8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

(Date of earliest event reported): February 12, 2005

FIRST VIRTUAL COMMUNICATIONS, INC.

(Exact name of Registrant as specified in its charter)

Delaware
(State or other
jurisdiction of
incorporation
or organization) 000-23305
(Commission File No.) 77-0357037
(I.R.S. Employer
Identification No.)

3200 Bridge Parkway, Suite 202
Redwood City, California 94065
(Address of principal executive offices) (Zip code)

(650) 801-6500
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENTS
	ITEM 1.03 BANKRUPTCY OR RECEIVERSHIP
	ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURES
EXHIBIT INDEX
EXHIBIT 10.4
EXHIBIT 10.5
EXHIBIT 99.1

ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENTS

On February 12, 2005, the Company and an investment partnership led by Millennium Technology Value Partners, L.P., a New York-based private equity fund (“Millennium”), Silicon Valley Bank and Morrison & Foerster LLP entered into an asset purchase agreement (the “Purchase Agreement”) for substantially all of the assets of the Company, subject to Bankruptcy Court approval and the solicitation of higher or better proposals for the purchase of such assets or another restructuring of the Company. Under this Purchase Agreement and a related letter agreement (the “Letter Agreement”) among Millenium, Silicon Valley Bank and Morrison & Foerster LLP (collectively, the “Buyer”), Huron Consulting Services LLC (“Huron”) and the Company, the Buyer will credit bid not less than approximately $5.2 million as of the date of the Purchase Agreement, among other consideration, in exchange for the purchase of the assets, free and clear of any interests in the Company’s assets. The Buyer and Huron hold substantially all of the Company’s secured debt, and Millenium is the lender for the Company’s $2 million debtor-in-possession credit facility. The Purchase Agreement and the Letter Agreement, if consummated, would provide for the satisfaction of substantially all of the secured debt obligations of the Company, and the Buyer is responsible for the costs of curing any assumed contracts at closing. The Purchase Agreement also provides for an additional $250,000 in cash consideration to the Company, and that the purchase price will increase as the underlying debt that is the subject of the credit bid accrues additional amounts. The transaction described in the Purchase Agreement is scheduled to close on or before March 18, 2005. If the transaction has not closed by such date, the Buyer may terminate the Purchase Agreement. In the event that the Company consummates an alternative transaction with a party other than the Buyer, the Purchase Agreement, as modified by order of the Bankruptcy Court, provides that the Buyer may be entitled to a break-up fee in the amount of $150,000. On February 18, 2005, the Company issued a press release announcing, among other things, the execution of the Purchase Agreement. Copies of the Purchase Agreement, the Letter Agreement and the press release are attached as Exhibits 10.4, 10.5, and 99.1 and are incorporated by reference in their entirety.

ITEM 1.03 BANKRUPTCY OR RECEIVERSHIP

At a hearing held on February 14, 2005 in the United States Bankruptcy Court for the Northern District of California, the Bankruptcy Court granted final approval for the Company’s debtor-in-possession financing in the amount of up to $2 million (the “Financing”), the agreement (the “Cash Collateral Agreement”) with the Company’s existing bank lender regarding continued access to working capital and the procedures (the “Bidding Procedures”) for interested parties to submit proposals in connection with the Company’s restructuring efforts, including, but not limited to, higher or better proposals to compete with the Purchase Agreement. Specifically, competing proposals must be submitted on or before February 21, 2005 in conjunction with a solicitation conference to occur on February 28, 2005. The Bankruptcy Court has scheduled a hearing for March 11, 2005 at 10:00 a.m. to consider approval of the highest or best proposal.

At this time, the Company cannot predict what values will be ascribed in the cases to claims against or interests in the Company because there are a variety of factors that may affect such values, including, but not limited to, the terms of restructuring proposals that the Company receives and the terms of any reorganization plan that may ultimately be confirmed. Accordingly, the Company urges that appropriate caution be exercised with respect to existing and future investments in any of its liabilities and/or securities.

The Bankruptcy Court also approved the Company’s request for additional time to submit its schedules of assets and liabilities and statement of financial affairs, for approval of an interim agreement with AT&T Corp. resolving certain disputes and for the rejection of the Company’s Redwood City, California lease, subject to notice to the Company’s landlord at such location.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

     (c) Exhibits

Exhibit
No.	Description
10.4	Asset Purchase Agreement dated as of February 12, 2005 among MTVP (First Virtual Investments), LLC, Silicon Valley Bank, Morrison & Foerster LLP, First Virtual Communications, Inc. and CUseeMe Networks, Inc.
10.5	Letter Agreement dated February 12, 2005 among Huron Consulting Services LLC, MTVP (First Virtual Investments), LLC, Silicon Valley Bank, Morrison & Foerster LLP, First Virtual Communications, Inc. and CUseeMe Networks, Inc.
99.1	Press Release issued February 18, 2005

Cautionary Statement:

In addition to the historical information contained in this Current Report, certain of the information contained in this Current Report should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect the Company’s current views with respect to current events and financial performance. Such forward looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company’s operations and business environment which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to access working capital, including, but not limited to, the use of cash collateral or debtor-in-possession financing; the Company’s ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more transactions for the sale of the Company’s assets or other change-of-control transactions under a plan or plans of reorganization with respect to the Chapter 11 cases; risks associated with third parties seeking and obtaining the Bankruptcy Court’s approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the ability of the Company to obtain and maintain normal terms and relationships with vendors, service providers and employees; the Company’s ability to maintain contracts that are critical to its operations; any adverse impact on us from the special investigation and restatement of previously announced financial results; any adverse impact arising from the delay in filing required periodic reports; the Company’s potential inability to maintain business relationships with the Company’s integrators, distributors and suppliers; and other risk factors set forth in the Company Annual Report on Form 10-K for the year ended December 31, 2003 and in the Company’s other public filings with the SEC.

We assume no obligation to update any forward-looking statements contained herein. The Company’s expectations and the events, conditions, and circumstances on which these forward-looking statements are based may change.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 18, 2005	FIRST VIRTUAL COMMUNICATIONS, INC.
	By:	/s/ Jonathan G. Morgan
		Jonathan G. Morgan
		Chief Executive Officer, Chief Financial Officer, and Secretary

EXHIBIT INDEX

Exhibit
No.	Description
10.4	Asset Purchase Agreement dated as of February 12, 2005 among MTVP (First Virtual Investments), LLC, Silicon Valley Bank, Morrison & Foerster LLP, First Virtual Communications, Inc. and CUseeMe Networks, Inc.
10.5	Letter Agreement dated February 12, 2005 among Huron Consulting Services LLC, MTVP (First Virtual Investments), LLC, Silicon Valley Bank, Morrison & Foerster LLP, First Virtual Communications, Inc. and CUseeMe Networks, Inc.
99.1	Press Release issued February 18, 2005

EX-10.4

                                                                    Exhibit 10.4



                            ASSET PURCHASE AGREEMENT

                                      AMONG

                      MTVP (FIRST VIRTUAL INVESTMENTS), LLC

                               SILICON VALLEY BANK

                             MORRISON & FOERSTER LLP

                       FIRST VIRTUAL COMMUNICATIONS, INC.

                                       AND

                             CUSEEME NETWORKS, INC.


                                FEBRUARY 12, 2005



                                TABLE OF CONTENTS



                                                                                          PAGE
                                                                                       
ARTICLE I        SALE OF ASSETS AND TERMS OF PAYMENT.........................................1

        1.01   Assets Being Sold to Buyer....................................................1
        1.02   Retained Assets...............................................................3
        1.03   Assumed Liabilities...........................................................4
        1.04   Retained Liabilities..........................................................5
        1.05   Purchase Price................................................................6
        1.06   Allocation of the Purchase Price..............................................6
        1.07   Absolute Sale.................................................................7

ARTICLE II       RELATED AGREEMENTS..........................................................7

        2.01   Assignments of Patent, Trademark, and Copyright Rights........................7
        2.02   Bill of Sale..................................................................7
        2.03   Real Property Lease Assignments...............................................7
        2.04   Contract Assignment...........................................................7

ARTICLE III      REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLERS........................7

        3.01   Organization and Good Standing; Assets of Subsidiaries........................8
        3.02   Authorization; Compliance with Other Instruments and Law......................8
        3.03   Due Diligence.................................................................9
        3.04   Operation of the Business in the Ordinary Course..............................9
        3.05   Tax Matters...................................................................9
        3.06   Material Contracts and Commitments: Cure Costs................................9
        3.07   Licenses, Permits and Authorizations.........................................10
        3.08   Title to Purchased Assets....................................................11
        3.09   Proprietary Rights...........................................................11
        3.10   Employee Benefit Plans; Labor Matters........................................12
        3.11   Litigation and Other Claims..................................................13
        3.12   [Intentionally Omitted]......................................................13
        3.13   Compliance with Laws.........................................................13
        3.14   Insurance....................................................................14
        3.15   Real Property Leases.........................................................14
        3.16   Condition of Purchased Assets................................................14
        3.17   Environmental Matters........................................................14
        3.18   Full Disclosure..............................................................16
        3.19   Representations and Warranties True at the Closing...........................16

ARTICLE IV       REPRESENTATIONS, WARRANTIES
                 AND COVENANTS OF BUYER.....................................................16





                                       i


                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                          PAGE
                                                                                       
        4.01   Organization and Good Standing...............................................16


        4.02   Due Authorization; Noncontravention..........................................16

ARTICLE V        EMPLOYEES..................................................................17

        5.01   Employees and Employee Benefits..............................................17
        5.02   Third Parties................................................................18

ARTICLE VI       WORKERS COMPENSATION, PRODUCT
                 LIABILITY AND WARRANTY RESPONSIBILITY......................................19

        6.01   Workers Compensation.........................................................19
        6.02   Product Liability and Warranty Claims........................................19

ARTICLE VII      COVENANTS AND AGREEMENTS REGARDING BANKRUPTCY..............................19

        7.01   Bankruptcy Actions...........................................................19

ARTICLE VIII     PRE-CLOSING COVENANTS......................................................21

        8.01   General......................................................................21
        8.02   Operation of Business........................................................21
        8.03   Books of Account.............................................................21
        8.04   Access to Information........................................................21
        8.05   Key Employees................................................................22
        8.06   Consents.....................................................................22
        8.07   Delivery of Schedules; Notice of Developments................................22
        8.08   Related Agreements...........................................................22
        8.09   Press Releases and Public Announcements......................................22
        8.10   Enforcement of Rights with Respect to Employees, etc.........................22
        8.11   Limitation on Solicitation, etc..............................................22

ARTICLE IX       CLOSING CONDITIONS.........................................................23

        9.01   Condition to Obligations of all Parties......................................23
        9.02   Conditions to the Obligations of Sellers.....................................23
        9.03   Conditions to the Obligations of Buyer.......................................23

ARTICLE X        THE CLOSING................................................................24

        10.01  Time and Place of Closing....................................................24
        10.02  Instruments of Transfer, Etc.................................................24
        10.03  Termination of Agreement.....................................................25
        10.04  Effect of Termination........................................................26



                                       ii





                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                          PAGE
                                                                                       
ARTICLE XI       POST-CLOSING COVENANTS.....................................................26

        11.01  Expenses.....................................................................26
        11.02  Further Assurances...........................................................26
        11.03  Commissions and Fees.........................................................26
        11.04  Sales, Transfer and Use Taxes................................................27
        11.05  Accounts Receivable..........................................................27
        11.06  Enforcement of Rights with Respect to Employees, etc.........................27

ARTICLE XII      MISCELLANEOUS..............................................................27

        12.01  Binding Effect...............................................................27
        12.02  No Assignment................................................................27
        12.03  Counterparts.................................................................28
        12.04  Governing Law................................................................28
        12.05  Venue........................................................................28
        12.06  Notices......................................................................28
        12.07  Amendment and Modification...................................................30
        12.08  Waiver of Compliance.........................................................30
        12.09  Interpretation...............................................................30
        12.10  Incorporation of Exhibits and Schedules......................................30
        12.11  Entire Agreement.............................................................30
        12.12  Buyer's Assignee.............................................................30




                                      iii

                                    SCHEDULES

                                                                            
                                                                                   SECTION
SCHEDULE              DESCRIPTION                                                 REFERENCE

  1.01(a)             Real Property Leases                                        1.01(a)
  1.01(b)             Furniture, Machinery & Equipment                            1.01(b)
  1.01(c)             Assumed Contracts; Defaults                                 1.01(c)
  1.01(f)             Government Licenses, Permits and Authorizations             1.01(f)
  1.01(h)             Proprietary Rights                                          1.01(h)
  1.01(k)             Assumed Insurance Policies                                  1.01(k)
  1.01(m)             Budget                                                      1.01(m)
  1.02                Retained Assets                                             1.02
  3.01                Organization and Good Standing;                             3.01
  3.01(b)             Assets of Subsidiaries                                      3.01(b)
  3.02                Noncontravention                                            3.02
  3.03                Due Diligence Checklist                                     3.03
  3.04                Operation of the Business in the Ordinary Course            3.04
  3.06(a)             Sellers' Contracts; Defaults                                3.06(a)
  3.06(b)             Government Contracts; Defaults                              3.06(b)
  3.06(c)             Cure Costs                                                  3.06(c)
  3.07                Licenses, Permits and Authorizations - Exceptions           3.07
  3.08                Encumbrances on Assets                                      3.08
  3.09(b)             IP - Computer Programs                                      3.09(b)
  3.09(c)             Licensee Software                                           3.09(c)
  3.09(d)             IP - Litigation                                             3.09(d)
  3.09(e)             IP - Infringements                                          3.09(e)
  3.09(f)             IP - Encumbrances                                           3.09(f)
  3.09(g)             IP - Licenses                                               3.09(g)
  3.09(h)             IP - Royalty Fees                                           3.09(h)
  3.10                Employee Benefit Plans                                      3.10
  3.11                Litigation                                                  3.11
  3.12                Material Adverse Change                                     3.12
  3.13                Compliance with Laws                                        3.13
  3.13(b)             List of US and ISO Standards                                3.13(b)
  3.14                Insurance                                                   3.14
  3.15                Real Property Leases                                        3.15
  3.17                Environmental Matters                                       3.17
  5.01                Employees                                                   5.01(b)
  8.06                Key Employees                                               8.06
11.03                 Commissions and Fees                                       11.03




                                       i

                                    EXHIBITS



                                                                                SECTION
     EXHIBIT                           DESCRIPTION                             REFERENCE
                                                                         
        A           Form of Assignment of Patent Rights                           2.01

        B           Form of Assignment of Trademark Rights                        2.01

        C           Form of Assignment of Copyright Rights                        2.01

        D           Form of Bill of Sale                                          2.02

        E           Form of Assignment of Leases                                  2.03

        F           Form of Contract Assignment                                   2.04

        G           Form of Sale Order                                            7.01

        H           Form of 9.03(a) Certificate                                 9.03(a)

        I           Certain Definitions                                         Recitals



                                       ii


                            ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of February
12, 2005 among MTVP (First Virtual Investments), LLC, a Washington limited
liability company, Silicon Valley Bank, a California banking corporation, and
Morrison & Foerster LLP, a limited liability partnership (collectively "Buyer"),
First Virtual Communications, Inc., a Delaware corporation ("FVC"), and CUseeMe
Networks, Inc., a Delaware corporation ("CUseeMe"; and together with FVC
referred to herein collectively as "Sellers" and each individually as a
"Seller"). Each of Buyer, FVC and CUseeMe are sometimes individually referred to
herein as a "Party" or collectively as the "Parties".

                             SUMMARY OF TRANSACTION

        Sellers are engaged in the business of providing integrated rich media
communication solutions to the enterprise, service provider and public sector
markets (the "Business"). CUseeMe is a wholly owned subsidiary of FVC.

