exhibit10-26.htm


    
       

      
              

                  Exhibit
            10.26      
    

      

    

     

    INTERCREDITOR
      AGREEMENT

     

    THIS
      INTERCREDITOR AGREEMENT is entered into as of January 4, 2008 (this
“Agreement”), by and among, the investors signatory hereto
      (each sometimes referred to herein individually as an
“Investor” and, collectively, as
“Investors”)

     

    RECITALS

     

    A.           The
      Investors have entered into that certain Convertible Note Purchase Agreement,
      dated as of the date hereof (as amended, modified or otherwise supplemented
      from
      time to time, the “Purchase Agreement”), with Avistar
      Communications Corporation, a Delaware corporation (the
“Company”) pursuant to which the Company has issued 4.5%
      Convertible Subordinate Secured Notes Due 2010, dated as of the date hereof
      (as
      amended, modified or otherwise supplemented from time to time, each a
“Note” and collectively, the “Notes”) in favor
      of the Investors.

     

    B.           In
      order to induce each Investor to purchase the Notes, the Company entered into
      that certain Security Agreement, dated as of the date hereof (as amended,
      modified or otherwise supplemented from time to time, the “Security
      Agreement”), to secure its obligations under the Notes.

     

    C.           The
      Investors have agreed to enter into this Agreement to allocate their respective
      rights with respect to the Collateral under the Security
      Agreement.  Capitalized terms not otherwise defined in this Agreement
      shall have the meaning given to such terms in the Security
      Agreement.

     

    AGREEMENT

     

    The
      parties agree as follows:

     

    1.  DEFINITIONS
      AND CONSTRUCTION

     

    1.1  Definitions.  As
      used in this Agreement, the following terms shall have the following
      definitions:

     

    “Bankruptcy
      Code” means the federal bankruptcy law of the United States as from time to time
      in effect, currently as Title 11 of the United States Code.  Section
      references to current sections of the Bankruptcy Code shall refer to comparable
      sections of any revised version thereof if section numbering is
      changed.

     

    “Collateral”
      has the meaning given to such term in the Security Agreement.

     

    “Claim”
      means any and all present and future “claims” (used in its broadest sense, as
      contemplated by and defined in Section 101(5) of the Bankruptcy Code, but
      without regard to whether such claim would be disallowed under the Bankruptcy
      Code) of each Investor now or hereafter arising or existing under or relating
      to
      its Note and the Credit Documents, whether joint, several, or joint and several,
      whether fixed or indeterminate, due or not yet due, contingent or
      non-contingent, matured or unmatured, liquidated or unliquidated, known or
      unknown, or disputed or undisputed, and whether arising under contract, in
      tort,
      by law, or otherwise, any interest or fees thereon (including interest or fees
      that accrue after the filing of a petition by or against the Company under
      the
      Bankruptcy Code, irrespective of whether allowable under the Bankruptcy Code),
      any costs of Enforcement Actions, including reasonable attorneys’ fees and
      costs, and any prepayment or termination premiums.

     

    “Credit
      Documents” means the Purchase Agreement, the Notes and the Security
      Agreement.

     

    “Enforcement
      Action” means, with respect to any Investor and with respect to any Claim of
      such Investor or any item of Collateral in which such Investor has or claims
      a
      security interest, lien or right of offset, any action, whether judicial or
      nonjudicial, to repossess, collect, accelerate, offset, recoup, give
      notification to third parties with respect to, sell, dispose of, foreclose
      upon,
      give notice of sale, disposition, or foreclosure with respect to, or obtain
      equitable or injunctive relief with respect to, such Claim or
      Collateral.  The filing by any Investor of, or the joining in the
      filing by any Investor of, an involuntary bankruptcy or insolvency proceeding
      against the Company also is an Enforcement Action.

     

    “Event
      of
      Default” has the meaning given to such term in the Security
      Agreement.

     

    “Insolvency
      Event” has the meaning given to such term in Section 3.3.

     

    “Investor”
      or “Investors” have the meanings given to such terms in the introductory
      paragraph hereof.

     

    “Baldwin”
      means Baldwin Enterprises, Inc.

     

    “Proceeds
      of Collection” has the meaning given to such term in Section 3.2.

