Document:

<PAGE>

                                                                    Exhibit 4.1

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                       FIRST VIRTUAL COMMUNICATIONS, INC.

                  THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") CERTIFIES
that, for value received, _____________ (the "Holder"), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date of issuance of this Warrant (the
"Initial Exercise Date") and on or prior to the fifth anniversary of the Initial
Exercise Date (the "Termination Date") but not thereafter, to subscribe for and
purchase from First Virtual Communications, Inc., a corporation incorporated in
the State of Delaware (the "Company"), up to ____________ shares (the "Warrant
Shares") of Common Stock, par value $0.001 per share, of the Company (the
"Common Stock"). The purchase price of one share of Common Stock (the "Exercise
Price") under this Warrant shall be $1.77, subject to adjustment hereunder. The
Exercise Price and the number of Warrant Shares for which the Warrant is
exercisable shall be subject to adjustment as provided herein. CAPITALIZED TERMS
USED AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS SET FORTH IN THAT
CERTAIN SECURITIES PURCHASE AGREEMENT (THE "PURCHASE AGREEMENT"), DATED NOVEMBER
6, 2003, AMONG THE COMPANY AND THE PURCHASERS SIGNATORY THERETO.

                                       1

<PAGE>

                  1.       Title to Warrant. Prior to the Termination Date and
subject to compliance with applicable laws and Section 7 of this Warrant, this
Warrant and all rights hereunder are transferable, in whole or in part, at the
office or agency of the Company by the Holder in person or by duly authorized
attorney, upon surrender of this Warrant together with the Assignment Form
annexed hereto properly endorsed. The transferee shall sign an investment letter
in form and substance reasonably satisfactory to the Company.

                  2.       Authorization of Shares. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

                  3.       Exercise of Warrant.

                           (a)      Subject to Section 3(c) below, exercise of
         the purchase rights represented by this Warrant may be made at any time
         or times on or after the Initial Exercise Date and on or before the
         Termination Date by delivery to the Company of a duly executed
         facsimile copy of the Notice of Exercise Form annexed hereto (or such
         other office or agency of the Company as it may designate by notice in
         writing to the registered Holder at the address of such Holder
         appearing on the books of the Company); provided, however, within 5
         Trading Days of the date said Notice of Exercise is delivered to the
         Company, the Holder shall have surrendered this Warrant to the Company
         and the Company shall have received payment of the aggregate Exercise
         Price of the shares thereby purchased (and all taxes required to be
         paid by the Holder, if any, pursuant to Section 5 prior to the issuance
         of such shares) by wire transfer or cashier's check drawn on a United
         States bank. Certificates for shares purchased hereunder shall be
         delivered to the Holder within 3 Trading Days from the delivery to the
         Company of the Notice of Exercise Form by facsimile copy, surrender of
         this Warrant and payment of the aggregate Exercise Price as set forth
         above ("Warrant Share Delivery Date). This Warrant shall be deemed to
         have been exercised on the later of the date the Notice of Exercise is
         delivered to the Company by facsimile copy, the date the Exercise Price
         (and all taxes required to be paid by the Holder, if any, pursuant to
         Section 5 prior to the issuance of such shares) is received by the
         Company, and the date the Warrant is surrendered to the Company (or
         evidence of loss, theft or destruction thereof and security or
         indemnity reasonably satisfactory to the Company) (the later date, the
         "Exercise Date"). The Warrant Shares shall be deemed to have been
         issued, and Holder or any other person so designated to be named
         therein shall be deemed to have become a holder of record of such
         shares for all purposes, as of the close of business on the Exercise
         Date. If the Company fails to deliver to the Holder a certificate or
         certificates representing the Warrant Shares pursuant to this Section
         3(a) by the third Trading Day following the Warrant Share Delivery
         Date, then the Holder will have the right to rescind such exercise. In
         addition to any other rights available to the Holder, if the Company
         fails to deliver to the Holder a certificate or certificates
         representing the Warrant Shares pursuant to an exercise by the seventh

                                       2

<PAGE>

         Trading Day after the Warrant Share Delivery Date, and if after such
         day the Holder is required by its broker to purchase (in an open market
         transaction or otherwise) shares of Common Stock to deliver in
         satisfaction of a sale by the Holder of the Warrant Shares which the
         Holder anticipated receiving upon such exercise (a "Buy-In"), then the
         Company shall (1) pay in cash to the Holder the amount by which (x) the
         Holder's total purchase price (including brokerage commissions, if any)
         for the shares of Common Stock so purchased exceeds (y) the amount
         obtained by multiplying (A) the number of Warrant Shares that the
         Company was required to deliver to the Holder in connection with the
         exercise at issue times (B) the price at which the sell order giving
         rise to such purchase obligation was executed, and (2) at the option of
         the Holder, either reinstate the portion of the Warrant and equivalent
         number of Warrant Shares for which such exercise was not honored or
         deliver to the Holder the number of shares of Common Stock that would
         have been issued had the Company timely complied with its exercise and
         delivery obligations hereunder. For example, if the Holder purchases
         Common Stock having a total purchase price of $11,000 to cover a Buy-In
         with respect to an attempted exercise of shares of Common Stock with an
         aggregate sale price giving rise to such purchase obligation of
         $10,000, under clause (1) of the immediately preceding sentence the
         Company shall be required to pay the Holder $1,000. The Holder shall
         provide the Company written notice indicating the amounts payable to
         the Holder in respect of the Buy-In, together with applicable
         confirmations and other evidence reasonably requested by the Company.
         Nothing herein shall limit a Holder's right to pursue any other
         remedies available to it hereunder, at law or in equity including,
         without limitation, a decree of specific performance and/or injunctive
         relief with respect to the Company's failure to timely deliver
         certificates representing shares of Common Stock upon exercise of the
         Warrant as required pursuant to the terms hereof.

                           (b)      If this Warrant shall have been exercised in
         part, the Company shall, at the time of delivery of the certificate or
         certificates representing Warrant Shares, deliver to Holder a new
         Warrant evidencing the rights of Holder to purchase the unpurchased
         Warrant Shares called for by this Warrant, which new Warrant shall in
         all other respects be identical with this Warrant.

                           (c)      The Company shall not effect any exercise of
         this Warrant, and the Holder shall not have the right to exercise any
         portion of this Warrant, pursuant to Section 3(a) or otherwise, to the
         extent that after giving effect to such issuance after exercise, the
         Holder (together with the Holder's affiliates), as set forth on the
         applicable Notice of Exercise, would beneficially own in excess of
         4.99% of the number of shares of the Common Stock outstanding
         immediately after giving effect to such issuance. For purposes of the
         foregoing sentence, the number of shares of Common Stock beneficially
         owned by the Holder and its affiliates shall include the number of
         shares of Common Stock issuable upon exercise of this Warrant with
         respect to which the determination of such sentence is being made, but
         shall exclude the number of shares of Common Stock which would be
         issuable upon (A) exercise of the remaining, nonexercised portion of
         this Warrant beneficially owned by the Holder or any of its affiliates
         and (B) exercise or conversion of the unexercised or nonconverted
         portion of any other securities of the Company (including, without
         limitation, any other Warrants) subject to a limitation on conversion
         or exercise analogous to the limitation contained herein beneficially
         owned by

                                       3

<PAGE>

         the Holder or any of its affiliates. Except as set forth in the
         preceding sentence, for purposes of this Section 3(c), beneficial
         ownership shall be calculated in accordance with Section 13(d) of the
         Exchange Act. To the extent that the limitation contained in this
         Section 3(c) applies, the determination of whether this Warrant is
         exercisable (in relation to other securities owned by the Holder) and
         of which a portion of this Warrant is exercisable shall be in the sole
         discretion of such Holder, and the submission of a Notice of Exercise
         shall be deemed to be such Holder's determination of whether this
         Warrant is exercisable (in relation to other securities owned by such
         Holder) and of which portion of this Warrant is exercisable, in each
         case subject to such aggregate percentage limitation, and the Company
         shall have no obligation to verify or confirm the accuracy of such
         determination. For purposes of this Section 3(c), in determining the
         number of outstanding shares of Common Stock, the Holder may rely on
         the number of outstanding shares of Common Stock as reflected in (x)
         the Company's most recent Form 10-Q or Form 10-K, as the case may be,
         (y) a more recent public announcement by the Company or (z) any other
         notice by the Company or the Company's transfer agent setting forth the
         number of shares of Common Stock outstanding. Upon the written or oral
         request of the Holder, the Company shall within two Trading Days
         confirm orally and in writing to the Holder the number of shares of
         Common Stock then outstanding. In any case, the number of outstanding
         shares of Common Stock shall be determined after giving effect to the
         conversion or exercise of securities of the Company, including this
         Warrant, by the Holder or its affiliates since the date as of which
         such number of outstanding shares of Common Stock was reported. The
         provisions of this Section 3(c) may be waived by the Holder upon, at
         the election of the Holder, not less than 61 days' prior notice to the
         Company, and the provisions of this Section 3(c) shall continue to
         apply until such 61st day (or such later date, as determined by the
         Holder, as may be specified in such notice of waiver).

                           (d)      If at any time after one year from the date
         of issuance of this Warrant there is no effective Registration
         Statement registering the resale of the Warrant Shares by the Holder,
         this Warrant may also be exercised at such time by means of a "cashless
         exercise" in which the Holder shall be entitled to receive a
         certificate for the number of Warrant Shares equal to the quotient
         obtained by dividing [(A-B) (X)] by (A), where:

                  (A) = the Closing Price on the Trading Day immediately
                        preceding the date of such election;

                  (B) = the Exercise Price of the Warrants, as adjusted; and

                  (X) = the number of Warrant Shares issuable upon exercise
                        of the Warrants in accordance with the terms of this
                        Warrant.

                           (e)      Subject to the provisions of this Section 3,
         if after the first anniversary of the Initial Exercise Date each VWAP
         (as defined below) for any twenty consecutive Trading Days (the
         "Measurement Price") (such period commencing only after such
         anniversary date) exceeds the then Exercise Price (as adjusted under
         this Warrant) by 200% (the "Threshold Price"), then the Company may,
         within three Trading Days of such period, call for cancellation of all
         or any portion of this Warrant for which a Notice of Exercise

                                       4

<PAGE>

         has not yet been delivered (such right, a "Call"). To exercise this
         right, the Company must deliver to the Holder an irrevocable written
         notice (a "Call Notice"), indicating therein the portion of the
         unexercised portion of this Warrant to which such notice applies. If
         the conditions set forth below for such Call are satisfied from the
         period from the date of the Call Notice through and including the Call
         Date (as defined below), then any portion of this Warrant subject to
         such Call Notice for which a Notice of Exercise shall not have been
         received by the Company from and after the date of the Call Notice will
         be cancelled at 6:30 p.m. (New York City time) on the 10th Trading Day
         after the date of the Call Notice is received by the Holder (such date,
         the "Call Date"). Any unexercised portion of this Warrant to which the
         Call Notice does not pertain, if any, will be unaffected by such Call
         Notice. In furtherance thereof, the Company covenants and agrees that
         it will honor all Notices of Exercise with respect to Warrant Shares
         subject to a Call Notice that are tendered from the time of delivery of
         the Call Notice on the Call Date. The parties agree that any Notice of
         Exercise delivered following a Call Notice shall first reduce to zero
         the number of Warrant Shares subject to such Call Notice prior to
         reducing the remaining Warrant Shares available for purchase under this
         Warrant. For example, if (x) this Warrant then permits the Holder to
         acquire 100 Warrant Shares, (y) a Call Notice pertains to 75 Warrant
         Shares, and (z) prior to the Call Date the Holder tenders a Notice of
         Exercise in respect of 50 Warrant Shares, then (1) on the Call Date the
         right under this Warrant to acquire 25 Warrant Shares will be
         automatically cancelled, (2) the Company, in the time and manner
         required under this Warrant, will have issued and delivered (or be
         required to issue and deliver) to the Holder 50 Warrant Shares in
         respect of the exercises following receipt of the Call Notice, and (3)
         the Holder may, until the Termination Date, exercise this Warrant for
         cash by payment of the aggregate Exercise Price then in effect for 25
         Warrant Shares (subject to adjustment as herein provided and subject to
         subsequent Call Notices and the other terms and conditions of this
         Warrant). Subject again to the provisions of this Section 3, the
         Company may deliver subsequent Call Notices for any portion of this
         Warrant for which the Holder shall not have delivered a Notice of
         Exercise. Notwithstanding anything to the contrary set forth in this
         Warrant, the Company may not require the cancellation of this Warrant
         pursuant to this Section 3(d) (and any Call Notice will be void),
         unless, from the beginning of the 20 consecutive Trading Days used to
         determine whether the Common Stock has achieved the Threshold Price
         through the Call Date, (i) the Company shall have honored in accordance
         with the terms of this Warrant all Notices of Exercise delivered prior
         to the Call Date, (ii) the Registration Statement shall be effective as
         to all Warrant Shares and the prospectus thereunder available for use
         by the Holder for the resale of all such Warrant Shares (and the
         Company is not aware of any event or occurrence that would make it
         appropriate for the Company to suspend the effectiveness of the
         Registration Statement), (iii) the Warrant Shares shall be listed or
         quoted for trading on the Principal Market and trading in the Common
         Stock shall not have been suspended (and the Company is not then aware
         of any event or occurrence that would required trading to be suspended)
         and (iv) such issuance would be permitted in full without violating the
         limitations set forth in Section 3(c).

                  "VWAP" means, for any date, the price determined by the first
         of the following clauses that applies: (a) if the Common Stock is then
         listed or quoted on a Trading Market, the daily volume weighted average
         price of the Common Stock for such date (or

                                       5

<PAGE>

         the nearest preceding date) on the Trading Market on which the Common
         Stock is then listed or quoted as reported by Bloomberg Financial L.P.
         (based on a trading day from 9:30 a.m. Eastern Time to 4:02 p.m.
         Eastern Time); (b) if the Common Stock is not then listed or quoted on
         a Trading Market and if prices for the Common Stock are then quoted on
         the OTC Bulletin Board, the volume weighted average price of the Common
         Stock for such date (or the nearest preceding date) on the OTC Bulletin
         Board; (c) if the Common Stock is not then listed or quoted on the OTC
         Bulletin Board and if prices for the Common Stock are then reported in
         the "Pink Sheets" published by the National Quotation Bureau
         Incorporated (or a similar organization or agency succeeding to its
         functions of reporting prices), the most recent bid price per share of
         the Common Stock so reported; or (d) in all other cases, the fair
         market value of a share of Common Stock as determined by an independent
         appraiser selected in good faith by the Purchasers and reasonably
         acceptable to the Company.

                  4.       No Fractional Shares or Scrip. No fractional shares
or scrip representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price.

                  5.       Charges, Taxes and Expenses. Issuance of certificates
for Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

                  6.       Closing of Books. The Company will not close its
stockholder books or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.

                  7.       Transfer, Division and Combination.

                           (a)      Subject to compliance with any applicable
         securities laws and the conditions set forth in Sections 1 and 7(e)
         hereof and to the provisions of Section 4.1 of the Purchase Agreement,
         this Warrant and all rights hereunder are transferable, in whole or in
         part (provided that if the Warrant is being transferred in part, the
         portion of this Warrant being transferred shall represents the right to
         purchase at least 100,000 Warrant Shares (or such lesser amount
         comprising the entire number of Warrant Shares then underlying this
         Warrant and subject to adjustment as provided herein), upon surrender
         of this Warrant at the principal office of the Company, together with a
         written assignment of this Warrant substantially in the form attached
         hereto duly executed by the Holder or its agent or attorney and funds
         sufficient to pay any transfer taxes payable upon the making of such
         transfer. Upon such surrender and compliance with the conditions
         referenced in

                                       6

<PAGE>

         the preceding sentence, if required, such payment, the Company shall
         execute and deliver a new Warrant or Warrants in the name of the
         assignee or assignees and in the denomination or denominations
         specified in such instrument of assignment, and shall issue to the
         assignor a new Warrant evidencing the portion of this Warrant not so
         assigned, and this Warrant shall promptly be cancelled. A Warrant, if
         properly assigned, may be exercised by a new holder for the purchase of
         Warrant Shares without having a new Warrant issued.