        On January 20, 2005 (the "Petition Date"), each Seller filed with the
United States Bankruptcy Court for the Northern District of California, San
Francisco Division (the "Bankruptcy Court") a voluntary petition (the "Chapter
11 Cases") for relief under chapter 11 of Title 11 of the United States Code
(the "Bankruptcy Code").

        Each of Buyer is a secured lender to Sellers pursuant to certain written
agreements. Prior to the Closing, Buyer will form a separate entity ("Buyer's
Assignee") which will take ownership of the assets described below and assume
the Assumed Liabilities and become the Buyer for all purposes under this
Agreement other than the forgiveness of the secured debt owed by the Sellers to
Buyer.

        Sellers wish to sell, and Buyer wishes to purchase, through forgiveness
of its secured debt and the secured debt of Huron Consulting Services LLC,
substantially all of the assets of Sellers on the conditions and pursuant to the
terms herein set forth. Capitalized terms used herein shall have the meanings
ascribed to them in this Agreement, including the Schedule of Definitions
annexed hereto as Exhibit I. To effect such transaction and in consideration of
the mutual covenants, representations, warranties and agreements hereinafter set
forth, and intending to be legally bound hereby, the Parties hereto agree as
follows:

                                   ARTICLE I

                       SALE OF ASSETS AND TERMS OF PAYMENT

        1.01 ASSETS BEING SOLD TO BUYER. Upon the terms and conditions set forth
in this Agreement and subject to the provisions of the Sale Order, Seller agrees
to sell and transfer to Buyer and Buyer agrees to purchase, at the Closing, all
of Sellers' assets used in or associated with the Business (the "Purchased
Assets"), as they shall exist on the Closing Date (as defined in Section 10.01
hereof), but excluding the Retained Assets (as defined in Section 1.02 hereof)
including without limitation the following assets:


                                       1


               (a) REAL PROPERTY LEASES. To the extent that the Bankruptcy Court
        has authorized Seller to assume and assign such leases to Buyer pursuant
        to section 365 of the Bankruptcy Code, all of the right, title and
        interest of Sellers in, to and under the leases (the "Assumed Real
        Property Leases") covering Sellers' leased premises (the "Leased
        Premises") listed on Schedule 1.01(a) hereto and all of the right, title
        and interest of Sellers in and to all leasehold improvements in or on
        the Leased Premises, which Schedule 1.01(a) shall be initially finalized
        by Buyer on or before February 18, 2005, provided, however, that Buyer
        may remove any lease from Schedule 1.01(a) at any time on or before the
        date that is 30 days after Closing;

               (b) FURNITURE, MACHINERY, AND EQUIPMENT. All the furniture,
        machinery, transportation vehicles, equipment, tools, fixtures, molds
        and dies and other fixed assets of Sellers located on the Leased
        Premises, on the premises of vendors or elsewhere, substantially all of
        which are listed on Schedule 1.01(b) hereto, except those items sold or
        otherwise disposed of after the date hereof in the ordinary course of
        business (subject to prior approval of Buyer);

               (c) ASSUMED CONTRACTS. To the extent that that the Bankruptcy
        Court has authorized Seller to assume and assign such contracts to Buyer
        pursuant to section 365 of the Bankruptcy Code or otherwise to transfer
        its rights under such contracts to Buyer pursuant to section 363 of the
        Bankruptcy Code, all of the right, title and interest of Sellers in, to
        and under those executory contracts, agreements, commitments and
        understandings (including leases of personal property) which are
        specifically listed on Schedule 1.01(c) hereto, which Schedule 1.01(c)
        shall be initially finalized by Buyer on or before February 18, 2005,
        provided, however, that Buyer may remove any contract from Schedule
        1.01(c) at any time on or before the date that is 30 days after Closing
        (the "Assumed Contracts");

               (d) ACCOUNTS RECEIVABLE AND CUSTOMER CLAIMS. All of Sellers'
        accounts receivable and notes receivable, subject to any trade credits
        or offsets owed to customers of Sellers and all of Sellers' rights,
        claims and causes of action against customers of the Business;

               (e) BOOKS AND RECORDS. All of Sellers' books and records (the
        "Records"), including all sales and credit records, advertising and
        sales material, literature, customer and distributor lists, financial
        records, personnel and payroll records to the extent transferable under
        applicable law, tax, accounting and other books and records;

               (f) GOVERNMENTAL LICENSES, PERMITS AND AUTHORIZATIONS. To the
        extent assignable and transferable under their terms and applicable law,
        all governmental licenses, permits and authorizations related to the
        Business a complete list of which, to Sellers' Knowledge, is set forth
        on Schedule 1.01(f) hereto (the "Assumed Licenses");

               (g) DEPOSITS, CREDITS AND PREPAID EXPENSES. All of Sellers'
        deposits, credits, prepaid expenses, other current assets and all
        security deposits and similar assets relating to the Assigned Contracts
        (as defined below);


                                       2


               (h) PROPRIETARY RIGHTS. Any and all Seller Proprietary Rights and
        any and all Seller Registered Proprietary Rights which, to the extent
        they can be specified, are included on Schedule 1.01(h) hereto;

               (i) INVENTORIES. All inventories of Sellers of any kind
        including, but not limited to, finished goods, work in progress,
        supplies and raw materials;

               (j) INTANGIBLE ASSETS. The intangible assets of the Business of
        Sellers as a going concern and good will thereof;

               (k) INSURANCE POLICIES. Those insurance policies specified by
        Buyer on Schedule 1.01(k) hereof (the "Assumed Insurance Policies"), to
        the extent such insurance policies are assignable and transferable under
        their terms and applicable law, which Schedule 1.01(k) shall be
        initially finalized by Buyer on or before February 18, 2005, provided,
        however, that Buyer may remove any insurance policy from Schedule
        1.01(k) at any time on or before the date that is 30 days after Closing;

               (l) RIGHTS WITH RESPECT TO EMPLOYEES, ETC. To the extent
        assignable and transferable under applicable law, any and all of
        Sellers' rights to enforce employee secrecy, non-disclosure,
        non-competition agreements or covenants by current or former employees
        and any other rights to protect the Seller Proprietary Rights and Seller
        Registered Proprietary Rights and the Business;

               (m) CASH AND BANK ACCOUNTS. Sellers' cash and cash equivalents as
        of the Closing Date, including, but not limited to any bank deposit
        accounts, provided, however, that Sellers may retain the total sum (the
        "Retained Cash") in the amount of (i) the Carve-Out as defined in the
        Interim Order Authorizing Debtor to Obtain Postpetition Financing
        Secured by Liens on Property of the Estate or the Final Order
        Authorizing Debtor to Obtain Postpetition Financing Secured by Liens on
        Property of the Estate, whichever is then in effect (the "DIP Order"),
        except that the time period in the Carve-Out following and defined by
        reference to the delivery of a Default Notice in the DIP Order follows
        and is defined instead under this Agreement by reference to the Closing
        Date, plus (ii) accrued, unpaid administrative expenses under 11 U.S.C.
        ss. 503(b) through and including the Closing Date (other than the
        Carve-out, as modified under this Agreement) to the extent previously or
        subsequently allowed, provided that such administrative expenses are
        included in the budget attached as Schedule 1.01(m); and

               (n) OTHER ASSETS. All other assets, properties and rights of
        Sellers, of every kind and nature, owned or held by Sellers or in which
        Sellers have an interest on the Closing Date, known or unknown, fixed or
        unfixed, choate or inchoate, accrued, absolute, contingent or otherwise,
        whether or not specifically referred to in this Agreement, where and as
        they are held, other than the Retained Assets.

        1.02 RETAINED ASSETS. Notwithstanding the foregoing, the Purchased
Assets shall not include any of the following (collectively the "Retained
Assets"):


                                       3


               (a) any equity security of a Seller or any direct or indirect
        subsidiary of a Seller;

               (b) Sellers' rights, title and interests under this Agreement and
        any agreements executed in connection herewith;

               (c) any leases covering leased premises that are not Assumed Real
        Property Leases;

               (d) any executory contracts, agreements, commitments and
        understandings (including leases of personal property) that are not
        Assumed Contracts;

               (e) the corporate seal, minute books, charter documents,
        corporate stock record books and such other Records as pertain to the
        organization, existence or share capitalization of Sellers and duplicate
        copies of the Records as are necessary to enable Seller to file its tax
        returns and reports as well as any other Records or materials relating
        to Seller generally and not involving or relating to the Purchased
        Assets;

               (f) all personnel records and other Records that Sellers are
        required by applicable law to retain in its possession, provided that
        Buyer will receive copies of such Records (to the extent permitted by
        applicable law);

               (g) all "employee benefit plans" (as such term is defined by
        Section 3(3) of the Employee Retirement Security Act of 1974, as amended
        ("ERISA")), "employee pension benefit plans" (as such term is defined by
        Section 3(2) of ERISA) and all other pension, profit sharing or cash or
        deferred compensation plans and trusts and assets thereof and any other
        employee benefit plan or arrangement thereof, if any, maintained by
        Sellers;

               (h) any tax attributes of the Sellers, including without
        limitation, any net operating loss carryovers and any right or claim for
        a tax refund attributable to the operation or assets of the Sellers,
        whether arising before or after the Closing;

               (i) the Retained Cash;

               (j) Any rights or actions for avoidance of transactions or
        obligations, or recovery under Sections 541 through 550 of the
        Bankruptcy Code (the "Avoidance Actions"), that may be asserted on
        behalf of Sellers as debtors in possession or a trustee in the Chapter
        11 Cases against a Person other than Buyer or its Affiliates, provided
        that Sellers shall not assert Avoidance Actions or other claims against
        a Person with whom Sellers had a business relationship with as of the
        date immediately prior to the Closing Date; and

               (k) those assets specifically listed on Schedule 1.02 hereto.

        1.03 ASSUMED LIABILITIES. Buyer agrees to (A) assume, perform and
discharge all post-Closing liabilities due under the Assumed Real Property
Leases, the Assumed Contracts and Assumed Licenses and otherwise related to the
Purchased Assets arising on and after the Closing Date and (B) cure, at Buyer's
expense, any and all monetary defaults existing under each Assumed Real Property
Lease, Assumed License, Assumed Insurance Policy and Assumed Contract included



                                       4


within the Purchased Assets (collectively the "Assigned Contracts") to the
extent required for Sellers to assume such Assigned Contracts in the Chapter 11
Cases, provided, however, that Buyer shall not be required to pay, and shall
have no liability for, any amounts to cure the Assigned Contracts in excess of
the total amount of cash and cash equivalents transferred to Buyer under Section
1.01(m) above (collectively, the foregoing shall be referred to as the "Assumed
Liabilities"); provided, however, any other provision of this Agreement
notwithstanding, that the Parties agree and acknowledge that MTVP (First Virtual
Investments), LLC, Silicon Valley Bank, Huron Consulting Services LLC and
Morrison & Foerster LLP shall not in any way or at any time assume or otherwise
be obligated for Assumed Liabilities, which shall only be assumed by Buyer's
Assignee, or otherwise be liable for any of the debts of Sellers, and Huron is
not a Buyer for the purposes of this or any other section or provision of this
Agreement.

        On the Closing Date or, as regards a particular Assigned Contract, on
such later date as Buyer pays the monetary cure for such Assigned Contract,
Sellers shall (i) cure, at Sellers' sole expense, any and all non-monetary
defaults existing under each Purchased Asset, and Assigned Contract to the
extent required for Sellers to assume such Assigned Contracts in the Chapter 11
Cases, (ii) assume each Assigned Contract in the Chapter 11 Cases to the extent
necessary to transfer such Assigned Contracts to Buyer, and (iii) subject to
Buyer providing adequate assurance of performance to the counterparty thereto to
the extent required by the Bankruptcy Court, assign such Assigned Contracts to
Buyer pursuant to an order of the Bankruptcy Court (which may be the Sale Order
or one or more other orders that are no less favorable to Buyer than the
provisions of the Sale Order). Effective upon and concurrently with such
assignment(s), Buyer shall assume each Assigned Contract assigned to it pursuant
to this Section 1.03 by executing and delivering to Sellers the Assignment and
Assumption of Contracts attached hereto as Exhibit F. Buyer shall not assume any
liabilities or obligations of Sellers except those specifically assumed by Buyer
pursuant to the provisions of this Section 1.03.

        1.04 RETAINED LIABILITIES. Buyer shall not assume any liabilities or
obligations of Sellers except those specifically assumed by Buyer pursuant to
the provisions of Section 1.03. Except for the Assumed Liabilities, Buyer shall
not assume and shall not be liable for any of the debts, obligations,
responsibilities (including, but not limited to, Sellers' responsibility for any
warranty or product liability claims (including claims for injury to person or
property) relating to the Business and arising from products sold or work
performed on or prior to the Closing Date), undertakings or liabilities, whether
matured or unmatured, fixed or contingent, secured or unsecured, accrued,
absolute or other of Sellers and all such liabilities will remain the
responsibility of the Sellers and shall be retained, paid, performed and
discharged by the Seller and the Sale Order shall so provide. The Assumed
Liabilities shall not include any of Sellers' accrued expenses or other
indebtedness or liabilities incurred, related to, or arising as a result of
operations conducted, actions taken or events occurring on or prior to the
Closing Date, including specifically, but without limitation, (i) federal, state
and local income tax liabilities, including, without limitation, all tax
liabilities associated with deferred income items and all franchise, gross
receipts, property, sales, use or value added taxes or any interest, additions
to tax or penalties thereon; (ii) bank and other short-term debt; (iii)
intercompany current liabilities; (iv) all environmental liabilities and claims
arising out of conditions existing or actions taken or not taken prior to the
Closing Date, (v) all litigations, arbitrations and other third party claims and
proceedings, (vi) all employee benefit liabilities and obligations (including
specifically, but without limitation, post-retirement medical benefits,
severance pay,



                                       5


bonuses, incentive pay and deferred compensation, and accrued vacation and WARN
Act liability to the extent arising or accruing prior to the Closing Date), and
(vii) all unknown, contingent and other liabilities and obligations not
specifically assumed by Buyer pursuant to Section 1.03 above (collectively the
"Retained Liabilities").

        1.05 PURCHASE PRICE. The purchase price of the Purchased Assets is the
amount which is equal to the aggregate sum of the outstanding principal
balances, accrued but unpaid interest, late fees, and any other charges and
fees, including but not limited to any administrative or attorneys' fees, due
and owing to the Buyer and Huron Consulting Services LLC on account of all of
the secured loans described immediately below (the "Secured Debt"). The Purchase
Price will be paid solely by the forgiveness of the Secured Debt as follows:

               (a) MTVP (First Virtual Investments), LLC: all sums outstanding
               pursuant to that certain Debtor In Possession Revolving Credit
               Agreement and all amendments and related documents thereto, which
               sums total approximately $780,000 as of the date of this
               Agreement;

               (b) Silicon Valley Bank: all sums outstanding pursuant to that
               certain Loan And Security Agreement and Schedule To Loan And
               Security Agreement dated April 3, 2003 and all amendments and
               related documents thereto, which sums total approximately
               $2,850,000 as of the date of this Agreement;

               (c) Huron Consulting Services LLC: all sums outstanding and owed
               to Huron Consulting Services LLC pursuant to that certain
               Services, Payment & Security Agreement dated August 19, 2004 and
               all amendments and related documents thereto, which sums total
               approximately $500,000 as of the date of this Agreement; and

               (d) Morrison & Foerster LLP: all sums outstanding and owed to
               Morrison & Foerster LLP pursuant to that certain Services,
               Payment & Security Agreement dated August 19, 2004 and all
               amendments and related documents thereto, which sums total
               approximately $1,060,000 as of the date of this Agreement.


