Exhibit 10.58
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
and entered into as of November 7, 2003, by and among First Virtual
Communications, Inc., a Delaware corporation (the "Company"), and the purchasers
named on the Schedule of Purchasers attached hereto as Exhibit A (each such
purchaser, a "Purchaser" and collectively, the "Purchasers").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"Purchase Agreement").
The Company and the Purchasers hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:
"Advice" shall have the meaning set forth in Section 6(d).
"Effectiveness Date" means, with respect to the Registration
Statement required to be filed hereunder, the earlier of (a) the 90th
calendar day following the date of the Filing Date, and (b) the fifth
Trading Day following the date on which the Company is notified by the
Commission that the Registration Statement will not be reviewed or is
no longer subject to further review and comments.
"Effectiveness Period" shall have the meaning set forth in
Section 2(a).
"Event" shall have the meaning set fort in Section 2(b).
"Event Date" shall have the meaning set forth in Section 2(b).
"Filing Date" means, with respect to the Registration
Statement required to be filed hereunder, the 30th calendar day
following the Closing Date.
"Holder" or "Holders" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in
Section 5(c).
"Indemnifying Party" shall have the meaning set forth in
Section 5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"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 in
writing.
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"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes
any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by the Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by
reference in such Prospectus.
"Registrable Securities" means all of the Shares and the
Warrant Shares, together with any shares of Common Stock issued or
issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing;
provided, however, that a security ceases to be a Registrable Security
when it: (i) has been registered pursuant to an effective registration
statement under the Securities Act and sold in a manner contemplated by
the Registration Statement, or (ii) has been transferred in compliance
with Rule 144 under the Securities Act (or any successor provision
thereto) or is transferable pursuant to paragraph (k) of such Rule 144
(or any successor provision thereto).
"Registration Statement" means the registration statements
required to be filed hereunder, including (in each case) the
Prospectus, amendments and supplements to the registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference in the registration
statement.
"Rule 415" means Rule 415 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 purpose and effect as such
Rule.
"Rule 424" means Rule 424 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 purpose and effect as such
Rule.
2. Registration.
(a) On or prior to the Filing Date, the Company shall
prepare and file with the Commission the Registration Statement
covering the resale of all of the Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement required hereunder shall be on Form S-3 (except
if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case the Registration
shall be on another appropriate form in accordance herewith). The
Registration Statement required hereunder shall contain (except if
otherwise directed by the Holders) substantially the "Plan of
Distribution" attached hereto as Annex A. Subject to the terms of this
Agreement, the Company shall use commercially reasonable efforts to
cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, but in
any event not later than the Effectiveness Date, and shall use
commercially reasonable efforts to keep the Registration Statement
continuously effective, subject to Sections 3(c), 3(i) and 6(d) below,
under the Securities Act until the date when all Registrable Securities
covered by the Registration Statement have been sold or may
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be sold without volume restrictions pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company's
transfer agent and the affected Holders (the "Effectiveness Period").
(b) If: (i) a Registration Statement is not filed on or
prior to the Filing Date (if the Company files a Registration Statement
without complying with Section 3(a), the Company shall not be deemed to
have satisfied this clause (i)), or (ii) the Company fails to file with
the Commission a request for acceleration in accordance with Rule 461
promulgated under the Securities Act, within five Trading Days of the
date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that a Registration Statement will not be
"reviewed," or is not subject to further review (unless the Company
provides notice to the Holders of a circumstance contemplated by
Section 3(c)(vi) that would make it appropriate to suspend the filing
of the Registration Statement and the related Prospectus for a
reasonable period of time not to exceed 10 Trading Days), or (iii)
prior to the date when such Registration Statement is first declared
effective by the Commission, the Company fails to file a pre-effective
amendment and otherwise respond in writing to comments made by the
Commission in respect of such Registration Statement within 15 Trading
Days after the receipt of comments by or notice from the Commission
that such amendment is required in order for a Registration Statement
to be declared effective, or (iv) a Registration Statement filed or
required to be filed hereunder is not declared effective by the
Commission on or before the Effectiveness Date, or (v) after a
Registration Statement is first declared effective by the Commission,
it ceases for any reason to remain continuously effective as to all
Registrable Securities for which it is required to be effective, or the
Holders are not permitted to utilize the Prospectus therein to resell
such Registrable Securities, for in any such case 15 consecutive days
but no more than an aggregate of 30 days during any 12 month period
(which need not be consecutive Trading Days)(any such failure or breach
being referred to as an "Event," and for purposes of clause (i) or (iv)
the date on which such Event occurs, or for purposes of clause (ii) the
date on which such five Trading Day period (or, if there is a delay in
filing as a result of a circumstance contemplated by Section 3(c)(vi),
10 Trading Day period) is exceeded, or for purposes of clause (iii) the
date which such 15 Trading Day period is exceeded, or for purposes of
clause (v) the date on which such 15 or 30 day period, as applicable,
is exceeded being referred to as "Event Date"), then in addition to any
other rights the Holders may have hereunder or under applicable law:
(x) on each such Event Date the Company shall pay to each Holder an
amount in cash, as liquidated damages and not as a penalty, equal to
1.5% of the aggregate purchase price paid by such Holder pursuant to
the Purchase Agreement for any Registrable Securities then held by such
Holder; and (y) on each monthly anniversary of each such Event Date (if
the applicable Event shall not have been cured by such date) until the
applicable Event is cured, the Company shall pay to each Holder an
amount in cash, as liquidated damages and not as a penalty, equal to
1.5% of the aggregate purchase price paid by such Holder pursuant to
the Purchase Agreement for any Registrable Securities then held by such
Holder; provided, however, that under no circumstances shall the
Company be required to pay hereunder to any Holder during any one month
period in excess of an aggregate of 1.5% of the aggregate purchase
price paid by such Holder pursuant to the Purchase Agreement for any
Registrable Securities then held by such Holder. If the Company fails
to pay any liquidated damages pursuant to this Section 2(b) in full
within 10 Trading Days after the date payable, the Company will pay
interest thereon at a rate of 15% per annum (or such lesser maximum
amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such liquidated damages are due until such
amounts, plus all such interest thereon, are paid in full. The
liquidated damages pursuant to the terms
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hereof shall apply on a daily pro-rata basis for any portion of a month
prior to the cure of an Event.
3. Registration Procedures
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Not less than five Trading Days prior to the filing
of the Registration Statement or two days prior to the filing of any
related Prospectus or any amendment or supplement thereto, the Company
shall, (i) furnish to the Holders copies of all such documents proposed
to be filed (including documents incorporated or deemed incorporated by
reference to the extent requested by such Person) which documents will
be subject to the review of such Holders, and (ii) cause its officers
and directors, counsel and independent certified public accountants to
respond to such reasonable inquiries as shall be necessary, in the
reasonable opinion of respective counsel to conduct a reasonable
investigation within the meaning of the Securities Act. The Company
shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of
the Registrable Securities then held by all Holders shall reasonably
object in good faith, provided that the Company is notified of such
objection in writing prior to the date 2 Trading Days after the Holders
have been so furnished copies of such documents proposed to be filed.
If the Company fails to file a Registration Statement or any such
prospectus or any amendments or supplements thereto so as to give rise
to an Event contemplated by Section 2(b) as a result of the Holders
objection to the filing of the Registration Statement, the Company
shall not be required to pay any liquidated damages contemplated by
Section 2(b) with respect to such Event for any delay resulting from
the Holder's objection to such filing.; provided, however, if it is
later determined that such objections were reasonable and in good
faith, the Company shall be required to pay such liquidated damages
contemplated by Section 2(b) with respect to such Event.