                           (b)      Subject to compliance with Section 7(a), as
         to any transfer which may be involved in such division or combination,
         (i) this Warrant may be divided or combined with other Warrants upon
         presentation hereof at the aforesaid office of the Company, together
         with a written notice specifying the names and denominations in which
         new Warrants are to be issued, signed by the Holder or its agent or
         attorney, and (ii) the Company shall execute and deliver a new Warrant
         or Warrants in exchange for the Warrant or Warrants to be divided or
         combined in accordance with such notice.

                           (c)      The Company shall prepare, issue and deliver
         at its own expense (other than transfer taxes) the new Warrant or
         Warrants under this Section 7.

                           (d)      The Company agrees to maintain, at its
         aforesaid office or at the offices of a designated agent, books for the
         registration and the registration of transfer of the Warrants.

                           (e)      At the time of the surrender of this Warrant
         in connection with any transfer of this Warrant, the Company will
         require, as a condition of allowing such transfer (i) that the Holder
         or transferee of this Warrant, as the case may be, furnish to the
         Company a written opinion of counsel (which opinion shall be in form,
         substance and scope customary for opinions of counsel in comparable
         transactions and reasonably acceptable to the Company) to the effect
         that such transfer may be made without registration under the
         Securities Act and under applicable state securities or blue sky laws,
         (ii) that the holder or transferee execute and deliver to the Company
         an investment letter in form and substance acceptable to the Company,
         (iii) that the transferee be an "accredited investor" as defined in
         Rule 501(a) promulgated under the Securities Act and (iv) such other
         documents as may be reasonably requested by the Company to give effect
         to the transfer and comply with applicable laws.

                  8.       No Rights as Shareholder until Exercise. This Warrant
does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the delivery of
the Exercise Notice, the surrender of this Warrant, the payment of the aggregate
Exercise Price to the Company, the Warrant Shares so purchased shall be and be
deemed to be issued to such Holder as the record owner of such shares as of the
close of business on the Exercise Date as determined in accordance with Section
3(a).

                  9.       Loss, Theft, Destruction or Mutilation of Warrant.
The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it

                                       7

<PAGE>

(which, in the case of the Warrant, shall not include the posting of any bond),
and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or cause to be
delivered a stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

                  10.      Saturdays, Sundays, Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day not a Saturday, Sunday or legal holiday.

                  11.      Adjustments of Exercise Price and Number of Warrant
Shares; Stock Splits, etc. The number and kind of securities purchasable upon
the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the events described
in the next sentence. In the event the Company shall (i) pay a dividend in
shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which it would have owned or have been entitled to receive had such
Warrant been exercised in prior to the date upon which such event described in
clauses (i) through (iv) of this Section 3(a) shall become effective. Upon each
such adjustment of the kind and number of Warrant Shares or other securities of
the Company which are purchasable hereunder, the Holder shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting
from such adjustment at an Exercise Price per Warrant Share or other security
equal to (x) the result obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares purchasable
pursuant hereto immediately prior to such adjustment divided by (y) the number
of Warrant Shares or other securities of the Company resulting from such
adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.

                  12.      Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets. In case the Company shall reorganize its
capital, reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all of its
property, assets or business to another corporation and, pursuant to the terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation, or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common stock of the successor or acquiring corporation
("Other Property"), to be received by or distributed to the holders of Common
Stock of the Company, then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the number of shares of Common Stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger,

                                       8

<PAGE>

consolidation or disposition of assets by a Holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring corporation
(if other than the Company) shall expressly assume the due and punctual
observance and performance of each and every covenant and condition of this
Warrant to be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for adjustments of Warrant Shares for which
this Warrant is exercisable which shall be as nearly equivalent as practicable
to the adjustments provided for in this Section 12. For purposes of this Section
12, "common stock of the successor or acquiring corporation" shall include stock
of such corporation of any class which is not preferred as to dividends or
assets over any other class of stock of such corporation and which is not
subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

                  13.      Voluntary Adjustment by the Company. The Company may
at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board
of Directors of the Company.

                  14.      Notice of Adjustment. Whenever the number of Warrant
Shares or number or kind of securities or other property purchasable upon the
exercise of this Warrant or the Exercise Price is adjusted, as herein provided,
the Company shall give notice thereof to the Holder, which notice shall state
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.

                  15.      Notice of Corporate Action. If at any time:

                           (a)      the Company shall take a record of the
         holders of its Common Stock for the purpose of entitling them to
         receive a dividend or other distribution, or any right to subscribe for
         or purchase any evidences of its indebtedness, any shares of stock of
         any class or any other securities or property, or to receive any other
         right, or

                           (b)      there shall be any capital reorganization of
         the Company, any reclassification or recapitalization of the capital
         stock of the Company or any consolidation or merger of the Company
         with, or any sale, transfer or other disposition of all or
         substantially all the property, assets or business of the Company to,
         another corporation or,

                           (c)      there shall be a voluntary or involuntary
         dissolution, liquidation or winding up of the Company;

                                       9

<PAGE>

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify, to the extent
known by the Company, (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right, the date on which the
holders of Common Stock shall be entitled to any such dividend, distribution or
right, and the amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock
shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).

                  16.      Authorized Shares. The Company covenants
that during the period the Warrant is outstanding, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the Trading Market upon which the Common Stock may be listed.

                  17.      Miscellaneous.

                           (a)      Jurisdiction. All questions concerning the
         construction, validity, enforcement and interpretation of this Warrant
         shall be determined in accordance with the provisions of the Purchase
         Agreement.

                           (b)      Restrictions. The Holder acknowledges that
         the Warrant Shares acquired upon the exercise of this Warrant, if not
         registered, will have restrictions upon resale imposed by state and
         federal securities laws.

                           (c)      Nonwaiver and Expenses. No course of dealing
         or any delay or failure to exercise any right hereunder on the part of
         Holder shall operate as a waiver of such right or otherwise prejudice
         Holder's rights, powers or remedies, notwithstanding all rights
         hereunder terminate on the Termination Date. If the Company willfully
         and knowingly fails to comply with any provision of this Warrant, which
         results in any material damages to the Holder as determined by a court
         of law, the Company shall pay to Holder such amounts as shall be
         sufficient to cover any costs and expenses including,

                                       10

<PAGE>

         but not limited to, reasonable attorneys' fees, including those of
         appellate proceedings, incurred by Holder in collecting any amounts due
         pursuant hereto or in otherwise enforcing any of its rights, powers or
         remedies hereunder.

                           (d)      Notices. Any notice, request or other
         document required or permitted to be given or delivered to the Holder
         by the Company shall be delivered in accordance with the notice
         provisions of the Purchase Agreement.

                           (e)      Limitation of Liability. Subject to Section
         3(d), no provision hereof, in the absence of any affirmative action by
         Holder to exercise this Warrant or purchase Warrant Shares, and no
         enumeration herein of the rights or privileges of Holder, shall give
         rise to any liability of Holder for the purchase price of any Common
         Stock or as a stockholder of the Company, whether such liability is
         asserted by the Company or by creditors of the Company.

                           (f)      Remedies. Holder, in addition to being
         entitled to exercise all rights granted by law, including recovery of
         damages, will be entitled to specific performance of its rights under
         this Warrant. The Company agrees that monetary damages would not be
         adequate compensation for any loss incurred by reason of a breach by it
         of the provisions of this Warrant and hereby agrees to waive the
         defense in any action for specific performance that a remedy at law
         would be adequate.

                           (g)      Successors and Assigns. Subject to
         applicable securities laws, this Warrant and the rights and obligations
         evidenced hereby shall inure to the benefit of and be binding upon the
         successors of the Company and the successors and permitted assigns of
         Holder. The provisions of this Warrant are intended to be for the
         benefit of all Holders from time to time of this Warrant and shall be
         enforceable by any such Holder or holder of Warrant Shares.

                           (h)      Amendment. This Warrant may be modified or
         amended or the provisions hereof waived with the written consent of the
         Company and the Holder.

                           (i)      Severability. Wherever possible, each
         provision of this Warrant shall be interpreted in such manner as to be
         effective and valid under applicable law, but if any provision of this
         Warrant shall be prohibited by or invalid under applicable law, such
         provision shall be ineffective to the extent of such prohibition or
         invalidity, without invalidating the remainder of such provisions or
         the remaining provisions of this Warrant.

                           (j)      Headings. The headings used in this Warrant
         are for the convenience of reference only and shall not, for any
         purpose, be deemed a part of this Warrant.

                              ********************

                                       11

<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated:  November 12, 2003
                                       FIRST VIRTUAL COMMUNICATIONS, INC.

                                       By:      /s/ Truman Cole
                                           _______________________________
                                             Name:
                                             Title:

                                       12

<PAGE>

                               NOTICE OF EXERCISE

To: First Virtual Communications, Inc.

                  (1) The undersigned hereby elects to purchase ________ Warrant
Shares of First Virtual Communications, Inc. pursuant to the terms of the
attached Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.

                  (2) Payment shall take the form of (check applicable box):

                           [ ] in lawful money of the United States; or

                           [ ] the cancellation of such number of Warrant Shares
                           as is necessary, in accordance with the formula set
                           forth in subsection 3(d), to exercise this Warrant
                           with respect to the maximum number of Warrant Shares
                           purchasable pursuant to the cashless exercise
                           procedure set forth in subsection 3(d).

                  (3) Please issue a certificate or certificates representing
said Warrant Shares in the name of the undersigned or in such other name as is
specified below:
                  ________________________________________

The Warrant Shares shall be delivered to the following:

                  ________________________________________

                  ________________________________________

                  ________________________________________

                  (4) Accredited Investor. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

                                       [PURCHASER]

                                       By: ______________________________
                                       Name:
                                       Title:

                                       Dated:  ________________________

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

                  FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

                                          Dated:  ______________, _______

                             Holder's Signature: ___________________________

                             Holder's Address: _____________________________

                                               _____________________________

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

<PAGE>

                                    EXHIBIT A

                                   PURCHASERS

<TABLE>
<CAPTION>
           NAME OF PURCHASER                    NUMBER OF SHARES      NUMBER OF WARRANTS
           -----------------                    ----------------      ------------------
<S>                                             <C>                   <C>
LAGUNITAS PARTNERS LP                               837,989                418,994

J. Patterson McBaine                                111,732                 55,866

Jon D. Gruber & Linda W. Gruber                     111,732                 55,866

Gruber & McBaine International                      279,330                139,665

Special Situations Fund III, L.P.                   553,771                276,885

Special Situations Cayman Fund L.P.                 178,911                 89,455

Special Situations Technology Fund L.P.              17,039                  8,519

Special Situations Technology Fund II L.P.          102,235                 51,117

MicroCapital Fund L.P.                              391,061                195,530

MicroCapital Fund Ltd.                              167,598                 83,799

Bonanza Fund                                        139,665                 69,832

Firelake Strategic Technology Fund, L.P.            837,989                418,994

Agile Partners, LP                                  279,330                139,665

Behavioral Financial Fund Ltd.                      782,123                391,061

Jurika Family Trust                                 167,598                 83,799

JMK Investment Partners, L.P.                       167,598                 83,799

Encinal Crossover Fund                               83,799                 41,899

Neal I. Goldman IRA Rollover                        200,000                100,000

Palisades Master Fund L.P.                          279,330                139,665

Gordon J. Roth                                       11,174                  5,587
</TABLE>

<PAGE>

<TABLE>
<S>                                                  <C>                     <C>
Joseph Paul Schimmelpfennig                          11,174                  5,587

John J. Weber                                        11,174                  5,587

Jeffrey M. Ng                                         8,380                  4,190

Louis J. Ellis                                        1,676                    838
</TABLE><PAGE>

                                                                   Exhibit 10.1

                          SECURITIES PURCHASE AGREEMENT

         This Securities Purchase Agreement (this "Agreement") is dated as of
November 7, 2003, among First Virtual Communications, Inc., a Delaware
corporation (the "Company"), and the purchasers identified on the Schedule of
Purchasers attached hereto (each a "Purchaser" and collectively the
"Purchasers"); and

         WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act, and Rule 506
promulgated thereunder, the Company desires to issue and sell to the Purchasers,
and each Purchaser, severally and not jointly, desires to purchase from the
Company in the aggregate, up to $12,000,000 of Common Stock and Warrants on the
Closing Date. Capitalized terms used herein and not otherwise defined are
defined in Section 1.1 below.

         NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

                                   ARTICLE I.
                                  DEFINITIONS

         1.1      Definitions. In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:

                  "Action" shall have the meaning ascribed to such term in
         Section 3.1(j).

                  "Affiliate" means any Person that, directly or indirectly
         through one or more intermediaries, controls or is controlled by or is
         under common control with a Person as such terms are used in and
         construed under Rule 144. With respect to a Purchaser, any investment
         fund or managed account that is managed on a discretionary basis by the
         same investment manager as such Purchaser will be deemed to be an
         Affiliate of such Purchaser.

                  "Business Day" means any day except Saturday, Sunday and any
         day which shall be a federal legal holiday or a day on which banking
         institutions in the State of New York are authorized or required by law
         or other governmental action to close.

                  "Closing" means the closing of the purchase and sale of the
         Common Stock and the Warrants pursuant to Section 2.1.

                  "Closing Date" means the Trading Day when all of the
         Transaction Documents have been executed and delivered by the
         applicable parties thereto, and all conditions precedent to (i) the
         Purchasers' obligations to pay the Subscription Amount and (ii) the
         Company's obligations to deliver the Securities have been satisfied or
         waived.

                                       1
<PAGE>

                  "Closing Price" means on any particular date (a) the last
         reported closing bid price per share of Common Stock on such date on
         the Trading Market (as reported by Bloomberg L.P. at 4:15 PM (New York
         time), or (b) if there is no such price on such date, then the closing
         bid price on the Trading Market on the date nearest preceding such date
         (as reported by Bloomberg L.P. at 4:15 PM (New York time) for the
         closing bid price for regular session trading on such day), or (c) if
         the Common Stock is not then listed or quoted on the Trading Market and
         if prices for the Common Stock are then reported in the "pink sheets"
         published by the National Quotation Bureau Incorporated (or a similar
         organization or agency succeeding to its functions of reporting
         prices), the most recent bid price per share of the Common Stock so
         reported, or (d) if the shares of Common Stock are not then publicly
         traded the fair market value of a share of Common Stock as determined
         by an appraiser selected in good faith by the Purchasers of a majority
         in interest of the Shares then outstanding.

                  "Commission" means the Securities and Exchange Commission.

                  "Common Stock" means the common stock of the Company, $0.001
         par value per share, and any securities into which such common stock
         may hereafter be reclassified.

                  "Common Stock Equivalents" means any securities of the Company
         or the Subsidiaries which would entitle the holder thereof to acquire
         at any time Common Stock, including without limitation, any debt,
         preferred stock, rights, options, warrants or other instrument that is
         at any time convertible into or exchangeable for, or otherwise entitles
         the holder thereof to receive, Common Stock.

                  "Company Counsel" means Cooley Godward LLP with offices
         located at 4401 Eastgate Mall, San Diego, CA 92121-9109.

                  "Disclosure Schedules" means the Disclosure Schedules
         delivered concurrently herewith.

                  "Effective Date" means the date that the Registration
         Statement is first declared effective by the Commission.

                  "Escrow Agent" shall have the meaning set forth in the Escrow
         Agreement.

                  "Escrow Agreement" shall mean the Escrow Agreement in
         substantially the form of Exhibit B hereto executed and delivered
         contemporaneously with this Agreement.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended.

                  "FW" means Feldman Weinstein LLP with offices located at 420
         Lexington Avenue, New York, New York 10170-0002.

                  "Intellectual Property Rights" shall have the meaning ascribed
         to such term in Section 3.1(o).

                                       2
<PAGE>

                  "Liens" means a lien, charge, security interest, encumbrance,
         right of first refusal, preemptive right or other restriction created
         by or upon the Company.

                  "Material Adverse Effect" shall have the meaning ascribed to
         such term in Section 3.1(b).

                  "Material Permits" shall have the meaning ascribed to such
         term in Section 3.1(m).

                  "Per Share Purchase Price" equals $1.79(1), subject to
         adjustment for reverse and forward stock splits, stock dividends, stock
         combinations and other similar transactions of the Common Stock that
         occur after the date of this Agreement and prior to the Closing Date.

                  "Person" means an individual or corporation, partnership,
         trust, incorporated or unincorporated association, joint venture,
         limited liability company, joint stock company, government (or an
         agency or subdivision thereof) or other entity of any kind.

                  "Proceeding" means an action, claim, suit, investigation or
         proceeding (including, without limitation, an investigation or partial
         proceeding, such as a deposition), whether commenced or threatened.

                  "Registration Statement" means a registration statement
         meeting the requirements set forth in the Registration Rights Agreement
         and covering the resale by the Purchasers of the Shares and the Warrant
         Shares.

                  "Registration Rights Agreement" means the Registration Rights
         Agreement, dated as of the date of this Agreement, among the Company
         and each Purchaser, in the form of Exhibit A hereto.

                  "Required Approvals" shall have the meaning ascribed to such
         term in Section 3.1(e).

                  "Rule 144" means Rule 144 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same effect as such Rule.

                  "SEC Reports" shall have the meaning ascribed to such term in
         Section 3.1(h).

                  "Securities" means the Shares, the Warrants and the Warrant
         Shares.

                  "Securities Act" means the Securities Act of 1933, as amended.

-----------------------

1        The lesser of (i) 100% of the Closing Price on the date immediately
         prior to the date hereof (if signed before the close of market) and
         (ii) 100% of the average of the 5 Closing Prices immediately prior to
         the date hereof, or, if permitted, such lower price as is possible to
         qualify for a fair market value transaction under the rules of the
         Trading Market, plus, in each case, $0.0625 per share as required by
         Nasdaq for the Warrant Shares.

                                       3
<PAGE>

                  "Shares" means the shares of Common Stock issued or issuable
         to each Purchaser pursuant to this Agreement.

                  "Subscription Amount" means, as to each Purchaser, the amounts
         set forth below such Purchaser's signature block on the signature page
         hereto, in United States dollars and in immediately available funds.

                  "Subsidiary" shall mean the subsidiaries of the Company, if
         any, set forth on Schedule 3.1(a).

                  "Trading Day" means (i) a day on which the Common Stock is
         traded on a Trading Market, or (ii) if the Common Stock is not listed
         on a Trading Market, a day on which the Common Stock is traded on the
         over-the-counter market, as reported by the OTC Bulletin Board, or
         (iii) if the Common Stock is not quoted on the OTC Bulletin Board, a
         day on which the Common Stock is quoted in the over-the-counter market
         as reported by the National Quotation Bureau Incorporated (or any
         similar organization or agency succeeding its functions of reporting
         prices); provided, that in the event that the Common Stock is not
         listed or quoted as set forth in (i), (ii) and (iii) hereof, then
         Trading Day shall mean a Business Day.

                  "Trading Market" means the following markets or exchanges on
         which the Common Stock is listed or quoted for trading on the date in
         question: the American Stock Exchange, the New York Stock Exchange, the
         Nasdaq National Market or the Nasdaq SmallCap Market.

                  "Transaction Documents" means this Agreement, the Escrow
         Agreement, the Warrants and the Registration Rights Agreement.

                  "Warrants" means the Common Stock Purchase Warrants, in the
         form of Exhibit C, issuable to the Purchasers at the Closing, which
         warrants shall be exercisable immediately upon issuance for a term of 5
         years and have an exercise price equal to $1.79(2).

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

                                   ARTICLE II.
                                PURCHASE AND SALE

         2.1      Closing. On the Closing Date, each Purchaser shall purchase
from the Company, severally and not jointly with the other Purchasers, and the
Company shall issue and sell to each Purchaser, (a) a number of Shares equal to
such Purchaser's Subscription Amount divided by the Per Share Purchase Price and
(b) the Warrants as determined pursuant to Section 2.2(a)(iii). The aggregate
Subscription Amounts for Shares sold hereunder shall be up to $12,000,000. Upon
satisfaction of the conditions set forth in Section 2.2, the Closing shall occur
at the offices of the Escrow Agent, or such other location as the parties shall
mutually agree.

-----------------------

2        The Per Share Purchase Price.

                                       4
<PAGE>

         2.2      Closing Conditions; Deliveries.

                  (a)      On the Closing Date, the Company shall deliver or
         cause to be delivered to the Escrow Agent with respect to each
         Purchaser the following:

                           (i)      this Agreement duly executed by the Company;

                           (ii)     a certificate evidencing a number of Shares
         equal to such Purchaser's Subscription Amount divided by the Per Share
         Purchase Price, registered in the name of such Purchaser;

                           (iii)    a Warrant, registered in the name of such
         Purchaser, pursuant to which such Purchaser shall have the right to
         acquire up to the number of shares of Common Stock equal to one half of
         the Shares to be issued to such Purchaser at the Closing;

                           (iv)     the Registration Rights Agreement duly
         executed by the Company;

                           (v)      the Escrow Agreement duly executed by the
         Company; and

                           (vi)     a legal opinion of Company Counsel, in the
         form of Exhibit D attached hereto.

                  (b)      On the Closing Date, each Purchaser shall deliver or
         cause to be delivered to the Escrow Agent the following:

                           (i)      this Agreement duly executed by such
         Purchaser;

                           (ii)     such Purchaser's Subscription Amount by wire
         transfer to the account of the Escrow Agent;

                           (iii)    the Escrow Agreement duly executed by such
         Purchaser; and

                           (iv)     the Registration Rights Agreement duly
         executed by such Purchaser.

                  (c)      All representations and warranties of the other party
         contained herein shall remain true and correct as of the Closing Date.

                  (d)      All obligations, covenants and agreements of the
         parties required to be performed at or prior to the Closing Date shall
         have been performed.

                  (e)      On or prior to the Closing Date, the Company shall
         have received confirmation from the Trading Market that no stockholder
         vote is required in connection with the Closing or the Company shall
         have complied with such stockholder vote requirement.

                  (f)      From the date hereof to the Closing Date, trading in
         the Common Stock shall not have been suspended by the Commission, and,
         at any time prior to the Closing

                                       5
<PAGE>

         Date, trading in securities generally as reported by Bloomberg
         Financial Markets shall not have been suspended or limited, or minimum
         prices shall not have been established on securities whose trades are
         reported by such service, or on any Trading Market, nor shall a banking
         moratorium have been declared either by the United States or New York
         State authorities nor shall there have occurred any material outbreak
         or escalation of hostilities or other national or international
         calamity of such magnitude in its effect on, or any material adverse
         change in, any financial market which, in each case, in the reasonable
         judgment of each Purchaser, makes it impracticable or inadvisable to
         purchase the Shares at the such Closing.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

         3.1      Representations and Warranties of the Company. Except as set
forth under the corresponding section of the Disclosure Schedules delivered
concurrently herewith, the Company hereby makes the following representations
and warranties as of the date hereof and as of the Closing Date to each
Purchaser:

                  (a)      Subsidiaries. All of the subsidiaries of the Company
         are set forth on Schedule 3.1(a). The Company owns, directly or
         indirectly, all of the capital stock or other equity interests of each
         Subsidiary free and clear of any Liens, and all the issued and
         outstanding shares of capital stock of each Subsidiary are validly
         issued and are fully paid, non-assessable and free of preemptive and
         similar rights to subscribe for or purchase securities. If the Company
         has no subsidiaries, then references in the Transaction Documents to
         the Subsidiaries will be disregarded.

                  (b)      Organization and Qualification. Each of the Company
         and the Subsidiaries is an entity duly incorporated or otherwise
         organized, validly existing and in good standing under the laws of the
         jurisdiction of its incorporation or organization (as applicable), with
         the requisite power and authority to own and use its properties and
         assets and to carry on its business as currently conducted. Neither the
         Company nor any Subsidiary is in violation or default of any of the
         provisions of its respective certificate or articles of incorporation,
         bylaws or other organizational or charter documents. Each of the
         Company and the Subsidiaries is duly qualified to conduct business and
         is in good standing as a foreign corporation or other entity in each
         jurisdiction in which the nature of the business conducted or property
         owned by it makes such qualification necessary, except where the
         failure to be so qualified or in good standing, as the case may be,
         could not have or reasonably be expected to result in (i) a material
         adverse effect on the legality, validity or enforceability of any
         Transaction Document, (ii) a material adverse effect on the results of
         operations, assets, business or financial condition of the Company and
         the Subsidiaries, taken as a whole, or (iii) a material adverse effect
         on the Company's ability to perform in any material respect on a timely
         basis its obligations under any Transaction Document (any of (i), (ii)
         or (iii), a "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.

                                       6
<PAGE>

                  (c)      Authorization; Enforcement. The Company has the
         requisite corporate power and authority to enter into and to consummate
         the transactions contemplated by each of the Transaction Documents and
         otherwise to carry out its obligations thereunder. The execution and
         delivery of each of the Transaction Documents by the Company and the
         consummation by it of the transactions contemplated thereby have been
         duly authorized by all necessary action on the part of the Company and
         no further action is required by the Company in connection therewith
         other than in connection with the Required Approvals. Each Transaction
         Document has been (or upon delivery will have been) duly executed by
         the Company and, when delivered in accordance with the terms hereof,
         will constitute the valid and binding obligation of the Company
         enforceable against the Company in accordance with its terms except (i)
         as limited by applicable bankruptcy, insolvency, reorganization,
         moratorium and other laws of general application affecting enforcement
         of creditors' rights generally and (ii) as limited by laws relating to
         the availability of specific performance, injunctive relief or other
         equitable remedies and (iii) insofar as indemnification and
         contribution provisions may be limited by applicable law.

                  (d)      No Conflicts. The execution, delivery and performance
         of the Transaction Documents by the Company, the issuance and sale of
         the Securities and the consummation by the Company of the other
         transactions contemplated thereby do not and will not (i) conflict with
         or violate any provision of the Company's or any Subsidiary's
         certificate or articles of incorporation, bylaws or other
         organizational or charter documents currently in effect, or (ii)
         conflict with, or constitute a default (or an event that with notice or
         lapse of time or both would become a default) under, result in the
         creation of any Lien upon any of the properties or assets of the
         Company or any Subsidiary, or give to others any rights of termination,
         amendment, acceleration or cancellation (with or without notice, lapse
         of time or both) of, any agreement, credit facility, debt or other
         instrument (evidencing a Company or Subsidiary debt or otherwise) or
         other understanding to which the Company or any Subsidiary currently is
         a party or by which any property or asset of the Company or any
         Subsidiary currently is bound or affected, or (iii) subject to the
         Required Approvals, conflict with or result in a violation of any law,
         rule, regulation, order, judgment, injunction, decree or other
         restriction of any court or governmental authority to which the Company
         or a Subsidiary currently is subject (including federal and state
         securities laws and regulations), or by which any property or asset of
         the Company or a Subsidiary currently is bound or affected, or (iv)
         conflict with or violate the terms of any agreement by which the
         Company or any Subsidiary currently is bound or to which any property
         or asset of the Company or any Subsidiary currently is bound or
         affected; except in the case of each of clauses (ii) and (iii), such as
         could not have or reasonably be expected to result in a Material
         Adverse Effect.

                  (e)      Filings, Consents and Approvals. The Company is not
         required to obtain any consent, waiver, authorization or order of, give
         any notice to, or make any filing or registration with, any court or
         other federal, state, local or other governmental authority or other
         Person in connection with the execution, delivery and performance by
         the Company of the Transaction Documents, other than (i) filings
         required pursuant to Section 4.4 of this Agreement, (ii) the filing
         with the Commission of the Registration Statement, (iii) application(s)
         to each applicable Trading Market for the listing of the

                                       7
<PAGE>

         Shares and Warrant Shares for trading thereon in the time and manner
         required thereby, and (iv) the filing of Form D with the Commission and
         such filings as are required to be made under applicable state
         securities laws (collectively, the "Required Approvals").

                  (f)      Issuance of the Securities. The Securities are duly
         authorized and, when issued and paid for in accordance with the
         Transaction Documents, will be duly and validly issued, fully paid and
         nonassessable, free and clear of all Liens. The issuance of the Shares
         is not subject to any preemptive or similar rights to subscribe for or
         purchase securities. The Company has reserved from its duly authorized
         capital stock the maximum number of shares of Common Stock issuable
         pursuant to this Agreement and the Warrants.

                  (g)      Capitalization. The capitalization of the Company is
         as described in the Company's most recent periodic report filed with
         the Commission. The Company has not issued any capital stock since such
         filing other than pursuant to the exercise of employee stock options
         under the Company's stock option plans, the issuance of shares of
         Common Stock to employees pursuant to the Company's employee stock
         purchase plan and pursuant to the conversion or exercise of outstanding
         Common Stock Equivalents outstanding. No Person has any right of first
         refusal, preemptive right, right of participation, or any similar right
         to participate in the transactions contemplated by the Transaction
         Documents. Except as a result of the purchase and sale of the
         Securities or in connection with the granting of options to employees,
         officers and directors of the Company pursuant to any stock option plan
         duly adopted by the Board of Directors of the Company, there are no
         outstanding options, warrants, script rights to subscribe to, calls or
         commitments of any character whatsoever relating to, or securities,
         rights or obligations convertible into or exchangeable for, or giving
         any Person any right to subscribe for or acquire, any shares of Common
         Stock, or contracts, commitments, understandings or arrangements by
         which the Company or any Subsidiary is or may become bound to issue
         additional shares of Common Stock, or securities or rights convertible
         or exchangeable into shares of Common Stock. The issue and sale of the
         Securities will not obligate the Company to issue shares of Common
         Stock or other securities to any Person (other than the Purchasers) and
         will not result in a right of any holder of Company securities to
         adjust the exercise, conversion, exchange or reset price under such
         securities. All of the outstanding shares of capital stock of the
         Company are validly issued, fully paid and nonassessable, have been
         issued in compliance with all federal and state securities laws, and
         none of such outstanding shares was issued in violation of any
         preemptive rights or similar rights to subscribe for or purchase
         securities. No further approval or authorization of any stockholder,
         the Board of Directors of the Company or others is required for the
         issuance and sale of the Shares. Except as disclosed in the SEC
         Reports, there are no stockholders agreements, voting agreements or
         other similar agreements with respect to the Company's capital stock to
         which the Company is a party or, to the knowledge of the Company,
         between or among any of the Company's stockholders.

                  (h)      SEC Reports; Financial Statements. The Company has
         filed all reports required to be filed by it under the Securities Act
         and the Exchange Act, including pursuant to Section 13(a) or 15(d)
         thereof, for the two years preceding the date hereof (or such shorter
         period as the Company was required by law to file such material) (the

                                       8
<PAGE>

         foregoing materials, including the exhibits thereto, being collectively
         referred to herein as the "SEC Reports") on a timely basis or has
         received a valid extension of such time of filing and has filed any
         such SEC Reports prior to the expiration of any such extension. As of
         their respective dates, the SEC Reports complied in all material
         respects with the requirements of the Securities Act and the Exchange
         Act and the rules and regulations of the Commission promulgated
         thereunder, and none of the SEC Reports, when filed, contained any
         untrue statement of a material fact or omitted to state a material fact
         required to be stated therein or necessary in order to make the
         statements therein, in light of the circumstances under which they were
         made, not misleading. The financial statements of the Company included
         in the SEC Reports complied in all material respects with applicable
         accounting requirements and the rules and regulations of the Commission
         with respect thereto as in effect at the time of filing. Such financial
         statements have been prepared in accordance with United States
         generally accepted accounting principles applied on a consistent basis
         during the periods involved ("GAAP"), except as may be otherwise
         specified in such financial statements or the notes thereto and except
         that unaudited financial statements may not contain all footnotes
         required by GAAP, and fairly present in all material respects the
         financial position of the Company and its consolidated subsidiaries as
         of and for the dates thereof and the results of operations and cash
         flows for the periods then ended, subject, in the case of unaudited
         statements, to normal, immaterial, year-end audit adjustments.

                  (i)      Material Changes. Except as set forth in the SEC
         Reports, since the date of the latest audited financial statements
         included within the SEC Reports, except as disclosed in the SEC
         Reports, (i) there has been no event, occurrence or development that
         has had or that could reasonably be expected to result in a Material
         Adverse Effect, (ii) the Company has not incurred any liabilities
         (contingent or otherwise) other than (A) trade payables and accrued
         expenses incurred in the ordinary course of business consistent with
         past practice and (B) liabilities not required to be reflected in the
         Company's financial statements pursuant to GAAP or required to be
         disclosed in filings made with the Commission, (iii) the Company has
         not altered its method of accounting, (iv) the Company has not declared
         or made any dividend or distribution of cash or other property to its
         stockholders or purchased, redeemed or made any agreements to purchase
         or redeem any shares of its capital stock and (v) the Company has not
         issued any equity securities to any officer, director or Affiliate,
         except pursuant to existing Company stock option plans. The Company
         does not have pending before the Commission any request for
         confidential treatment of information.

                  (j)      Litigation. Except as disclosed in the SEC Reports,
         there is no action, suit, inquiry, notice of violation, proceeding or
         investigation pending or, to the knowledge of the Company, threatened
         against or affecting the Company, any Subsidiary or any of their
         respective properties before or by any court, arbitrator, governmental
         or administrative agency or regulatory authority (federal, state,
         county, local or foreign) (collectively, an "Action") which (i)
         adversely affects or challenges the legality, validity or
         enforceability of any of the Transaction Documents or the Securities or
         (ii) could, if there were an unfavorable decision, have or reasonably
         be expected to result in a Material Adverse Effect. Except as disclosed
         in the SEC Reports, neither the Company nor any Subsidiary, nor any
         director or officer thereof, is or has been the subject of any Action

                                       9
<PAGE>

         involving a claim of violation of or liability under federal or state
         securities laws or a claim of breach of fiduciary duty. Except as
         disclosed in the SEC Reports, there has not been, and to the knowledge
         of the Company, there is not pending or contemplated, any investigation
         by the Commission involving the Company or any current or former
         director or officer of the Company. The Commission has not issued any
         stop order or other order suspending the effectiveness of any
         registration statement filed by the Company or any Subsidiary under the
         Exchange Act or the Securities Act.

                  (k)      Labor Relations. No material labor dispute exists or,
         to the knowledge of the Company, is imminent with respect to any of the
         employees of the Company which could reasonably be expected to result
         in a Material Adverse Effect.

                  (l)      Compliance. Except as disclosed in the SEC Reports,
         neither the Company nor any Subsidiary (i) is in default under or in
         violation of (and no event has occurred that has not been waived that,
         with notice or lapse of time or both, would result in a default by the
         Company or any Subsidiary under), nor has the Company or any Subsidiary
         received notice of a claim that it is in default under or that it is in
         violation of, any indenture, loan or credit agreement or any other
         agreement or instrument to which it is a party or by which it or any of
         its properties is bound (whether or not such default or violation has
         been waived), (ii) is in violation of any order of any court,
         arbitrator or governmental body, or (iii) is or has been in violation
         of any statute, rule or regulation of any governmental authority,
         including without limitation all foreign, federal, state and local laws
         applicable to its business except in each case as could not have a
         Material Adverse Effect.

                  (m)      Regulatory Permits. The Company and the Subsidiaries
         possess all certificates, authorizations and permits issued by the
         appropriate federal, state, local or foreign regulatory authorities
         necessary to conduct their respective businesses as described in the
         SEC Reports, except where the failure to possess such permits could not
         have or reasonably be expected to result in a Material Adverse Effect
         ("Material Permits"), and neither the Company nor any Subsidiary has
         received any notice of proceedings relating to the revocation or
         modification of any Material Permit.

                  (n)      Title to Assets. Except as set forth in the SEC
         Reports, the Company and the Subsidiaries have good and marketable
         title in fee simple to all real property owned by them that is material
         to the business of the Company and the Subsidiaries and good and
         marketable title in all personal property owned by them that is
         material to the business of the Company and the Subsidiaries, in each
         case free and clear of all Liens, except for Liens as do not materially
         affect the value of such property and do not materially interfere with
         the use made and proposed to be made of such property by the Company
         and the Subsidiaries and Liens for the payment of federal, state or
         other taxes, the payment of which is neither delinquent nor subject to
         penalties. Any real property and facilities held under lease by the
         Company and the Subsidiaries are held by them under valid, subsisting
         and enforceable leases of which the Company and the Subsidiaries are in
         compliance.

                                       10
<PAGE>

                  (o)      Patents and Trademarks. To the knowledge of the
         Company and each Subsidiary, the Company and the Subsidiaries have, or
         have rights to use, all patents, patent applications, trademarks,
         trademark applications, service marks, trade names, copyrights,
         licenses and other similar rights that are necessary or material for
         use in connection with their respective businesses as described in the
         SEC Reports and which the failure to so have could have or reasonably
         be expected to result in a Material Adverse Effect (collectively, the
         "Intellectual Property Rights"). Except as disclosed in the SEC
         Reports, neither the Company nor any Subsidiary has received a written
         notice that the Intellectual Property Rights used by the Company or any
         Subsidiary violates or infringes upon the rights of any Person. To the
         knowledge of the Company, all such Intellectual Property Rights are
         enforceable and do not violate or infringe the Intellectual Property
         Rights of others.

                  (p)      Insurance. The Company and the Subsidiaries are
         insured by insurers of recognized financial responsibility against such
         losses and risks and in such amounts as are prudent and customary in
         the businesses in which the Company and the Subsidiaries are engaged.
         Neither the Company nor any Subsidiary has any reason to believe that
         it will not be able to renew its existing insurance coverage as and
         when such coverage expires or to obtain similar coverage from similar
         insurers as may be necessary to continue its business without a
         significant increase in cost.

                  (q)      Transactions With Affiliates and Employees. Except as
         set forth in the SEC Reports, none of the officers or directors of the
         Company and, to the knowledge of the Company, none of the employees of
         the Company is presently a party to any transaction with the Company or
         any Subsidiary (other than for services as employees, officers and
         directors), including any contract, agreement or other arrangement
         providing for the furnishing of services to or by, providing for rental
         of real or personal property to or from, or otherwise requiring
         payments to or from any officer, director or such employee or, to the
         knowledge of the Company, any entity in which any officer, director, or
         any such employee has a substantial interest or is an officer,
         director, trustee or partner, in each case in excess of $60,000 other
         than (i) for payment of salary or consulting fees for services
         rendered, (ii) reimbursement for expenses incurred on behalf of the
         Company and (iii) for other employee benefits, including stock option
         agreements under any stock option plan of the Company.

                  (r)      Internal Accounting Controls. The Company and each of
         the Subsidiaries maintains a system of internal accounting controls
         sufficient to provide reasonable assurance 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 conformity with GAAP 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. The Company has established disclosure
         controls and procedures (as defined in Exchange Act Rules 13a-14 and
         15d-14) for the Company and designed such disclosure controls and
         procedures to ensure that material information relating to the Company,
         including the Subsidiaries, is made known to the certifying officers by
         others

                                       11
<PAGE>

         within those entities, particularly during the period in which the
         Company's most recently filed period report under the Exchange Act, as
         the case may be, is being prepared. The Company's certifying officers
         have evaluated the effectiveness of the Company's controls and
         procedures as of a date within 90 days prior to the filing date of the
         most recently filed periodic report under the Exchange Act (such date,
         the "Evaluation Date"). The Company presented in its most recently
         filed periodic report under the Exchange Act the conclusions of the
         certifying officers about the effectiveness of the disclosure controls
         and procedures based on their evaluations as of the Evaluation Date.
         Since the Evaluation Date, there have been no significant changes in
         the Company's internal controls (as such term is defined in Item 307(b)
         of Regulation S-K under the Exchange Act) or, to the Company's
         knowledge, in other factors that could significantly affect the
         Company's internal controls. The Company maintains and will continue to
         maintain a standard system of accounting established and administered
         in accordance with GAAP and the applicable requirements of the Exchange
         Act.

                  (s)      Certain Fees. No brokerage or finder's fees or
         commissions are or will be payable by the Company to any broker,
         financial advisor or consultant, finder, placement agent, investment
         banker, bank or other Person with respect to the transactions
         contemplated by this Agreement, other than to Roth Capital Partners,
         LLC. The Purchasers shall have no obligation with respect to any fees
         or with respect to any claims made by or on behalf of other Persons for
         fees of a type contemplated in this Section that may be due in
         connection with the transactions contemplated by this Agreement.

                  (t)      Private Placement. Assuming the accuracy of the
         Purchasers representations and warranties set forth in Section 3.2, no
         registration under the Securities Act is required for the offer and
         sale of the Securities by the Company to the Purchasers as contemplated
         hereby. The issuance and sale of the Securities hereunder does not
         contravene the rules and regulations of the Trading Market.

                  (u)      Investment Company. The Company is not, and is not an
         Affiliate of, and immediately after receipt of payment for the Shares,
         will not be or be an Affiliate of, an "investment company" within the
         meaning of the Investment Company Act of 1940, as amended. The Company
         shall conduct its business in a manner so that it will not become
         subject to the Investment Company Act.

                  (v)      Registration Rights. No Person has any right to cause
         the Company to effect the registration under the Securities Act of any
         securities of the Company.

                  (w)      Listing and Maintenance Requirements. The Company's
         Common Stock is registered pursuant to Section 12(g) of the Exchange
         Act, and the Company has taken no action designed to, or which to its
         knowledge is likely to have the effect of, terminating the registration
         of the Common Stock under the Exchange Act nor has the Company received
         any notification that the Commission is contemplating terminating such
         registration. Except as set forth in the SEC Reports, the Company has
         not, in the 12 months preceding the date hereof, received notice from
         any Trading Market on which the Common Stock is or has been listed or
         quoted to the effect that the Company is not in compliance with the
         listing or maintenance requirements of such Trading Market.

                                       12
<PAGE>

                  (x)      Application of Takeover Protections. The Company and
         its Board of Directors have taken all necessary action, if any, in
         order to render inapplicable any control share acquisition, business
         combination, poison pill (including any distribution under a rights
         agreement) or other similar anti-takeover provision under the Company's
         Certificate of Incorporation (or similar charter documents) or the laws
         of its state of incorporation that is or could become applicable to the
         Purchasers as a result of the Purchasers and the Company fulfilling
         their obligations or exercising their rights under the Transaction
         Documents, including without limitation the Company's issuance of the
         Securities and the Purchasers' ownership of the Securities.

                  (y)      Disclosure. Other than the terms of the transaction
         contemplated by this Agreement, the Company confirms that, neither the
         Company nor any other Person acting on its behalf has provided any of
         the Purchasers or their agents or counsel with any information that
         constitutes or might constitute material, non-public information;
         provided, however, that the Company makes no representation with
         respect to any information provided to the Purchasers by Roth Capital
         Partners, LLC. The Company understands and confirms that the Purchasers
         will rely on the foregoing representations and covenants in effecting
         transactions in securities of the Company. All disclosure provided to
         the Purchasers regarding the Company, its business and the transactions
         contemplated hereby, including the Disclosure Schedules to this
         Agreement, furnished by or on behalf of the Company are true and
         correct and do not contain any untrue statement of a material fact or
         omit to state any material fact necessary in order to make the
         statements made therein, in light of the circumstances under which they
         were made, not misleading.

                  (z)      No Integrated Offering. Assuming the accuracy of the
         Purchasers' representations and warranties set forth in Section 3.2,
         neither the Company, nor any of its affiliates, nor any Person acting
         on its or their behalf has, directly or indirectly, made any offers or
         sales of any security or solicited any offers to buy any security,
         under circumstances that would cause this offering of the Securities to
         be integrated with prior offerings by the Company for purposes of the
         Securities Act or any applicable shareholder approval provisions,
         including, without limitation, under the rules and regulations of any
         exchange or automated quotation system on which any of the securities
         of the Company are listed or designated.

                  (aa)     Solvency. Based on the financial condition of the
         Company as of the Closing Date after giving effect to the receipt by
         the Company of the proceeds from the sale of the Securities hereunder,
         (i) the Company's fair saleable value of its assets exceeds the amount
         that will be required to be paid on or in respect of the Company's
         existing debts and other liabilities (including known contingent
         liabilities) as they mature; (ii) the Company's assets do not
         constitute unreasonably small capital to carry on its business for the
         current fiscal year as now conducted and as proposed to be conducted
         including its capital needs taking into account the particular capital
         requirements of the business conducted by the Company, and projected
         capital requirements and capital availability thereof; and (iii) the
         current cash flow of the Company, together with the proceeds the
         Company would receive, were it to liquidate all of its assets, after
         taking into account all anticipated uses of the cash, would be
         sufficient to pay all amounts on or

                                       13
<PAGE>

         in respect of its debt when such amounts are required to be paid. The
         Company does not intend to incur debts beyond its ability to pay such
         debts as they mature (taking into account the timing and amounts of
         cash to be payable on or in respect of its debt).

                  (bb)     Form S-3 Eligibility. The Company is eligible to
         register the resale of its Common Stock by the Purchasers under Form
         S-3 promulgated under the Securities Act and the Company hereby
         covenants and agrees to use its commercially reasonable best efforts to
         maintain its eligibility to use Form S-3 until the Registration
         Statement covering the resale of the Shares shall have been filed with,
         and declared effective by, the Commission.

                  (cc)     Taxes. Except for matters that would not,
         individually or in the aggregate, have or reasonably be expected to
         result in a Material Adverse Effect, the Company and each Subsidiary
         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 or any Subsidiary.

                  (dd)     General Solicitation. Neither the Company nor any
         person acting on behalf of the Company has offered or sold any of the
         Shares by any form of general solicitation or general advertising. The
         Company has offered the Shares for sale only to the Purchasers and
         certain other "accredited investors" within the meaning of Rule 501
         under the Securities Act.

                  (ee)     Foreign Corrupt Practices. Neither the Company, nor
         to the knowledge of the Company, any agent or other person acting on
         behalf of the Company, has (i) directly or indirectly, used any corrupt
         funds for unlawful contributions, gifts, entertainment or other
         unlawful expenses related to foreign or domestic political activity,
         (ii) made any unlawful payment to foreign or domestic government
         officials or employees or to any foreign or domestic political parties
         or campaigns from corporate funds, (iii) failed to disclose fully any
         contribution made by the Company (or made by any person acting on its
         behalf of which the Company is aware) which is in violation of law, or
         (iv) violated in any material respect any provision of the Foreign
         Corrupt Practices Act of 1977, as amended.

                  (ff)     Accountants. To the Company's knowledge,
         PriceWaterhouseCoopers LLP, the Company's accountants, who the Company
         expects will express their opinion with respect to the financial
         statements to be included in the Company's Annual Report on Form 10-K
         for the year ended December 31, 2003, are independent accountants as
         required by the Securities Act and the rules and regulations
         promulgated thereunder.

                  (gg)     Acknowledgment Regarding Purchasers' Purchase of
         Shares. The Company acknowledges and agrees that each of the Purchasers
         is acting solely in the capacity of an arm's length purchaser with
         respect to the Transaction Documents and the transactions contemplated
         hereby. The Company further acknowledges that no Purchaser is acting as
         a financial advisor or fiduciary of the Company (or in any similar
         capacity) with respect to this Agreement and the transactions
         contemplated hereby and any advice

                                       14
<PAGE>

         given by any Purchaser or any of their respective representatives or
         agents in connection with this Agreement and the transactions
         contemplated hereby is merely incidental to the Purchasers' purchase of
         the Shares. The Company further represents to each Purchaser that the
         Company's decision to enter into this Agreement has been based solely
         on the independent evaluation of the transactions contemplated hereby
         by the Company and its representatives.

         3.2      Representations and Warranties of the Purchasers. Each
Purchaser hereby, for itself and for no other Purchaser, represents and warrants
as of the date hereof and as of the Closing Date to the Company as follows:

                  (a)      Organization; Authority. Such Purchaser is an entity
         duly organized, validly existing and in good standing under the laws of
         the jurisdiction of its organization with full right, corporate or
         partnership power and authority to enter into and to consummate the
         transactions contemplated by the Transaction Documents and otherwise to
         carry out its obligations thereunder. The execution, delivery and
         performance by such Purchaser of the transactions contemplated by the
         Transaction Agreements have been duly authorized by all necessary
         corporate or similar action on the part of such Purchaser. Each
         Transaction Document to which it is party has been duly executed by
         such Purchaser, and when delivered by such Purchaser in accordance with
         the terms hereof, will constitute the valid and legally binding
         obligation of such Purchaser, enforceable against it in accordance with
         its terms, except (i) as limited by general equitable principles and
         applicable bankruptcy, insolvency, reorganization, moratorium and other
         laws of general application affecting enforcement of creditors' rights
         generally, (ii) as limited by laws relating to the availability of
         specific performance, injunctive relief or other equitable remedies and
         (iii) insofar as indemnification and contribution provisions may be
         limited by applicable law.

                  (b)      Investment Intent. Such Purchaser understands that
         the Securities are "restricted securities" and have not been registered
         under the Securities Act or any applicable state securities law and is
         acquiring the Securities as principal for its own account for
         investment purposes only and not with a view to or for distributing or
         reselling such Securities or any part thereof, has no present intention
         of distributing any of such Securities and has no arrangement or
         understanding with any other persons regarding the distribution of such
         Securities (this representation and warranty not limiting such
         Purchaser's right to sell the Securities pursuant to the Registration
         Statement or otherwise in compliance with applicable federal and state
         securities laws). Such Purchaser is acquiring the Securities hereunder
         in the ordinary course of its business. Such Purchaser does not have
         any agreement or understanding, directly or indirectly, with any Person
         to distribute any of the Securities (this representation and warranty
         not limiting such Purchaser's right to sell the Securities pursuant to
         the Registration Statement or otherwise in compliance with applicable
         federal and state securities laws).

                  (c)      Purchaser Status. At the time such Purchaser was
         offered the Securities, it was, and at the date hereof and on the
         Closing Date it is an "accredited investor" as defined in Rule 501(a)
         under the Securities Act. Such Purchaser is not required to be
         registered as a broker-dealer under Section 15 of the Exchange Act.

                                       15
<PAGE>

                  (d)      Experience of Such Purchaser. Such Purchaser, either
         alone or together with its representatives, has such knowledge,
         sophistication and experience in business and financial matters so as
         to be capable of evaluating the merits and risks of the prospective
         investment in the Securities, and has so evaluated the merits and risks
         of such investment. Such Purchaser is able to bear the economic risk of
         an investment in the Securities and, at the present time, is able to
         afford a complete loss of such investment.

                  (e)      General Solicitation. Such Purchaser is not
         purchasing the Securities as a result of any advertisement, article,
         notice or other communication regarding the Securities published in any
         newspaper, magazine or similar media or broadcast over television or
         radio or presented at any seminar or any other general solicitation or
         general advertisement.

         The Company acknowledges and agrees that each Purchaser does not make
or has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in this
Section 3.2.

                                   ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

         4.1      Transfer Restrictions.

                  (a)      The Securities may only be disposed of in compliance
         with state and federal securities laws. In connection with any transfer
         of Securities, other than pursuant to an effective registration
         statement or Rule 144 (as to any transfer pursuant to Rule 144,
         provided that the holder thereof provides the Company with such
         documents as may be reasonably requested by the Company to give effect
         to the transfer and comply with applicable laws), to the Company or to
         an Affiliate of a Purchaser, the Company may require the transferor
         thereof to provide to the Company an opinion of counsel selected by the
         transferor, the form and substance of which opinion shall be reasonably
         satisfactory to the Company, to the effect that such transfer does not
         require registration of such transferred Securities under the
         Securities Act. As a condition of transfer, any such transferee shall
         agree in writing to be bound by the terms of this Agreement and shall
         have the rights of a Purchaser under this Agreement and the
         Registration Rights Agreement.

                  (b)      The Purchasers agree to the imprinting, so long as is
         required by this Section 4.1(b), of a legend on any of the Securities
         in the following form:

                  THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES
                  AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
                  STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
                  THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
                  AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
                  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
                  ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A

                                       16
<PAGE>

                  TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
                  THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
                  SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
                  THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
                  REASONABLY ACCEPTABLE TO THE COMPANY.

                  The Company acknowledges and agrees that a Purchaser may from
         time to time pledge pursuant to a bona fide margin agreement with a
         registered broker-dealer or grant a security interest in some or all of
         the Securities to a financial institution that is an "accredited
         investor" as defined in Rule 501(a) under the Securities Act and who
         agrees to be bound by the provisions of this Agreement and the
         Registration rights Agreement and, if required under the terms of such
         arrangement, such Purchaser may transfer pledged or secured Securities
         to the pledgees or secured parties. Such a pledge or transfer would not
         be subject to approval of the Company and no legal opinion of legal
         counsel of the pledgee, secured party or pledgor shall be required in
         connection therewith. Further, no notice shall be required of such
         pledge. At the appropriate Purchaser's expense, the Company will
         execute and deliver such reasonable documentation as a pledgee or
         secured party of Securities may reasonably request in connection with a
         pledge or transfer of the Securities, including, if the Securities are
         subject to registration pursuant to the Registration Rights Agreement,
         the preparation and filing of any required post-effective amendment to
         the Registration Statement to appropriately amend the list of Selling
         Stockholders thereunder.

                  (c)      The Company shall, upon request and subject to
         Section 4(e) below, and assuming the Purchaser is not an Affiliate of
         the Company, promptly reissue certificates evidencing the Shares and
         Warrant Shares without any legend (including the legend set forth in
         Section 4.1(b)), (i) while a registration statement (including the
         Registration Statement) covering the resale of such security is
         effective under the Securities Act, or (ii) following any sale of such
         Shares or Warrant Shares pursuant to Rule 144, provided that the holder
         thereof provides the Company with such documents as may be reasonably
         requested by the Company to give effect to the transfer and comply with
         applicable laws, or (iii) if such Shares or Warrant Shares are eligible
         for sale under Rule 144(k), or (iv) if, in the opinion of counsel to
         the Company, such legend is not required under applicable requirements
         of the Securities Act (including judicial interpretations and
         pronouncements issued by the Staff of the Commission). The Company
         shall cause its counsel (which may be in-house counsel) to issue a
         legal opinion to the Company's transfer agent promptly after the
         Effective Date if required by the Company's transfer agent to effect
         the removal of the legend hereunder. Subject to the foregoing, if all
         or any portion of a Warrant is exercised at a time when there is an
         effective registration statement to cover the resale of the Warrant
         Shares, such Warrant Shares shall be issued free of all legends. The
         Company agrees that following the Effective Date or at such time as
         such legend is no longer required under this Section 4.1(c), it will
         promptly, but in no event later than five Trading Days following the
         delivery by a Purchaser to the Company or the Company's transfer agent
         of a certificate representing Shares or Warrant Shares, as the case may
         be, issued with a restrictive legend and, if the sale or transfer is
         made pursuant to Rule 144, any other required documentation that are
         reasonable and customary for

                                       17
<PAGE>

         such sales or transfers (such fifth Trading Day after such delivery,
         the "Legend Removal Date"), deliver or cause to be delivered to such
         Purchaser a certificate representing such Securities that is free from
         all restrictive and other legends, unless the Purchaser is an Affiliate
         of the Company. Unless the Purchaser is an Affiliate of the Company,
         the Company may not make any notation on its records or give
         instructions to any transfer agent of the Company that enlarge the
         restrictions on transfer set forth in this Section.

                  (d)      In addition to such Purchaser's other available
         remedies, the Company shall pay to a Purchaser, in cash, as liquidated
         damages and not as a penalty, for each $1,000 of Shares or Warrant
         Shares (based on the Closing Price of the Common Stock on the date such
         Securities are submitted to the Company's transfer agent) subject to
         Section 4.1(c), $5 per Trading Day (increasing to $10 per Trading Day
         five (5) Trading Days after such damages have begun to accrue) for each
         Trading Day after the fifth Trading Day following the Legend Removal
         Date until such certificate is delivered. Nothing herein shall limit
         such Purchaser's right to pursue actual damages for the Company's
         failure to deliver certificates representing any Securities as required
         by the Transaction Documents, and such Purchaser shall have the right
         to pursue all remedies available to it at law or in equity including,
         without limitation, a decree of specific performance and/or injunctive
         relief.

                  (e)      Each Purchaser, severally and not jointly with the
         other Purchasers, agrees that the removal of the restrictive legend
         from certificates representing Securities as set forth in this Section
         4.1 is predicated upon the Company's reliance that the Purchaser will
         sell any Securities pursuant to either the registration requirements of
         the Securities Act, including any applicable prospectus delivery
         requirements, or an exemption therefrom.

         4.2      Furnishing of Information. As long as any Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. As long as any Purchaser owns Securities, if the Company is not
required to file reports pursuant to the Exchange Act, it will prepare and
furnish to the Purchasers and make publicly available in accordance with Rule
144(c) such information as is required for the Purchasers to sell the Securities
under Rule 144. The Company further covenants that it will take such further
action as any holder of Securities may reasonably request, all to the extent
required from time to time to enable such Person to sell such Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144.

         4.3      Integration. The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers or that
would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction unless
shareholder approval is obtained before the closing of such subsequent
transaction.

                                       18
<PAGE>

         4.4      Securities Laws Disclosure; Publicity. The Company shall, by
8:30 a.m. Eastern time on the Trading Day following the Closing Date, issue a
press release or file a Current Report on Form 8-K, in each case reasonably
acceptable to each Purchaser disclosing the transactions contemplated hereby.
The Company and each Purchaser shall consult with each other in issuing any
press releases with respect to the transactions contemplated hereby, and neither
the Company nor any Purchaser shall issue any such press release or otherwise
make any such public statement without the prior consent of the Company, with
respect to any press release of any Purchaser, or without the prior consent of
each Purchaser, with respect to any press release of the Company, which consent
shall not unreasonably be withheld, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
the registration statement contemplated by the Registration Rights Agreement and
(ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii) and (iii) except
that the Transaction Documents will be filed with the Company's SEC Reports.
Notwithstanding anything herein to the contrary, any party to this Agreement
(and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure; provided, however, that such disclosure may not be made to the extent
reasonably necessary to comply with any applicable federal or state securities
laws. For the purposes of the foregoing sentence, (i) the "tax treatment" of a
transaction means the purported or claimed federal income tax treatment of the
transaction, and (ii) the "tax structure" of a transaction means any fact that
may be relevant to understanding the purported or claimed federal income tax
treatment of the transaction.

         4.5      Shareholders Rights Plan. No claim will be made or enforced by
the Company or, to the knowledge of the Company, any other Person that any
Purchaser is an "Acquiring Person" under any shareholders rights plan or similar
plan or arrangement in effect or hereafter adopted by the Company, or that any
Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers. The Company
shall conduct its business in a manner so that it will not become subject to the
Investment Company Act.

         4.6      Non-Public Information. The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.

         4.7      Use of Proceeds. Except as set forth on Schedule 4.7 attached
hereto, the Company shall use the net proceeds from the sale of the Securities
hereunder for working capital

                                       19
<PAGE>

purposes and not for the satisfaction of any portion of the Company's debt
(other than payment of trade payables in the ordinary course of the Company's
business and prior practices and periodic installment payments under outstanding
indebtedness), to redeem any Company equity or equity-equivalent securities or
to settle any outstanding litigation.

         4.8      Indemnification of Purchasers.

                  (a)      The Company will indemnify and hold the Purchasers
         and their directors, officers, shareholders, partners, employees and
         agents (each, a "Purchaser Party") harmless from any and all losses,
         liabilities, obligations, claims, contingencies, damages, costs and
         expenses, including all judgments, amounts paid in settlements, court
         costs and reasonable attorneys' fees and costs of investigation that
         any such Purchaser Party may suffer or incur as a result of or relating
         to: (a) any misrepresentation, breach or inaccuracy on the part of the
         Company of any of the representations, warranties, covenants or
         agreements made by the Company in this Agreement or in the other
         Transaction Documents; or (b) any cause of action, suit or claim
         brought or made against such Purchaser Party and arising solely out of
         or solely resulting from the Purchaser's execution, delivery,
         performance or enforcement of this Agreement or any of the other
         Transaction Documents, other than directly resulting from the gross
         negligence or willful misconduct of the Purchasers. The Company will
         reimburse such Purchaser for its reasonable legal and other expenses
         (including the cost of any investigation, preparation and travel in
         connection therewith) incurred in connection therewith, as such
         expenses are incurred.

                  (b)      Promptly after receipt by any Purchaser Party (the
         "Indemnified Person") of notice of any demand, claim or circumstances
         which would or might give rise to a claim or the commencement of any
         action, proceeding or investigation in respect of which indemnity may
         be sought pursuant to Section 4.8, such Indemnified Person shall
         promptly notify the Company in writing and the Company shall assume the
         defense thereof, including the employment of counsel reasonably
         satisfactory to such Indemnified Person, and shall assume the payment
         of all fees and expenses; provided, however, that the failure of any
         Indemnified Person so to notify the Company shall not relieve the
         Company of its obligations hereunder except to the extent that the
         Company is materially prejudiced by such failure to notify. In any such
         proceeding, any Indemnified Person shall have the right to retain its
         own counsel, but the fees and expenses of such counsel shall be at the
         expense of such Indemnified Person unless: (i) the Company and the
         Indemnified Person shall have mutually agreed to the retention of such
         counsel; or (ii) in the reasonable judgment of counsel to such
         Indemnified Person representation of both parties by the same counsel
         would be inappropriate due to actual or potential differing interests
         between them. The Company shall not be liable for any settlement of any
         proceeding effected without its written consent, which consent shall
         not be unreasonably withheld, but if settled with such consent, or if
         there be a final judgment for the plaintiff, the Company shall
         indemnify and hold harmless such Indemnified Person from and against
         any loss or liability (to the extent stated above) by reason of such
         settlement or judgment. Without the prior written consent of the
         Indemnified Person, which consent shall not be unreasonably withheld,
         the Company shall not effect any settlement of any pending or
         threatened proceeding in respect of which any Indemnified Person is or
         could

                                       20
<PAGE>

         have been a party and indemnity could have been sought hereunder by
         such Indemnified Party, unless such settlement includes an
         unconditional release of such Indemnified Person from all liability
         arising out of such proceeding.

         4.9      Reservation of Common Stock. As of the date hereof, the
Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of shares
of Common Stock for the purpose of enabling the Company to issue Shares pursuant
to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.