        1.06 ALLOCATION OF THE PURCHASE PRICE. Each of the parties agrees that
the Purchase Price shall be allocated as reasonably determined by Buyer (and
reasonably satisfactory to Sellers) prior to the Closing on a schedule to be
prepared by Buyer (and reasonably satisfactory to Sellers) in accordance with
Section 1060 of the Code. Each of the parties agrees to report this transaction
for all state and federal tax purposes and all accounting purposes in accordance
with such allocation. If any state or federal taxing authority challenges such
allocation, Buyer and Sellers shall cooperate in good faith in responding to
such challenge and shall each bear their own costs and expenses in any response.
The party receiving the notice of such challenge shall give prompt written
notice to the other party of any such challenge. Within thirty (30) calendar
days after receipt of such notice, Buyer shall have the option to elect to
assume the defense of any such challenge. Regardless of whether Buyer elects to
assume such defense, both Buyer and Sellers, respectively, shall be entitled to
approve the settlement, if any, that the other may desire to make with respect
to any such challenge,



                                       6


which approval shall not be unreasonably withheld. The foregoing allocation
shall not be determinative of the appropriate allocation of the Purchase Price
among any creditors of Sellers asserting the right to receive a portion of the
Purchase Price as a distribution under the Bankruptcy Code.

        1.07 ABSOLUTE SALE. Subject to the Sale Order (as defined below) and to
the extent provided in the Sale Order, the Sellers' sale, conveyance, transfer
and delivery of the Purchased Assets to Buyer shall be free and clear of all
title defects, liabilities, obligations, liens, mortgages, security interests,
encumbrances, claims or similar adverse interests of any kind or character to
the extent provided in the Sale Order.

                                   ARTICLE II

                               RELATED AGREEMENTS

        Simultaneously with the Closing hereunder or, as regards a particular
Assigned Contract, on such later date as Buyer pays the monetary cure for such
Assigned Contract, the following agreements (the "Related Agreements") will be
executed and delivered:

        2.01 ASSIGNMENTS OF PATENT, TRADEMARK, AND COPYRIGHT RIGHTS. Assignment
agreements (the "Intellectual Property Assignments") in the forms of Exhibit A,
Exhibit B, and Exhibit C hereto, pursuant to which Sellers will assign to Buyer,
all of Sellers' right, title and interest in, to and under all Seller
Proprietary Rights and Seller Registered Proprietary Rights included in the
Purchased Assets.

        2.02 BILL OF SALE. Bill of Sale, in the form of Exhibit D hereto,
transferring title to the Purchased Assets (other than the Real Property Leases)
to Buyer.

        2.03 REAL PROPERTY LEASE ASSIGNMENTS. Assignments and/or Subleases of
the Leased Premises to Buyer in the form of Exhibit E hereto.

        2.04 CONTRACT ASSIGNMENT. Assignment of the Assumed Contracts to Buyer
in the form of Exhibit F hereto.

                                  ARTICLE III

                         REPRESENTATIONS, WARRANTIES AND
                              COVENANTS OF SELLERS

        Each Seller, jointly and severally, represents and warrants to, and
covenants with, Buyer that as of the date hereof and as of the Closing Date:



                                       7


        3.01   ORGANIZATION AND GOOD STANDING; ASSETS OF SUBSIDIARIES.

               (a) Each Seller is a corporation duly organized, validly existing
        and in good standing under the laws of the State of Delaware, and has
        the corporate power and authority to own, lease and operate its
        properties and assets (including the Purchased Assets) and to conduct
        its business as it is now being conducted. Each Seller is duly qualified
        to do business in each jurisdiction in which it owns, leases or operates
        property or otherwise conducts business, each of which is set forth on
        Schedule 3.01 hereto. Except as set forth on Schedule 3.01 hereto, no
        Seller has equity or similar investments, direct or indirect, in any
        corporation, partnership, association, joint venture or other entity.

               (b) Schedule 3.01(b) lists all material assets of the
        subsidiaries of the Sellers, including, but not limited to, any
        Proprietary Rights of such subsidiaries.

        3.02 AUTHORIZATION; COMPLIANCE WITH OTHER INSTRUMENTS AND LAW. Subject
to the entry of the Sale Order, Sellers have full corporate power and authority
to enter into this Agreement, the Related Agreements and any other agreements
and documents to be executed and delivered by it at Closing as contemplated
hereby (collectively, the "Closing Documents"), to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Closing Documents and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action on the
part of Sellers. This Agreement has been duly executed and delivered by each
Seller, and is a valid and binding obligation of each Seller enforceable in
accordance with its terms and the Closing Documents will, when executed and
delivered by each Seller at Closing, constitute valid and binding obligations of
each Seller enforceable in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect which affect
creditor's rights generally and by legal and equitable limitations on the
availability of specific remedies.

        Except as set forth on Schedule 3.02 and upon entry of the Sale Order,
the execution, delivery and performance of this Agreement and the Closing
Documents will not to the Sellers' Knowledge (i) conflict with or result in a
breach or violation of any provision of the Certificate of Incorporation or
By-Laws or any other applicable organizational documents of either Seller or of
any order, writ, injunction, judgment, decree, law, statute, rule or regulation
to which either Seller is a party or by which any Seller or the Purchased Assets
may be bound or affected; or (ii) result in a default (or give rise to any right
of termination, cancellation or acceleration) or result in the creation of any
lien, encumbrance, security agreement, charge, pledge, equity or other claim or
right of any person in or to the Purchased Assets under the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which any of the Sellers is a party or by which any
Seller or the Purchased Assets may be bound. All necessary authorizations of the
transactions contemplated by this Agreement required to be obtained by any
Seller from any Federal, state, local or foreign government or agency shall have
been obtained prior to the Closing, and any filings, notifications or
disclosures required by law or regulation of any such government or agency shall
have been made in such form as is acceptable as filed. Buyer shall cooperate
with Sellers with respect to the aforesaid



                                       8


filings, notifications or disclosures to the extent necessary to obtain said
authorizations. Sellers will deliver to Buyer at the Closing true and complete
copies of all resolutions of their boards of directors by which the execution,
delivery and performance of this Agreement and the Closing Documents and the
consummation of the transactions contemplated hereby and thereby were
authorized, certified by the Secretary or Assistant Secretary of each Seller as
of the Closing Date.

        3.03 DUE DILIGENCE. To the Sellers' Knowledge, the due diligence
materials provided by Sellers and their agents to Buyer in connection with the
Transactions contemplated by this Agreement do not contain any materially
incorrect information.

        3.04 OPERATION OF THE BUSINESS IN THE ORDINARY COURSE. Since January 20,
2005, except as set forth on Schedule 3.04, except as to any foreign operations
and except by reason of the filing of Chapter 11 Cases, the Sellers' Business
has been operated in the ordinary course, except to the extent that Buyer has
otherwise agreed in writing or as is expressly contemplated by this Agreement.

        3.05 TAX MATTERS. The Sellers will file any and all required tax returns
and pay any and all taxes due in connection with such returns on or prior to the
Closing Date.

        3.06 MATERIAL CONTRACTS AND COMMITMENTS; CURE COSTS.

               (a) Schedule 3.06(a) hereto constitutes a full and complete list,
        as of the date hereof, of the possible Assigned Contracts. Except as
        indicated on Schedule 1.01(c) or Schedule 3.06(a), the Sellers are not
        in breach or violation, or in default under, any of the possible
        Assigned Contracts, and upon entry of the Sale Order, the execution of
        this Agreement and the consummation of the transactions contemplated
        hereby will not constitute a default or breach under the possible
        Assigned Contracts; and except as specifically indicated on Schedule
        1.01(c) or Schedule 3.06(a), the execution of this Agreement and the
        consummation of the transactions contemplated hereby will not give rise
        to any consent requirement under any of the possible Assigned Contracts
        for which consent has not already been obtained ("Required Consents").
        All of the contracts listed on Schedule 1.01(c) and Schedule 3.06(a) are
        in full force and effect and have not been modified or amended in any
        material respect, except as set forth on Schedule 1.01(c) or Schedule
        3.06(a). To Sellers' Knowledge, there exists no reason why any one of
        the possible Assigned Contracts or Government Contracts cannot be
        assumed and assigned.

               (b) Schedule 3.06(b) contains a list of all Government Contracts
        (as hereinafter defined) as of the date hereof, true, complete and
        correct copies of which have been provided or made available to Buyer.
        Except as set forth in Schedule 3.06(b) and except for the commencement
        of the Chapter 11 Cases, to Sellers' Knowledge: (i) no Seller has taken
        any action or omitted to take any action required under the terms of a
        Government Contract which would cause a material breach or default under
        such Government Contract or cause a Seller to be subject to
        disqualification or removal from any capacity which a Seller now
        occupies with respect to, or as a result of the Government Contracts,
        either directly or as a subcontractor, consultant or otherwise, nor has
        any Seller been disqualified or removed from any such capacity; (ii) no
        Seller has received notice of any default under, or notice of any
        violation of the terms of, any Government Contract, other than those
        relating to the



                                       9


        commencement of the Chapter 11 Cases; (iii) no Seller is participating
        in, or is the subject of, any investigation by an Governmental Authority
        relating to the Government Contracts, billings, claims or business
        practices that is reasonably likely to lead to criminal or material
        civil penalties or the cancellation of any Government Contract, and no
        such investigation has been threatened or is actively being considered;
        (iv) no Seller is debarred or suspended under the Federal Acquisition
        Regulations or other similar applicable federal or state laws or
        regulations by any Governmental Authority from bidding for, or obtaining
        any Government Contract for services provided by, Sellers, and no such
        proceeding is pending or threatened; (v) each Seller has complied in all
        material respects with all applicable requirements, if any, under the
        Federal Truth in Negotiations Act (codified at 10 U.S.C. Sections 2306
        and 2306a; 41 U.S.C. Section 254b) with respect to Government Contracts
        for services provided by Sellers; (vi) no Government Contract is subject
        to the U.S. Government Cost Accounting Standards, as set forth in 48
        C.F.R. Part 30; and (vii) no Seller has engaged in any fraudulent act,
        bribery or other act of dishonesty or made any misrepresentation of
        material fact in connection with soliciting, negotiating, obtaining or
        maintaining any Government Contract which could serve as the basis of
        the termination of any such Government Contract. Except as set forth in
        Schedule 3.06(b) and to the Sellers' Knowledge: (i) the operation of the
        Purchased Assets has conformed, and is expected to conform, with the
        delivery schedule requirements of each Government Contract except as
        otherwise agreed by the applicable Governmental Authority; (ii) there
        has not been, nor is there expected to be, any cost overrun liability or
        spending in excess of any limitation of cost and fund provisions under
        any cost reimbursement type Government Contracts; and (iii) no
        Governmental Authority has, in writing or orally communicated, asserted
        or filed any actual or potential material price reduction, adverse
        contract adjustment, or disallowance of costs or claims in respect of
        any Government Contract. Except as set forth in Schedule 3.06(b) and to
        the Sellers' Knowledge no Seller has received, with respect to any
        Government Contract, notice of: (i) any cure notice pursuant to
        applicable contract default provisions or notice of default, however
        termed; (ii) any contract termination, whether for default, convenience,
        cancellation or a lack of funding or other reasons; (iii) any final
        decision or unilateral modification assessing a price reduction, penalty
        or claim for damages or other remedy, however termed; (iv) any claim,
        based on assertions of defective pricing or asserted violations of
        government cost accounting standards or cost principles; (v) any claim
        for indemnification by an Governmental Authority; (vi) other than in the
        ordinary course of business and in amounts less than $50,000, an
        equitable adjustment of or claim concerning such Government Contract
        submitted by or brought by any Seller or brought by any subcontractors
        or suppliers against a Seller; or (vii) any disallowance of costs
        (direct or indirect) or related claims, in each case referred to in one
        of the preceding clauses of this Section 3.06.

               (c) Schedule 3.06(c) lists the costs associated with curing
        defaults under each possible Assigned Contract to the extent the default
        must be cured under Bankruptcy Code Section 365(b).

        3.07 LICENSES, PERMITS AND AUTHORIZATIONS. Except as set forth on
Schedule 3.07, each of the Sellers has all approvals, authorizations, consents,
licenses, franchises, orders, certificates and other permits of, and has made
all filings with, any governmental authority, whether foreign, Federal, state or
local, which are required for the ownership of their assets (including the
Purchased Assets)



                                       10


or the conduct of Seller's Business as presently conducted. A complete list to
the Sellers' Knowledge of all such approvals, authorizations, consents,
licenses, franchises, orders, certificates, permits and filings is included on
Schedule 3.07 hereto.

        3.08 TITLE TO PURCHASED ASSETS. Except as set forth on Schedule 3.08
hereto, Sellers have good and marketable legal title to the Purchased Assets
and, subject to entry of the Sale Order (as defined below) shall at the Closing
deliver to Buyer good and marketable legal title to the Purchased Assets free
and clear of all title defects, liabilities, obligations, liens, mortgages,
security interests, encumbrances, claims or similar adverse interests of any
kind or character to the extent provided in the Sale Order. All leases pursuant
to which Sellers lease any of the Purchased Assets, including the frequency and
amount of payments thereunder and duration of such leases are set forth on
Schedule 3.08 hereto. All such leases are valid and binding in accordance with
their respective terms.

        3.09 PROPRIETARY RIGHTS.

               (a) Schedule 1.01(h) sets forth a list of the Seller Proprietary
        Rights and Seller Registered Proprietary Rights to the extent they can
        be specified.

               (b) Schedule 3.09(b) sets forth a list of computer programs
        (excluding readily available, off-the-shelf personal computer software
        packages) currently used or held for use by the Sellers.

               (c) To the Sellers' Knowledge, the Seller Proprietary Rights and
        Seller Registered Proprietary Rights are valid and enforceable and the
        Sellers have the right to use all Seller Proprietary Rights and Sellers
        Registered Proprietary Rights used or held for use in the Business
        except computer software identified on Schedule 3.09(c) as computer
        software not owned by the Sellers and used in the Business ("Licensee
        Software"). With respect to Licensee Software, at Buyer's request and to
        the extent permitted under the license applicable to such Licensee
        Software, Sellers shall sublicense the Licensee Software to Buyer on the
        same terms and conditions as Sellers' license applicable thereto.

               (d) Except as set forth on Schedule 3.09(d), to the Sellers'
        Knowledge there are no pending or threatened proceedings or litigation
        against any Seller: (i) based upon the Seller Proprietary Rights or the
        Seller Registered Proprietary Rights, or (ii) alleging that operation of
        the Sellers' Business or any of the Purchased Assets infringe or
        misappropriate the patents, trademarks, trade names, copyrights, trade
        secrets or other intellectual property rights of others.

               (d) Except as set forth on Schedule 3.09(e), (i) there are no
        infringements, misappropriations or other violations by others of valid,
        enforceable items of Seller Proprietary Rights and Seller Registered
        Proprietary Rights, and (ii) use of the Seller Proprietary Rights and
        Seller Registered Proprietary Rights in the operation of the Sellers'
        Business as currently conducted do not infringe, misappropriate or
        violate the patents, trademarks, trade names, copyrights, trade secrets
        or other intellectual property rights of others.



                                       11


               (f) Except as set forth on Schedule 3.09(f) and upon entry of the
        Sale Order, the Sellers have good and marketable title to the Seller
        Proprietary Rights and Seller Registered Proprietary Rights, free and
        clear of all encumbrances.

               (g) Except as set forth on Schedule 3.09(g), the Sellers have not
        granted any license with respect to any of the Seller Proprietary Rights
        or Seller Registered Proprietary Rights to any person.

               (h) Except as set forth on Schedule 3.09(h), none of the Seller
        Proprietary Rights and Seller Registered Proprietary Rights requires
        payment of any royalty or fee, however classified, to any person to be
        used in connection with the Sellers' Business as presently used.