     

    “Pro
      Rata
      Share” has the meaning given to such term in the Security
      Agreement.

     

    “Royalty
      Payments” means the Company’s right, title and interest in the royalties or
      other funds or assets under that certain Patent License Agreement, dated July
      17, 2006, by and among, the Company, Sony Corporation and Sony Computer
      Entertainment, Inc., as amended, modified, supplemented or extended from time
      to
      time, or as any provision thereof may be waived, and any patent license
      agreement executed by the parties or their respective affiliates in substitution
      or replacement therefor, and the Company’s rights to enforce payment or delivery
      of such royalties or other funds or assets.

     

     “UCC”
      means the Uniform Commercial Code as in effect in the State of New York from
      time to time (except to the extent that the UCC requires the application of
      the
      Uniform Commercial Code of another jurisdiction, in which case, the UCC shall
      mean such other jurisdiction’s Uniform Commercial Code).

     

    1.2  Other
      Interpretive Provisions.  References in this Agreement to
“Recitals,” “Sections,” and “Exhibits” are to recitals, sections, and exhibits
      herein and hereto unless otherwise indicated.  References in this
      Agreement to any document, instrument or agreement shall include (a) all
      exhibits, schedules, annexes and other attachments thereto, (b) all documents,
      instruments or agreements issued or executed in replacement thereof, and (c)
      such document, instrument or agreement, or replacement or predecessor thereto,
      as amended, modified and supplemented from time to time and in effect at any
      given time.  The words “include” and “including” and words of similar
      import when used in this Agreement shall not be construed to be limiting or
      exclusive.

     

    2.  INTERCREDITOR
      ARRANGEMENTS

     

    2.1  Security
      Interest and Lien Priorities.

     

    (a)  Priority.  Notwithstanding
      the time, order or method of attachment or perfection of security interests,
      or
      the time or order of filing or recording of financing statements or the
      provisions of the UCC or any applicable law or decision or any provision of
      the
      Credit Documents, the relative priority of the security interest and liens
      of
      the Investors arising under the Credit Documents shall be pari passu,
      provided, however, that Baldwin’s security interest in the Royalty Payments
      shall be senior in priority to the security interest in favor of the Investors
      (other than Baldwin).

     

    (b)  Distribution
      of Proceeds of Royalty Payments.  Upon the occurrence and during
      the continuance of any Event of Default under any of the Credit Documents,
      as
      among the Investors, all proceeds of any sale, exchange, collection or other
      disposition of any Royalty Payments shall be distributed as
      follows:

     

    (i)           first,
      to Baldwin in an amount up to its Claim under its Note (taking into account
      the
      satisfaction or partial satisfaction of such Claim with the proceeds of
      Collateral other than Royalty Payments); and

     

    (ii)           second,
      to the Investors (other than Baldwin) to be distributed pari passu based upon
      such Investors’ Pro Rata Share, in an amount up to their respective Claims under
      their Notes (taking into account the satisfaction or partial satisfaction of
      such Claims with the proceeds of Collateral other than Royalty
      Payments).

     

    (c)  Distribution
      of Proceeds of Collateral Generally.  Upon the occurrence and
      during the continuance of any Event of Default under any of the Credit
      Documents, as among the Investors, all proceeds of any sale, exchange,
      collection or other disposition of any Collateral (other than the Royalty
      Payments) shall be distributed pari passu to each Investor based upon its Pro
      Rata Share, but which amount shall not exceed such Investor’s Claim under its
      respective Note.  To the extent that Baldwin’s Claim under its Note is
      satisfied in full with less than its Pro Rata Share, such amount in excess
      of
      such Claim shall be redistributed to the other Investors based on their
      respective Pro Rata Shares to the extent necessary to satisfy the Claims of
      such
      Investors.

     

    (d)  Possession
      of Royalty Payments.  If any Investor (other than Baldwin) shall
      obtain possession of any Royalty Payments, it shall hold such Royalty Payments
      in trust for Baldwin and shall promptly deliver such Royalty Payments to Baldwin
      pursuant to the terms of distribution set forth in Section 2.1(b) of this
      Agreement.

