Exhibit 4.2


REGISTRATION RIGHTS AGREEMENT


 


This Registration Rights Agreement (the “Agreement”)
is made and entered into as of this 12th day of April, 2002 by and among First
Virtual Communications, Inc., a Delaware corporation (the “Company”), and the
“Investors” named in that certain Purchase Agreement by and among the Company
and the Investors (the “Purchase Agreement”).


The parties hereby agree as follows:


1.             Certain
Definitions.


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


“Affiliate”
means, with respect to any person, any other person which directly or
indirectly controls, is controlled by, or is under common control with, such
person.


“Business Day”
means a day, other than a Saturday or Sunday, on which banks in New York City
are open for the general transaction of business.


“Common Stock”
shall mean the Company’s common stock, par value $0.001 per share, and any
securities into which such shares may hereafter be reclassified.


“Investors”
shall mean the Investors identified in the Purchase Agreement and any Affiliate
or permitted transferee of any Investor who is a subsequent holder of any
Warrants or Registrable Securities.


“Prospectus”
shall mean the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by reference in such prospectus.


“Register,”
“registered” and “registration” refer to a registration made by
preparing and filing a Registration Statement or similar document in compliance
with the 1933 Act (as defined below), and the declaration or ordering of
effectiveness of such Registration Statement or document.


“Registrable
Securities” shall mean the shares of Common Stock issued (i) pursuant to
the Purchase Agreement, and (ii) upon the exercise of the Warrants, if any, and
any other securities issued or issuable with respect to or in exchange for
Registrable Securities; provided, that, a security shall cease to be a
Registrable Security upon (A) sale pursuant to a Registration Statement or Rule
144 under the 1933 Act, or (B) such security becoming eligible for sale by the
Investors pursuant to Rule 144(k). 
Unless the context otherwise requires, “Registrable Securities” includes
both the outstanding Initial Registrable Securities and the outstanding
Remaining Registrable Securities (as such terms are defined herein).


 

















 


“Registration
Statement” shall mean any registration statement of the Company filed under
the 1933 Act that covers the resale of any of the Registrable Securities
pursuant to the provisions of this Agreement, amendments and supplements to
such Registration Statement, including post-effective amendments, all exhibits
and all material incorporated by reference in such Registration Statement.


“Required
Investors” means the Investors holding a majority of the Registrable
Securities.


“SEC” means
the U.S. Securities and Exchange Commission.


“1933 Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.


“1934 Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.


“Warrants”
means, the warrants to purchase shares of Common Stock issued to the Investors
pursuant to the Purchase Agreement, the form of which is attached to the
Purchase Agreement as Exhibit A.


“Warrant Shares”
means the shares of Common Stock issuable upon the exercise of the Warrants.


2.             Registration.


(a)           Registration
Statements.


(i)            Promptly following the First Closing
Date (as defined in the Purchase Agreement) but no later than thirty (30) days
after the First Closing Date, the Company shall prepare and file with the SEC
one Registration Statement on Form S-3 (or, if Form S-3 is not then available
to the Company, on such form of registration statement as is then available to
effect a registration for resale of the Registrable Securities, subject to the
Required Investors’ consent), covering the resale of all of the Registrable
Securities (including Registrable Securities issuable upon the conversion or
exercise, as applicable, of the Initial Securities (as defined in the Purchase
Agreement)) (the “Initial Registrable Securities”).  Such Registration Statement also shall cover, to the extent
allowable under the 1933 Act and the rules promulgated thereunder (including
Rule 416), such indeterminate number of additional shares of Common Stock
resulting from stock splits, stock dividends or similar transactions with
respect to the Registrable Securities. 
The Company shall use its reasonable best efforts to obtain from each
person who now has piggyback registration rights a waiver of those rights with
respect to the Registration Statement. 
The Registration Statement (and each amendment or supplement thereto,
and each request for acceleration of effectiveness thereof) shall be provided
in accordance with Section 3(c) to the Investors and their counsel prior to its
filing or other submission.


(ii)           Promptly following any Subsequent
Closing Date (as defined in the 


 


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Purchase
Agreement) but no later than thirty (30) days after any Subsequent Closing
Date, the Company shall prepare and file with the SEC one Registration
Statement on Form S-3, or amend the Registration Statement filed in connection
with the First Closing , if not yet effective, (or, if Form S-3 is not then
available to the Company, on such form of registration statement as is then
available to effect a registration for resale of the Registrable Securities,
subject to the Required Investors’ consent), covering the resale of all of the
Registrable Securities (including Registrable Securities issuable upon the
conversion or exercise, as applicable, of the Remaining Securities (as defined
in the Purchase Agreement)) (the “Remaining Registrable Securities”).  Such Registration Statement also shall
cover, to the extent allowable under the 1933 Act and the rules promulgated
thereunder (including Rule 416), such indeterminate number of additional shares
of Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Remaining Registrable Securities.  The Company shall use its reasonable best
efforts to obtain from each person who now has piggyback registration rights a
waiver of those rights with respect to the Registration Statement.  The Registration Statement (and each
amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided in accordance with Section 3(c) to the
Investors and their counsel prior to its filing or other submission.


(b)           Expenses.  The Company will pay all expenses associated
with each registration, including filing and printing fees, counsel and
accounting fees and expenses, costs associated with clearing the Registrable
Securities for sale under applicable state securities laws, listing fees, fees
and expenses of one counsel to the Investors, not to exceed $7,500, and the
Investors’ reasonable expenses in connection with the registration, but
excluding discounts, commissions, fees of underwriters, fees and expenses of
legal counsel to the Investors (except as provide above), selling brokers,
dealer managers or similar securities industry professionals with respect to
the Registrable Securities being sold.


(c)           Effectiveness.


(i)            The Company shall use commercially
reasonable efforts to have each Registration Statement declared effective as
soon as practicable, but in any event, no later than ninety (90) days after the
First Closing Date or Subsequent Closing Date, as applicable.  The Company shall notify the Investors by
facsimile or e-mail as promptly as practicable, and in any event, within
twenty-four (24) hours, after any Registration Statement is declared effective
and shall provide the Investors no later than one Business Day thereafter with
copies of any related Prospectus to be used in connection with the sale or
other disposition of the securities covered thereby.


(ii)           For not more than twenty (20)
consecutive days or for a total of not more than forty-five (45) days in any
twelve (12) month period, the Company may delay the disclosure of material
non-public information concerning the Company, by suspending the use of any
Prospectus included in any registration contemplated by this Section containing
such information, the disclosure of which at the time is not, in the good faith
opinion of the Company, in the best interests of the Company (an “Allowed
Delay”); provided, that the Company shall promptly (a) notify the Investors in
writing of the existence of (but in no event, without the prior written consent
of an Investor, shall the Company disclose to such Investor any of the facts or



 


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circumstances regarding) material non-public
information giving rise to an Allowed Delay, and (b) advise the Investors in
writing to cease all sales under the Registration Statement until the end of
the Allowed Delay.


(d)           Underwritten Offering.  If any offering pursuant to a Registration
Statement pursuant to Section 2(a) hereof involves an underwritten offering,
the Company shall have the right to select an investment banker and manager to
administer the offering, which investment banker or manager shall be reasonably
satisfactory to the Required Investors.


3.             Company
Obligations.  The Company will use
commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the terms hereof, and pursuant thereto the
Company will, as expeditiously as possible:


(a)           use commercially reasonable efforts
to cause such Registration Statement to become effective and to remain
continuously effective for a period that will terminate upon the earlier of (i)
the date on which all Registrable Securities covered by such Registration
Statement as amended from time to time, have been sold, and (ii) the date on
which all Registrable Securities covered by such Registration Statement may be
sold pursuant to Rule 144(k);


(b)           prepare and file with the SEC such
amendments and post-effective amendments to the Registration Statement and the
Prospectus as may be necessary to keep the Registration Statement effective for
the period specified in Section 3(a) and to comply with the provisions of the
1933 Act and the 1934 Act with respect to the distribution of all of the
Registrable Securities covered thereby;


(c)           provide copies to and permit counsel
designated by the Investors to review each Registration Statement and all
amendments and supplements thereto no fewer than five (5) days prior to their
filing with the SEC and not file any document to which such counsel reasonably
objects;


(d)           furnish to the Investors and their
legal counsel (i) promptly after the same is prepared and publicly distributed,
filed with the SEC, or received by the Company (but not later than two (2)
Business Days after the filing date, receipt date or sending date, as the case
may be, one (1) copy of any Registration Statement and any amendment thereto,
each preliminary prospectus and Prospectus and each amendment or supplement
thereto, and each letter written by or on behalf of the Company to the SEC or
the staff of the SEC, and each item of correspondence from the SEC or the staff
of the SEC, in each case relating to such Registration Statement (other than
any portion of any thereof which contains information for which the Company has
sought confidential treatment), and (ii) such number of copies of a Prospectus,
including a preliminary prospectus, and all amendments and supplements thereto
and such other documents as each Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Investor
that are covered by the related Registration Statement;


 


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(e)           in the event the Company selects an
underwriter for the offering, the Company shall enter into and perform its reasonable
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriter of such offering;


(f)            if required by the underwriter, or
if any Investor is described in the Registration Statement as an underwriter,
the Company shall furnish, on the effective date of the Registration Statement
(except with respect to clause (i) below) and on the date that Registrable
Securities are delivered to an underwriter, if any, for sale in connection with
the Registration Statement (including any Investor deemed to be an
underwriter), (i) (A) in the case of an underwritten offering, an opinion,
dated as of the closing date of the sale of Registrable Securities to the
underwriters, from independent legal counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
underwriters and the Investors participating in such underwritten offering or
(B) in the case of an “at the market” offering, an opinion, dated as of or
promptly after the effective date of the Registration Statement to the
Investors, from independent legal counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily
given in a public offering, addressed to the Investors, and (ii) a letter,
dated as of the effective date of such Registration Statement and confirmed as
of the applicable dates described above, from the Company’s independent
certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters (including any Investor deemed
to be an underwriter);


(g)           use commercially reasonable efforts
to (i) prevent the issuance of any stop order or other suspension of
effectiveness and, (ii) if such order is issued, obtain the withdrawal of any
such order at the earliest possible moment;


(h)           prior to any public offering of
Registrable Securities, use commercially reasonable efforts to register or
qualify or cooperate with the Investors and their counsel in connection with
the registration or qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions requested by
the Investors and do any and all other commercially reasonable acts or things
necessary or advisable to enable the distribution in such jurisdictions of the
Registrable Securities covered by the Registration Statement;


(i)            use commercially reasonable efforts
to cause all Registrable Securities covered by a Registration Statement to be
listed on each securities exchange, interdealer quotation system or other
market on which similar securities issued by the Company are then listed;


(j)            immediately notify the Investors, at
any time when a Prospectus relating to Registrable Securities is required to be
delivered under the 1933 Act, upon discovery that, or upon the happening of any
event as a result of which, the Prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein 


 


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not misleading in light of the circumstances then
existing, and at the request of any such holder, promptly prepare and furnish
to such holder a reasonable number of copies of a supplement to or an amendment
of such Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing; and


(k)           otherwise use commercially reasonable
efforts to comply with all applicable rules and regulations of the SEC under
the 1933 Act and the 1934 Act, take such other actions as may be reasonably
necessary to facilitate the registration of the Registrable Securities
hereunder; and make available to its security holders, as soon as reasonably
practicable, but not later than the Availability Date (as defined below), an
earnings statement covering a period of at least twelve (12) months, beginning
after the effective date of each Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933 Act,
including Rule 158 promulgated thereunder (for the purpose of this subsection
3(k), “Availability Date” means the 45th day following the end of the fourth
fiscal quarter that includes the effective date of such Registration Statement,
except that, if such fourth fiscal quarter is the last quarter of the Company’s
fiscal year, “Availability Date” means the 90th day after the end of such
fourth fiscal quarter).


(l)            With a view to making available to
the Investors the benefits of Rule 144 (or its successor rule) and any other
rule or regulation of the SEC that may at any time permit the Investors to sell
shares of Common Stock to the public without registration, the Company
covenants and agrees to:  (i) make and
keep public information available, as those terms are understood and defined in
Rule 144, until the earlier of (A) six months after such date as all of the
shares of Common Stock purchased by them pursuant to the Purchase Agreement
(including the Warrant Shares) may be resold pursuant to Rule 144(k) or any
other rule of similar effect or (B) such date as all of the shares of Common
Stock purchased by them pursuant to the Purchase Agreement (including the
Warrant Shares) shall have been resold; (ii) file with the SEC in a timely
manner all reports and other documents required of the Company under the 1934
Act; and (iii) furnish to each Investor upon request, as long as such Investor
owns any shares of Common Stock purchased by them pursuant to the Purchase
Agreement (including the Warrant Shares), (A) a written statement by the
Company that it has complied with the reporting requirements of the 1934 Act,
but no more than once per year, (B) a copy of the Company’s most recent Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail such Investor of
any rule or regulation of the SEC that permits the selling of any such shares
of Common Stock without registration.


4.             Due
Diligence Review; Information.  The
Company shall make available, during normal business hours, for inspection and
review by the Investors, advisors to and representatives of the Investors (who
may or may not be affiliated with the Investors and who are reasonably
acceptable to the Company), any underwriter participating in any disposition of
shares of Common Stock on behalf of the Investors pursuant to a Registration
Statement or amendments or supplements thereto or any blue sky, NASD or other
filing, all financial and other records, all SEC Filings (as defined in the
Purchase Agreement) and other filings with the SEC, and all other 


 


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relevant corporate
documents and properties of the Company as may be reasonably necessary for the
purpose of such review, and cause the Company’s officers, directors and
employees, within a reasonable time period, to supply all such relevant
information reasonably requested by the Investors or any such representative,
advisor or underwriter in connection with such Registration Statement
(including, without limitation, in response to all relevant questions and other
inquiries reasonably made or submitted by any of them), prior to and from time
to time after the filing and effectiveness of the Registration Statement for
the sole purpose of enabling the Investors and such representatives, advisors
and underwriters and their respective accountants and attorneys to conduct
initial and ongoing due diligence with respect to the Company and the accuracy
of such Registration Statement; provided, however, that such persons enter into
an appropriate confidentiality agreement with the Company with respect thereto.


The Company shall
not disclose material nonpublic information to the Investors, or to advisors to
or representatives of the Investors, unless prior to disclosure of such
information the Company identifies such information as being material nonpublic
information and provides the Investors, such advisors and representatives with
the opportunity to accept or refuse to accept such material nonpublic
information for review and any Investor wishing to obtain such information
enters into an appropriate confidentiality agreement with the Company with
respect thereto.


5.             Obligations
of the Investors.


(a)           Each Investor shall furnish in
writing to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.  At least five (5) Business Days prior to the
first anticipated filing date of any Registration Statement, the Company shall
notify each Investor of the information the Company requires from such Investor
if such Investor elects to have any of the Registrable Securities included in
the Registration Statement.  An Investor
shall provide such information to the Company at least two (2) Business Days
prior to the first anticipated filing date of such Registration Statement if
such Investor elects to have any of the Registrable Securities included in the
Registration Statement.


(b)           Each Investor, by its acceptance of
the Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of a
Registration Statement hereunder, unless such Investor has notified the Company
in writing of its election to exclude all of its Registrable Securities from
such Registration Statement.


(c)           In the event the Company, at the
request of the Investors, determines to engage the services of an underwriter,
such Investor agrees to enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are reasonably
required in order to expedite or facilitate the dispositions of the Registrable
Securities.


 


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(d)           Each Investor agrees that, upon
receipt of any notice from the Company of either (i) the commencement of an
Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening of an event
pursuant to Section 3(j) hereof, such Investor will immediately discontinue
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities, until the Investor’s receipt of the
copies of the supplemented or amended prospectus filed with the SEC and
declared effective and, if so directed by the Company, the Investor shall
deliver to the Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies in the Investor’s
possession of the Prospectus covering the Registrable Securities current at the
time of receipt of such notice.


(e)           No Investor may participate in any third
party underwritten registration hereunder unless it (i) agrees to sell the
Registrable Securities on the basis provided in any underwriting arrangements
in usual and customary form entered into by the Company, (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) agrees to pay its pro rata share of all
underwriting discounts and commissions. 
Notwithstanding the foregoing, no Investor shall be required to make any
representations to such underwriter, other than those with respect to itself
and the Registrable Securities owned by it, including its right to sell the
Registrable Securities, and any indemnification in favor of the underwriter by
the Investors shall be several and not joint and limited in the case of any
Investor, to the proceeds received by such Investor from the sale of its
Registrable Securities.  The scope of
any such indemnification in favor of an underwriter shall be limited to the
same extent as the indemnity provided in Section 6(b) hereof.


6.             Indemnification.


(a)           Indemnification by the Company.  The Company will indemnify and hold harmless
each Investor and its officers, directors, members, employees and agents,
successors and assigns, and each other person, if any, who controls such
Investor within the meaning of the 1933 Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof; (ii) any blue sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Registrable
Securities under the securities laws thereof (any such application, document or
information herein called a “Blue Sky Application”); (iii) 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; (iv) any violation
by the Company or its agents of any rule or regulation promulgated under the
1933 Act applicable to the Company or its agents and relating to action or
inaction required of the Company in connection with such registration; or (v)
any failure to register or qualify the Registrable Securities included in any
such Registration in any state where the Company or its agents has
affirmatively undertaken or agreed in writing that the Company will undertake
such registration or qualification on an Investor’s behalf (the undertaking of
any underwriter chosen by the


 


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Company being attributed to the Company) and will
reimburse such Investor, and each such officer, director or member and each
such 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 Company
will not be liable in any such case if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by such Investor or any such controlling person in
writing specifically for use in such Registration Statement or Prospectus.


(b)           Indemnification by the Investors.  In connection with any registration pursuant
to the terms of this Agreement, each Investor will furnish to the Company in
writing such information as the Company reasonably requests concerning the
holders of Registrable Securities or the proposed manner of distribution for
use in connection with any Registration Statement or Prospectus and agrees,
severally but not jointly, to indemnify and hold harmless, to the fullest
extent permitted by law, the Company, its directors, officers, employees,
agents, stockholders, successors and assigns and each person who controls the
Company (within the meaning of the 1933 Act) against any losses, claims,
damages, liabilities and expense (including reasonable attorney fees) resulting
from any untrue statement of a material fact or any omission of a material fact
required to be stated in the Registration Statement or Prospectus or
preliminary prospectus or amendment or supplement thereto or necessary to make
the statements therein not misleading, to the extent, but only to the extent
that such untrue statement or omission is contained in any information
furnished in writing by such Investor to the Company specifically for inclusion
in such Registration Statement or Prospectus or amendment or supplement thereto.  In no event shall the liability of an
Investor be greater in amount than the dollar amount of the proceeds (net of
all expense paid by such Investor in connection with any claim relating to this
Section 6 and the amount of any damages such holder has otherwise been required
to pay by reason of such untrue statement or omission) received by such
Investor upon the sale of the Registrable Securities included in the
Registration Statement giving rise to such indemnification obligation.


(c)           Conduct of Indemnification
Proceedings.  Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying
party of any claim with respect to which it seeks indemnification and (ii)
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided that any
person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person unless (a)
the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person or (c) in the reasonable
judgment of any such person, based upon written advice of its counsel, a
conflict of interest exists between such person and the indemnifying party with
respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such person); and provided,
further, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give 


 


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notice shall materially adversely affect the
indemnifying party in the defense of any such claim or litigation.  It is understood that the indemnifying party
shall not, in connection with any proceeding in the same jurisdiction, be
liable for fees or expenses of more than one separate firm of attorneys at any
time for all such indemnified parties. 
No indemnifying party will, except with the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement that 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
of such claim or litigation.


(d)           Contribution.  If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless, other than as expressly
specified therein, then the indemnifying party shall contribute to the amount
paid or payable by the 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 indemnified party and the indemnifying party, as well as
any other relevant equitable considerations. 
No person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the 1933 Act shall be entitled to contribution from any person
not guilty of such fraudulent misrepresentation.  In no event shall the contribution obligation of a holder of
Registrable Securities be greater in amount than the dollar amount of the
proceeds (net of all expenses paid by such holder in connection with any claim
relating to this Section 6 and the amount of any damages such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.


7.             Miscellaneous.


(a)           Amendments and Waivers.  This Agreement may be amended only by a
writing signed by the Company and the Required Investors.  The Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company shall have obtained the written consent to such amendment,
action or omission to act, of the Required Investors.


(b)           Notices.  All notices and other communications
provided for or permitted hereunder shall be made as set forth in Section 9.4
of the Purchase Agreement.