        3.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.

               (a) Except as set forth on Schedule 3.10 hereto, no Seller
        maintains, administers or otherwise contributes to any "employee benefit
        plan," as defined in Section 3(3) of the Employee Retirement Income
        Security Act of 1974, as amended ("ERISA"), whether or not such plan is
        subject to any of the provisions of ERISA, which covers any employee or
        beneficiary of any employee, whether active or retired (any such plan
        being herein referred to as an "Employee Plan"). None of such Employee
        Plans is intended to be qualified under Section 401 of the Code. No
        Seller has any commitment to create any additional Employee Plans.

               (b) True and complete copies of each Employee Plan, including all
        amendments thereto and related trust or other funding agreements and the
        latest financial statements thereof, have been heretofore delivered to
        Buyer, together with (i) a true and complete copy of the three most
        recent annual reports (if required by law) for each such plan including
        any and all schedules, opinions and attachments thereto prepared in
        connection with any such reports, and (ii) a copy of the most recent
        summary plan description and summary of material modifications of each
        such plan. None of Seller, any Employee Plan or any "party in interest",
        as defined in section 3(14) of ERISA, has engaged in a "prohibited
        transaction", as defined in section 406 of ERISA, which could subject
        any of them or Buyer to liability under section 409 or 502(i) of ERISA.

               (c) Each Seller and each fiduciary for each of the Employee
        Plans, is in compliance with the terms of the Employee Plans and with
        the requirements of any and all laws, statutes, orders, decrees, rules
        and regulations, including but not limited to ERISA, applicable to each
        such plan. No Seller has failed to make any contribution to, or to pay
        any amount due and owing, as required by applicable law or by the terms
        of any Employee Plan as of the last day of the most recent fiscal year
        of each of such plans ended prior to the Closing Date.

                (d) To Sellers' Knowledge, there is no pending or threatened
        legal action, proceedings or investigations against any Seller or any
        Employee Plan with respect to any



                                       12

        such plan, other than routine claims for benefits, which could result in
        liability to any such plan, or to any Seller, and there is no basis for
        any such legal action or proceeding.

               (e) Except as set forth on Schedule 3.10, (i) each Seller is in
        compliance with all applicable laws respecting employment and employment
        practices, terms and conditions of employment and wages and hours, and
        is not engaged in any unfair labor practice; (ii) there is no unfair
        labor practice complaint against any Seller pending before the National
        Labor Relations Board or any other tribunal; (iii) to Sellers' Knowledge
        there is no labor strike, dispute, slowdown or stoppage actually pending
        or threatened against or affecting Seller; (iv) no Seller has received
        notice that any representation or petition respecting any of its
        employees has been filed with the National Labor Relations Board or
        comparable foreign regulatory authority; (v) no grievance or any
        arbitration proceeding arising out of or under any collective bargaining
        agreements is pending against any Seller; (vi) no Seller has experienced
        any strike or work stoppage or other industrial dispute involving its
        employees in the past five years; and (vii) to Sellers' Knowledge no
        claims, charges, investigations, audits, arbitrations, administrative
        proceedings or lawsuits are pending or threatened concerning any alleged
        violation of any Law referenced in subparagraph (i) above.

        3.11 LITIGATION AND OTHER CLAIMS. To the Sellers' Knowledge, there are
no actions, suits, arbitration proceedings, claims, administrative charges,
investigations, audits or other proceedings related to the Sellers or relating
to any of the Purchased Assets pending or threatened before any foreign,
federal, state, municipal or other court, department, commission, arbitration
panel, board, bureau, agency, body or instrumentality against any Seller or
affecting any of the Sellers' property or assets (including the Purchased
Assets) at law or in equity except as set forth on Schedule 3.11. No Seller is a
party to or subject to the provisions of any order, writ, injunction, decree or
judgment of any court or foreign, federal, state, municipal or other
governmental or administrative body, department, commission, board, bureau, any
securities exchange or other agency or instrumentality in connection with the
ongoing operations of the Sellers except as set forth on Schedule 3.11. No
Seller is engaged in any arbitration nor has either Seller submitted any
disputed matter to an arbitrator in connection with the ongoing operations of
the Sellers except as set forth on Schedule 3.11.

        3.12 [INTENTIONALLY OMITTED]

        3.13 COMPLIANCE WITH LAWS. Except as set forth on Schedule 3.13 hereof:

               (a) The Sellers' Business is being conducted in material
        compliance with all applicable Laws.

               (b) The Sellers comply in all material respects with the
        standards applicable to the Sellers' Business established by the
        International Organization for Standardization (ISO). Schedule 3.13(b)
        sets forth all United States and ISO standards with which the Sellers
        comply and includes copies of all certificates received by any Seller
        regarding its compliance with any United States or ISO standards.



                                       13


        3.14 INSURANCE. The Sellers maintain reasonable and customary insurance
insuring the Purchased Assets and the operations of their Business. All policies
of insurance of any kind maintained, owned or held by the Sellers are set forth
on Schedule 3.14 hereto and such policies are in full force and effect, all
premiums with respect thereto covering all periods up to and including the
Closing Date have been paid other than premiums for which the Sellers are
prohibited from making payment by the Bankruptcy Code or the Bankruptcy Court,
and to Sellers' Knowledge no notice of cancellation or termination has been
received with respect to any such policy which has not been replaced on
substantially similar terms prior to the date of such cancellation or
termination.

        3.15 REAL PROPERTY LEASES. Except as set forth on Schedule 3.15, all
possible Real Property Leases are valid and binding upon the lessor and are in
full force and effect. Except as set forth on Schedule 3.15 and upon entry of
the Sale Order, there are no existing defaults by either Seller under the
possible Real Property Leases and no event has occurred which (whether with or
without notice, lapse of time, or both) would constitute a default thereunder by
the Sellers. Sellers have delivered to Buyer true and complete copies of the
possible Real Property Leases.

        3.16 CONDITION OF PURCHASED ASSETS. The Purchased Assets are in good
repair and working condition, normal wear and tear excepted, are suited for the
uses intended, and are in conformity with all applicable laws, ordinances, rules
and regulations.

        3.17 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 3.17 hereto:

               (a) Each Seller is in compliance with all environmental laws,
        regulations, permits and orders applicable to it, and with all laws,
        regulations, permits and orders governing or relating to asbestos
        removal or abatement. No Seller has received nor is the subject of any
        Environmental Claim (as hereinafter defined) with respect to its
        business.

               (b) Except for temporary storage on premises pending arrangements
        for removal, no Seller has transported, stored, treated, disposed of or
        released, nor has it allowed or arranged for any third parties not a
        party to this Agreement, to transport, store, treat, dispose of or
        release, Hazardous Substances (as hereinafter defined) or other waste to
        or at any location other than a site lawfully permitted to receive such
        Hazardous Substances or other waste for such purposes; no Seller has
        performed, arranged for or allowed by any method or procedure such
        transportation, storage, treatment, disposal or release in contravention
        of any laws or regulations. No Seller has disposed, treated, stored,
        released or allowed or arranged for any third parties to dispose, treat,
        store or release Hazardous Substances or other waste upon any property
        or facility of the Sellers, whether owned or leased.

               (c) There has not occurred, nor is there presently occurring, a
        Release (as hereinafter defined), treatment, storage or disposal of any
        Hazardous Substance or other waste on, into, above or beneath the
        surface of any parcel of real property in which any Seller has or has
        had an ownership interest or any leasehold interest or which any Seller
        manages or operates or has managed or operated. For purposes of this
        Section the term "Release" shall mean releasing, spilling, leaking,
        pumping, pouring, emitting, emptying, discharging, injecting, escaping,
        leaching, dumping or disposing into the environment.



                                       14


               (d) No Seller has transported or disposed of, nor has it allowed
        or arranged for any third parties to transport or dispose of, any
        Hazardous Substance or other waste to or at a site, nor does or has any
        property or facility owned, leased, managed or operated by any Seller,
        constitute or constituted a site, which, pursuant to the U.S.
        Comprehensive Environmental Response, Compensation and Liability Act of
        1980, as amended ("CERCLA") or any similar state law, (A) has been
        placed on the National Priorities List or its state equivalent or
        otherwise been designated as an environmental or hazardous waste
        clean-up site, or (B) the Environmental Protection Agency or the
        relevant state agency has proposed or is proposing to place on the
        National Priorities List or its state equivalent or otherwise designate
        as an environmental or hazardous waste clean-up site. To Sellers'
        Knowledge, no Seller has received a notice or notice of any facts which
        could give rise to any notice that any Seller is a potentially
        responsible party for a federal or state environmental cleanup site or
        for corrective action under CERCLA or any other applicable law or
        regulation or of any other Environmental Claim. No Seller has submitted
        nor was required to submit any notice pursuant to Section 103(c) of
        CERCLA. To Sellers' Knowledge, no Seller has received any written or
        oral request for information in connection with any federal or state
        environmental cleanup site nor has it undertaken (or been requested to
        undertake) any response or remedial actions or cleanup actions of any
        kind at the request of any federal, state or local governmental entity,
        or at the request of any other person or entity.

               (e) To Sellers' Knowledge, there are no laws, regulations,
        ordinances, licenses, permits or orders relating to environmental or
        worker safety matters requiring any work, repairs, construction or
        capital expenditures with respect to the assets or properties of any
        Seller or otherwise required to be performed by any Seller with respect
        to any properties or facilities owned, leased, managed or operated by
        any Seller.

               (f) Schedule 3.17 identifies (A) all environmental audits,
        assessments or occupational health studies undertaken by any Seller or
        its agents or by any governmental agencies with respect to the business
        or properties of any Seller; (B) the results of any groundwater, soil,
        air or asbestos monitoring undertaken with respect to any real property
        owned or leased by any Seller; (C) all written communications of any
        Seller with environmental agencies; and (D) all citations issued with
        respect to any Seller under the Occupational Safety and Health Act (29
        U.S.C. Sections 651 et seq.).

               (g) For the purposes of this Agreement, "Environmental Claim"
        shall mean any demand, claim, governmental notice or threat of
        litigation or the actual institution of any action, suit or proceeding
        at any time by a Person or entity which asserts that an Environmental
        Condition constitutes a violation of or otherwise may give rise to any
        liability or obligation under, any statute, ordinance, regulation, or
        other governmental requirement or the common law, including, any such
        statute, ordinance, regulation, or other governmental requirement
        relating to the emission, discharge, or release of any Hazardous
        Substance into the environment or the generation, treatment, storage,
        transportation, or disposal of any Hazardous Substance. "Environmental
        Condition" shall mean the presence on the Closing Date, or the
        occurrence on or at any time prior to the Closing Date of any storage,
        treatment, disposal or Release, or the presence on the Closing Date of
        any condition or circumstances which thereafter causes or gives rise to
        any storage, treatment, disposal or Release, whether



                                       15


        discovered or undiscovered on the Closing Date, in surface water, ground
        water, drinking water supply, land surface, subsurface strata or ambient
        air or any other location, of any pollutant, contaminant, industrial
        solid waste or Hazardous Substance, arising out of or otherwise related
        to (i) the operations or other activities of any Seller, or of any
        predecessor in interest or line of business of any Seller, conducted or
        undertaken prior to the Closing Date or (ii) any property, facility
        owned, leased, managed or operated by any Seller. "Hazardous Substance"
        shall mean any substance defined in the manner set forth in Section
        101(14) of the U.S. Comprehensive Environment Response, Compensation and
        Liability Act of 1980, as amended, and shall include any additional
        substances designated under Section 102(a) thereof or any other
        substance which is or contains asbestos in any form, urea formaldehyde
        foam insulation, methane, petroleum, gasoline, diesel fuel or another
        petroleum hydrocarbon product, transformers or other equipment which
        contain dielectric fluid containing levels of polychlorinated biphenys
        in excess of 50 parts per million, or any other chemical material or
        substance which is regulated as toxic or hazardous or exposure to which
        is prohibited, limited, or regulated by foreign, federal, state, county,
        regional, local or other governmental authority or which, even if not so
        regulated, may or could pose a hazard to the health or safety of the
        occupants of any property or facility or the owners or occupants of any
        property or facility adjacent thereto.

        3.18 FULL DISCLOSURE. To Sellers' Knowledge, no representation or
warranty by Sellers herein (including the Schedules hereto) or in any
certificate furnished by or on behalf of Sellers to Buyer in connection
herewith, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make the
statements herein or therein, in the light of the circumstances under which they
were made, not misleading.

        3.19 REPRESENTATIONS AND WARRANTIES TRUE AT THE CLOSING. The
representations and warranties of Sellers herein and in any schedule attached
hereto shall be true and complete at the Closing Date with the same effect as
though made at and as of such time.

                                   ARTICLE IV

                           REPRESENTATIONS, WARRANTIES
                             AND COVENANTS OF BUYER

        Buyer hereby represents and warrants to, and covenants with, Sellers
that:

        4.01 ORGANIZATION AND GOOD STANDING. Each of Buyer represents that as to
itself, it is a duly incorporated or otherwise formed entity under the laws of
its respective state of formation and has all requisite power and authority to
own, lease and operate its properties and to carry on its business as proposed
to be conducted.

        4.02 DUE AUTHORIZATION; NONCONTRAVENTION. Each of Buyer represents as to
itself that it has full corporate power and authority to enter into this
Agreement, the Related Agreements and any other agreements and documents to be
executed and delivered by it at Closing as contemplated hereby (collectively,
the "Closing Documents"), to consummate the transactions contemplated hereby and
thereby and to perform its obligations hereunder and thereunder. The execution,
delivery



                                       16


and performance of this Agreement, the Related Agreements and the Closing
Documents and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Buyer. This Agreement has been duly executed and delivered by Buyer, and is a
valid and binding obligation of Buyer enforceable in accordance with its terms
and the Related Agreements and the Closing Documents will, when executed and
delivered by Buyer at Closing, constitute valid and binding obligations of Buyer
enforceable in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws from time to time in effect which affect creditor's rights
generally and by legal and equitable limitations on the availability of specific
remedies.

        The execution, delivery and performance of this Agreement, the Related
Agreements and the Closing Documents will not (i) conflict with or result in a
breach or violation of any provision of the organizational documents of Buyer,
or of any order, writ, injunction, judgment, decree, law, statute, rule or
regulation to which Buyer is a party or by which Buyer may be bound or affected;
or (ii) result in a default (or give rise to any right of termination,
cancellation or acceleration) or result in the creation of any lien,
encumbrance, security agreement, charge, pledge, equity or other claim or right
of any person under the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, agreement or other instrument or obligation to
which Buyer is a party or by which Buyer may be bound. All necessary
authorizations of the transactions contemplated by this Agreement and the
Related Agreements required to be obtained by Buyer from any federal, state,
local or foreign government or agency shall have been obtained prior to the
Closing, and any filings, notifications or disclosures required by law or
regulation of any such government or agency shall have been made in such form as
is acceptable as filed. Sellers shall cooperate with Buyer with respect to the
aforesaid filings, notifications or disclosures to the extent necessary to
obtain said authorizations. Buyer will deliver to Sellers at the Closing true
and complete copies of all resolutions of its board of directors by which the
execution, delivery and performance of this Agreement, the Related Agreements
and the Closing Documents and the consummation of the transactions contemplated
hereby and thereby were authorized, certified by the Secretary or Assistant
Secretary of Buyer as of the Closing Date.

                                   ARTICLE V

                                    EMPLOYEES

        5.01 EMPLOYEES AND EMPLOYEE BENEFITS.

               (a) Buyer shall have no requirement to offer employment to any of
        the employees of Sellers. Any offer Buyer determines to make shall be
        for employment at-will by Buyer as new employees of Buyer (subject to
        any applicable probation period not prohibited by law) to occupy
        positions designated by Buyer and pursuant to the terms and conditions
        determined by Buyer in its sole discretion, unless Buyer otherwise
        agrees in writing with any such employee.

               (b) Schedule 5.01 is a true and complete list of the names and
        positions of those of Sellers' current and furloughed employees who work
        in positions related to the Business (the "Employees"). At Buyer's
        request, Sellers shall deliver, with respect to any Employee designated
        by Buyer, the following compensation information for fiscal year 2004
        and as of



                                       17


        the date of Buyer's request: (i) annual base salary; (ii) annual bonus;
        (iii) commissions; (iv) perquisites; (v) benefits; (vi) severance; and
        (vii) all other material items of compensation. Buyer may engage in
        negotiations to employ any Employee on the condition that any such
        employment not begin until on or after the Closing Date.

               (c) Sellers shall make available to Buyer to the fullest extent
        permitted by law, all information and materials reasonably requested by
        Buyer from the personnel files of each of the Employees who shall have
        elected to accept employment with Purchaser ("Applicable Employees").

               (d) Seller shall remain responsible for the payment of all
        benefits that accrue under each of such Seller's or its Affiliates'
        compensation plans, "employee benefit plans" (as defined in Section 3(3)
        of ERISA) and stock plans (collectively "Benefit Plans"). Buyer shall
        not at any time assume any liability under any of the Sellers' Benefit
        Plans for the payment of any benefits to any active or any terminated,
        vested or retired participants (or any of their beneficiaries) in any of
        the Benefit Plans. Buyer assumes no obligations to continue or assume
        any Benefit Plan or liabilities of the Sellers under any Benefit Plans.

               (e) With respect to any Applicable Employee (and any dependent or
        beneficiary of any such Applicable Employee), Sellers shall retain all
        liabilities and obligations arising under any group life, accident,
        medical, dental or disability plan or similar arrangement (whether or
        not insured) and any other "employee welfare benefit plan" (as defined
        in Section 3(1) of ERISA) maintained for the benefit of Sellers'
        employees and their dependents and other beneficiaries under each such
        plan or similar arrangement, and such liabilities and obligations shall
        constitute Retained Liabilities. Buyer shall be responsible only for
        liabilities and obligations with respect to claims incurred by any
        Applicable Employee (and any dependent or beneficiary of any such
        Applicable Employee) on or after the later of the Closing Date and the
        date upon which such Applicable Employee is hired by Buyer which are
        covered under any life, accident, medical, dental or disability plan or
        similar arrangement (whether or not insured) established or made
        available to Buyer for the benefit of Applicable Employees and their
        dependents and beneficiaries after the Closing Date. For this purpose
        claims under any medical, dental, vision, or prescription drug plan, a
        claim generally will be deemed to be incurred on the date that the
        service giving rise to such claim is performed and not when such claim
        is made.

               (f) Any former or current employees of Sellers hired by Buyer may
        share and utilize any Proprietary Rights, information, inventions or
        know how derived from their work for Sellers, including without
        limitation customer lists and employee lists, and Buyer may use any such
        shared Proprietary Rights, information, inventions or know how. Sellers
        waive any claims against such employees and Buyer based on such sharing
        or use including, without limitation, any claims arising under contract,
        statute or common law.

        5.02 THIRD PARTIES. The covenants of Buyer and Sellers in this Article V
are not intended to create any right in any of Sellers' current or former
employees or his or her heirs, executors, beneficiaries or personal
representatives.



                                       18


                                   ARTICLE VI

                          WORKERS COMPENSATION, PRODUCT
                      LIABILITY AND WARRANTY RESPONSIBILITY

        6.01 WORKERS COMPENSATION. Sellers will retain responsibility for all
workers' compensation claims of employees of Sellers other than Applicable
Employees and will retain responsibility for workers' compensation claims by
Applicable Employees pending as of the Closing Date or arising as a result of
events occurring or conditions caused on or prior to the Closing Date. Buyer
will be responsible for workers' compensation claims by Applicable Employees
filed after the Closing Date and arising solely as a result of events occurring
or conditions caused solely after the later of the Closing Date and the date
upon which such Applicable Employee is hired by Buyer.

        6.02 PRODUCT LIABILITY AND WARRANTY CLAIMS. Buyer shall discharge all
product liability claims (including claims for injury to person or property),
warranty claims and litigation relating to the Business conducted by Buyer and
arising from products sold and work performed after the Closing Date; Sellers
shall retain responsibility for such claims and litigation relating to products
sold and work performed on or prior to the Closing Date.

                                   ARTICLE VII

                  COVENANTS AND AGREEMENTS REGARDING BANKRUPTCY

        7.01 BANKRUPTCY ACTIONS.

               (a) COOPERATION; EFFORTS. Each of Sellers and Buyer shall use its
        best reasonable efforts to cooperate, assist and consult with each other
        to procure the entry of the Sale Procedures Order and a sale order (the
        "Sale Order," substantially in the form attached as Exhibit G, and
        together with the Sale Procedures Order, the "363/365 Orders") as
        promptly hereafter as practicable. Without limiting the generality of
        the foregoing, Sellers each (i) shall comply with all requirements under
        the Bankruptcy Code and Federal Rules of Bankruptcy Procedure and the
        Local Rules of the United States Bankruptcy Court for the Northern
        District of California and any applicable guidelines and procedures
        (collectively, the "Bankruptcy Rules") in connection with obtaining the
        363/365 Orders, (ii) agree to proceed with their Chapter 11 Cases
        pursuant to and in accordance with the terms and provisions contemplated
        by the 363/365 Orders, in each case after the order has been entered by
        the Bankruptcy Court and (iii) comply or cause the compliance with the
        notice requirements of the 363/365 Orders, in each case after the order
        has been entered by the Bankruptcy Court, any other applicable order of
        the Bankruptcy Court as it relates to the Chapter 11 Cases, the
        Bankruptcy Rules (including, without limitation, Rules 2002, 6004, 6006
        and 9014 of the Federal Rules of Bankruptcy Procedure) and any
        applicable local rules of the Bankruptcy Court with respect to the
        transactions contemplated by this Agreement. Sellers further agree to
        give notice of any proceeding in the Chapter 11 Cases to any Person
        specified by Buyer in writing. In the event that the 363/365 Orders or
        any other orders of the Bankruptcy Court relating to this Agreement
        shall be appealed by any party (or a petition for certiorari or motion
        for reconsideration, amendment, clarification, modification, vacation,




                                       19


        stay, rehearing or reargument shall be filed with respect to any such
        order), each of Sellers and Buyer will cooperate in taking such steps
        diligently to defend against such appeal, petition or motion and each of
        Sellers and Buyer and Buyer shall use its best reasonable efforts to
        obtain an expedited resolution of any such appeal, petition or motion.
        Buyer must timely provide to Sellers, or to the Bankruptcy Court upon
        Sellers' request, any information necessary or prudent to obtain
        Bankruptcy Court approval of the Sale Order, including, but not limited
        to, the 363/365 Orders, and Sellers agree that Sellers shall cooperate
        with Buyer to avoid the unnecessary disclosure of any of Buyer's
        confidential proprietary information. Buyer agrees that Buyer shall
        cooperate with Sellers to present such information as is necessary or
        prudent in connection with the Bankruptcy Court's consideration or
        approval of the Sale Order, including, but not limited to, the 363/365
        Orders, and Sellers agree that Sellers shall cooperate with Buyer to
        avoid the unnecessary disclosure of any of Buyer's confidential
        proprietary information. Buyer shall not make any filing in the
        Bankruptcy Court with respect to the 363/365 Orders (or otherwise take
        any position in the Bankruptcy Court proceedings with respect thereto)
        without the express written consent of Sellers, which consent may not be
        unreasonably withheld, conditioned or delayed, or otherwise that would
        be reasonably likely to result in the failure of the transactions
        contemplated hereby. Notwithstanding anything to the contrary herein,
        however, nothing in this Agreement shall be deemed to prohibit or
        otherwise restrain Buyer from making any filing in the Bankruptcy Court
        to challenge or object to the entry of an order by the Bankruptcy Court
        approving the entry by one or more Sellers into an Alternate Transaction
        (as hereinafter defined); provided that the Sellers do not acknowledge
        and reserve all rights to challenge Buyer's standing to make any filing
        in the Bankruptcy Court. Notwithstanding anything to the contrary
        contained herein, the Sellers shall not be required to act in a manner
        inconsistent with their fiduciary duties under (a) applicable Law,
        arising from their status as corporations organized under Delaware Law,
        or (b) the Bankruptcy Code, arising from their status as a debtor in
        possession.

               (b) BREAK-UP FEE. Each of Sellers hereby agrees, in the event
        that a Bankruptcy Court enters an order that becomes final and
        non-appealable approving a sale or restructuring transaction involving
        the Sellers' Business or any part thereof (a "Transaction") with a party
        other than Buyer (an "Alternate Transaction"), Sellers shall pay to
        Buyer a cash break-up fee (the "Break-Up Fee") in the amount of three
        percent (3%) of the dollar amount of the Purchase Price. These amounts
        are intended to compensate Buyer for the time and expense dedicated to
        this transaction and the value added by Buyer in (i) establishing a bid
        standard or minimum for other bidders, (ii) placing the Sellers' estate
        property in a sales configuration mode attracting other bidders to the
        auction and (iii) for serving, by its name and its expressed interest,
        as a catalyst for other potential or actual bidders. Subject to entry of
        the final Sale Procedure Order, the Break-Up Fee shall be deemed a claim
        and a cost of sale of the Alternate Transaction and shall be payable
        from the cash proceeds of the Alternate Transaction, if any, before any
        claim of a lien holder or other creditor of the Sellers, at such time as
        the order of the Bankruptcy Court approving an Alternate Transaction
        becomes final and non-appealable. The Sellers agree to support inclusion
        of the Break-Up Fee provided by this subparagraph in the final Sale
        Procedures Order .




                                       20


               (c) NOTIFICATION. Sellers shall promptly provide written
        notification to Buyer of the fact of any submissions, proposals, offers
        or inquiries regarding an Alternate Transaction.

               (d) ASSIGNMENT OF RIGHTS. If, in connection with the auction or
        sale referred to in the Sale Procedures Order, any of Sellers or any of
        their Affiliates enter into confidentiality or similar agreements with
        any Person, such Sellers shall assign all rights under those agreements
        to the extent relating to the Sellers' Business to Buyer at the Closing.

                                  ARTICLE VIII

                              PRE-CLOSING COVENANTS

        The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.

        8.01 GENERAL. Each of the Parties will use its reasonable efforts to
take all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including supplementing the Schedules hereto as facts become known to the
parties and satisfaction, but not waiver, of the closing conditions set forth in
Article IX below). Notwithstanding the foregoing, the supplementing of the
Schedules will not relieve Sellers of the obligations with respect to the
representations and warranties made herein, subject to the Schedules as
originally prepared, nor will it relieve Sellers of their obligations to
republish the representations and warranties of Sellers herein at the Closing.

        8.02 OPERATION OF BUSINESS. Except as contemplated by this Agreement,
during the period from the date of this Agreement to the Closing, each member of
the Seller shall (i) maintain its corporate existence in good standing, (ii)
conduct the Business in the ordinary course of business as contemplated in the
budget(s) approved in the Chapter 11 Cases, except as otherwise provided in
Section 3.04, (iii) decline to accept prepayments of sums due to Sellers under
any contracts, provided however, that Seller may collect payments as they
normally come due even if such payments constitute payments for obligations to
be performed in the future; (iv) maintain each Benefit Plan, (v) maintain the
property, plant and equipment included in the Purchased Assets in the ordinary
course of business as contemplated in the budget(s) approved in the Chapter 11
Cases, and (vi) refrain from offering to any customer any discount on or
incentive with respect to any product or service (collectively, the
"Incentives") in excess of the discount or incentive being offered with respect
to such product or service as of the date of this Agreement.

        8.03 BOOKS OF ACCOUNT. The Sellers shall, in respect of the Sellers'
Business and the Purchased Assets, maintain its books and records of account in
the usual, regular and ordinary manner, consistent with past practices.

        8.04 ACCESS TO INFORMATION. Sellers agree to permit Buyer and
representatives of Buyer (including, without limitation, Buyer's legal counsel
and accountants) access during normal business hours to Sellers' premises and
books and records, following receipt of reasonable notice.



                                       21


        8.05 KEY EMPLOYEES. Sellers shall use its reasonable efforts to assist
Buyer in procuring the employment immediately following the Closing of the
employees identified on Schedule 8.06 (the "Key Employees") pursuant to
employment agreements reasonably acceptable to Buyer; provided that Buyer
acknowledges that such employment decisions will be made by such employees.

        8.06 CONSENTS. The Parties will use their commercially reasonable
efforts (including the giving of required notices) to promptly obtain consents
(including any Required Consents and any required approvals or permit transfers)
of all Persons and governmental authorities necessary for the consummation of
the transactions contemplated by this Agreement and the Related Agreements.

        8.07 DELIVERY OF SCHEDULES; NOTICE OF DEVELOPMENTS. (a) The Sellers
shall deliver to Buyer as set forth in Section 12.06, a proposed set of
Schedules as set forth in this Agreement no later than February 12, 2005. Buyer
shall deliver to Sellers' counsel the Schedules set forth in this Agreement no
later than 5:00 p.m. (Pacific Standard Time) on February 18, 2005 except as
otherwise provided in Section 1.01. (b) From the date hereof until the Closing
Date, the Parties shall promptly notify each other in writing and supply full
details of (i) any facts indicating that any representation or warranty was not
true and correct when made, and (ii) any matter arising after the date hereof
which, if existing or occurring at the date of this Agreement would have been
required to be set forth or described in the Schedules hereto.

        8.08 RELATED AGREEMENTS. The Parties hereto agree that at Closing or, as
regards a particular Assigned Contract, on such later date as Buyer pays the
monetary cure for such Assigned Contract, they will execute and deliver the
Related Agreements to which they are a Party.

        8.09 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing, without the prior written approval of the
other Parties, and Seller shall not issue any press release or make any public
announcement relating to the subject matter of this Agreement following the
Closing without the prior written approval of Buyer; provided, however, that any
Party may make any public disclosure it believes in good faith is (a) required
by applicable law or any listing or trading agreement concerning its
publicly-traded securities or (b) permitted or required to be filed with the
Bankruptcy Court or otherwise disclosed by this Agreement or the Sale Procedures
Order (in the case of either (a) or (b) above, the disclosing Party will, prior
to making any such disclosure, consult with the other Party regarding such
disclosure).

        8.10 ENFORCEMENT OF RIGHTS WITH RESPECT TO EMPLOYEES, ETC. Sellers shall
enforce any employee secrecy, non-disclosure, non-competition agreements or
covenants by current or former employees and any other rights to protect the
Seller Proprietary Rights, the Seller Registered Proprietary Rights and the
Business.

        8.11 LIMITATION ON SOLICITATION, ETC. Until the Closing and except as
provided in Section 8.05, Buyer shall not, and Buyer shall cause each of its
subsidiaries and affiliates not to, directly or indirectly, actively solicit for
employment any individual while employed by Sellers; provided, however, general
advertisements and other forms of general solicitations for employment shall not
be deemed a violation of this provision, provided that if this Agreement is
terminated for any reason other than a default by Buyer, this provision shall no
longer apply after the date of that termination.



                                       22


                                   ARTICLE IX

                               CLOSING CONDITIONS

        9.01 CONDITION TO OBLIGATIONS OF ALL PARTIES. The respective obligations
of each Party to effect the transactions contemplated hereby shall be subject to
the fulfillment at or prior to the Closing Date of the following condition:

               (a) NO ORDER, DECREE OR INJUNCTION. Neither Sellers nor Buyer
        shall be subject to any order, decree or injunction of a court of
        competent jurisdiction or governmental agency and no statute, rule or
        regulation shall be enacted or issued which (i) prevents or delays any
        of the transactions contemplated by this Agreement, or (ii) would impose
        any limitation on the ability of Buyer effectively to exercise full
        rights of ownership of the Purchased Assets.

        9.02 CONDITIONS TO THE OBLIGATIONS OF SELLERS. The obligations of
Sellers to effect the transactions contemplated hereby shall be further subject
to the fulfillment at or prior to the Closing Date of the following conditions,
any one or more of which may be waived by Sellers:

               (a) COVENANTS PERFORMED; REPRESENTATIONS AND WARRANTIES TRUE.
        Buyer shall have performed and complied in all material respects with
        the covenants and agreements contained in this Agreement required to be
        performed and complied with by it at or prior to the Closing Date, and
        there shall be as of the Closing Date no material incorrectness of any
        representation and warranty of Buyer set forth in this Agreement, and
        Sellers shall have received a certificate to that effect signed by an
        authorized officer of Buyer;

               (b) BANKRUPTCY COURT APPROVAL. (i)The Bankruptcy Judge presiding
        over the Chapter 11 Cases shall have signed the Sale Order substantially
        in the form of Exhibit G, without modification or the imposition of
        conditions or limitations with respect thereto, except for such
        immaterial modifications, conditions or limitations which do not,
        individually or in the aggregate, materially and adversely affect
        Sellers or Buyer and which Sellers and Buyer approve, (ii) the signed
        Sale Order shall include a determination that this Agreement has been
        made and negotiated in good faith and that Buyer is entitled to the
        protections of Section 363(m) of the Bankruptcy Code as a result, and
        (iii) the Sale Order shall not have been vacated, stayed, amended,
        reversed or modified.

        9.03 CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligations of Buyer to
effect the transactions contemplated hereby shall be further subject to the
fulfillment at or prior to the Closing Date of the following conditions, any one
or more of which may be waived by Buyer:

               (a) COVENANTS PERFORMED; REPRESENTATIONS AND WARRANTIES TRUE.
        Sellers shall have performed and complied in all material respects with
        the covenants and agreements contained in this Agreement required to be
        performed and complied with by them at or prior to the Closing Date, and
        there shall be as of the Closing Date no material incorrectness of any
        representation and warranty of Sellers set forth in this Agreement, and



                                       23


        Buyer shall have received a certificate to that effect in the form of
        Exhibit H from Jonathan Morgan.

               (b) BANKRUPTCY COURT APPROVAL. (i) The Bankruptcy Judge presiding
        over the Chapter 11 Cases shall have signed the Sale Order substantially
        in the form of Exhibit G, without modification or the imposition of
        conditions or limitations with respect thereto, except for such
        immaterial modifications, conditions or limitations which do not,
        individually or in the aggregate, materially and adversely affect Buyer
        and Sellers and which Buyer and Sellers approve, (ii) the signed Sale
        Order shall include a determination that this Agreement has been made
        and negotiated in good faith and that Buyer is entitled to the
        protections of Section 363(m) of the Bankruptcy Code as a result, and
        (iii) the Sale Order shall not have been vacated, stayed, amended,
        reversed or modified.

               (c) ASSIGNMENTS AND NOVATIONS. Buyer shall have received an
        assignment or novation (including any necessary third-party consents and
        approvals) reasonably satisfactory to Buyer to each of the Assigned
        Contracts which by their terms or by law require third-party consent or
        approval as a result of the transactions contemplated by this Agreement,
        except where the Sale Order makes such assignment or novation
        unnecessary.

               (d) BUYER'S ASSIGNEE. Buyer shall have formed Buyer's Assignee,
        which shall have assumed all of the rights, obligations and liabilities
        of Buyer under this Agreement and shall have become "Buyer" for all
        purposes under this Agreement; provided, however, that MTVP (First
        Virtual Investments), LLC, Silicon Valley Bank, Huron Consulting
        Services LLC and Morrison & Foerster LLP shall remain obligated for the
        forgiveness of debt as set forth in Section 1.05 and for the delivery of
        acknowledgements of satisfaction of the Secured Debt as set forth in
        Section 10.02.

                                   ARTICLE X

                                   THE CLOSING

        10.01 TIME AND PLACE OF CLOSING. Upon the terms and conditions of this
Agreement, the Closing of the transactions contemplated hereby (the "Closing")
shall take place, effective as of the close of business on March 11, 2005, or if
the conditions contained in Article VIII hereof have not been satisfied or
waived by such date then on the second Business Day after the satisfaction or
waiver of the last such condition (the "Closing Date"), at the offices of
Bingham McCutchen LLP, Three Embarcadero Center, San Francisco, California, or
at such other time and place as the Parties hereto may agree in writing. All
Closing transactions shall be deemed to take place simultaneously, and no
Closing transaction shall be deemed consummated until all transactions to take
place at the Closing have been consummated.

        10.02 INSTRUMENTS OF TRANSFER, ETC. At the Closing, or, as regards a
particular Assigned Contract, on such later date as Buyer pays the monetary cure
for such Assigned Contract, Sellers will deliver to Buyer such deeds, bills of
sale, instruments of assignment and other good and sufficient



                                       24



instruments of transfer, executed by Sellers and in a form reasonably
satisfactory to Buyer, as Buyer may reasonably require to vest in Buyer all
right, title and interest of Sellers in and to the Purchased Assets, and Buyer
and Huron Consulting Services LLC shall deliver to Seller the Purchase Price in
the form of acknowledgments of satisfaction of the Secured Debt as contemplated
by Section 1.05 hereof, and shall also deliver to Sellers the other documents
and instruments reasonably required of it at the Closing.

        Without limiting the foregoing, the documents to be delivered by the
Parties at the Closing or, as regards a particular Assigned Contract, on such
later date as Buyer pays the monetary cure for such Assigned Contract, shall
include the following:

               (a) SELLERS. Sellers shall execute and deliver (i) the Related
        Agreements, (ii) the Secretary's Certificate contemplated by Section
        3.02 hereof, (iii) the certificates contemplated by Section 9.03(a)
        hereof, and (iv) such other instruments and documents as may reasonably
        be required of it at the Closing pursuant to the terms of this
        Agreement.

               (b) BUYER. Buyer shall execute and deliver (i) the Related
        Agreements, (ii) the Secretary's Certificates contemplated by Section
        4.02 hereof, (iii) the Officer's Certificate contemplated by Section
        9.02(a) hereof, and (iv) such other instruments and documents as may
        reasonably be required of it at the Closing pursuant to the terms of
        this Agreement.

        Sellers shall deliver to Buyer at the Closing possession of the
Purchased Assets being sold pursuant to this Agreement and the entire right,
title and interest of Sellers in and to such Purchased Assets shall pass to
Buyer at the Closing or, as regards a particular Assigned Contract, on such
later date as Buyer pays the monetary cure for such Assigned Contract.

        10.03 TERMINATION OF AGREEMENT. This Agreement may be terminated by
the Parties as provided below:

               (a) The Parties may terminate this Agreement by mutual written
        consent at any time prior to the Closing;

               (b) Buyer may terminate this Agreement by giving written notice
        to Sellers at any time prior to the Closing (i) in the event that
        Sellers have breached any material representation, warranty, or covenant
        contained in this Agreement in any material respect, Buyer has notified
        Sellers of the breach, and the breach has continued without cure for a
        period of 10 days after the notice of breach, or (ii) if the Closing
        shall not have occurred on or before March 18, 2005, by reason of the
        failure of any condition precedent under Section 9.01 or 9.03 hereof
        (unless the failure results primarily from Buyer itself breaching any
        representation, warranty, or covenant contained in this Agreement);

               (c) Sellers may terminate this Agreement by giving written notice
        to Buyer at any time prior to the Closing (i) in the event Buyer has
        breached any material representation, warranty, or covenant contained in
        this Agreement in any material respect, Sellers have notified Buyer of
        the breach, and the breach has continued without cure for a period of 10
        days after the notice of breach, or (ii) if the Closing shall not have
        occurred on or before

                                       25


        March 18, 2005, by reason of the failure of any condition precedent
        under Section 9.01 or 9.02 hereof (unless the failure results
        primarily from Sellers' breach of any representation, warranty, or
        covenant contained in this Agreement); and

               (d) Buyer or Sellers may terminate this Agreement by giving
        written notice to the other if there shall be in effect any law or
        regulation that prohibits the consummation of the Closing or if
        consummation of the Closing would violate any non-appealable final
        order, decree or judgment of any court or governmental body having
        competent jurisdiction.

        10.04 EFFECT OF TERMINATION. If either Party terminates this Agreement
pursuant to Section 10.03 above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
or their respective Affiliates, directors, officers or employees, except for the
return of the escrow deposit upon the termination of this Agreement or the
consummation of an Alternative Transaction. Notwithstanding the foregoing
sentence, the obligations of the Parties hereto contained in provisions which
are stated to survive any termination of this Agreement, including, without
limitation, Sections 7.01(b), 8.11, 11.01, 11.03, 12.04 and 12.05 shall survive
termination of this Agreement.

                                   ARTICLE XI

                             POST-CLOSING COVENANTS


        11.01 EXPENSES. Except as otherwise provided herein, Sellers and Buyer
shall each bear their own costs and expenses incurred in connection with this
Agreement, the Related Agreements and the transactions contemplated hereby and
thereby. Buyer shall be responsible for fees, commissions, expenses and
reimbursements incurred by or required to be paid to its professional advisors
(including, without limitation, its legal counsel) and Sellers shall be
responsible for the fees, commissions, expenses and reimbursements incurred by
or required to be paid to their professional advisors (including, without
limitation, its legal counsel).

        11.02 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each of the Parties hereto will use their best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the sale of the Purchased Assets and the other
transactions contemplated by this Agreement and the Related Agreements. From
time to time after the date hereof (including after the Closing Date if
requested), Sellers will, at their own expense, execute and deliver such
documents to Buyer as Buyer may reasonably request in order more effectively to
vest in Buyer good title to the Purchased Assets and to more effectively
consummate the transactions contemplated by this Agreement and the Related
Agreements.

        11.03 COMMISSIONS AND FEES. Except as set forth on Schedule 11.03
hereto, Sellers and Buyer each represent and warrant to the other that no
broker, finder, financial adviser or other person is entitled to any brokerage
fees, commissions or finder's fees in connection with the transactions
contemplated hereby by reason of any action taken by the Party making such
representation. Sellers and Buyer will pay to the other or otherwise discharge,
and will indemnify and hold the other

                                       26


harmless from and against, any and all claims or liabilities for all brokerage
fees, commissions and finder's fees (other than as described above) incurred by
reason of any action taken by such Party.

        11.04 SALES, TRANSFER AND USE TAXES. The Parties recognize and
acknowledge that the sale, transfer, assignment and delivery of the Purchased
Assets may be exempt under Section 1146(c) of the Bankruptcy Code and the Sale
Order from all state and local transfer, recording, stamp or other similar
transfer Taxes that may be imposed by reason of the sale, transfer, assignment
and delivery of the Purchased Assets. Notwithstanding the foregoing, the Seller
on the one hand and the Buyer on the other, will each bear and pay one-half of
any sales Taxes, use Taxes, transfer Taxes, documentary charges, recording fees,
filing fees or similar Taxes, charges, fees or expenses that may become payable
by Buyer or Seller in connection with the sale of the Purchased Assets to Buyer,
the assumption by Buyer of the Assumed Liabilities or any of the other
transactions contemplated by this Agreement (the "Transfer Taxes").

        11.05 PUBLICITY. Seller shall not issue any press release or make any
public announcement relating to the subject matter of this Agreement following
the Closing without the prior written approval of Buyer; provided, however, that
any Party may make any public disclosure it believes in good faith is (a)
required by applicable law or any listing or trading agreement concerning its
publicly-traded securities or (b) permitted or required to be filed with the
Bankruptcy Court or otherwise disclosed by this Agreement or the Sale Procedures
Order (in the case of either (a) or (b) above, the disclosing Party will, prior
to making any such disclosure, consult with the other Party regarding such
disclosure).

        11.06 ACCOUNTS RECEIVABLE. In the event that, following the Closing
Date, Sellers receive any payment with respect to any account receivable that is
a Purchased Asset, then Sellers shall promptly remit or forward such payment to
Buyer.

        11.07 ENFORCEMENT OF RIGHTS WITH RESPECT TO EMPLOYEES, ETC. For a period
beginning as of the Closing Date and continuing until the third anniversary of
the Closing Date, Sellers shall assign to Buyer or shall enforce any employee
secrecy, non-disclosure, non-competition agreements or covenants by current or
former employees and any other rights to protect the Seller Proprietary Rights,
the Seller Registered Proprietary Rights and the Business.

                                   ARTICLE XII

                                  MISCELLANEOUS

        12.01 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted
assigns.

        12.02 NO ASSIGNMENT. This Agreement may not be assigned by any Party
hereto without the prior written consent of the other Parties, provided,
however, that Buyer may assign its rights hereunder, in whole or in part, to any
corporation or other entity controlled by, controlling, or under common control
with Buyer or its assignee may assign its rights hereunder, in whole or in part,
to any purchaser of substantially all of the assets or business of Buyer. In the
event of Buyer's assignment of this Agreement to an Affiliate, Buyer will be
fully released of all obligations set forth


                                       27


herein except as expressly set forth in Section 12.12 below, and Seller will
look solely to the assignee of Buyer with respect thereto. Any attempted or
purported assignment by either Party other than in accordance with this Section
12.02 shall be null and void.

        12.03 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by any Party on separate counterparts, each of which as so
executed and delivered shall be deemed an original but all of which together
shall constitute one and the same instrument, and it shall not be necessary in
making proof of this Agreement as to any Party, hereto to produce or account for
more than one such counterpart executed and delivered by such Party.

        12.04 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal substantive laws of the State of California as
to all matters, including but not limited to matters of validity, construction,
effect, performance and remedies.

        12.05 VENUE. Each of the Parties submits to the jurisdiction of the
Bankruptcy Court, or, if the Bankruptcy Court declines to exercise jurisdiction,
any state or federal court sitting in the County of San Mateo, California, in
any action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Any
Party may make service on any other Party by sending or delivering a copy of the
process (i) to the Party to be served at the address and in the manner provided
for the giving of notices in Section 12.06 below. Nothing in this Section 12.05,
however, shall affect the right of any Party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or at equity. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.

        12.06 NOTICES. All notices required to be given under the terms of this
Agreement or which any of the Parties desires to give hereunder shall be in
writing and personally delivered or sent by registered or certified mail, return
receipt requested, or sent by facsimile, addressed as follows:

               (a) TO BUYER . If to Buyer addressed to:


           Advisory Services Department
           Silicon Valley Bank
           38 Technology Drive, Suite 150
           Irvine, CA 92618 Facsimile: 949-790-9026
           Attention: Diane LeMay, Senior Advisor

           With a copy to:
           Hopkins & Carley, A Law Corporation
           70 S. First St.
           San Jose, Ca.  95113
           Mailing
           P.O. Box 1469

                                       28


           San Jose, Ca.  95109-1469
           Facsimile: 408-998-4790
           Attention: Stephen J. Kottmeier, Esq.

              MTVP (First Virtual Investments), LLC
           2815 Eastlake  Avenue East, Suite 300
           Seattle, WA  98102
           Facsimile: 206-299-4888
           Attention:  Thomas Todaro

           With a copy to:
           Bingham McCutchen LLP
           Three Embarcadero Center, 18th Floor
           San Francisco, CA  94111
           Facsimile:  (415) 393-2286
           Attention:  Randy Michelson, Esq.