         4.10     Listing of Common Stock. The Company hereby agrees to use
commercially reasonable efforts to maintain the listing of the Common Stock on a
Trading Market, and as soon as reasonably practicable following the Closing (but
not later than the earlier of the Effective Date and the first anniversary of
the Closing Date) to list all of the Shares and Warrant Shares on such Trading
Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will include in such application
all of the Shares and Warrant Shares, and will take such other action as is
necessary to cause all of the Shares and Warrant Shares to be listed on such
other Trading Market as promptly as possible. The Company will take all action
reasonably necessary to continue the listing and trading of its Common Stock on
a Trading Market and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the Trading Market.

         4.11     Equal Treatment of Purchasers. No consideration shall be
offered or paid to any person to amend or consent to a waiver or modification of
any provision of any of the Transaction Documents unless the same consideration
is also offered to all of the parties to the Transaction Documents. For
clarification purposes, this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated separately by each Purchaser, and
is intended to treat for the Company the Purchasers as a class and shall not in
any way be construed as the Purchasers acting in concert or as a group with
respect to the purchase, disposition or voting of Securities or otherwise.

                                   ARTICLE V.
                                 MISCELLANEOUS

         5.1      Fees and Expenses. Except as otherwise set forth in this
Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the initial sale of the Securities to the
Purchasers.

         5.2      Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

                                       21
<PAGE>

         5.3      Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto prior to 6:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a
day that is not a Trading Day or later than 6:30 p.m. (New York City time) on
any Trading Day, (c) the second Trading Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the signature pages
attached hereto.

         5.4      Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and each Purchaser or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.

         5.5      Construction. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

         5.6      Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Purchaser. Any Purchaser may
assign any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees
in writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the "Purchasers".

         5.7      No Third-Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.8.

         5.8      Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of
the State of California, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of San Francisco. Each party hereto hereby

                                       22
<PAGE>

irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of San Francisco, California for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by delivering a copy thereof via overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereto (including its affiliates, agents, officers,
directors and employees) hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence an action or proceeding to
enforce any provisions of a Transaction Document, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its
attorneys' fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

         5.9      Survival. The representations and warranties herein shall
survive the Closing and delivery of the Shares and Warrant Shares.

         5.10     Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

         5.11     Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

         5.12     Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, required by the Company's transfer agent. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Securities.

                                       23
<PAGE>

         5.13     Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any
action for specific performance of any such obligation the defense that a remedy
at law would be adequate.

         5.14     Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser was introduced to the Company by Roth Capital Partners,
LLC, which has acted solely as agent for the Company and not for any Purchaser.
Each Purchaser has been represented by its own separate legal counsel in their
review and negotiation of the Transaction Documents. For reasons of
administrative convenience only, Purchasers and their respective counsel have
chosen to communicate with the Company through FW. FW does not represent all of
the Purchasers but only the placement agent, Roth Capital Partners, LLC. The
Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by the Purchasers.

                            (Signature Page Follows)

                                       24
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

FIRST VIRTUAL COMMUNICATIONS, INC.                        Address for Notice:

By: /s/ Truman Cole
    ----------------------------------------
    Name: Truman Cole
    Title: Chief Financial Officer                        Attn:
                                                          Tel:
                                                          Fax:
With copy to (which shall not constitute notice):

Cooley Godward LLP
4401 Eastgate Mall
San Diego, CA 92121-9109
Attn: Julie M. Robinson

With a copy to for benefit of Placement Agent:

                                                      Feldman Weinstein LLP
                                                      420 Lexington Avenue
                                                      New York, New York 10170
                                                      Attn: Robert F. Charron
                                                      Tel: (212) 869-7000
                                                      Fax: (212) 401-4741

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES FOR PURCHASERS FOLLOW]

<PAGE>

         IN WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

[PURCHASER]                                               Address for Notice:

By: _____________________________________
         Name:
         Title:                                           Attn:

Subscription Amount: $

[FVCX SPA SIGNATURE PAGE CONTINUED]

<PAGE>

                             SCHEDULE OF PURCHASERS

<TABLE>
<CAPTION>
            NAME OF PURCHASER                   NUMBER OF SHARES      NUMBER OF WARRANTS
            -----------------                   ----------------      ------------------
<S>                                             <C>                   <C>
Lagunitas Partners LP                                837,989                418,994
J. Patterson McBaine                                 111,732                 55,866
Jon D. Gruber & Linda W. Gruber                      111,732                 55,866
Gruber & McBaine International                       279,330                139,665
Special Situations Fund III, L.P.                    553,771                276,885
Special Situations Cayman Fund L.P.                  178,911                 89,455
Special Situations Technology Fund L.P.               17,039                  8,519
Special Situations Technology Fund II L.P.           102,235                 51,117
MicroCapital Fund L.P.                               391,061                195,530
MicroCapital Fund Ltd.                               167,598                 83,799
Bonanza Fund                                         139,665                 69,832
Firelake Strategic Technology Fund, L.P.             837,989                418,994
Agile Partners, LP                                   279,330                139,665
Behavioral Financial Fund Ltd.                       782,123                391,061
Jurika Family Trust                                  167,598                 83,799
JMK Investment Partners, L.P.                        167,598                 83,799
Encinal Crossover Fund                                83,799                 41,899
Neal I. Goldman IRA Rollover                         200,000                100,000
Palisades Master Fund L.P.                           279,330                139,665
Gordon J. Roth                                        11,174                  5,587
</TABLE>

<PAGE>

<TABLE>
<S>                                                   <C>                     <C>
Joseph Paul Schimmelpfennig                           11,174                  5,587
John J. Weber                                         11,174                  5,587
Jeffrey M. Ng                                          8,380                  4,190
Louis J. Ellis                                         1,676                    838
</TABLE>

<PAGE>
                                    EXHIBIT A

                          REGISTRATION RIGHTS AGREEMENT

                               [SEE EXHIBIT 10.2]
<PAGE>

                                    EXHIBIT B

                                ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this "Agreement") is made as of November 6, 2003, by and
among First Virtual Communications, Inc., a corporation incorporated under the
laws of Delaware (the "Company"), the purchasers signatory hereto (each a
"Purchaser" and together the "Purchasers"), and Feldman Weinstein LLP, with an
address at 420 Lexington Avenue, New York, New York 10170-0002 (the "Escrow
Agent"). CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS
SET FORTH IN THE SECURITIES PURCHASE AGREEMENT REFERRED TO IN THE FIRST RECITAL.

                              W I T N E S S E T H:

WHEREAS, the Purchasers will be purchasing from the Company, severally and not
jointly with the other Purchasers, up to $12,000,000 of Common Stock and
Warrants on the Closing Date as set forth in the Securities Purchase Agreement
(the "Purchase Agreement") dated the date hereof between the Purchasers and the
Company, which securities will be issued under the terms contained herein and in
the Purchase Agreement; and

WHEREAS, it is intended that the purchase of the securities be consummated in
accordance with the requirements set forth in Regulation D promulgated under the
Securities Act of 1933, as amended; and

WHEREAS, the Company and the Purchasers have requested that the Escrow Agent
hold the Subscription Amounts in escrow until the Escrow Agent has received the
Release Notice in the form attached hereto from the Company and each Purchaser;

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

                                   ARTICLE I.
                               TERMS OF THE ESCROW

         1.1      The parties hereby agree to establish an escrow account with
the Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase
of up to $12,000,000 of Common Stock and Warrants, in the aggregate, as
contemplated by the Purchase Agreement.

         1.2      Upon the Escrow Agent's receipt of the aggregate Subscription
Amounts for the Closing into its master escrow account, together with executed
counterparts of this Agreement, the Purchase Agreement and the Registration
Rights Agreement, it shall telephonically advise the Company, or the Company's
designated attorney or agent, of the amount of funds it has received into its
master escrow account.

         1.3      Wire transfers to the Escrow Agent shall be made as follows:

<PAGE>

         STERLING NATIONAL BANK
         622 3RD AVENUE
         NEW YORK, NY 10017
         Account Name: Feldman Weinstein LLP
         ABA ROUTING NO: 026007773
         ACCT NO: 0814180101
         Remark: fvcx/[FUND NAME]

         (a)      The Company, promptly following being advised by the Escrow
Agent that the Escrow Agent has received the Subscription Amounts for the
Closing along with facsimile copies of counterpart signature pages of the
Purchase Agreement, Registration Rights Agreement and this Agreement from each
Purchaser, shall deliver to the Escrow Agent the stock certificates and Warrants
evidencing the Securities to be issued to each Purchaser at the Closing together
with:

                  (i)      the Company's executed counterpart of the Purchase
Agreement;

                  (ii)     the Company's executed counterpart of the
Registration Rights Agreement;

                  (iii)    the executed opinion of Cooley Godward LLP, in the
form of Exhibit C to the Purchase Agreement;

                  (iv)     a warrant, issued to Roth Capital Partners, LLC, to
purchase up to a number of shares of Common Stock equal to 8% of the Shares
purchased at the Closing and an exercise price equal to 120% of the Per Share
Purchase Price, and have a term of five years ("ROTH Warrant"); and

                  (v)      the Company's original executed counterpart of this
Escrow Agreement.

         (b)      In the event that the foregoing items are not in the Escrow
Agent's possession within five (5) Trading Days of the Escrow Agent notifying
the Company that the Escrow Agent has custody of the Subscription Amount for the
Closing, then each Purchaser shall have the right to demand the return of their
portion of the Subscription Amount.

         (c)      Once the Escrow Agent receives a Release Notice in the form
attached hereto as Exhibit X executed by the Company and each Purchaser, it
shall (a) wire 93% of the aggregate Subscription Amounts to the Company's
account listed in Section 1.7 below, and (b) wire the remaining 7% of the
aggregate Subscription Amounts per the written instructions of Roth Capital
Management. Wire transfers to the Company shall be made per the written
instructions of the Company to the Escrow Agent.

         (d)      Once the funds (as set forth above) have been sent per the
Company's instructions, the Escrow Agent shall then arrange to have the Shares,
the Purchase Agreement, the Registration Rights Agreement, the Warrants, Roth
Warrant, the Escrow Agreement and the opinion of counsel delivered to the
appropriate parties.

<PAGE>

                                  ARTICLE II.
                                 MISCELLANEOUS

         2.1      No waiver or any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed an extension of
the time for performance of any other obligation or act.

         2.2      All notices or other communications required or permitted
hereunder shall be in writing, and shall be sent as set forth in the Purchase
Agreement.

         2.3      This Escrow Agreement shall be binding upon and shall inure to
the benefit of the permitted successors and permitted assigns of the parties
hereto.

         2.4      This Escrow Agreement is the final expression of, and contains
the entire agreement between, the parties with respect to the subject matter
hereof and supersedes all prior understandings with respect thereto. This Escrow
Agreement may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the
parties to be charged or by a party's agent duly authorized in writing or as
otherwise expressly permitted herein.

         2.5      Whenever required by the context of this Escrow Agreement, the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if all parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.

         2.6      The parties hereto expressly agree that this Escrow Agreement
shall be governed by, interpreted under and construed and enforced in accordance
with the laws of the State of New York. Any action to enforce, arising out of,
or relating in any way to, any provisions of this Escrow Agreement shall only be
brought in a state or Federal court sitting in New York City.

         2.7      The Escrow Agent's duties hereunder may be altered, amended,
modified or revoked only by a writing signed by the Company, each Purchaser and
the Escrow Agent.

         2.8      The Escrow Agent shall be obligated only for the performance
of such duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed by the Escrow Agent to be genuine and to have been signed or presented
by the proper party or parties. The Escrow Agent shall not be personally liable
for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent
while acting in good faith and in the absence of gross negligence, fraud and
willful misconduct, and any act done or omitted by the Escrow Agent pursuant to
the advice of the Escrow Agent's attorneys-at-law shall be conclusive evidence
of such good faith, in the absence of gross negligence, fraud and willful
misconduct.

         2.9      The Escrow Agent is hereby expressly authorized to disregard
any and all warnings given by any of the parties hereto or by any other person
or corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any

<PAGE>

such order, judgment or decree, the Escrow Agent shall not be liable to any of
the parties hereto or to any other person, firm or corporation by reason of such
decree being subsequently reversed, modified, annulled, set aside, vacated or
found to have been entered without jurisdiction.

         2.10     The Escrow Agent shall not be liable in any respect on account
of the identity, authorization or rights of the parties executing or delivering
or purporting to execute or deliver the Purchase Agreement or any documents or
papers deposited or called for thereunder in the absence of gross negligence,
fraud and willful misconduct.

         2.11     The Escrow Agent shall be entitled to employ such legal
counsel and other experts as the Escrow Agent may deem necessary properly to
advise the Escrow Agent in connection with the Escrow Agent's duties hereunder,
may rely upon the advice of such counsel, and may pay such counsel reasonable
compensation; provided that the costs of such compensation shall be borne by the
Escrow Agent. The Escrow Agent has acted as legal counsel for Roth Capital
Management ("ROTH") and may continue to act as legal counsel for ROTH from time
to time, notwithstanding its duties as the Escrow Agent hereunder. The Company
and the Purchasers consent to the Escrow Agent in such capacity as legal counsel
for ROTH and waive any claim that such representation represents a conflict of
interest on the part of the Escrow Agent. The Company understands that ROTH and
the Escrow Agent are relying explicitly on the foregoing provision in entering
into this Escrow Agreement.

         2.12     The Escrow Agent's responsibilities as escrow agent hereunder
shall terminate if the Escrow Agent shall resign by giving written notice to the
Company and the Purchasers. In the event of any such resignation, the Purchasers
and the Company shall appoint a successor Escrow Agent and the Escrow Agent
shall deliver to such successor Escrow Agent any escrow funds and other
documents held by the Escrow Agent.

         2.13     If the Escrow Agent reasonably requires other or further
instruments in connection with this Escrow Agreement or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

         2.14     It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the documents
or the escrow funds held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed in the Escrow Agent's sole discretion (1) to retain in
the Escrow Agent's possession without liability to anyone all or any part of
said documents or the escrow funds until such disputes shall have been settled
either by mutual written agreement of the parties concerned, or by a final
order, decree or judgment or a court of competent jurisdiction after the time
for appeal has expired and no appeal has been perfected, but the Escrow Agent
shall be under no duty whatsoever to institute or defend any such proceedings or
(2) to deliver the escrow funds and any other property and documents held by the
Escrow Agent hereunder to a state or Federal court having competent subject
matter jurisdiction and located in the City of New York in accordance with the
applicable procedure therefore

         2.15     The Company and each Purchaser agree jointly and severally to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims, liabilities, costs or expenses in
any way arising from or relating to the duties

<PAGE>

or performance of the Escrow Agent hereunder or the transactions contemplated
hereby or by the Purchase Agreement other than any such claim, liability, cost
or expense to the extent the same shall have been determined by final,
unappealable judgment of a court of competent jurisdiction to have resulted from
the gross negligence, fraud or willful misconduct of the Escrow Agent.

                            ************************

<PAGE>

                                                                       EXHIBIT C

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

FIRST VIRTUAL COMMUNICATIONS, INC.

                  By:______________________________________
                         Name:
                         Title:

                  ESCROW AGENT:

                  FELDMAN WEINSTEIN LLP

                  By:______________________________________
                           Name:
                           Title:

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

<PAGE>

                   [PURCHASER'S SIGNATURE PAGE TO RCG ESCROW]

                            [PURCHASER]

                            By: _____________________________________
                                   Name:
                                   Title:

                      [PURCHASERS' SIGNATURE PAGE FOLLOWS]

<PAGE>

                                                                    EXHIBIT X TO
                                                                ESCROW AGREEMENT

                                 RELEASE NOTICE

The UNDERSIGNED, pursuant to the Escrow Agreement, dated as of November __,
2003, among First Virtual Communications, Inc., the Purchasers signatory thereto
and Feldman Weinstein LLP, as Escrow Agent (the "Escrow Agreement"; capitalized
terms used herein and not defined shall have the meaning ascribed to such terms
in the Escrow Agreement), hereby notify the Escrow Agent that each of the
conditions precedent to the purchase and sale of the Shares set forth in the
Securities Purchase Agreement have been satisfied. The Company and the
undersigned Purchaser hereby confirm that all of their respective
representations and warranties contained in the Purchase Agreement remain true
and correct and authorize the release by the Escrow Agent of the funds and
documents to be released at the Closing as described in the Escrow Agreement.
This Release Notice shall not be effective until executed by the Company and the
Purchasers.

This Release Notice may be signed in one or more counterparts, each of which
shall be deemed an original.

IN WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly
executed and delivered as of this __ day of November, 2003.

                                              FIRST VIRTUAL COMMUNICATIONS, INC.

                                              By: ______________________________
                                                  Name:
                                                  Title:

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

<PAGE>
                                   EXHIBIT C

                                FORM OF WARRANT

                                   ARTICLE I.
                                TITLE TO WARRANT

Prior to the Termination Date and subject to compliance with applicable laws and
Section 7 of this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance reasonably
satisfactory to the Company.

                                  ARTICLE II.
                             AUTHORIZATION OF SHARES

The Company covenants that all Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

                                  ARTICLE III.
                               EXERCISE OF WARRANT

                  (a)      Subject to Section 3(c) below, exercise of the
         purchase rights represented by this Warrant may be made at any time or
         times on or after the Initial Exercise Date and on or before the
         Termination Date by delivery to the Company of a duly executed
         facsimile copy of the Notice of Exercise Form annexed hereto (or such
         other office or agency of the Company as it may designate by notice in
         writing to the registered Holder at the address of such Holder
         appearing on the books of the Company); provided, however, within 5
         Trading Days of the date said Notice of Exercise is delivered to the
         Company, the Holder shall have surrendered this Warrant to the Company
         and the Company shall have received payment of the aggregate Exercise
         Price of the shares thereby purchased (and all taxes required to be
         paid by the Holder, if any, pursuant to Section 5 prior to the issuance
         of such shares) by wire transfer or cashier's check drawn on a United
         States bank. Certificates for shares purchased hereunder shall be
         delivered to the Holder within 3 Trading Days from the delivery to the
         Company of the Notice of Exercise Form by facsimile copy, surrender of
         this Warrant and payment of the aggregate Exercise Price as set forth
         above ("Warrant Share Delivery Date). This Warrant shall be deemed to
         have been exercised on the later of the date the Notice of Exercise is
         delivered to the Company by facsimile copy, the date the Exercise Price
         (and all taxes required to be paid by the Holder, if any, pursuant to
         Section 5 prior to the issuance of such shares) is received by the
         Company, and the date the Warrant is surrendered to the Company (or
         evidence of loss, theft or destruction thereof and security or
         indemnity reasonably satisfactory to the Company) (the later date, the
         "Exercise Date"). The Warrant Shares shall be deemed to have been
         issued, and Holder or any other person so designated to be named
         therein shall be deemed to have become a holder of record of such
         shares for all purposes, as of the close of business on the Exercise
         Date. If the Company fails to

<PAGE>

         deliver to the Holder a certificate or certificates representing the
         Warrant Shares pursuant to this Section 3(a) by the third Trading Day
         following the Warrant Share Delivery Date, then the Holder will have
         the right to rescind such exercise. In addition to any other rights
         available to the Holder, if the Company fails to deliver to the Holder
         a certificate or certificates representing the Warrant Shares pursuant
         to an exercise by the seventh Trading Day after the Warrant Share
         Delivery Date, and if after such day the Holder is required by its
         broker to purchase (in an open market transaction or otherwise) shares
         of Common Stock to deliver in satisfaction of a sale by the Holder of
         the Warrant Shares which the Holder anticipated receiving upon such
         exercise (a "Buy-In"), then the Company shall (1) pay in cash to the
         Holder the amount by which (x) the Holder's total purchase price
         (including brokerage commissions, if any) for the shares of Common
         Stock so purchased exceeds (y) the amount obtained by multiplying (A)
         the number of Warrant Shares that the Company was required to deliver
         to the Holder in connection with the exercise at issue times (B) the
         price at which the sell order giving rise to such purchase obligation
         was executed, and (2) at the option of the Holder, either reinstate the
         portion of the Warrant and equivalent number of Warrant Shares for
         which such exercise was not honored or deliver to the Holder the number
         of shares of Common Stock that would have been issued had the Company
         timely complied with its exercise and delivery obligations hereunder.
         For example, if the Holder purchases Common Stock having a total
         purchase price of $11,000 to cover a Buy-In with respect to an
         attempted exercise of shares of Common Stock with an aggregate sale
         price giving rise to such purchase obligation of $10,000, under clause
         (1) of the immediately preceding sentence the Company shall be required
         to pay the Holder $1,000. The Holder shall provide the Company written
         notice indicating the amounts payable to the Holder in respect of the
         Buy-In, together with applicable confirmations and other evidence
         reasonably requested by the Company. Nothing herein shall limit a
         Holder's right to pursue any other remedies available to it hereunder,
         at law or in equity including, without limitation, a decree of specific
         performance and/or injunctive relief with respect to the Company's
         failure to timely deliver certificates representing shares of Common
         Stock upon exercise of the Warrant as required pursuant to the terms
         hereof.

                  (b)      If this Warrant shall have been exercised in part,
         the Company shall, at the time of delivery of the certificate or
         certificates representing Warrant Shares, deliver to Holder a new
         Warrant evidencing the rights of Holder to purchase the unpurchased
         Warrant Shares called for by this Warrant, which new Warrant shall in
         all other respects be identical with this Warrant.

                  (c)      [AT CLOSING HOLDER MAY ELECT, BY NOTATION ON ITS
         SIGNATURE PAGE, TO EXCLUDE THIS PROVISION FROM ITS WARRANT] The Company
         shall not effect any exercise of this Warrant, and the Holder shall not
         have the right to exercise any portion of this Warrant, pursuant to
         Section 3(a) or otherwise, to the extent that after giving effect to
         such issuance after exercise, the Holder (together with the Holder's
         affiliates), as set forth on the applicable Notice of Exercise, would
         beneficially own in excess of 4.99% of the number of shares of the
         Common Stock outstanding immediately after giving effect to such
         issuance. For purposes of the foregoing sentence, the number of shares
         of Common Stock beneficially owned by the Holder and its affiliates
         shall include the number of shares of Common Stock issuable

<PAGE>

         upon exercise of this Warrant with respect to which the determination
         of such sentence is being made, but shall exclude the number of shares
         of Common Stock which would be issuable upon (A) exercise of the
         remaining, nonexercised portion of this Warrant beneficially owned by
         the Holder or any of its affiliates and (B) exercise or conversion of
         the unexercised or nonconverted portion of any other securities of the
         Company (including, without limitation, any other Warrants) subject to
         a limitation on conversion or exercise analogous to the limitation
         contained herein beneficially owned by the Holder or any of its
         affiliates. Except as set forth in the preceding sentence, for purposes
         of this Section 3(c), beneficial ownership shall be calculated in
         accordance with Section 13(d) of the Exchange Act. To the extent that
         the limitation contained in this Section 3(c) applies, the
         determination of whether this Warrant is exercisable (in relation to
         other securities owned by the Holder) and of which a portion of this
         Warrant is exercisable shall be in the sole discretion of such Holder,
         and the submission of a Notice of Exercise shall be deemed to be such
         Holder's determination of whether this Warrant is exercisable (in
         relation to other securities owned by such Holder) and of which portion
         of this Warrant is exercisable, in each case subject to such aggregate
         percentage limitation, and the Company shall have no obligation to
         verify or confirm the accuracy of such determination. For purposes of
         this Section 3(c), in determining the number of outstanding shares of
         Common Stock, the Holder may rely on the number of outstanding shares
         of Common Stock as reflected in (x) the Company's most recent Form 10-Q
         or Form 10-K, as the case may be, (y) a more recent public announcement
         by the Company or (z) any other notice by the Company or the Company's
         transfer agent setting forth the number of shares of Common Stock
         outstanding. Upon the written or oral request of the Holder, the
         Company shall within two Trading Days confirm orally and in writing to
         the Holder the number of shares of Common Stock then outstanding. In
         any case, the number of outstanding shares of Common Stock shall be
         determined after giving effect to the conversion or exercise of
         securities of the Company, including this Warrant, by the Holder or its
         affiliates since the date as of which such number of outstanding shares
         of Common Stock was reported. The provisions of this Section 3(c) may
         be waived by the Holder upon, at the election of the Holder, not less
         than 61 days' prior notice to the Company, and the provisions of this
         Section 3(c) shall continue to apply until such 61st day (or such later
         date, as determined by the Holder, as may be specified in such notice
         of waiver).

                  (d)      If at any time after one year from the date of
         issuance of this Warrant there is no effective Registration Statement
         registering the resale of the Warrant Shares by the Holder, this
         Warrant may also be exercised at such time by means of a "cashless
         exercise" in which the Holder shall be entitled to receive a
         certificate for the number of Warrant Shares equal to the quotient
         obtained by dividing [(A-B) (X)] by (A), where:

                  (A) =  the Closing Price on the Trading Day immediately
                         preceding the date of such election;

                  (B) =  the Exercise Price of the Warrants, as adjusted; and

                  (X) =  the number of Warrant Shares issuable upon exercise of
                         the Warrants in accordance with the terms of this
                         Warrant.

<PAGE>

                  (e)      Subject to the provisions of this Section 3, if after
         the first anniversary of the Initial Exercise Date each VWAP (as
         defined below) for any twenty consecutive Trading Days (the
         "Measurement Price") (such period commencing only after such
         anniversary date) exceeds the then Exercise Price (as adjusted under
         this Warrant) by 200% (the "Threshold Price"), then the Company may,
         within three Trading Days of such period, call for cancellation of all
         or any portion of this Warrant for which a Notice of Exercise has not
         yet been delivered (such right, a "Call"). To exercise this right, the
         Company must deliver to the Holder an irrevocable written notice (a
         "Call Notice"), indicating therein the portion of the unexercised
         portion of this Warrant to which such notice applies. If the conditions
         set forth below for such Call are satisfied from the period from the
         date of the Call Notice through and including the Call Date (as defined
         below), then any portion of this Warrant subject to such Call Notice
         for which a Notice of Exercise shall not have been received by the
         Company from and after the date of the Call Notice will be cancelled at
         6:30 p.m. (New York City time) on the 10th Trading Day after the date
         of the Call Notice is received by the Holder (such date, the "Call
         Date"). Any unexercised portion of this Warrant to which the Call
         Notice does not pertain, if any, will be unaffected by such Call
         Notice. In furtherance thereof, the Company covenants and agrees that
         it will honor all Notices of Exercise with respect to Warrant Shares
         subject to a Call Notice that are tendered from the time of delivery of
         the Call Notice on the Call Date. The parties agree that any Notice of
         Exercise delivered following a Call Notice shall first reduce to zero
         the number of Warrant Shares subject to such Call Notice prior to
         reducing the remaining Warrant Shares available for purchase under this
         Warrant. For example, if (x) this Warrant then permits the Holder to
         acquire 100 Warrant Shares, (y) a Call Notice pertains to 75 Warrant
         Shares, and (z) prior to the Call Date the Holder tenders a Notice of
         Exercise in respect of 50 Warrant Shares, then (1) on the Call Date the
         right under this Warrant to acquire 25 Warrant Shares will be
         automatically cancelled, (2) the Company, in the time and manner
         required under this Warrant, will have issued and delivered (or be
         required to issue and deliver) to the Holder 50 Warrant Shares in
         respect of the exercises following receipt of the Call Notice, and (3)
         the Holder may, until the Termination Date, exercise this Warrant for
         cash by payment of the aggregate Exercise Price then in effect for 25
         Warrant Shares (subject to adjustment as herein provided and subject to
         subsequent Call Notices and the other terms and conditions of this
         Warrant). Subject again to the provisions of this Section 3, the
         Company may deliver subsequent Call Notices for any portion of this
         Warrant for which the Holder shall not have delivered a Notice of
         Exercise. Notwithstanding anything to the contrary set forth in this
         Warrant, the Company may not require the cancellation of this Warrant
         pursuant to this Section 3(d) (and any Call Notice will be void),
         unless, from the beginning of the 20 consecutive Trading Days used to
         determine whether the Common Stock has achieved the Threshold Price
         through the Call Date, (i) the Company shall have honored in accordance
         with the terms of this Warrant all Notices of Exercise delivered prior
         to the Call Date, (ii) the Registration Statement shall be effective as
         to all Warrant Shares and the prospectus thereunder available for use
         by the Holder for the resale of all such Warrant Shares (and the
         Company is not aware of any event or occurrence that would make it
         appropriate for the Company to suspend the effectiveness of the
         Registration Statement), (iii) the Warrant Shares shall be listed or
         quoted for trading on the Principal Market and trading in the Common
         Stock shall not have been suspended

<PAGE>

         (and the Company is not then aware of any event or occurrence that
         would required trading to be suspended) and (iv) such issuance would be
         permitted in full without violating the limitations set forth in
         Section 3(c).

                  "VWAP" means, for any date, the price determined by the first
         of the following clauses that applies: (a) if the Common Stock is then
         listed or quoted on a Trading Market, the daily volume weighted average
         price of the Common Stock for such date (or the nearest preceding date)
         on the Trading Market on which the Common Stock is then listed or
         quoted as reported by Bloomberg Financial L.P. (based on a trading day
         from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if the
         Common Stock is not then listed or quoted on a Trading Market and if
         prices for the Common Stock are then quoted on the OTC Bulletin Board,
         the volume weighted average price of the Common Stock for such date (or
         the nearest preceding date) on the OTC Bulletin Board; (c) if the
         Common Stock is not then listed or quoted on the OTC Bulletin Board and
         if prices for the Common Stock are then reported in the "Pink Sheets"
         published by the National Quotation Bureau Incorporated (or a similar
         organization or agency succeeding to its functions of reporting
         prices), the most recent bid price per share of the Common Stock so
         reported; or (d) in all other cases, the fair market value of a share
         of Common Stock as determined by an independent appraiser selected in
         good faith by the Purchasers and reasonably acceptable to the Company.

                                  ARTICLE IV.
                          NO FRACTIONAL SHARES OR SCRIP

         No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. As to any fraction of a share which
Holder would otherwise be entitled to purchase upon such exercise, the Company
shall pay a cash adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the Exercise Price.

                                   ARTICLE V.
                           CHARGES, TAXES AND EXPENSES

         Issuance of certificates for Warrant Shares shall be made without
charge to the Holder for any issue or transfer tax or other incidental expense
in respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the Holder or in such name or names as may be directed by the Holder;
provided, however, that in the event certificates for Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder; and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.

                                  ARTICLE VI.
                                CLOSING OF BOOKS

         The Company will not close its stockholder books or records in any
manner which prevents the timely exercise of this Warrant, pursuant to the terms
hereof.

<PAGE>

                                  ARTICLE VII.
                       TRANSFER, DIVISION AND COMBINATION.

                  (a)      Subject to compliance with any applicable securities
         laws and the conditions set forth in Sections 1 and 7(e) hereof and to
         the provisions of Section 4.1 of the Purchase Agreement, this Warrant
         and all rights hereunder are transferable, in whole or in part
         (provided that if the Warrant is being transferred in part, the portion
         of this Warrant being transferred shall represents the right to
         purchase at least 100,000 Warrant Shares (or such lesser amount
         comprising the entire number of Warrant Shares then underlying this
         Warrant and subject to adjustment as provided herein), upon surrender
         of this Warrant at the principal office of the Company, together with a
         written assignment of this Warrant substantially in the form attached
         hereto duly executed by the Holder or its agent or attorney and funds
         sufficient to pay any transfer taxes payable upon the making of such
         transfer. Upon such surrender and compliance with the conditions
         referenced in the preceding sentence, if required, such payment, the
         Company shall execute and deliver a new Warrant or Warrants in the name
         of the assignee or assignees and in the denomination or denominations
         specified in such instrument of assignment, and shall issue to the
         assignor a new Warrant evidencing the portion of this Warrant not so
         assigned, and this Warrant shall promptly be cancelled. A Warrant, if
         properly assigned, may be exercised by a new holder for the purchase of
         Warrant Shares without having a new Warrant issued.