     

    2.2  Transfer
      of Interest in Loans.

     

    (a)  Consent.  No
      Investor may sell or otherwise transfer any of its interest in the Credit
      Documents, including without limitation, any loans or advances made under the
      Credit Documents without satisfying the terms and conditions of Section 2.2(b)
      hereof.

     

    (b)  Assumption
      of Obligations.  The transferee shall assume all obligations of
      the transferring Investor with respect to the portion of the transferor’s
      interest under this Agreement and the applicable Credit Document.

     

    (c)  Voidability.  Any
      sale or transfer of an interest in this Agreement shall be voidable at the
      option of the remaining Investor unless the provisions of this Section 2.2
      are
      satisfied.

     

    (d)  Collateral
      Agent.  The Collateral Agent under the Security Agreement is
      authorized and directed by the Investors to take all actions which may be
      necessary or desirable to give effect to this Agreement and the relative
      priorities of the Investors set forth herein.

     

    3.  REPRESENTATIONS
      AND WARRANTIES

     

    3.1  Due
      Organization and Qualification.  Each Investor that is an
      organization represents and warrants that it is duly existing and in good
      standing under the laws of its jurisdiction of formation.

     

    3.2  Authority.  Each
      Investor that is an organization represents and warrants that it has all
      necessary power and authority to execute, deliver and perform this Agreement
      in
      accordance with the terms hereof and that it has all requisite power and
      authority to own and operate its properties and to carry on its business as
      now
      conducted.

     

    3.3  Authorization;
      Enforceability.  Each Investor represents and warrants that (a)
      the execution and delivery of this Agreement and the consummation of the
      transactions contemplated herein have each been duly authorized by all necessary
      action on the part of such Investor and (b) this Agreement has been duly
      executed and delivered and constitutes a legal, valid and binding obligation
      of
      such Investor, enforceable in accordance with its terms, except as the
      enforceability thereof may be limited by bankruptcy, insolvency or other similar
      laws of general application relating to or affecting the enforcement of
      creditors' rights or by general principles of equity.

     

    4.  NOTICES.

     

    Unless
      otherwise provided in this Agreement, all notices or demands by any party
      relating to this Agreement shall be made in the manner provided in the Purchase
      Agreement.

     

    5.  NO
      BENEFIT TO THIRD PARTIES.

     

    The
      terms
      and provisions of this Agreement shall be for the sole benefit of Investors
      and
      their respective successors and assigns, and no other person or entity
      (including the Company) shall have any right, benefit, priority, or interest
      under, or because of this Agreement.

     

    6.  GENERAL
      PROVISIONS

     

    6.1  Successors
      and Assigns.  This Agreement shall bind and inure to the benefit
      of the respective successors and permitted assigns of each of the parties;
      provided, however, that neither this Agreement nor any rights hereunder may
      be
      assigned by an Investor unless such assignment is made in compliance with
      Section 2.2.

     

    6.2  Severability
      of Provisions.  Each provision of this Agreement shall be
      severable from every other provision of this Agreement for the purpose of
      determining the legal enforceability of any specific provision.

     

    6.3  Entire
      Agreement; Construction; Amendments and Waivers.

     

    (a)  This
      Agreement and the Credit Documents, constitutes and contains the entire
      agreement among the Investors and supersedes any and all prior agreements,
      negotiations, correspondence, understandings and communications between the
      parties, whether written or oral, respecting the subject matter
      hereof.

     

    (b)  This
      Agreement is the result of negotiations between and has been reviewed by each
      of
      the Investors executing this Agreement as of the date hereof and their
      respective counsel; accordingly, this Agreement shall be deemed to be the
      product of the parties hereto, and no ambiguity shall be construed in favor
      of
      or against either Investor.  Investors agree that they intend the
      literal words of this Agreement and that no parol evidence shall be necessary
      or
      appropriate to establish any Investor's actual intentions.

     

    (c)  Any
      and
      all amendments, modifications, discharges or waivers of, or consents to any
      departures from any provision of this Agreement shall not be effective without
      the written consent of each Investor.  Any waiver or consent with
      respect to any provision of this Agreement shall be effective only in the
      specific instance and for the specific purpose for which it was
      given.  Any amendment, modification, waiver or consent effected in
      accordance with this Section 6.3 shall be binding upon each
      Investor.

