Exhibit
10.12


 


EXECUTION COPY


 


STOCK PURCHASE AGREEMENT


 


Avistar Communications Corporation

555 Twin Dolphin Drive, Suite 360

Redwood Shores, CA  94065


 


The undersigned (the “Investor”),
hereby confirms its agreement with you as follows:


 


1.                                       This
Stock Purchase Agreement (the “Agreement”)
is made as of the date set forth below between Avistar Communications
Corporation, a Delaware corporation (the “Company”),
and the Investor.


 


2.                                       The
Company has authorized the sale and issuance of up to 3,333,333 Shares (the “Shares”) of common stock of the Company,
$0.001 par value (the “Common Stock”),
to certain investors in a private placement (the “Offering”).


 


3.                                       The
Company and the Investor agree that the Investor will purchase from the Company
and the Company will issue and sell to the Investor 3,000,000 Shares at a
purchase price of $1.20 per Share, for an aggregate purchase price of
$3,600,000.00, pursuant to the Terms and Conditions for Purchase of Shares
attached hereto as Annex I and incorporated herein by this reference as if
fully set forth herein.  Unless
otherwise requested by the Investor in Exhibit A to Annex I,
certificates representing the Shares purchased by the Investor will be
registered in the Investor’s name and address as set forth below.


 


4.                                       The
Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years
with the Company or its affiliates, and (b) it has no direct or indirect
affiliation or association with any National Association of Securities Dealers,
Inc. (“NASD”) member.  Exceptions:


 


NONE


 


(If no exceptions, write “none.”  If left blank, response will be deemed to be
“none.”)


 


5.                                       The
Investor represents that it holds 559,100 shares of the Common Stock as of the
date hereof, which it acquired in “brokers transactions” as such transactions
are defined in Rule 144 promulgated under the Securities Act of 1933, as
amended.


 

















 


Please confirm that the foregoing correctly sets forth
the agreement between us by signing in the space provided below for that
purpose.


 


	
   

  	
  Dated as of:
  March 23, 2004

  
	
   

  	
   

  
	
   

  	
  Fuller & Thaler Behavioral
  Finance Fund, Ltd.

  
	
   

  	
  Fuller & Thaler Avalanche Fund,
  L.P.

  
	
   

  	
   

  
	
   

  	
  “INVESTOR”

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Brendan MacMillan

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Brendan MacMillan

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Portfolio Manager

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  Avistar Communications Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Gerald J. Burnett

  	
   

  	
   

  
	
  Name: Gerald J. Burnett

  	
   

  
	
  Title: Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert J. Habig

  	
   

  	
   

  
	
  Name:  Robert
  J. Habig

  	
   

  
	
  Title:  Chief
  Financial Officer

  	
   

  
									



 


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ANNEX I


TERMS AND CONDITIONS FOR
PURCHASE OF SHARES


 


1.                                      Agreement to Sell and Purchase
the Shares; Subscription Date.  At the Closing (as defined in Section 2),
Avistar Communications Corporation (the “Company”)
will sell to the Investor named in the Stock Purchase Agreement dated March 23,
2004 to which this Annex I is attached (the “Stock Purchase Agreement”), and the Investor will purchase
from the Company, upon the terms and conditions hereinafter set forth, the
number of Shares, (the “Shares”)
set forth in paragraph 3 of the Stock Purchase Agreement to which these
Terms and Conditions for Purchase of Shares are attached as Annex I (this
“Annex” and, together with the
Stock Purchase Agreement, this “Agreement”)
and at the purchase price set forth in such paragraph.  Terms used but not otherwise defined in this
Annex shall have the meanings set forth in the Stock Purchase Agreement.


 


2.                                      Delivery of the Shares at Closing.  The
completion of the purchase and sale of the Shares (the “Closing”) shall occur at a place and time,
no later than March 31, 2004 (the “Closing
Date”), to be specified by the Company and the Investor.  By mutual agreement, the Closing can be
conducted by phone, fax, and e-mail, with delivery of stock certificates within
five business days thereafter.  At the
Closing, the Company shall agree to deliver to the Investor one or more stock
certificates representing the number of Shares set forth on the signature page
hereto, each such certificate to be registered in the name of the Investor or,
if so indicated on the Securities Certificate Questionnaire attached hereto as Exhibit A,
in the name of a nominee designated by the Investor.  In addition, on or prior to the Closing Date, the Company shall
cause counsel to the Company to deliver to the Investor a legal opinion in the
form attached hereto as Exhibit D.


 


The Company’s obligation to issue and sell the Shares
to the Investor shall be subject to the following conditions, any one or more
of which may be waived by the Company: (a) receipt by the Company of the
purchase price for the Shares being purchased hereunder as set forth on the
signature page hereto; (b) the representations and warranties made by the
Investor being true and correct in all material respects on and as of such
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing and the fulfillment of those
undertakings of the Investor to be fulfilled on or prior to the Closing;
(c) the sale and issuance of the Shares by the Company to the Investor
shall not require approval by the stockholders of the Company under the
Marketplace Rules of the Nasdaq Stock Market or Delaware General Corporation
Law; and (d) the absence of any order, writ, injunction, judgment or
decree that questions the validity of the Agreement or the right of the Company
to enter into the Agreement or to consummate the transactions contemplated
hereby and thereby.


 


The Investor’s obligation to purchase the Shares shall
be subject to the following conditions, any one or more of which may be waived
by the Investor: (a) the delivery to the Investor by counsel to the
Company of a legal opinion in the form attached hereto as Exhibit D;
(b) the representations and warranties of the Company contained in
Section 3 being true and correct in all material respects on and as of
such Closing with the same effect as though such representations and warranties
had been made on and as of the date of such Closing; (c) the absence of
any order, writ, injunction, judgment or decree that questions the validity of
the Agreement or the right of the Company to enter into such Agreement or to
consummate the transactions contemplated hereby and thereby; and (d) the
delivery to the Investor by the Secretary or Assistant Secretary of the Company
of a certificate stating that the condition specified in part (b) of this
paragraph has been fulfilled.


 


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3.                                      Representations, Warranties and
Covenants of the Company.  Except as otherwise described in the
Company’s Annual Report on Form 10—K for the year ended December 31, 2003
(and any amendments thereto filed prior to the date hereof); the Company’s
Proxy Statement for its 2003 Annual Meeting of Shareholders; the Company’s
Quarterly Reports on Form 10—Q for the quarters ended March 31, 2003,
June 30, 2003, and September 30, 2003; and the Company’s Current
Reports on Form 8—K filed since January 1, 2003 (collectively, the “SEC Reports” or the “Reports”), or any press releases issued by
the Company since January 1, 2003, the Company hereby represents and warrants
to, and covenants with, the Investor as of the date hereof and the Closing Date,
as follows:


 


3.1                               Organization.  Each of the Company and its Subsidiaries (as
defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”)) is duly incorporated and
validly existing in good standing under the laws of the jurisdiction of its
organization.  Each of the Company and
its Subsidiaries has full power and authority to own, operate and occupy its
properties and to conduct its business as presently conducted and is registered
or qualified to do business and in good standing in each jurisdiction in which
it owns or leases property or transacts business and where the failure to be so
qualified would have a material adverse effect upon the Company and its
Subsidiaries taken as a whole, or the business, financial condition, properties,
operations or assets of the Company and its Subsidiaries taken as a whole, or
the Company’s ability to perform its obligations under the Agreements (“Material Adverse Effect”), and no
proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification, which proceeding is reasonably likely to result in a Material
Adverse Effect.


 


3.2                               Due Authorization.  The Company has all requisite power and authority
to execute, deliver and perform its obligations under the Agreement, and the
Agreement has been duly authorized and validly executed and delivered by the
Company and constitute legal, valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, except as
rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).


 


3.3                               Non—Contravention.  The execution and delivery of the Agreement,
the issuance and sale of the Shares to be sold by the Company under the
Agreement, the fulfillment of the terms of the Agreement and the consummation
of the transactions contemplated thereby will not (A) result in conflict
with or constitute a violation of, or default (with the passage of time or
otherwise) under, (i) any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or their respective properties are bound, where such conflict,
violation or default is reasonably expected to result in a Material Adverse
Effect; or (ii) the certificate of incorporation, bylaws or other
organizational documents of the Company or any of its Subsidiaries, or
(iii) any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority binding upon the Company
or any of its Subsidiaries or their respective properties, where such conflict,
violation or default is reasonably likely to result in a Material Adverse
Effect or (B) result in (x) the creation or imposition of any lien,
encumbrance, claim, security interest or restriction whatsoever upon any of the
properties or assets of the Company or any of its Subsidiaries which is reasonably
likely to result in a Material Adverse Effect or (y) an acceleration of
indebtedness pursuant to any obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or any


 


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indenture,
mortgage, deed of trust or any other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them is bound
or to which any of the property or assets of the Company or any of its
Subsidiaries is subject which is reasonably likely to result in a Material
Adverse Effect.  No consent, approval,
authorization or other order of, or registration, qualification or filing with,
any regulatory body, administrative agency, or other governmental body in the
United States is required for the execution and delivery of the Agreement by
the Company and the valid issuance and sale of the Shares by the Company
pursuant to the Agreement, other than such as have been made or obtained, and
except for any filings required to be made under federal or state securities
laws, which the Company covenants to do in a timely manner.


 


3.4                               Capitalization.  The authorized and outstanding capital stock
of the Company as of December 31, 2003 is as described in the Consolidated
Balance Sheet as at December 31, 2003 of the Company included in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2003.  The Shares to be sold pursuant to
the Agreement have been duly authorized, and when issued and paid for in accordance
with the terms of the Agreement, will be duly and validly issued, fully paid
and nonassessable and free and clear of all pledges, liens and encumbrances
(other than restrictions on transfer under state and/or federal securities laws
as set forth herein or as otherwise required by such laws at the time a
transfer is proposed).  The outstanding
Shares of capital stock of the Company have been duly and validly issued and
are fully paid and nonassessable, have been issued in compliance with the
registration requirements of federal and state securities laws or exemptions
therefrom, and were not issued in violation of any preemptive rights or similar
rights to subscribe for or purchase Shares, other than such rights as are duly
and validly waived.  Except for options
issued under the Company’s stock option plans, and rights under the Company’s
Employee Stock Purchase Plan, there are no outstanding rights (including,
without limitation, preemptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any unissued Shares of
capital stock or other equity interest in the Company or any of its
Subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind, in either case to which the Company or any of its
Subsidiaries is a party and providing for the issuance or sale of any capital
stock of the Company or any of its Subsidiaries, any such convertible or
exchangeable Shares or any such rights, warrants or options.


 


3.5                               Legal Proceedings.  Except as set forth in the SEC Reports,
there is no legal or governmental proceeding pending, or to the knowledge of
the Company, threatened, to which the Company or any of its Subsidiaries is a
party or of which the business or property of the Company or any of its
Subsidiaries is subject which is reasonably likely to result in a Material
Adverse Effect; nor, to the knowledge of the Company, is there any reasonable
basis therefor.  Neither the Company nor
any Subsidiary is a party to the provisions of any injunction, judgment, decree
or order of any court, regulatory body, administrative agency or other
government body which has had or could reasonably be expected to have a
Material Adverse Effect.


 


3.6                               No Violations.  Neither the Company nor any of its Subsidiaries
is (a) in violation of its certificate of incorporation, bylaws or other
organizational documents, or (b) in violation of any law, administrative
regulation, ordinance or order of any court or governmental agency, arbitration
panel or authority applicable to the Company or any of its Subsidiaries, which
violation(s), individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect; nor is the Company or any of its Subsidiaries in
default (and there exists no condition which, with the passage of time or
otherwise, would constitute a default) in the performance of any bond,
debenture, note or any other evidence of indebtedness or any indenture,
mortgage, deed of trust or any other material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound or by which


 


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the
property of the Company or any of its Subsidiaries is bound, which default is
reasonably likely to have a Material Adverse Effect.


 


3.7                               Governmental Permits, Etc.  Each of the Company and its Subsidiaries has
all necessary franchises, licenses, certificates and other authorizations from
any foreign, federal, state or local government or governmental agency,
department or body that are currently necessary for the operation of the
business of the Company and its Subsidiaries as currently conducted, except
where the failure to currently possess such franchises, licenses, certificates
and other authorizations is not reasonably expected to have a Material Adverse
Effect, and the Company has not received any notice of proceedings relating to
the revocation or modification of any such permit or any circumstance which
would lead it to believe that such proceedings are reasonably likely which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could reasonably be expected to have a Material Adverse
Effect.


 


3.8                               Financial Statements.  The consolidated financial statements of the
Company and the related notes contained in the SEC Reports present fairly, in
accordance with generally accepted accounting principles, the consolidated
financial position of the Company and its Subsidiaries as of the dates indicated,
and the results of their operations, cash flows and the changes in
stockholders’ equity for the periods therein specified, subject, in the case of
unaudited financial statements for interim periods, to normal year-end audit
adjustments.  Such consolidated
financial statements (including the related notes) have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods therein specified, except that
unaudited financial statements may not contain all footnotes required by
generally accepted accounting principles.


 


3.9                               No Material Adverse Change.  Since December 31, 2003, there has not
been (i) a change that has had or is reasonably likely to have a Material
Adverse Effect, (ii) any debt, obligation or liability, direct or
contingent, that is material to the Company or any of its Subsidiaries
considered as one enterprise, incurred by the Company or any of its
Subsidiaries, except obligations incurred in the ordinary course of business,
(iii) any dividend or distribution of any kind declared, paid or made on
the capital stock of the Company or any of its Subsidiaries, or (iv) any
loss or damage (whether or not insured) to the physical property of the Company
or any of its Subsidiaries which has been sustained and which has resulted in a
Material Adverse Effect.  Except as
disclosed in the Company’s SEC Reports and except for liens and security
interests granted in connection with the Company’s credit facilities and liens
granted in the ordinary course of business, since December 31, 2003, the
Company has not (i) mortgaged, pledged or subjected to lien, charge,
security interest or other encumbrance any of its assets, tangible or
intangible, (ii) waived any material debt owed to the Company, or (iii) satisfied
or discharged any material lien, claim or encumbrance or paid any obligation
other than in the ordinary course of business.


 


3.10                        Nasdaq Compliance.  The Company’s Common Stock is registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and
is listed on the Nasdaq SmallCap Market (the “Nasdaq
Stock Market”), and the Company has taken no action designed to, or
which to its knowledge is reasonably likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act or delisting the
Common Stock from the Nasdaq Stock Market.


 


3.11                        Reporting Status.  The Company has made all filings required
under the Exchange Act on a timely basis during the 12 months preceding the
date of this Agreement, and all of those documents complied in all material
respects with the SEC’s requirements as of their respective filing dates, and
the information contained therein as of the respective dates thereof did not
contain an untrue statement of a


 


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material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made not misleading.


 


3.12                        Accountants.  KPMG LLP, who expressed its opinion with
respect to the consolidated financial statements contained in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2003, has
advised the Company that it is, and to the best knowledge of the Company it is,
an independent accountant as required by the Securities Act and the rules and
regulations promulgated thereunder (the “Rules
and Regulations”).


 


3.13                        Contracts.  Except for matters which are not reasonably
likely to have a Material Adverse Effect, the contracts listed as exhibits to
the SEC Reports, other than those contracts that are substantially or fully
performed or expired by their terms, are in full force and effect on the date
hereof, and none of the Company, its Subsidiaries nor, to the Company’s
knowledge, any other party to such contracts, is in material breach of or
default under any of such contracts.


 


3.14                        Taxes.  Except for matters which are not reasonably expected to have a
Material Adverse Effect, the Company has filed all necessary federal, state and
foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency
which has been asserted or threatened against the Company.


 


3.15                        Transfer Taxes.  On the Closing Date, all stock transfer or
other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares hereunder will be, or will
have been, fully paid or provided for by the Company and the Company will have
complied with all laws imposing such taxes.


 


3.16                        Investment Company.  The Company is not an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for an investment company, within the
meaning of the Investment Company Act of 1940, as amended.


 


3.17                        Insurance.  The Company and its Subsidiaries maintain
insurance of the types and in the amounts that the Company reasonably believes
is adequate for the businesses of the Company and its subsidiaries, including,
but not limited to, insurance covering real and personal property owned or
leased by the Company and its Subsidiaries against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against by similarly situated
companies, all of which insurance is in full force and effect.


 


3.18                        Offering Materials.  The Company has not in the past nor will it
hereafter take any action to sell, offer for sale or solicit offers to buy any
Shares of the Company which would bring the offer or sale of the Shares as
contemplated by this Agreement within the provisions of Section 5 of the
Securities Act without the availability of an exception from the registration
requirements contained therein.  Based
in part upon the representations and warranties of the Investor contained in
Section 4 of the Agreement, the offer, sale and issuance of the Shares as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act, and from the registration or qualification requirements of
the laws of any applicable state or U.S. jurisdiction which has not or will not
be obtained.


 


3.19                        Listing.  The Company shall comply with all requirements of the NASD with
respect to the issuance of the Shares and shall use its commercially reasonable
efforts to have the Shares listed on the Nasdaq Stock Market on or before the
first date that the Registration Statement (as defined in Section 6.1) is
declared effective by the SEC.


 


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3.20                        Books and Records.  The books, records and accounts of the
Company and the Subsidiaries accurately and fairly reflect, in reasonable
detail, the transactions in, and dispositions of, the assets of, and the
operations of, the Company and the Subsidiaries.  The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization
and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.


 


3.21                        Compliance with Environmental Laws.  Except as disclosed in the SEC Reports and
except for matters which are not reasonably likely to have a Material Adverse
Effect, (i) the Company is not in violation of any applicable statute, law
or regulation relating to the environment or occupational health and safety,
and, (ii) to the Company’s knowledge, no material expenditures are or will
be required in order to comply with any such existing statute, law or
regulation relating to the environment or occupational health and safety.  To the Company’s knowledge, the Company does
not have any material liability to any governmental authority or other third
party arising under or as a result of any such past or existing statute, law or
regulation relating to the environment or occupational health and safety.


 


3.22                        Properties.  The Company has good and marketable title to
all the properties and assets reflected as owned in the financial statements
included in the SEC Reports, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any, reflected in the financial
statements included in the SEC Reports, (ii) those imposed by its lenders,
including parties to the Company’s acquisitions; or (iii) those which are
not material in amount and do not adversely affect the use of such property by
the Company and its subsidiaries.  The
Company holds its leased properties under valid and binding leases, with such
exceptions as are not materially significant in relation to the business of the
Company.  Except as disclosed in the SEC
Reports, the Company owns or leases all such properties as are necessary to its
operations as now conducted or as proposed to be conducted in the SEC Reports.


 


3.23                        Compliance.  The Company has not been advised, and has no
reason to believe, that it is conducting its business in violation of applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, except where such violation(s) would not have a Material Adverse
Effect.


 


3.24                        Labor Matters.  No labor dispute with the employees of the
Company exists other than those that have arisen in the ordinary course of
business or, to the knowledge of the Company, is imminent or reasonably likely.


 


3.25                        Other Governmental Proceedings.  To the Company’s knowledge, there are no
rulemaking or similar proceedings before federal, state, local or foreign
government bodies that involve or affect the Company, and which ruling or
proceeding, if the subject of an action unfavorable to the Company, would
reasonably be likely to have a Material Adverse Effect.


 


4.                                      Representations, Warranties and
Covenants of the Investor.


 


4.1                               Investor Knowledge and Status.  The Investor represents and warrants to, and
covenants with, the Company that: (i) the Investor is an “accredited investor” as defined in
Regulation D under the Securities Act and has requested, received,
reviewed and considered all information it deemed relevant in making an
informed decision to purchase the Shares; (ii) the Investor understands
that the Shares


 


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are “restricted securities” and the offer and
sale thereof have not been registered under the Securities Act and is acquiring
the number of Shares set forth on the signature page hereto in the ordinary
course of its business and for its own account for investment only, has no
present intention of distributing any of such Shares and has no arrangement or
understanding with any other persons regarding the distribution of such Shares
(this representation and warranty not limiting the Investor’s right to sell
Shares pursuant to the Registration Statement, referenced in Section 6, or
otherwise); (iii) the Investor will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Shares except in
compliance with the Securities Act, applicable state securities laws and the
respective rules and regulations promulgated thereunder; (iv) the Investor
has answered all questions on the signature page hereto and the Investor
Questionnaire attached hereto as Exhibit B for use in preparation
of the Registration Statement and the answers thereto are true and correct as
of the date hereof and will be true and correct as of the Closing Date; and
(v) the Investor will notify the Company immediately of any change in any
of such information until such time as the Investor has sold all of its Shares
or until the Company is no longer required to keep the Registration Statement
effective.  Investor understands that
the issuance of the Shares to the Investor has not been registered under the
Securities Act, or registered or qualified under any state securities law in
reliance on specific exemptions therefrom, which exemptions may depend upon,
among other things, the bona fide nature of the Investor’s investment intent as
expressed herein.  No person is
authorized to provide any representation which is inconsistent or in addition
to those herein or in the SEC Reports. 
The Investor acknowledges that it has not received or relied on any such
representations.


 


4.2                               International Actions.  The Investor acknowledges, represents and
agrees that no action has been or will be taken in any jurisdiction outside the
United States by the Company that would permit an offering of the Shares, or
possession or distribution of offering materials in connection with the issue
of the Shares, in any jurisdiction outside the United States.  If the Investor is located outside the
United States, it has or will take all actions, subject to the limitations and
representations set forth in Section 4 hereof, necessary for the sale of
the Shares to comply with all applicable laws and regulations in each foreign
jurisdiction in which it purchases, offers, sells or delivers Shares or has in
its possession or distributes any offering material, in all cases at its own
expense.


 


4.3                               Registration Required.  The Investor hereby covenants with the
Company not to make any sale of the Shares without complying with the
provisions of this Agreement, including Section 6.2 hereof, and without
effectively causing the prospectus delivery requirement under the Securities
Act to be satisfied (unless the Investor is selling such Shares in a
transaction not subject to the prospectus delivery requirement), and the
Investor acknowledges that the certificates evidencing the Shares will be
imprinted with a legend that prohibits their transfer except in accordance
therewith.  The Investor acknowledges
that as set forth in, and subject to the provisions of, Section 6.2, there
may occasionally be times when the Company, based on the advice of its counsel,
determines that it must suspend the use of the Prospectus forming a part of the
Registration Statement until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the SEC or
until the Company has amended or supplemented such Prospectus.


 


4.4                               Power and Authority.  The Investor further represents and warrants
to, and covenants with, the Company that (i) the Investor has full right,
power, authority and capacity to enter into this Agreement and to consummate
the transactions contemplated hereby and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and
(ii) this Agreement constitutes a valid and binding obligation of the
Investor enforceable against the Investor in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be


 


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subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as the
indemnification agreements of the Investors herein may be legally
unenforceable.


 


4.5                               No Tax or Legal Advice.  The Investor understands that nothing in
this Agreement, or any other materials presented to the Investor in connection
with the purchase and sale of the Shares by the Company, its officers,
directors, agents, attorneys or advisors, constitutes legal, tax or investment
advice.  The Investor has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of Shares.


 


4.6                               Investment Experience.  The Investor understands that the purchase
of the Shares involves substantial risk. 
The Investor has experience as an investor in securities of companies
and acknowledges that it is able to fend for itself, can bear the economic risk
of its investment in the Shares and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of this investment in the Shares and protecting its own interests in
connection with this investment.


 


4.7                               Receipt of Information.  The Investor has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the issuance and sale of the Shares and the business, properties,
prospects and financial condition of the Company and to obtain any additional
information requested and has received and considered all information it deems
relevant to make an informed decision to purchase the Shares.


 


4.8                               HSR Compliance.


 


(i)                                    The
Investor is its own “ultimate parent entity”
as defined in the Hart—Scott—Rodino Antitrust Improvements Act of 1976, as
amended (the “HSR Act”).


 


(ii)                                The
Investor will hold less than $50,000,000 in voting securities of the Company
following execution of this Agreement, as valued under the HSR Act.


 


4.9                               Forms 13D or 13G.  The Investor will timely file with the SEC
and amend any reports regarding its ownership of the Company’s Common Stock
required by Section 13(d) or Section 13(g) of the Exchange Act and
the rules and regulations promulgated thereunder.


 


4.10                        Material Confidential Information.  In connection with the Investor’s
decision-making with respect to its acquisition of the Shares, the Company may
furnish to the Investor and its officers, directors, employees and agents, if
applicable (collectively referred to as “Investor
and its Agents”) financial and other information which has not
theretofore been made available to the public (“Material Confidential Information”).  The Investor and its Agents shall treat all such Material
Confidential Information in accordance with the provisions of this Agreement
and agree to take or abstain from taking certain other actions herein set forth.  The term “Material
Confidential Information” does not include information which
(i) was already in the Investor and its Agents’ possession prior to the
disclosure by the Company of the Material Confidential Information, provided
that such information is not known by the Investor and its Agents to be subject
to another confidentiality agreement with or other obligation of secrecy to the
Company or another party, (ii) becomes generally available to the public
other than as a result of disclosure by the Investor and its Agents or (iii) becomes
available to the Investor and its Agents on a non-confidential basis from a
source other than the Company or its advisors, provided that such source is not
known to the Investor and its Agents to be bound by a confidentiality agreement
with or other obligation of secrecy to the Company or


 


D-8

















 


another
party.  The Investor agrees that the
Company’s Material Confidential Information will be used solely for the
purposes of evaluating its investment in the Shares.  The Investor also agrees that the Investor and its Agents will
not disclose any of the Company’s Material Confidential Information now or
hereafter received or obtained from the Company or its representatives to any
third party or otherwise use or permit the use of the Material Confidential
Information, except as required by applicable law or legal process, without the
prior written consent of the Company; provided, however, that any such Material
Confidential Information of the Company may be disclosed to such of the
Investor’s representatives who need to know such information for the purpose of
evaluating the Investor’s investment in the Shares, in which case it is
understood that the Investor’s representatives, directors, officers, employees,
agents and advisors, if applicable, shall be informed by the Investor of the
confidential nature of such information and shall be directed by the Investor
to treat such information confidentially. 
In the event that the Investor and its Agents or any of their representatives
becomes legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand, other demand or rules and regulations
under the federal securities laws or similar process) to disclose any of the
Material Confidential Information, the Investor and its Agents shall provide
the Company with prompt prior written notice of such requirement prior to such
disclosure.  In the event that a
protective order or other remedy is not obtained, or that the Company waives compliance
with the provisions hereof, the Investor agrees to furnish only that portion of
the Material Confidential Information which the Investor is legally required to
furnish and, where appropriate, to exercise the Investor’s and its Agents’
reasonable efforts to obtain assurances that confidential treatment will be
accorded such Material Confidential Information.  The Investor further agrees that it will not engage in any open
market sales or purchases of the Company’s Common Stock, including the Shares,
while it is in possession of any Material Confidential Information.


 


5.                                      Survival of Representations,
Warranties and Agreements.  Notwithstanding any investigation made by
any party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and the Investor herein shall survive the
execution of this Agreement, the delivery to the Investor of the Shares being
purchased and the payment therefor; provided however that the representations
and warranties contained herein shall expire on the second anniversary of the
Closing Date.


 


6.                                      Registration of the Shares;
Compliance with the Securities Act.


 


6.1                               Registration Procedures and Expenses.  (a) At anytime after the Closing Date
and prior to the date that all of the Investor’s Shares may be resold without
registration pursuant to Rule 144(k) or any other rule of similar effect, the
Investor may request that the Company register all of the Investor’s Shares for
resale under the Securities Act by delivery of a written notice to the Company
(the date of receipt of such notice by the Company, the “Request Date”).  Upon receipt of such written registration request, the Company
shall:


 


(i)                                    subject
to receipt of necessary information from the Investor, prepare and file with
the SEC, as soon as practicable, but in no event later than 30 business days
after the Request Date, a registration statement on Form S-3 (except
if the Company is not then eligible to register for resale the Shares on
Form S-3, in which case such registration shall be on another
appropriate form in accordance with the Securities Act and the rules
promulgated thereunder) (the “Registration
Statement”) to enable the resale of the Shares by the Investor from
time to time through the automated quotation system of the Nasdaq Stock Market
or in privately-negotiated transactions; provided, however, that the Company
shall not be obligated to have any special audit conducted or file any reports
required to be filed by it under the Exchange Act prior to the time such
reports would otherwise be required to be filed;


 


D-9

















 


(ii)                                use
its commercially reasonable efforts, subject to receipt of necessary
information from the Investors, to cause the Registration Statement to become
effective as soon as practicable thereafter, subject to backlog or other delay
at or by the SEC, delay at or by the Company’s independent accountants, or
delay caused by any other matter beyond the control of the Company;


 


(iii)                            use
its commercially reasonable efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep the Registration
Statement current and effective for a period not exceeding, with respect to
each Investor’s Shares purchased hereunder, the earliest of (A) the first
anniversary of the date the Registration Statement was first declared effective
by the SEC, (B) the date on which the Investor may sell all Shares then held
by the Investor without restriction by volume limitations pursuant to Rule
144(k) of the Securities Act or (C) such time as all Shares purchased by
such Investor in the Offering have been sold pursuant to a registration
statement;


 


(iv)                               furnish
to the Investor with respect to the Shares registered for resale under the
Registration Statement up to 20 copies of the Registration Statement,
Prospectuses (including supplemental prospectuses) and preliminary versions of
the Prospectus filed with the Securities and Exchange Commission (“Preliminary Prospectuses”) in conformity
with the requirements of the Securities Act and such other documents as the
Investor may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Shares by the Investor, provided,
however, that unless waived by the Company in writing, the obligation of the
Company to deliver copies of Prospectuses or Preliminary Prospectuses to the
Investor shall be subject to the receipt by the Company of reasonable assurances
from the Investor that the Investor will comply with the applicable provisions
of the Securities Act and of such other Shares or blue sky laws as may be
applicable in connection with any use of such Prospectuses or Preliminary
Prospectuses;


 


(v)                                   file
documents required of the Company, if any, for normal blue sky clearance in
(A) in all U.S. jurisdictions in which any of the Shares originally sold,
and (B) in states specified in writing by the Investor, provided, however,
that, as to clause (B) the Company shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which it is
not now so qualified or has not so consented;


 


(vi)                               bear
all reasonable expenses (other than underwriting discounts and commissions, if
any) including the reasonable fees and expenses of a single counsel to the
Investors, in connection with the procedures in paragraph (i) through (v)
of this Section 6.1 and the registration of the resale of the Shares
pursuant to the Registration Statement; and


 


(vii)                           advise
the Investor, promptly after it shall receive notice or obtain knowledge of the
issuance of any stop order by the SEC delaying or suspending the effectiveness
of the Registration Statement or of the initiation of any proceeding for that purpose;
and promptly use its commercially reasonable efforts to prevent the issuance of
any stop order or to obtain its withdrawal at the earliest possible moment if
such stop order should be issued.


 


(b)                                  With
a view to making available to the Investor 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 Investor to sell Shares 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) such
date as all of the Investor’s Shares may be resold pursuant to Rule 144(k)
or any other rule of similar effect, (B) such date as all of the
Investor’s Shares shall have been resold, or (C) such date as the
Registration


 


D-10

















 


Statement
has been filed, declared effective and ceased to be effective  in accordance with Section 6.1(a)(iii);
(ii) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and under the Exchange Act;
and (iii) furnish to the Investor upon request, as long as the Investor
owns any Shares, (A) a copy of the Company’s most recent Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, and
(B) such other information as may be reasonably requested in order to
avail the Investor of any rule or regulation of the SEC that permits the
selling of any such Shares without registration.


 


(c)                                  It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Section 6.1 that the Investor shall furnish to the
Company such information regarding itself, the Shares to be sold by the
Investor, and the intended method of disposition of such Shares as shall be
required to effect the registration of the resale of the Shares.


 


(d)                                  Notwithstanding
the foregoing paragraphs of this Section 6.1, if, in the good faith
judgment of the Board of Directors of the Company (the “Board”) and reflected in a formal
resolution of the Board, the effectiveness of the Registration Statement
covering the Shares would be detrimental to the Company, and the Board
concludes, as a result, that it is in the best interests of the Company to
defer the Company’s request that the Registration Statement be declared
effective at such time, then the Company may defer its request that the
Registration Statement be declared effective; provided, however, that the
Company may not defer effectiveness of the Registration Statement pursuant to
this paragraph 6.1(d) for more than thirty (30) consecutive days.


 


6.2                               Transfer of Shares After Registration;
Suspension.


 


(a)                                  The
Investor agrees that it will not effect any disposition of the Shares or its
right to purchase the Shares that would constitute a sale within the meaning of
the Securities Act other than transactions exempt from the registration
requirements of the Securities Act, except as contemplated in the Registration
Statement referred to in Section 6.1 and as described below, and that it
will promptly notify the Company of any changes in the information set forth in
the Registration Statement regarding the Investor or its plan of distribution.


 


(b)                                  Except
in the event that paragraph (c) below applies, the Company shall:
(i) if deemed necessary by the Company, prepare and file from time to time
with the SEC a post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document so that
such Registration Statement will not contain 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, and so that, as
thereafter delivered to purchasers of the Shares being sold thereunder, such
Prospectus will not contain 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, in light of the circumstances under which they were made,
not misleading; (ii) provide the Investor copies of any documents filed
pursuant to Section 6.2(b)(i); and (iii) upon request, inform each
Investor who so requests that the Company has complied with its obligations in
Section 6.2(b)(i) (or that, if the Company has filed a post-effective
amendment to the Registration Statement which has not yet been declared
effective, the Company will notify the Investor to that effect, will use its
commercially reasonable efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify the
Investor pursuant to Section 6.2(b)(i) hereof when the amendment has
become effective).


 


D-11

















 


(c)                                  Subject
to paragraph (d) below, in the event: (i) of any request by the SEC or any
other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to a
Registration Statement or related Prospectus or for additional information;
(ii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose; (iii) of
the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Shares for
sale in any jurisdiction or the initiation of any proceeding for such purpose;
(iv) of any event or circumstance which necessitates the making of any
changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (v) if, in
the good faith judgment of the Board and reflected in a formal resolution of
the Board, the continued effectiveness of the Registration Statement covering
the Shares would be detrimental to the Company, and the Board concludes, as a
result, that it is in the best interests of the Company to suspend the
effectiveness of such Registration Statement at such time, then the Company
shall promptly deliver a certificate in writing to the Investor (the “Suspension Notice”) to the effect of the
foregoing and, upon receipt of such Suspension Notice, the Investor will
refrain from selling any Shares pursuant to the Registration Statement (a “Suspension”) until the Investor’s receipt
of copies of a supplemented or amended Prospectus prepared and filed by the
Company, or until it is advised in writing by the Company that the current
Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in any such Prospectus.  In the event of
any Suspension, the Company will use its commercially reasonable efforts to
cause the use of the Prospectus so suspended to be resumed within 30 days after
delivery of a Suspension Notice to the Investors.  In addition to and without limiting any other remedies
(including, without limitation, at law or at equity) available to the Investor,
the Investor shall be entitled to specific performance in the event that the
Company fails to comply with the provisions of this Section 6.2(c).


 


(d)                                  Notwithstanding
the foregoing paragraphs of this Section 6.2, the Company shall use its
commercially reasonable efforts to ensure that the Investor shall not be
prohibited from selling Shares under the Registration Statement as a result of
Suspensions on more than two occasions of not more than 60 days in any twelve
month period.


 


(e)                                  Provided
that a Suspension is not then in effect the Investor may sell Shares under the
Registration Statement, provided that it arranges for delivery of a current
Prospectus to the transferee of such Shares. 
Upon receipt of a request therefor, the Company will provide an adequate
number of current Prospectuses to the Investor and to any other parties
requiring such Prospectuses.


 


(f)                                    In
the event of a sale of Shares by the Investor, unless such requirement is
waived by the Company in writing, the Investor must also deliver to the
Company’s transfer agent, with a copy to the Company, a Certificate of
Subsequent Sale substantially in the form attached hereto as Exhibit C,
so that the Shares may be properly transferred.


 


D-12

















 


6.3                               Indemnification.  For the purpose of this Section 6.3:


 


(a)                                  the
term “Selling Stockholder” shall
include the Investor and each person, if any, who controls the Investor within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act;


 


(b)                                  the
term “Registration Statement”
shall include any Preliminary Prospectus, final Prospectus, exhibit, supplement
or amendment included in or relating to, and any document incorporated by
reference in, the Registration Statement (or deemed to be a part thereof)
referred to in Section 6.1; and


 


(c)                                  the
term “untrue statement” shall
include any untrue statement or alleged untrue statement of a material fact, or
any omission or alleged omission to state in the Registration Statement a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.


 


(d)


 


(i)                                    The
Company agrees to indemnify and hold harmless each Selling Stockholder from and
against any losses, claims, damages or liabilities to which such Selling
Stockholder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon (i) any untrue statement
of a material fact contained in the Registration Statement, or (ii) any
failure by the Company to fulfill any undertaking included in the Registration
Statement, and the Company will promptly reimburse such Selling Stockholder for
any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim,
provided, however, that the Company shall not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of, or is based
upon, an untrue statement made in such Registration Statement in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such Selling Stockholder specifically for use in preparation of the
Registration Statement or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Investor at
least one business day prior to the pertinent sale or sales by the Investor.


 


(ii)                                The
Investor agrees to indemnify and hold harmless the Company (and each person, if
any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses,
claims, damages or liabilities to which the Company (or any such officer,
director or controlling person) may become subject (under the Securities Act or
otherwise), insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any untrue
statement of a material fact contained in the Registration Statement if such
untrue statement was made in reliance upon and in conformity with written
information furnished by or on behalf of the Investor specifically for use in
preparation of the Registration Statement, and the Investor will promptly
reimburse the Company (or such officer, director or controlling person), as the
case may be, for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; provided further, however, that the aggregate obligation to indemnify
and contribute under this Section 6.3 shall be limited to the net amount
of the proceeds received by the Investor from the sale of the Shares pursuant
to the Registration Statement.


 


D-13

















 


(iii)                            Promptly
after receipt by any indemnified person of a notice of a claim or the beginning
of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 6.3, such indemnified person
shall notify the indemnifying person in writing of such claim or of the
commencement of such action, but the omission to so notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party under this Section 6.3 (except to the extent that such
omission materially and adversely affects the indemnifying party’s ability to
defend such action) or from any liability otherwise than under this
Section 6.3.  Subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person, the indemnifying person shall be entitled to participate
therein, and, to the extent that it shall elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person.  After notice from the indemnifying person to
such indemnified person of its election to assume the defense thereof (unless
it has failed to assume the defense thereof and appoint counsel reasonably
satisfactory to the indemnified party), such indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof, provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate, in the reasonable opinion of counsel to the indemnified
person, for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying person; provided, however, that no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel for all
indemnified persons.  In no event shall
any indemnifying person be liable in respect of any amounts paid in settlement
of any action unless the indemnifying person shall have approved the terms of
such settlement; provided that such consent shall not be unreasonably withheld
or delayed.  No indemnifying person
shall, without the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could reasonably have been a party and indemnification
could have been sought hereunder by such indemnified person, unless such settlement
includes an unconditional release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.


 


(iv)                               If
the indemnification provided for in this Section 6.3 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (i) or (ii)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Investor on the other in connection
with the statements or omissions or other matters which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations.  The relative fault shall be determined by reference to, among
other things, in the case of an untrue statement, whether the untrue statement
relates to information supplied by the Company on the one hand or the Investor
on the other and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement.  The Company and the Investor, or Investors
if there are more than one, agree that it would not be just and equitable if
contribution pursuant to this subsection (iv) were determined by pro rata
allocation (even if the Investors were treated as one entity for such purpose)
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this subsection (iv).  The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (iv) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim.  Notwithstanding the provisions
of this subsection (iv), the Investor shall not be required to indemnify
and contribute an aggregate amount in excess of the amount by which the net
amount received


 


D-14

















 


by the
Investor from the sale of the Shares to which such loss relates exceeds the
amount of any damages which the Investor has otherwise been required to pay by
reason of such untrue statement.  No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.  The Investors’ obligations in this subsection
to contribute are several in proportion to their sales of Shares to which such
loss relates and not joint.


 


(v)                                   The
parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations
regarding the provisions hereof including, without limitation, the provisions
of this Section 6.3, and are fully informed regarding said
provisions.  They further acknowledge
that the provisions of this Section 6.3 fairly allocate the risks in light
of the ability of the parties to investigate the Company and its business in
order to assure that adequate disclosure is made in the Registration Statement
as required by the Securities Act and the Exchange Act.


 


6.4                               Termination of Conditions and Obligations.  The conditions precedent imposed by
Section 4 or this Section 6 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Shares when such
Shares shall have been effectively registered under the Securities Act and sold
or otherwise disposed of in accordance with the intended method of disposition
set forth in the Registration Statement covering such Shares or at such time as
an opinion of counsel satisfactory to the Company shall have been rendered to
the effect that such conditions are not necessary in order to comply with the
Securities Act.


 


6.5                               Information Available.  So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the Company will
make available to the Investor through the Company’s EDGAR filings or by
delivery on request:


 


(a)                                  as
soon as practicable after it is available, one copy of (i) its Annual
Report to Stockholders (which Annual Report shall contain financial statements
audited in accordance with generally accepted accounting principles by a
national firm of certified public accountants), (ii) if not included in
substance in the Annual Report to Shareholders, its Annual Report on Form 10-K
(the foregoing, in each case, excluding exhibits) and (iii) its Quarterly
Reports on 10-Q;


 


(b)                                  upon
the reasonable request of the Investor, all other information that is made
available to stockholders; and


 


(c)                                  upon
the reasonable request of the Investor, up to 20 copies of the Prospectuses to
supply to any other party requiring such Prospectuses; and the Company, upon
the reasonable request of the Investor, will meet with the Investor or a
representative thereof at the Company’s headquarters to discuss all information
relevant for disclosure in the Registration Statement covering the Shares and
will otherwise reasonably cooperate with the Investor conducting an
investigation for the purpose of reducing or eliminating the Investor’s
exposure to liability under the Securities Act, including the reasonable production
of information at the Company’s headquarters; provided, that the Company shall
not be required to disclose any confidential information to or meet at its
headquarters with the Investor until and unless the Investor shall have entered
into a confidentiality agreement in form and substance reasonably satisfactory
to the Company with the Company with respect thereto.


 


D-15

















 


6.6                               Transfer or Assignment of Registration Rights.  The rights to cause the Company to register
the Shares issued to the Investor by the Company under this Section 6 may
be transferred or assigned by the Investor only to a transferee or assignee of
not less than 500,000 Shares (as presently constituted and subject to
subsequent adjustments for stock splits, stock dividends, reverse stock splits,
and the like) in a transaction exempt from the registration requirements of the
Securities Act which would result in the transferee or assignee holding
“restricted securities” within the meaning of Rule 144 under the
Securities Act; provided that (i) such transfer or assignment of
Shares is effected in accordance with applicable securities laws, (ii) the
Company is given written notice prior to said transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
securities with respect to which such registration rights are intended to be
transferred or assigned and (iii) the transferee or assignee of such
rights assumes in writing the obligations of the Investor under this Agreement
with respect to the Shares.


 


6.7                               Termination of Registration Rights.  The right of the Investor to request
registration pursuant to this Section 6 shall terminate on the earlier of
(i) such date on which all the Shares held by the Investor may immediately
be sold under Rule 144 during any ninety (90)-day period, and
(ii) two (2) years after the Closing Date.


 


7.                                      Notices.  All
notices, requests, consents and other communications hereunder shall be in
writing, shall be delivered by facsimile or mailed (A) if within domestic
United States by first-class registered or certified airmail, or nationally
recognized overnight express courier, postage prepaid, or (B) if delivered
to or from outside the United States, by International Federal Express (or
comparable service) and shall be deemed given (i) if delivered by
first-class registered or certified mail domestic, four (4) business days
after so mailed, (ii) if delivered by nationally recognized overnight
carrier, one (1) business day after so mailed, (iii) if delivered by
international Federal Express (or comparable service), two (2) business
days after so mailed, (iv) if delivered by facsimile, upon electric
confirmation of receipt if confirmation is before 4:00 p.m. local time of the
recipient on a business day and, if not, then the next business day, and shall
be delivered as addressed as follows:


 


(a)                                  if
to the Company, to:


 


	
  Avistar Communications Corporation

  
	
  555 Twin Dolphin Drive, Suite 360

  
	
  Redwood Shores, CA 
  94065

  
	
  Attention:

  	
  Chief Financial Officer

  
	
  Telephone:

  	
  (650) 610-2910

  
	
  Fax:

  	
  (650) 610-2901

  
	
   

  
	
  with a copy mailed or faxed to:

  
	
   

  
	
  Wilson Sonsini Goodrich & Rosati. P.C.

  
	
  650 Page Mill Road

  
	
  Palo Alto, CA 
  94304

  
	
  Attention:

  	
  Robert P. Latta

  
	
  Telephone:

  	
  (650) 320-4646

  
	
  Fax:

  	
  (650) 496-4367

  



 


(b)                                  if
to the Investor, at its address on the signature page hereto, or at such other
address or addresses as may have been furnished to the Company in writing.


 


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8.                                      Changes.  This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.


 


9.                                      Headings.  The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.


 


10.                               Severability.  In case
any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.


 


11.                               Governing Law.  This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of Delaware, without giving effect to the principles of
conflicts of law.


 


12.                               Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other parties.


 


13.                               Expenses.  All
fees, costs and expenses (including attorneys’ fees and expenses) incurred by
any party hereto in connection with the preparation, negotiation and execution
of this Agreement and the exhibits and schedules hereto and the consummation of
the transactions contemplated hereby and thereby (including the costs
associated with any filings with, or compliance with any of the requirements
of, any governmental authorities), shall be the sole and exclusive
responsibility of such party.


 


14.                               Confidential Disclosure Agreement. 
Notwithstanding any provision of this Agreement to the contrary, any
confidential disclosure agreement previously executed by the Company and the
Investor in connection with the transactions contemplated by this Agreement
shall remain in full force and effect in accordance with its terms following
the execution of this Agreement and the consummation of the transactions
contemplated hereby.


 


15.                               Successors and Assigns.  Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the parties hereto and, subject to Section 6.6,
shall inure to the benefit of and be enforceable by each person who shall be a
holder of the Shares from time to time.


 


16.                               Further Assurances.  Each
party agrees to cooperate fully with the other parties and to execute such
further instruments, documents and agreements and to give such further written
assurance as may be reasonably requested by any other party to evidence and
reflect the transactions described herein and contemplated hereby and to carry
into effect the intents and purposes of this Agreement.


 


17.                               Entire Agreement.  This
Agreement supersedes all prior oral or written agreements between the Company
and the Investor (except as noted in Section 14 above) with respect to the
matters discussed herein and therein. 
This Agreement and the schedules and exhibits hereto contain the entire
understanding of the parties with respect to the matters discussed herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Investors makes any representation, warranty, covenant or undertaking
with respect to such matters.  The
Company has not, directly or indirectly, made any agreements with the Investor
relating to the terms or conditions of the purchase of the Shares except as set
forth in this Agreement.


 


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