                  (b)      Subject to compliance with Section 7(a), as to any
         transfer which may be involved in such division or combination, (i)
         this Warrant may be divided or combined with other Warrants upon
         presentation hereof at the aforesaid office of the Company, together
         with a written notice specifying the names and denominations in which
         new Warrants are to be issued, signed by the Holder or its agent or
         attorney, and (ii) the Company shall execute and deliver a new Warrant
         or Warrants in exchange for the Warrant or Warrants to be divided or
         combined in accordance with such notice.

                  (c)      The Company shall prepare, issue and deliver at its
         own expense (other than transfer taxes) the new Warrant or Warrants
         under this Section 7.

                  (d)      The Company agrees to maintain, at its aforesaid
         office or at the offices of a designated agent, books for the
         registration and the registration of transfer of the Warrants.

                  (e)      At the time of the surrender of this Warrant in
         connection with any transfer of this Warrant, the Company will require,
         as a condition of allowing such transfer (i) that the Holder or
         transferee of this Warrant, as the case may be, furnish to the Company
         a written opinion of counsel (which opinion shall be in form, substance
         and scope customary for opinions of counsel in comparable transactions
         and reasonably acceptable to the Company) to the effect that such
         transfer may be made without registration under the Securities Act and
         under applicable state securities or blue sky laws, (ii) that the
         holder or transferee execute and deliver to the Company an investment
         letter in form and substance acceptable to the Company, (iii) that the
         transferee be an "accredited investor" as defined in Rule 501(a)
         promulgated under the Securities Act and

<PAGE>

         (iv) such other documents as may be reasonably requested by the Company
         to give effect to the transfer and comply with applicable laws.

                                 ARTICLE VIII.
                     NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE

         This Warrant does not entitle the Holder to any voting rights or other
rights as a shareholder of the Company prior to the exercise hereof. Upon the
delivery of the Exercise Notice, the surrender of this Warrant, the payment of
the aggregate Exercise Price to the Company, the Warrant Shares so purchased
shall be and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the Exercise Date as determined in
accordance with Section 3(a).

                                  ARTICLE IX.
                LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT

         The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate relating to the Warrant Shares, and in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant
or cause to be delivered a stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

                                   ARTICLE X.
                       SATURDAYS, SUNDAYS, HOLIDAYS, ETC.

         If the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall be a Saturday, Sunday
or a legal holiday, then such action may be taken or such right may be exercised
on the next succeeding day not a Saturday, Sunday or legal holiday.

                                  ARTICLE XI.
                   ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF
                       WARRANT SHARES; STOCK SPLITS, ETC.

         The number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time to time
upon the happening of any of the events described in the next sentence. In the
event the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock, then the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in prior to the date upon

<PAGE>

which such event described in clauses (i) through (iv) of this Section 3(a)
shall become effective. Upon each such adjustment of the kind and number of
Warrant Shares or other securities of the Company which are purchasable
hereunder, the Holder shall thereafter be entitled to purchase the number of
Warrant Shares or other securities resulting from such adjustment at an Exercise
Price per Warrant Share or other security equal to (x) the result obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment divided by (y) the number of Warrant Shares or other securities
of the Company resulting from such adjustment. An adjustment made pursuant to
this paragraph shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.

                                  ARTICLE XII.
                    REORGANIZATION, RECLASSIFICATION, MERGER,
                     CONSOLIDATION OR DISPOSITION OF ASSETS

         In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all of its property, assets or
business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), to be received by or distributed to the holders of Common Stock of
the Company, then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

<PAGE>

                                 ARTICLE XIII.
                       VOLUNTARY ADJUSTMENT BY THE COMPANY

         The Company may at any time during the term of this Warrant reduce the
then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.

                                  ARTICLE XIV.
                              NOTICE OF ADJUSTMENT

         Whenever the number of Warrant Shares or number or kind of securities
or other property purchasable upon the exercise of this Warrant or the Exercise
Price is adjusted, as herein provided, the Company shall give notice thereof to
the Holder, which notice shall state the number of Warrant Shares (and other
securities or property) purchasable upon the exercise of this Warrant and the
Exercise Price of such Warrant Shares (and other securities or property) after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.

                                  ARTICLE XV.
                           NOTICE OF CORPORATE ACTION

         If at any time:

                           (a)      the Company shall take a record of the
         holders of its Common Stock for the purpose of entitling them to
         receive a dividend or other distribution, or any right to subscribe for
         or purchase any evidences of its indebtedness, any shares of stock of
         any class or any other securities or property, or to receive any other
         right, or

                           (b)      there shall be any capital reorganization of
         the Company, any reclassification or recapitalization of the capital
         stock of the Company or any consolidation or merger of the Company
         with, or any sale, transfer or other disposition of all or
         substantially all the property, assets or business of the Company to,
         another corporation or,

                           (c)      there shall be a voluntary or involuntary
         dissolution, liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify, to the extent
known by the Company, (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right, the date on which the
holders of Common Stock shall be entitled to any such dividend, distribution or
right, and the amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger,

<PAGE>

consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their Warrant Shares
for securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently given
if addressed to Holder at the last address of Holder appearing on the books of
the Company and delivered in accordance with Section 17(d).

                                  ARTICLE XVI.
                                AUTHORIZED SHARES

         The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common
Stock may be listed.

                                  ARTICLE XVII.
                                  MISCELLANEOUS

         17.1     Jurisdiction. All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.

         17.2     Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

         17.3     Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder as determined by a
court of law, the Company shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to,
reasonable attorneys' fees, including those of appellate proceedings, incurred
by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.

         17.4     Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement.

         17.5     Limitation of Liability. Subject to Section 3(d), no provision
hereof, in the absence of any affirmative action by Holder to exercise this
Warrant or purchase Warrant Shares,

<PAGE>

and no enumeration herein of the rights or privileges of Holder, shall give rise
to any liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

         17.6     Remedies. Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.

         17.7     Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

         17.8     Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

         17.9     Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

         17.10    Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

                              ********************

<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated: November __, 2003
                                        FIRST VIRTUAL COMMUNICATIONS, INC.

                                        By: ___________________________________
                                                   Name:
                                                   Title:

<PAGE>

                               NOTICE OF EXERCISE

To:      First Virtual Communications, Inc.

                  1.       The undersigned hereby elects to purchase ________
Warrant Shares of First Virtual Communications, Inc. pursuant to the terms of
the attached Warrant (only if exercised in full), and tenders herewith payment
of the exercise price in full, together with all applicable transfer taxes, if
any.|

                  2.       Payment shall take the form of (check applicable
box):

                           [  ] in lawful money of the United States; or

                           [ ] the cancellation of such number of Warrant Shares
                           as is necessary, in accordance with the formula set
                           forth in subsection 3(d), to exercise this Warrant
                           with respect to the maximum number of Warrant Shares
                           purchasable pursuant to the cashless exercise
                           procedure set forth in subsection 3(d).

                  3.       Please issue a certificate or certificates
representing said Warrant Shares in the name of the undersigned or in such other
name as is specified below:

                      ____________________________________

The Warrant Shares shall be delivered to the following:

                      ____________________________________

                      ____________________________________

                      ____________________________________

                  (4)      Accredited Investor. The undersigned is an
"accredited investor" as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.

                                              [PURCHASER]

                                              By: ______________________________
                                              Name:
                                              Title:

                                              Dated:  ________________________

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

                  FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

                                                 Dated:  ______________, _______

                  Holder's Signature: _____________________________

                  Holder's Address:   _____________________________

                                      _____________________________

Signature Guaranteed:__________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

<PAGE>

                                    EXHIBIT D

                                 FORM OF OPINION

November 12, 2003

         The Purchasers Named

         on Exhibit A Hereto

RE:      FIRST VIRTUAL COMMUNICATIONS, INC.

Ladies and Gentlemen:

We have acted as counsel for First Virtual Communications, Inc., a Delaware
corporation (the "Company") in connection with the negotiation of the Securities
Purchase Agreement dated as of November 7, 2003, by and between you (the
"PURCHASERS") and the Company (the "PURCHASE AGREEMENT"), which provides for the
issuance and sale by the Company of Common Stock and warrants to purchase Common
Stock (the "WARRANTS") on the Closing Date, and the Escrow Agreement (the
"ESCROW AGREEMENT") and the Registration Rights Agreement between the Purchasers
and the Company, each dated as of November 7, 2003 (the "REGISTRATION RIGHTS
AGREEMENT") (collectively with the Purchase Agreement, the Escrow Agreement, the
Warrants and the Registration Rights Agreement, the "AGREEMENTS"). This opinion
is furnished to you pursuant to Section 2.2(a)(vi) of the Purchase Agreement.
All terms used herein have the meanings defined for them in the Purchase
Agreement unless otherwise defined herein.

In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Purchase Agreement by the various parties and originals or
copies certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. Where we render
an opinion "to the best of our knowledge" or concerning an item "known to us" or
our opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who perform legal services for the
Company, (ii) receipt of a certificate executed by an officer of the Company
covering such matters (the "CERTIFICATE"), and (iii) such other investigation,
if any, that we specifically set forth herein.

In rendering this opinion, we have assumed: the genuineness and authenticity of
all signatures on original documents; the authenticity of all documents
submitted to us as originals; the conformity to originals of all documents
submitted to us as copies; the accuracy, completeness and authenticity of
certificates of public officials; and the due authorization, execution and
delivery of all documents (except the due authorization, execution and delivery
by the Company of the Agreements), where authorization, execution and delivery
are prerequisites to the effectiveness of such documents. We have also assumed:
that all individuals executing and delivering documents had the legal capacity
to so execute and deliver; that you have received all documents you were to
receive under the Agreements; that the Agreements are obligations binding upon
you; if you are a corporation or other entity, that you have filed any required

<PAGE>

California franchise or income tax returns and have paid any required California
franchise or income taxes; that there are no extrinsic agreements or
understandings among the parties to the Agreements that would modify or
interpret the terms of the Agreements or the respective rights or obligations of
the parties thereunder; and that there are no extrinsic agreements or
understandings among the parties to the Material Agreements (as defined below)
that would modify or interpret the terms of any Material Agreement or the
respective rights or obligations of the parties thereunder.

Our opinion is expressed only with respect to the federal laws of the United
States of America, the laws of the State of California and the General
Corporation Law of the State of Delaware. We note that the parties to the Escrow
Agreement have designated the laws of the State of New York as the laws
governing the Escrow Agreement. Accordingly, with your permission, our opinions
in paragraphs 2 and 3 below as to the validity, binding effect and
enforceability of the Escrow Agreement are premised upon the result that would
be obtained if a California court were to apply the internal laws of the State
of California (notwithstanding the designation of the laws of the State of New
York) to the interpretation and enforcement of the Escrow Agreement. In
addition, we express no opinion on the enforceability of the parties' choice of
law. We express no opinion as to whether the laws of any particular jurisdiction
apply, and no opinion to the extent that the laws of any jurisdiction other than
those identified above are applicable to the subject matter hereof. We are not
rendering any opinion as to compliance with any antitrust law, rule or
regulation or any antifraud law, rule or regulation relating to securities, or
to the sale or issuance thereof.

Our opinion in paragraph 1 below as to the good standing of the Company as a
domestic corporation in the state of Delaware is based solely upon our review of
certifications we received from the Secretary of State of the State of Delaware
that the Company is in good standing in such state. We have made no further
investigation.

With regard to our opinions in paragraphs 2 and 3 below, we express no opinion
as to whether the performance by the Company of its indemnity and contribution
obligations under the Purchase Agreement and the Registration Rights Agreement
complies with any applicable federal securities laws or the laws of the states
of California or Delaware relating to indemnification and contribution.

With regard to our opinion in paragraph 3 below with respect to material
defaults under any Material Agreement, we have relied solely upon (i)
representations of an officer of the Company contained in the Certificate, and
(iii) an examination of the Material Agreements. We have made no further
investigation.

With regard to our opinion in paragraph 4 below concerning preemptive or similar
rights with respect to the issuance and purchase of the Shares and Warrants, we
have relied solely upon (i) representations of officers of the Company contained
in the Certificate, and (ii) an examination of the Company's Certificate of
Incorporation and Bylaws. We have made no further investigation. In addition,
with regard to our opinion in paragraph 4 below, we have assumed full payment by
the Purchasers of the purchase price of the Shares, Warrants and Warrant Shares.

Our opinions in paragraph 6 below with respect to the outstanding capital stock
of the Company are based solely upon our review a certificate of the Company's
transfer agent. We have made no further investigation.

<PAGE>

On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:

1.       The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business and to own, lease and
operate its properties and assets as described in the Company's SEC Reports.

2.       The Company has the requisite corporate power and authority to enter
into and perform its obligations under the Agreements and to issue the Shares,
the Warrants and the Warrant Shares. Each of the Agreements has been duly
executed and delivered by the Company and each of the Agreements constitutes
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, except as rights to indemnity under
Section 4.8 of the Purchase Agreement and Section 5 of the Registration Rights
Agreement may be limited by applicable laws and except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws affecting creditors' rights, and subject to
general equity principles and to limitations on availability of equitable
relief, including specific performance.

3.       The execution and delivery of the Agreements by the Company and the
issuance of the Shares and the Warrants, do not, and if issued to the Purchasers
on the date hereof, the issuance of the Warrant Shares would not, (i) result in
a violation of the Company's Certificate of Incorporation or Bylaws; (ii)
constitute a material default under any agreement to which the Company is bound
and which agreement is included as an exhibit filed pursuant to Item 601(b)(4)
or Item 601(b)(10) of Regulation S-K to the SEC Reports (the "MATERIAL
AGREEMENTS"), or (iii) result in a violation of any federal or state law, rule
or regulation applicable to the Company, except for such violations as would
not, individually or in the aggregate, have a Material Adverse Effect.

4.       Assuming (a) the accuracy of the representations and warranties of the
Purchasers and the Company contained in the Purchase Agreement, and (b) the due
performance by each of the Company and the Purchasers of the covenants and the
agreements set forth in the Purchase Agreement, respectively, it being
understood that this opinion is not expressed as to any subsequent resale of any
Shares and Warrants, as of the date hereof, the issuance of the Shares and the
Warrants in accordance with the Purchase Agreement are exempt from registration
under the Securities Act and the issuance of the Warrant Shares, if issued to
the Purchasers on the date hereof, would be exempt from registration under the
Securities Act. When so issued, the Shares and the Warrant Shares will be duly
and validly issued, fully paid and nonassessable, and free of any preemptive or
similar rights contained in the Company's Certificate of Incorporation or
Bylaws.

5.       We have not been engaged to devote substantive attention to any claims,
actions, suits, proceedings or investigations that are pending against the
Company or its properties, or against any officer or director of the Company in
his or her capacity as such, that are not disclosed in the SEC Reports. To our
knowledge, except as set forth in the SEC Reports, the Company is not a party to
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality that would prohibit the
issuance of the Shares and the Warrants pursuant to the Purchase Agreement.

<PAGE>

6.       Immediately prior to the issuance of the Shares, the authorized capital
stock of the Company consists of 100,000,000 shares of Common Stock, $.001 par
value, of which 8,778,903 shares are issued and outstanding and 5,000,000 shares
of Preferred Stock, .001 par value, of which 27,437 shares are designed as
Series A Convertible Preferred Stock, all of which are issued and outstanding.

This opinion is intended solely for your benefit and is not to be made available
to or be relied upon by any other person, firm or entity without our prior
written consent.

Very truly yours,

COOLEY GODWARD LLP

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]