     

    6.4  Counterparts.  This
      Agreement may be executed in any number of counterparts and by different parties
      on separate counterparts, each of which, when executed and delivered, shall
      be
      deemed to be an original, and all of which, when taken together, shall
      constitute but one and the same Agreement.

     

    6.5  Termination.  With
      respect to any particular Credit Document and the obligations thereunder, upon
      payment in full to any Investor of all amounts owing to such Investor with
      respect to such Credit Document, this Agreement shall terminate as to such
      Credit Document.

     

    6.6  Reinstatement.  Notwithstanding
      any provision of this Agreement to the contrary, the rights and obligations
      of
      the parties hereunder shall be reinstated and revived if and to the extent
      that
      for any reason any payment by or on behalf of the Company is rescinded, or
      must
      be otherwise restored by Investors, whether as a result of any proceedings
      in
      bankruptcy or reorganization or otherwise, all as though such amount had not
      been paid.

     

    6.7  Survival.  All
      covenants, representations and warranties made in this Agreement shall continue
      in full force and effect so long as any obligations remain outstanding
      hereunder.

     

    7.  RELATIONSHIP
      OF PARTIES.

     

    Investors
      shall not under any circumstances be construed to be partners or joint venturers
      of each other; nor shall the Investors under any circumstances be deemed to
      be
      in a relationship of confidence or trust or a fiduciary relationship with each
      other, or to owe any fiduciary duty to each other.  Investors do not
      undertake or assume any responsibility or duty to each other to select, review,
      inspect, supervise, pass judgment upon or otherwise inform each other of any
      matter in connection with the Company’s property, any collateral held by any
      Investor or the operations of the Company.  Each Investor shall rely
      entirely on its own judgment with respect to such matters, and any review,
      inspection, supervision, exercise of judgment or supply of information
      undertaken or assumed by any Investor in connection with such matters is solely
      for the protection of such Investor.

     

    8.  CHOICE
      OF
      LAW AND VENUE; JURY TRIAL WAIVER

     

    THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
      LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
      LAW,
      EACH OF THE INVESTORS HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE
      AND FEDERAL COURTS LOCATED IN THE COUNTY AND STATE OF NEW
      YORK.  LENDERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
      ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
      DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
      CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
      STATUTORY CLAIMS.

     

    [Remainder
      of page intentionally left blank.]

     

    




    


     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      as
      of the date first above written.

     

    BALDWIN
      ENTERPRISES,
      INC.

     

    By: /s/
      Joseph A.
      Orlando

    Name:
      Joseph A.
      Orlando

    Title:
      Vice
      President


    
      
              

                  
      
      


        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    


     

    THE
      GERARD J. BURNETT AND MARJORIE J. BURNETT REVOCABLE TRUST FOR THE BENEFIT OF
      GERALD J. AND MARJORIE J. BURNETT

     

    By:
/s/
      G.J.
      Burnett

    Name:
      Gerald J.
      Burnett

    Title:
      Trustee

     

    HEINRICHS
      REVOCABLE TRUST

     

    By: /s/
      R. Stephen
      Heinrichs

    Name:
      R. Stephen
      Heinrichs

    Title:
      Trustee

     

    THE
      CAMPBELL FAMILY 2001 TRUST DATED 2/07/01

     

    By: /s/
      William L.
      Campbell

    Name:
      William L.
      Campbell

    Title:
      Trustee

     

    


     

    /s/
      Simon Moss

    SIMON
      MOSS

    


    


    /s/
      Craig Heimark

    CRAIG
      HEIMARK

    


    


    /s/
      Darren Innes

    DARREN
      INNES


    
      
              

                  
      
      

           

                
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    


     

    WS
      INVESTMENT COMPANY, LLC (2007A)

     

    By:
/s/
      James A.
      Terranova

    Name:
      James A.
      Terranova

    Title:                                                                      

    


     

    WS
      INVESTMENT COMPANY, LLC (2007D)

     

    By: /s/
      James A.
      Terranova

    Name:
      James A.
      Terranova

    Title: