating the adoption of desktop video, and that it is a natural fit withPolycom’s market leading products.  Welook forward to working with them on ways to use each others’ capabilities tobroaden this market.  We strongly believethis settlement is in the best interests of all parties, and we are pleased tobe able to concentrate our future efforts and resources on expanding the marketfor rich-media collaboration."

 

Under the cross-licensing and settlement agreement, CPI is dismissingwith prejudice its infringement suit against Polycom.  The original litigation was initiated inSeptember, 2002, in the Federal District Court for the Northern District ofCalifornia and involved the following CPI

 

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patents: U.S. Patent Nos. 5,867,654; 5,896,500; 6,212,547; and6,343,314.  In addition, thecross-licensing and settlement agreement includes patent licenses spanning eachcompany’s extensive patent portfolios. 

 

#### **AboutAvistar Communications Corporation**

Avistardevelops, markets, and supports video collaboration solutions for theenterprise, all powered by the AvistarVOSTM software. From the desktop, Avistardelivers TV-quality video calling, recording, publishing to web and emails,video-on-demand, broadcast origination and distribution, and documentsharing.  Avistar delivers on vBusiness – video-enabling business – byintegrating visual communications into the daily workflow and connectingcommunities of users within and across enterprises.  By offering both IPand circuit-switched products, which are fully interoperable, Avistar providescustomers with a unique choice of how they implement high-quality video.

 

Foundedin 1993, Avistar Communications Corporation is headquartered in Redwood Shores,California, with sales offices in New York and London.  Avistar’stechnology is used in more than 35 countries. Collaboration Properties, Inc., awholly owned subsidiary of Avistar Communications Corporation, holds a current portfolio of 65 patents for inventions in primary areas of videotechnology, including Avistar’s video operating system and networkedvideo collaboration products in both digital and analog networks.  Inquiries regarding CPI'slicensing may be directed to Paul Carmichael, primary licensing advisor, byarrangement with Amanda Redd at 650/610-2900. For more information, visitwww.avistar.com.

 

****ForwardLooking Statements********This press release containsforward-looking statements that involve risks and uncertainties, including butnot limited to statements concerning possible future business arrangementsamong Avistar, CPI and Polycom, future use of licensed technology among thecompanies and the impact of any relationship between the companies on themarket for rich-media collaboration products. Actual events or results may differ materially from those described inthis press release due to a number of risks and uncertainties.

 

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Copyright (c) 2004 Avistar CommunicationsCorporation. All rights reserved. Avistar, AvistarVOS, and the Avistar logo aretrademarks or registered trademarks of Avistar Communications Corporation.

 

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Polycom Press Release

 

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**EXHIBIT C**

 

**PatentCross-License Agreement**

 

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