(b) (i) Prepare and file with the Commission such
amendments, including post-effective amendments, to the Registration
Statement and the Prospectus used in connection therewith as may be
necessary to keep the Registration Statement continuously effective as
to the applicable Registrable Securities for the Effectiveness Period;
(ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424; (iii) reasonable efforts to respond as
promptly as reasonably practicable to any comments received from the
Commission with respect to the Registration Statement or any amendment
thereto and, as promptly as reasonably possible, upon request, provide
the Holders true and complete copies of all correspondence from and to
the Commission relating to the Registration Statement; and (iv) comply
in all material respects with the provisions of the Securities Act and
the Exchange Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement during the applicable
period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended
or in such Prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities to be
sold as promptly as reasonably possible and (if requested by any such
Person) confirm such notice in writing promptly following the day
(i)(A) when a Prospectus or any Prospectus supplement or
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post-effective amendment to the Registration Statement is proposed to
be filed; (B) the Commission notifies the Company that there will be a
"review" of the Registration Statement and if the Commission comments
in writing on the Registration Statement (the Company shall upon
request provide true and complete copies thereof and all written
responses thereto to each of the Holders); and (C) with respect to the
Registration Statement or any post-effective amendment, when the same
has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or Prospectus or for
additional information with respect to the Registration Statement;
(iii) of the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness
of the Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv)
of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any
of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; and (v)
of the occurrence of any event or passage of time that makes the
financial statements included in the Registration Statement ineligible
for inclusion therein or any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus
or other documents so that, in the case of the Registration Statement
or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or (vi) of the occurrence or existence of a pending
corporate development or other material non-public information
concerning the Company that, in the reasonable discretion of the
Company, makes it appropriate to suspend the availability of the
Registration Statement and the related Prospectus.
(d) Use commercially reasonable efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (i) any order
suspending the effectiveness of the Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, as soon
as reasonably practicable.
(e) Furnish to each Holder, without charge, at least one
conformed copy of the Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference to the
extent requested by such Person, and all exhibits to the extent
requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents
with the Commission.
(f) Upon request, promptly deliver to each Holder,
without charge, as many copies of the Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement
thereto as such Persons may reasonably request in connection with
resales by the Holder of Registrable Securities. Subject to the terms
of this Agreement, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving of any notice pursuant to
clauses (ii) through (vii) of Section 3(c).
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(g) Prior to any resale of Registrable Securities by a
Holder, use its commercially reasonable efforts to register or qualify
or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from the Registration or
qualification) of such Registrable Securities for the resale by the
Holder under the securities or Blue Sky laws of such jurisdictions
within the United States as any Holder reasonably requests in writing,
to keep each such Registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and
all other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, that the Company shall not be
required to qualify generally to do business in any jurisdiction where
it is not then so qualified, subject the Company to any material tax in
any such jurisdiction where it is not then so subject or file a general
consent to service of process in any such jurisdiction.
(h) If requested by the Holders, cooperate with the
Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statement, which certificates
shall be free, to the extent permitted by the Purchase Agreement and
applicable state and federal securities laws, of all restrictive
legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may
request.
(i) Upon the occurrence of any event contemplated by
Section 3(c)(v), as promptly as reasonably possible, prepare a
supplement or amendment, including a post-effective amendment, to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. If the Company notifies the Holders in accordance
with clauses (ii) through (vi) of Section 3(c) above to suspend the use
of the use of any Prospectus until the requisite changes to such
Prospectus have been made, then the Holders shall suspend use of such
Prospectus. The Company will use its best efforts to ensure that the
use of the Prospectus may be resumed as promptly as is practicable. The
Company shall be entitled to exercise its right under this Section 3(i)
to suspend the availability of a Registration Statement and Prospectus,
subject to the payment of liquidated damages pursuant to Section 2(b),
for a period not to exceed 60 consecutive days or for multiple periods
not to exceed 90 days in the aggregate in any 12 month period.
(j) Comply with all applicable rules and regulations of
the Commission.
(k) The Company may require each Holder to furnish to the
Company a certified statement as to the number of shares of Common
Stock beneficially owned by such Holder and the person thereof that has
voting and dispositive control over the Shares. During any periods that
the Company is unable to meet its obligations hereunder with respect to
the registration of the Registrable Securities solely because any
Holder fails to furnish such information within three Trading Days of
the Company's request, any liquidated damages that are accruing at such
time or that result from such delay shall be tolled and any Event that
may otherwise occur solely because of such delay shall be suspended,
until such information is delivered to the Company.
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4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the
Holders.
5. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, agents and employees of
each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of each
such controlling Person, to the fullest extent permitted by applicable
law, from and against any and all losses, claims, damages, liabilities,
costs (including, without limitation, reasonable attorneys' fees) and
expenses (collectively, "Losses"), as incurred, arising out of or
relating to any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, pursuant to which Registrable Securities were
registered under the Securities Act or arising out of or relating to
any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case
of any Prospectus or form of prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading, except
to the extent, but only to the extent, that (i) such untrue statements
or omissions or alleged untrue statements or omissions are based upon
information regarding such Holder furnished in writing to the Company
by such Holder for use therein, or to the extent that such information
relates to such Holder or such Holder's proposed method of distribution
of Registrable Securities and was reviewed and expressly approved in
writing by such Holder for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved Annex A
hereto for this purpose) or (ii) in the case of an occurrence of an
event of the type specified in Section 3(c)(ii)-(v), the use by such
Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or
defective and prior to the receipt by such Holder of the Advice
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contemplated in Section 6(d). The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the transactions
contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall,
severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, to the
extent arising out of or based upon: (x) such Holder's failure to
comply with the prospectus delivery requirements of the Securities Act
or (y) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading (i) to the
extent, but only to the extent, that such untrue statement or omission
is contained in any information so furnished in writing by such Holder
to the Company for inclusion in the Registration Statement or such
Prospectus or (ii) to the extent that (1) such untrue statements or
omissions are based upon information regarding such Holder furnished in
writing to the Company by such Holder for use therein, or to the extent
that such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities and was reviewed and
approved in writing by such Holder for use in the Registration
Statement (it being understood that the Holder has approved Annex A
hereto for this purpose), such Prospectus or such form of Prospectus or
in any amendment or supplement thereto or (2) in the case of an
occurrence of an event of the type specified in Section 3(c)(ii)-(vi),
the use by such Holder of an outdated or defective Prospectus after the
Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the
Advice contemplated in Section 6(d). In no event shall the liability of
any selling Holder hereunder be greater in amount than the dollar
amount of the gross proceeds received by such Holder upon the sale of
the Registrable Securities giving rise to such indemnification
obligation.
(c) Conduct of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an "Indemnified Party"), such Indemnified Party
shall promptly notify the Person from whom indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party shall have
the right to assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations
or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless: (1) the
Indemnifying Party has agreed in writing to pay such fees and expenses;
(2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ
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counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including
any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall reasonably believe
that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel
at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and the reasonable
fees and expenses of one separate counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for
any settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in
respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party
from all liability on claims that are the subject matter of such
Proceeding.
Subject to the terms of this Agreement, all reasonable fees
and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with
this Section) shall be paid to the Indemnified Party, as incurred,
within ten Trading Days of written notice thereof to the Indemnifying
Party; provided, that the Indemnified Party shall promptly reimburse
the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is not
entitled to indemnification hereunder, determined based upon the
relative faults of the parties.
(d) Contribution. If a claim for indemnification under
Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason
of public policy or otherwise), then each Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses,
in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or
omission or alleged omission of a material fact, has been taken or made
by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the
limitations set forth in this Agreement, any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its
terms.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined
by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 5(d), no Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount
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by which the proceeds actually received by such Holder from the sale of
the Registrable Securities subject to the Proceeding exceeds the amount
of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission, except in the case of fraud by such Holder.
The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties
may have to the Indemnified Parties.
6. Miscellaneous
(a) Remedies. In the event of a breach by the Company or
by a Holder, of any of their obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being
entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in
the event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be
adequate.
(b) No Piggyback on Registrations. Except as set forth on
Schedule 6(b) attached hereto, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant
hereto) may include securities of the Company in a Registration
Statement other than the Registrable Securities, and the Company shall
not after the date hereof enter into any agreement providing any such
right to any of its security holders. Except as set forth on Schedule
6(b), no Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company.
The Company shall not file any other registration statement (other than
a registration statement on Form S-8) until after the Effective Date.
(c) Compliance. Each Holder covenants and agrees that it
will comply with the prospectus delivery requirements of the Securities
Act as applicable to it in connection with sales of Registrable
Securities pursuant to the Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a
notice from the Company of the occurrence of any event of the kind
described in Section 3(c), such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration
Statement until such Holder's receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement or until it is advised
in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of
any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus or Registration
Statement. The Company will use its best efforts to ensure that the use
of the Prospectus may be resumed as promptly as it practicable. The
Company agrees and acknowledges that any periods during which the
Holder is required to discontinue the disposition of the Registrable
Securities hereunder shall be subject to the provisions of Section
2(b).
10
(e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of
others under the Securities Act of any of its equity securities, other
than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or
business or equity securities issuable in connection with the stock
option or other employee benefit plans, then the Company shall send to
each Holder a written notice of such determination and, if within
fifteen days after the date of such notice, any such Holder shall so
request in writing, the Company shall include in such registration
statement all or any part of such Registrable Securities such Holder
requests to be registered, subject to customary underwriter cutbacks
applicable to all holders of registration rights.
(f) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the same
shall be in writing and signed by the Company and each Holder of the
then outstanding Registrable Securities.
(g) Notices. Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be
made in accordance with the provisions of the Purchase Agreement.
(h) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and permitted assigns
of each of the parties and shall inure to the benefit of each Holder.
Each Holder may assign their respective rights hereunder in the manner
and to the Persons as permitted under the Purchase Agreement.
(i) Execution and Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.
(j) Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this
Agreement shall be determined with the provisions of the Purchase
Agreement.
(k) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term,
11
provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(n) Independent Nature of Purchasers' Obligations and
Rights. The obligations of each Holder hereunder are several and not
joint with the obligations of any other Holder hereunder, and no Holder
shall be responsible in any way for the performance of the obligations
of any other Holder hereunder. Nothing contained herein or in any other
agreement or document delivered at any closing, and no action taken by
any Holder pursuant hereto or thereto, shall be deemed to constitute
the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in
any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be
entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not
be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.
*************************
12
EXHIBIT A
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
FIRST VIRTUAL COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxx
_______________________________
Name:
Title:
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
13
[PURCHASER'S SIGNATURE PAGE TO FVCX RRA]
[PURCHASER]
By: _____________________________________
Name:
Title:
[PURCHASERS' SIGNATURE PAGE FOLLOWS]
14
[PURCHASER'S SIGNATURE PAGE TO FVCX RRA]
[PURCHASER]
By:_____________________________________
Name:
Title:
15
SCHEDULE 6(b)
The Company has outstanding obligations to register securities of the
Company as follows: (i) the Company is obligated to register 642,921 shares of
Common Stock that were issued to Net One Systems Co., Ltd. ("Net One") in early
October 2003 pursuant to that certain Equity Investment Agreement dated
September 30, 2003 by and between the Company and Net One; (ii) the Company has
certain obligations pursuant to that certain Registration Rights Agreement dated
as of June 2000, by and between the Company and Vulcan Inc., to register the
shares of common stock issuable upon conversion of the Series A Preferred Stock
and upon exercise of a warrant to purchase common stock held by Vulcan, Inc.;
(iii) the Company has certain obligations pursuant to that certain Registration
Rights Agreement dated as of April 12, 2002, by and among the Company and the
investors referenced therein, and (iv) the Company is obligated to register any
shares that may be issued to Xxxxx Xxxxxxxxx, Executive Chairman of the
Company's Board of Directors, pursuant to that certain Private Equity Line
Financing Agreement dated as of April 14, 2003 between the Company and Xx.
Xxxxxxxxx. The Company intends to include the 642,921 shares issued to Net One
pursuant to the Equity Investment Agreement referenced above on the Registration
Statement.
16
ANNEX A
Plan of Distribution
The Selling Stockholders (the "Selling Stockholders") of the common
stock ("Common Stock") of First Virtual Communications, Inc. (the "Company") and
any of their pledgees, assignees and successors-in-interest may, from time to
time, sell any or all of their shares of Common Stock on the Nasdaq SmallCap
Market or any other stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:
- ordinary brokerage transactions and transactions in
which the broker-dealer solicits purchasers, which
may include long sales or short sales effected after
the effective date of the prospectus of which this
registration statement is a part;
- block trades in which the broker-dealer will attempt
to sell the shares as agent but may position and
resell a portion of the block as principal to
facilitate the transaction;
- purchases by a broker-dealer as principal and resale
by the broker-dealer for its account;
- an exchange distribution in accordance with the rules
of the applicable exchange;
- privately negotiated transactions;
- "at the market" or through market makers or into an
existing market for the shares
- broker-dealers may agree with the Selling
Stockholders to sell a specified number of such
shares at a stipulated price per share;
- a combination of any such methods of sale;
- through the writing or settlement of options or other
hedging transactions, whether through an options
exchange or otherwise; or
- any other method permitted pursuant to applicable
law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available, rather
than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
In connection with the sale of our common stock or interests therein,
the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume.
17
The Selling Stockholders may also sell shares of our common stock short and
deliver these securities to close out their short positions, or loan or pledge
the common stock to broker-dealers that in turn may sell these securities. The
Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each of the Selling
Stockholders have informed the Company that it does not have any agreement or
understanding, directly or indirectly, with any person to distribute the Common
Stock. Some of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
The Company is required to pay certain fees and expenses incurred by
the Company incident to the registration of the shares, including all reasonable
costs and expenses incurred by us or the Selling Stockholders and all
registration and filing fees and legal fees and accounting fees.
The Company has agreed to indemnify the Selling Stockholders and
certain control and other related persons related to the foregoing persons
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act. The Selling Stockholders have agreed to indemnify the
Company in certain circumstances, as well as certain related persons, against
certain liabilities, including liabilities under the Securities Act.
The Selling Stockholders are not obligated to, and there is no
assurance that the Selling Stockholders will, sell any or all of the shares
being offered by this prospectus.
The Company has agreed with the Selling Stockholders to keep the
registration statement effective until the shares being offered by this
prospectus may be sold without registration or restriction pursuant to Rule
144(k) promulgated under the Securities Act, or, if earlier, until the
distribution contemplated in this prospectus has been completed.
18
EXHIBIT A
PURCHASERS
NAME OF PURCHASER NUMBER OF SHARES NUMBER OF WARRANTS
--------------------------------------------------------------------------------------
LAGUNITAS PARTNERS LP 837,989 418,994
---------------------------------------------------------------------------------
X. Xxxxxxxxx McBaine 111,732 55,806
---------------------------------------------------------------------------------
Xxx X. Xxxxxx & Xxxxx X. Xxxxxx 111,732 55,866
---------------------------------------------------------------------------------
Xxxxxx & 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 139,655 69,832
---------------------------------------------------------------------------------
Firelake Strategic Technology Fund, L.P. 837,989 418,994
---------------------------------------------------------------------------------
Agile Partners, LP 279,3320 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
---------------------------------------------------------------------------------
Xxxx X. Xxxxxxx XXX Rollover 200,000 100,000
---------------------------------------------------------------------------------
Palisades Master Fund L.P. 279,330 139,665
---------------------------------------------------------------------------------
19
---------------------------------------------------------------------------------
Xxxxxx X. Xxxx 11,174 5,587
---------------------------------------------------------------------------------
Xxxxxx Xxxx Xxxxxxxxxxxxxxx 11,174 5,587
---------------------------------------------------------------------------------
Xxxx X. Xxxxx 11,174 5,587
---------------------------------------------------------------------------------
Xxxxxxx X. Xx 8,380 4,190
---------------------------------------------------------------------------------
Xxxxx X. Xxxxx 1,676 838
---------------------------------------------------------------------------------
20