              Morrison & Foerster LLP
           425 Market Street
           San Francisco, California 94105-2482
           Phone: (415) 268-7000
           Fax: (415) 268-7522
           Attention:  Adam Lewis, Esq.


               (b)    TO SELLERS. If to Sellers addressed to:

                      First Virtual Communications, Inc.
                      3200 Bridge Parkway, Suite 202
                      Redwood City, CA  94065
                      Attention: Jonathan G. Morgan
                      Facsimile No.: 408-988-7077

                      with a copy to:

                      Skadden, Arps, Slate, Meagher & Flom LLP
                      300 South Grand Avenue, Suite 3400
                      Los Angeles, California 90071
                      Attention:  Van C. Durrer, II, Esq.
                      Facsimile No.: 213-687-5600

        Any Party may designate a change in address at any time upon written
notice to the other Party.

                                       29


        12.07 AMENDMENT AND MODIFICATION. The Agreement may be amended, modified
or supplemented only by a written instrument executed by the Party against whom
such amendment, modification or supplement is sought to be enforced.

        12.08 WAIVER OF COMPLIANCE. Except as otherwise provided in this
Agreement, any failure of any of the Parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the Party or Parties
entitled to the benefits thereof only by a written instrument signed by the
Party or Parties granting such waiver, but any such waiver or the failure to
insist upon strict compliance with any obligation, covenant, agreement or
condition herein, shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure or breach.

        12.09 INTERPRETATION. The table of contents and the article and section
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the Parties and shall not in any way affect the
meaning or interpretation of this Agreement. When used herein, the masculine,
feminine or neuter gender and the singular or plural number shall each be deemed
to include the others whenever the context so indicates or permits.

        12.10 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.

        12.11 ENTIRE AGREEMENT. This Agreement, the Related Agreements and that
certain letter agreement from Huron Consulting Services LLC dated February 12,
2005, including the schedules, exhibits, documents, certificates and instruments
referred to herein and therein, embody the entire agreement and understanding of
the Parties hereto in respect of any transactions contemplated by this Agreement
and the Related Agreements and supersede all prior agreements and understandings
between all the Parties with respect thereto.

        12.12 BUYER'S ASSIGNEE. Buyer may assign all of its rights and
obligations hereunder to Buyer's Assignee without the consent of Sellers. At the
time that Buyer does so, then wherever the term Buyer is used herein, said term
shall thereafter be construed to mean Buyer's Assignee; provided, however, that
MTVP (First Virtual Investments), LLC, Silicon Valley Bank, Huron Consulting
Services LLC and Morrison & Foerster LLP shall remain obligated for the
forgiveness of debt as set forth in Section 1.05 and for the delivery of
acknowledgements of satisfaction of the Secured Debt as set forth in Section
10.02.


                                       30

        IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date first above written.

                       MTVP (FIRST VIRTUAL INVESTMENTS), LLC


                       By: /s/ Thomas Todaro
                           ------------------------------------------------
                       Name:  Thomas Todaro
                       Title:    Managing Partner

                       SILICON VALLEY BANK


                       By: /s/ C. Diane LeMay
                           ------------------------------------------------
                       Name:  C. Diane LeMay
                       Title:    Senior Vice President

                       MORRISON & FOERSTER LLP


                       By: /s/ Adam A. Lewis
                           ------------------------------------------------
                       Name:  Adam A. Lewis
                       Title:    Partner

                       FIRST VIRTUAL COMMUNICATIONS, INC.


                       By: /s/ Jonathan G. Morgan
                           ------------------------------------------------
                       Name:  Jonathan G. Morgan
                       Title:  President and Chief Executive Officer

                       CUSEEME NETWORKS, INC.


                       By: /s/ Jonathan G. Morgan
                           ------------------------------------------------
                       Name:  Jonathan G. Morgan
                       Title:  President and Chief Executive Officer



                                       31

                                Schedule 1.01(a)

                              Real Property Leases







                                Schedule 1.01(b)

                        Furniture, Machinery & Equipment






                                Schedule 1.01(c)

                           Assumed Contracts; Defaults





                                Schedule 1.01(f)

                 Government Licenses, Permits and Authorizations


                                Schedule 1.01(h)

       Seller Proprietary Rights and Seller Registered Proprietary Rights


                               Schedule 1.01(k)

                           Assumed Insurance Policies



                                  Schedule 1.02

                                 Retained Assets

                                  Schedule 3.01

                         Organization and Good Standing



                                Schedule 3.01(b)

                             Assets of Subsidiaries

                                  Schedule 3.02

                                Noncontravention

                                  Schedule 3.04

            Operation of Business in the Ordinary Course - Exceptions


                                Schedule 3.06(a)

                          Sellers' Contracts; Defaults


                                Schedule 3.06(b)

                         Government Contracts; Defaults

                                Schedule 3.06(c)

                                   Cure Costs

                                  Schedule 3.07

               Licenses, Permits and Authorizations -- Exceptions


                                  Schedule 3.08

                             Encumbrances on Assets


                                Schedule 3.09(b)

                             IP -- Computer Programs

                                Schedule 3.09(c)

                                Licensee Software

                                Schedule 3.09(d)

                                IP -- Litigation


                                Schedule 3.09(e)

                               IP -- Infringements


                                Schedule 3.09(f)

                               IP -- Encumbrances

                                Schedule 3.09(g)

                                 IP -- Licenses


                                Schedule 3.09(h)

                               IP -- Royalty Fees

                                  Schedule 3.10

                             Employee Benefit Plans

                                  Schedule 3.11

                                   Litigation


                                  Schedule 3.13

                              Compliance with Laws


                                Schedule 3.13(b)

                          List of US and ISO Standards

                                  Schedule 3.14

                                    Insurance

                                  Schedule 3.16

                        Real Property Leases; Exceptions


                                  Schedule 3.17

                              Environmental Matters

                                  Schedule 5.01

                                    Employees

                                  Schedule 8.06

                                  Key Employees

                                 Schedule 11.03

                              Commissions and Fees


                                                                       EXHIBIT A

                            FORM OF PATENT ASSIGNMENT


        THIS PATENT ASSIGNMENT ("Assignment") is made as of this       day
of                                   , 2005 ( the "Closing Date"), by
[                                            ],  a Delaware corporation with its
principal office at [                                   ] ("Assignor"), in favor
of ____________., a corporation organized under the laws of the _______________
with its principal office at [
                                                      ] ("Assignee").

        WHEREAS, pursuant to the Asset Purchase Agreement dated as of , 2005,
among Assignor, Assignee, and the parties named therein, (the "Purchase
Agreement"), Assignor is transferring substantially all assets of the Business
(as defined in such Purchase Agreement), including the assignment to Assignee of
the United States patents, United States patent applications and their foreign
equivalents identified and set forth on Schedule A hereto (the "Patents"); and


        WHEREAS, Assignee wishes to acquire and Assignor wishes to assign to
Assignee all right, title and interest in and to the Patents;


        NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor agrees as follows:


        1. Assignor does hereby sell, assign, transfer and set over to Assignee,
the entire right, title and interest in and to the Patents, for the United
States and for all foreign countries (if any), including any divisions,
reissues, reexaminations, extensions or foreign equivalents thereof or
continuations or continuations-in-part that have been filed, and including the
subject matter of all claims which may be obtained therefrom for its own use and
enjoyment, and for the use and enjoyment of its successors, assigns or other
legal representatives, as fully and entirely as the same would have been held
and enjoyed by Assignor if this assignment had not been made; together with all
income, royalties, damages or payments due or payable as of the Closing Date (as
defined in the Purchase Agreement) or thereafter, including, without limitation,
all claims for damages by reason of past, present or future infringement or
other unauthorized use of the Patents, with the right to sue for, and collect
the same for its own use and enjoyment, and for the use and enjoyment of its
successors, assigns, or other legal representatives.

        2. Assignor authorizes and requests the Commissioner of Patent and
Trademarks to record Assignee as owner of the Patents, including any divisions,
reissues, reexaminations or extensions thereof or continuations or
continuations-in-part that have been filed, and to issue any

                                      A-1


and all letters patent of the United States thereon to Assignee, as assignee of
the entire right, title and interest in, to and under the same, for the sole use
and enjoyment of Assignee, its successors, assigns or other legal
representatives.


                            [SIGNATURE PAGE FOLLOWS]


                                      A-2


        IN TESTIMONY WHEREOF, Assignor has caused this Assignment to be signed
and executed by its undersigned duly authorized officer.

                                      [ASSIGNOR]


                                      By:
                                          --------------------------------------

                                      Name:
                                            ------------------------------------

                                      Title:
                                            ------------------------------------


STATE OF                     )
                             :  ss.:
COUNTY OF                    )

               On this day of , 2005, there appeared before me , personally
known to me, who acknowledged that he signed the foregoing Assignment as
[his/her] voluntary act and deed on behalf and with full authority of
[Assignor].



                                         --------------------------
                                               Notary Public


                                      A-3

                                   SCHEDULE A

                                     Patents










                                      A-4

                                                                       EXHIBIT B

                        FORM OF ASSIGNMENT OF TRADEMARKS

        KNOW ALL MEN BY THESE PRESENTS that [ ], Assignor, a corporation
organized and existing under the laws of Delaware, having a principal office or
place of business at [ ], has adopted, owns and has used the trademarks listed
in Schedule A (the "Marks").

        WHEREAS, ______________, a corporation organized and existing under the
laws of the __________________, with its principal place of business at [ ]
("Assignee"), desires to acquire the Marks and all associated goodwill in said
Marks, and the pending application;

        In consideration of the Purchase Price, as defined in that certain Asset
Purchase Agreement dated as of _________________, 2005 by and among Assignor,
Assignee, and the parties named therein, and other good and valuable
consideration to it paid by Assignee, the receipt whereof is hereby
acknowledged, Assignor does hereby sell, assign and transfer to Assignee, all of
Assignor's rights, title and interest in and to the Marks, together with the
goodwill of the business symbolized by the Marks and with all causes of action,
claims and demands or other rights for, or arising from, any infringement,
including the right to sue for any past, present or future infringement of the
Marks and related claims, including the right to sue for injunctive relief and
to collect damages for its own use and enjoyment, and for the use and enjoyment
of its successors, assigns, or other legal representatives.

        Executed at _________________________________________, this _____ day of
_______________________, 2005


                                   [ASSIGNOR]

                                    By:
                                       -----------------------------------------

                                    Name:
                                         ---------------------------------------

                                    Title:
                                          --------------------------------------


                                      B-1

                         SCHEDULE A -- SCHEDULE OF MARKS








                                       B-2

                                                                       EXHIBIT C

                          FORM OF COPYRIGHT ASSIGNMENT


        THIS COPYRIGHT ASSIGNMENT ("Assignment") is made as of this       day
of                                   , 2005 ( the "Closing Date"), by [
                                                ],  a Delaware corporation with
its principal office at [                                   ] ("Assignor"), in
favor of  ______________a corporation organized under the laws of the
____________with its principal office at [
                                                      ] ("Assignee").


        WHEREAS, pursuant to the Asset Purchase Agreement dated as of , 2005,
among Assignor, Assignee, and the parties named therein, (the "Purchase
Agreement"), Assignor is transferring substantially all assets of the Business
(as defined in such Purchase Agreement), including the assignment to Assignee of
the United States copyrights, United States copyright registrations and
applications and their foreign equivalents identified and set forth on Schedule
A hereto (the "Copyrights"); and


        WHEREAS, Assignee wishes to acquire and Assignor wishes to assign to
Assignee all right, title and interest in and to the Copyrights;


        NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor agrees as follows:


        1. Assignor does hereby sell, assign, transfer and set over to Assignee,
the entire right, title and interest in and to the Copyrights, for the United
States and for all foreign countries (if any), including any renewals,
extensions or foreign equivalents thereof, and for the use and enjoyment of its
successors, assigns or other legal representatives, as fully and entirely as the
same would have been held and enjoyed by Assignor if this assignment had not
been made; together with all causes of actions, claims and demands or other
rights for, or arising from, any infringement, including the right to sue for
any past, present or future infringement of the Copyrights and related claims,
including the right to sue for injunctive relief and to collect damages.


        2. Assignor authorizes and requests the Register of Copyrights to record
Assignee as owner of the Copyrights, including any renewals or extensions
thereof, and to issue any registrations to Assignee, as assignee of the entire
right, title and interest in, to and under the same, for the sole use and
enjoyment of Assignee, its successors, assigns or other legal representatives.

                                      C-1



                            [SIGNATURE PAGE FOLLOWS]






                                      C-2

        IN TESTIMONY WHEREOF, Assignor has caused this Assignment to be signed
and executed by its undersigned duly authorized officer.


                                   [ASSIGNOR]

                                    By:
                                       -----------------------------------------

                                    Name:
                                         ---------------------------------------

                                    Title:
                                          --------------------------------------



STATE OF                     )
                             :  ss.:
COUNTY OF                    )

         On this                 day of               , 2005, there appeared
before me , personally known to me, who acknowledged that he signed the
foregoing Assignment as [his/her] voluntary act and deed on behalf and with full
authority of [Assignor].



                                    -----------------------
                                        Notary Public


                                      C-3


                                   SCHEDULE A

                                   Copyrights








                                      C-4


                                                                       EXHIBIT D

                              FORM OF BILL OF SALE


        This BILL OF SALE dated as of _________________, 2005 entered into by
FIRST VIRTUAL COMMUNICATIONS, INC., a Delaware corporation, CUSEEME NETWORKS,
INC., a Delaware corporation (collectively, the "Sellers") in favor of
_________________, a corporation organized under the laws of the __________(the
"Buyer").

        All capitalized terms used herein and not defined shall have the
meanings given to them in the Asset Purchase Agreement dated as of February ___,
2005 by and among the Sellers and the Buyer (the "Purchase Agreement").

                                   BACKGROUND

        Pursuant to the terms and conditions of the Purchase Agreement the
Sellers have agreed that they may sell, convey, transfer, assign and deliver to
the Buyer, or cause to be sold, conveyed, transferred, assigned and delivered to
the Buyer, and the Buyer has agreed to purchase, acquire and accept from the
Sellers, all of their right, title and interest in and to the Purchased Assets
being sold to the Buyer thereunder.

        To effect such transactions and in consideration of the foregoing and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and intending to be legally bound hereby, the Sellers
agree as follows:

                                      TERMS

        Section 1. Sale. Pursuant to the Purchase Agreement, and upon the terms
and subject to the conditions set forth therein, the Sellers hereby sell,
convey, transfer, assign and deliver to the Buyer, its successors and assigns,
all of the Sellers' right, title and interest as of the date hereof in and to
the Purchased Assets, free and clear of all liens to the extent provided in the
Sale Order.

        Section 2. Rights Cumulative; Conflict With Purchase Agreement. The
rights and remedies of the Buyer and the duties and obligations of Sellers
hereunder shall be cumulative and in addition to the rights and remedies of the
Buyer and the duties and obligations of Sellers under the Purchase Agreement.
Nothing herein shall be deemed to limit the rights and remedies of the Buyer and
the duties and obligations of Sellers under the Purchase Agreement and, to the
extent of any conflict between the terms and conditions of this Bill of Sale and
the terms and conditions of the Purchase Agreement, the terms and conditions of
the Purchase Agreement shall govern, supersede and prevail. Notwithstanding
anything to the contrary herein, nothing herein is intended to, nor shall it,
extend, amplify or otherwise alter the representations, warranties, covenants
and obligations of the Sellers or the Buyer contained in the Purchase Agreement
or the survival thereof.


                                      D-1


        Section 3. Further Assurances. The Sellers do hereby agree, from and
after the date hereof upon the reasonable request of the Buyer, to execute such
other documents as the Buyer may require to obtain the full benefit of this Bill
of Sale and the Sellers' obligations hereunder.