(c)           Assignments and Transfers by
Investors.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the Investors and
their respective successors and assigns. 
Upon compliance with the requirements of Section 9.1 of the Purchase
Agreement, an Investor may transfer or assign, in whole or from time to time in
part, to one or more persons its rights hereunder in connection with the
transfer of Registrable Securities by such Investor to such person, provided
that such Investor complies with all laws applicable thereto and provides written
notice of assignment to the Company promptly after such assignment is effected.


(d)           Assignments and Transfers by the
Company.  This Agreement may not be
assigned by the Company (whether by operation of law or otherwise) without the
prior 


 


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written consent of the Required Investors, provided,
however, that the Company may assign its rights and obligations and delegate
its duties hereunder to any surviving or successor corporation in connection
with a merger or consolidation of the Company with another corporation, or a
sale, transfer or other disposition of all or substantially all of the
Company’s assets to another corporation, without the prior written consent of
the Required Investors, after notice duly given by the Company to each
Investor.


(e)           Benefits of the Agreement.  The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. 
Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.


(f)            Counterparts; Faxes.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement may also be executed via
facsimile, which shall be deemed an original.


(g)           Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.


(h)           Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  To the extent
permitted by applicable law, the parties hereby waive any provision of law
which renders any provisions hereof prohibited or unenforceable in any respect.


(i)            Further Assurances.  The parties shall execute and deliver all
such further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.


(j)            Entire Agreement.  This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein.  This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.


(k)           Governing Law; Consent to
Jurisdiction.  This Agreement shall
be governed by, and construed in accordance with, the internal laws of the
State of New York without regard to the choice of law principles thereof.  Each of the parties hereto irrevocably 


 


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submits to the exclusive jurisdiction of the courts of
the State of New York located in New York County and the United States District
Court for the Southern District of New York for the purpose of any suit,
action, proceeding or judgment relating to or arising out of this Agreement and
the transactions contemplated hereby. 
Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding
and to the laying of venue in such court. 
Each party hereto irrevocably waives any objection to the laying of
venue of any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.


(l)            Additional Parties.  Notwithstanding anything to the contrary
contained herein, if the Company shall issue additional Common Stock and
Warrants pursuant to the Purchase Agreement, any purchaser of such shares may
become a party to this Agreement by executing and delivering an additional
counter-part signature page to this Agreement and shall be deemed an “Investor”
hereunder and a holder of “Remaining Registrable Securities,” provided,
however, such Investor shall not be deemed a holder of the “Initial
Registrable Securities” for the purposes of this Agreement.


 


 


 


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IN WITNESS
WHEREOF, the parties have executed this Agreement or caused their duly
authorized officers to execute this Agreement as of the date first above
written.


	
  The Company:

  	
  FIRST VIRTUAL
  COMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy A.
  Rogers

  
	
   

  	
  Name:

  	
  Timothy A.
  Rogers

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
  The Investors:

  	
  SPECIAL
  SITUATIONS FUND III, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Austin Marxe

  
	
   

  	
  Name:

  	
  Austin Marxe

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL
  SITUATIONS CAYMAN FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Austin Marxe

  
	
   

  	
  Name:

  	
  Austin Marxe

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL
  SITUATIONS PRIVATE EQUITY FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Austin Marxe

  
	
   

  	
  Name:

  	
  Austin Marxe

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL
  SITUATIONS TECHNOLOGY FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Austin Marxe

  
	
   

  	
  Name:

  	
  Austin Marxe

  
	
   

  	
  Title:

  	
  General Partner

  



 


 


13

















 


 


	
   

  	
   

  	
   

  
	
   

  	
  STRATFORD
  PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Fain

  
	
   

  	
  Name:

  	
  Mark Fain

  
	
   

  	
  Title:

  	
  General Partner

  



 


 


14

















 


 


	
   

  	
   

  	
   

  
	
   

  	
  NET ONE
  SYSTEMS CO., LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kazuo Sato

  
	
   

  	
  Name:

  	
  Kazuo Sato

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Ralph Ungermann

  
	
   

  	
  Ralph Ungermann

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Norman Gaut

  
	
   

  	
  Norman Gaut

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Shigeru Ota

  
	
   

  	
  Shigeru Ota

  



 


 


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