        Section 4. Governing Law. This Bill of Sale shall be governed by and
construed under the substantive laws of the State of California without
reference to conflicts of laws principles.

        IN WITNESS WHEREOF, the Sellers have caused this Bill of Sale to be
executed by its duly authorized officer and Sellers have executed this Bill of
Sale as of the date first above written.

                                    FIRST VIRTUAL COMMUNICATIONS, INC.


                                    By:
                                        ----------------------------------------
                                    Name:
                                    Title:


                                    CUSEEME NETWORKS, INC.

                                    By:
                                        ----------------------------------------
                                    Name:
                                    Title:



                                      D-2

                                                                       EXHIBIT E

                             FORM OF ASSIGNMENT AND
                               ASSUMPTION OF LEASE

        THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is made this
______ day of ______________, 2005 (the "Effective Date"), by and between
[                                          ], a Delaware corporation
(hereinafter called "Assignor") and [__________., a corporation organized under
the laws of _____________] (hereinafter called "Assignee").

                              W I T N E S S E T H :

        (a) Pursuant to that certain Purchase Agreement dated as of February ,
2005, by and among Assignor, Assignee and the parties named therein, Assignor
agreed to assign and Assignee agreed to assume the lease for the premises known
as (the "Lease").

        (b) Assignor desires to assign to Assignee by this Assignment the Lease,
and Assignee intends to assume and undertake to perform all of Assignor's
obligations from and after the Effective Date, under and with respect to the
Lease.

        NOW, THEREFORE, the parties do hereby agree as follows:

        1. Assignor assigns and transfers to Assignee all of Assignor's right,
title and interest with respect to the Lease, and all of the rights of Assignor
thereunder.

        2. Assignee assumes and agrees to perform and discharge all obligations
of Assignor with respect to the Lease from and after the Effective Date.

        3. This Assignment shall be binding upon, enforceable by and shall inure
to the benefit of the successors and assigns of the parties.

        4. This Assignment may be signed in multiple counterparts which, when
taken together and signed by all parties and delivered to any other party
hereto, shall constitute a binding agreement between the parties.

        5. This Assignment shall be governed by and construed in accordance with
the laws of the State of [ ].



                                      E-1


        IN WITNESS WHEREOF, Assignor and Assignee have signed this Assignment as
of the date and year first above written.


                                    ASSIGNOR:

                                    [                                       ]

                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:



                                    ASSIGNEE:

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


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                      E-2

                           ACKNOWLEDGEMENT AND RELEASE

The undersigned, as Landlord pursuant to the Lease (as defined in the foregoing
Assignment and Assumption of Lease) hereby acknowledges the Assignment and
Assumption of Lease and agrees that [ ] (the "Assignor") shall be and hereby is
relieved from any further obligations, duties or liabilities accruing under the
Lease from and after the Effective Date of the foregoing Assignment and
Assumption of Lease. Assignor shall be exclusively liable for any obligations,
duties or liabilities accruing under the Lease prior to the Effective Date of
the foregoing Assignment and Assumption of Lease.

[LANDLORD]

By:
   -------------------------------------
   Name:
   Title:


                                      E-3

                                                                       EXHIBIT F


                 FORM OF ASSIGNMENT AND ASSUMPTION OF CONTRACTS


               THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS is made and entered
into on _______________, 2005 by and between [ ], a Delaware corporation (the
"Assignor"), and [____________ a corporation organized under the laws of
___________ (the "Assignee").

               All capitalized terms used herein and not defined shall have the
meanings given to them in the Asset Purchase Agreement dated as of
_____________, 2005 by and among the Assignor, the Assignee, and the parties
named therein (the "Purchase Agreement").

                                   BACKGROUND

               Pursuant to the terms and conditions of the Purchase Agreement,
the Assignor has agreed to assign to the Assignee the Assignor's right, title
and interest in and to the Assigned Contracts free and clear of all liens, and
the Assignee has agreed to assume certain of the Assignee's performance
obligations under the Assigned Contracts.

               To effect such transactions and in consideration of the foregoing
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the Assignor
and the Assignee agree as follows:

                                      TERMS

               SECTION 1 ASSIGNMENT. Pursuant to the Purchase Agreement, and on
the same terms and conditions stated therein, the Assignor hereby sells,
conveys, transfers, assigns and delivers to the Assignee all of the Assignor's
right, title and interest in and to the Assigned Contracts, free and clear of
all liens to the extent provided in the Sale Order.

               SECTION 2 ASSUMPTION. The Assignee hereby accepts the foregoing
assignment, and assumes and undertakes to timely discharge and perform the
performance obligations under the Assigned Contracts to the extent set forth in
Section 1.03 of the Purchase Agreement.

               SECTION 3 DUTIES AND OBLIGATIONS OF ASSIGNOR. The Assignor shall
not be bound by, liable for or required to perform any duties and obligations
under the Assigned Contracts which are provided for in any amendment,
modification, renewal, extension or supplement to any of the Assigned Contracts
which may be entered into after the date hereof.

               SECTION 4 FURTHER ASSURANCES. The Assignor agrees to execute and
deliver all such further transfers, assignments and conveyances and assurances
as may reasonably be requested by the Assignee in order to effect the full
assignment of the Assigned Contracts to the Assignee as contemplated herein.


                                      F-1


               SECTION 5 RIGHTS CUMULATIVE; CONFLICT WITH PURCHASE AGREEMENT.
The rights and remedies of the Assignee and the duties and obligations of the
Assignor hereunder shall be cumulative and in addition to the rights and
remedies of the Assignee and the duties and obligations of the Assignor under
the Purchase Agreement. Nothing herein shall be deemed to limit the rights and
remedies of the Assignee and the duties and obligations of the Assignor under
the Purchase Agreement and, to the extent of any conflict between the terms and
conditions of this Assignment and Assumption of Contracts and the terms and
conditions of the Purchase Agreement, the terms and conditions of the Purchase
Agreement shall govern, supersede and prevail. Notwithstanding anything to the
contrary herein, nothing herein is intended to, nor shall it, extend, amplify or
otherwise alter the representations, warranties, covenants and obligations of
the Buyer contained in the Purchase Agreement or the survival thereof.

               SECTION 6 GOVERNING LAW. This Assignment and Assumption of
Contracts shall be governed and construed under the substantive laws of
California, without reference to conflicts of laws principles.

               IN WITNESS WHEREOF, the Assignor and Assignee have caused this
Assignment and Assumption of Contracts to be executed as of the date first above
written.

                                  Assignor:

                                  [                                 ]


                                  By:
                                        ---------------------------------------
                                  Name:
                                  Authorized Signatory


                                  Assignee:

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


                                  By:
                                        ----------------------------------------
                                  Name:
                                  Authorized Signatory



                                      F-2

                                                                       EXHIBIT G


                               FORM OF SALE ORDER

                                   (attached)




                                      G-1

                                                                       EXHIBIT H

                             FORM OF CERTIFICATE OF

                                 JONATHAN MORGAN


        I, Jonathan Morgan, certify that:

        1. I am delivering this certificate to Buyer pursuant to Section 9.03(a)
of the Asset Purchase Agreement by and among MTVP (First Virtual Investments),
LLC, Silicon Valley Bank, Morrison & Foerster LLP, First Virtual Communications,
Inc. and CUseeMe Networks, Inc. dated as of February ___, 2004 (the
"Agreement").

        2. All capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Agreement.

        3. As of the date hereof, Sellers have performed and complied in all
material respects with the covenants contained in the Agreement.

        4.  As of the date hereof, the representations and warranties of the
Sellers set forth in the Agreement are true and correct in all material
respects.

        IN WITNESS WHEREOF, I have executed this Certificate as of this _____
day of March, 2005.



                                        ----------------------------------------
                                        Jonathan Morgan




                                       H-1


                                                                       EXHIBIT I

                                   DEFINITIONS

Capitalized terms used in this Agreement that are not otherwise defined herein
shall have the following meaning for the purposes of this Agreement:

               (a) "Affiliate" of any Person means another Person that directly
        or indirectly, through one or more intermediaries, controls, is
        controlled by, or is under common control with, such first Person. For
        purposes of this definition, "control" as applied to any Person means
        the possession, directly or indirectly, of the power to direct or cause
        the direction of the management and policies of that Person, whether
        through the ownership of voting securities, by contract, or otherwise.

               (b) "Business Day" means any day other than a Saturday, a Sunday
        or a day on which banks in San Francisco, California, are authorized or
        obliged by law or executive order to close.

               (c) "Code" means the Internal Revenue Code of 1986, as amended,
        together with the Treasury regulations promulgated thereunder.

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

               (e) "GAAP" means generally accepted accounting principles as in
        effect and as applied in the United States.

               (f) "Government Contract" means those Assumed Contracts between a
        Seller and the U.S. Federal government or any agency thereof or a Seller
        and another party which is party to a contract with the U.S. federal
        government or any agency therefor under which such Seller acts as
        subcontractor to such other party and is obligated pursuant to any
        contractual flow-down provisions to abide by any government contracting
        regulations, including the Federal Acquisition Regulations, that are
        applicable for the principal contractor.

               (g) "Governmental Authority" means any domestic or foreign
        supranational, national, federal, state or local judicial, legislative,
        executive or regulatory authority.

               (h) "Law" means any federal, state, local or foreign law,
        statute, code, ordinance, rule, regulation, Order or rule of common law.

               (i) "Order" means any decree, injunction, judgment, order,
        ruling, binding settlement agreement or writ.

               (j) "Person" means and includes an individual, a partnership, a
        joint venture, a


                                      I-1


        corporation, a trust, an unincorporated organization or a governmental
        entity or any department or agency thereof.

               (k) "Proprietary Rights" means all (i) U.S. and foreign patents,
        patent applications, patent disclosures and improvements thereto,
        including petty patents, utility models, design patents and provisional
        and non-provisional applications therefor and reissues and extensions
        thereof, and rights of priority thereunder, (ii) registered and
        unregistered U.S. and foreign trademarks, service marks, trade dress,
        logos, trade names and corporate names and the goodwill associated
        therewith and registrations and applications for registration thereof,
        (iii) U.S. and foreign copyrights and registrations and applications for
        registration thereof, (iv) U.S. and foreign mask work rights and
        registrations and applications for registration thereof, (v) rights in
        know-how, proprietary information and trade secrets, (vi) software and
        database and data rights, (vii) domain name registrations and contents
        of all websites, (viii) other proprietary rights, and (ix) licenses
        granting any rights with respect to any of the foregoing.

               (l) "Registered Proprietary Rights" means all United States,
        international and foreign: (i) issued patents and patent applications
        (including provisional applications), (ii) registered trademarks and
        servicemarks, applications to register trademarks and servicemarks,
        intent-to-use applications, other registrations or applications to
        trademarks or servicemarks, (iii) registered copyrights and applications
        for copyright registration, (iv) any mask work registrations and
        applications to register mask works, and (v) any other Proprietary Right
        that is the subject of an application, certificate, filing, registration
        or other document issued by, filed with, or recorded by, any state,
        government or other public legal authority.

               (m) "Sale Procedures Order" means the Interim Order Approving
        Bidding Procedures and Protections entered on February 8, 2005 in the
        Sellers' Chapter 11 Cases, as it may be amended or modified by the Final
        Order Approving Bidding Procedures to be considered at and entered
        following the hearing scheduled for February 14, 2005 before the
        Bankruptcy Court.

               (n) "Securities Act" means the U.S. Securities Act of 1933, as
        amended.

               (o) "Seller Proprietary Rights" means any Proprietary Right
        (including, but not limited to, all websites maintained or owned by any
        Seller or anyone on its behalf (or used by others with the approval of
        any Seller) and the exclusive right to use the names First Virtual
        Communications, Inc., FVC, CUseeMe Networks, Inc. and Click to Meet
        Version 4.1) that (i) is owned or used by, (ii) is licensed to, or (iii)
        was developed or created by or for the Sellers.

               (p) "Seller Registered Proprietary Rights" means all Registered
        Proprietary Rights owned by, filed in the name of, assigned to or
        applied by or for the Sellers.


                                      I-2


               (q) "Sellers' Knowledge" means, with respect to the Transactions
        and the Purchased Assets, the actual knowledge of any of the officers of
        the Sellers.

               (r) "Tax" or "Taxes" means any foreign, United States federal,
        state or local income, gross receipts, license, payroll, employment,
        excise, severance, stamp, occupation, premium, windfall profits,
        environmental, customs duties, capital stock, franchise, profits,
        withholding, social security (or similar), unemployment, disability,
        real property, personal property, sales, use, transfer, registration,
        value added, alternative or add-on minimum, estimated or other tax of
        any kind whatsoever, including all estimated taxes, deficiency
        assessments and any interest, penalty or addition thereto.

               (s) "Transactions" means the sale of the Purchased Assets,
        assumption of the Assumed Liabilities and the other transactions
        contemplated by this Agreement.



                                      I-3

EX-10.5

                                                                    Exhibit 10.5

February 12, 2005

Silicon Valley Bank
Advisory Services Department
38 Technology Drive, Suite 150
Irvine, CA 92618
Attention: Diane LeMay, Senior Advisor

MTVP (First Virtual Investments), LLC
2815 Eastlake  Avenue East, Suite 300
Seattle, WA  98102
Attention:  Thomas Todaro

Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105-2482
Attention:  Adam Lewis, Esq.

First Virtual Communications, Inc.
CUseeMe Networks, Inc.
3200 Bridge Parkway, Suite 202
Redwood City, CA  94065
Attention: Jonathan G. Morgan

Re: Asset Purchase Agreement dated February 12, 2005 among MTVP (First Virtual
Investments), LLC, Silicon Valley Bank, Morrison & Foerster LLP, First Virtual
Communications, Inc. and CUseeMe Networks, Inc. (the "Asset Purchase Agreement")

Dear Ms. LeMay and Messrs. Todaro, Lewis and Morgan:

     This letter is to confirm that Huron Consulting Services LLC ("Huron")
hereby consents to and agrees to be bound by the provisions of Sections 1.05 and
10.02 of the Asset Purchase Agreement, provided, however, that this letter does
not become effective until such time as the Asset Purchase Agreement is fully
executed by all parties to it and, provided further, however, that Huron is not
hereby considered a Buyer under the Asset Purchase Agreement.

Sincerely,

/s/ Daniel Wikel

Daniel Wikel
Managing Director

cc: Stephen J. Kottmeier, Esq., Hopkins & Carley, A Law Corporation
    Randy Michelson, Esq., Bingham McCutchen LLP
    Van C. Durrer, II, Esq., Skadden, Arps, Slate, Meagher & Flom LLP

EX-99.1

Exhibit 99.1

Contact:

Jonathan Morgan
Chief Executive Officer
First Virtual Communications, Inc.
(650) 801-6500

Samuel L. Schwerin
Managing Partner
Millennium Technology Value Partners, L.P.
(646) 521-7800

FIRST VIRTUAL COMMUNICATIONS, INC. RECEIVES $5.2 MILLION STALKING HORSE BID
LED BY MILLENNIUM TECHNOLOGY VALUE PARTNERS

Bankruptcy Court Finalizes Process For Additional Proposals For Chapter 11

Company Obtains Final Approval on $2 Million DIP Financing

REDWOOD CITY, CA — (Business Wire) — Feb. 18, 2005 — First Virtual Communications, Inc. (Pink Sheets: FVCCQ.PK)

At a hearing on February 14, 2005, the United States Bankruptcy Court for the Northern District of California granted First Virtual Communications, Inc. the following relief:

•   Final approval of the procedures and timing for interested parties to submit competing proposals in connection with the Company’s restructuring efforts based on an improved “stalking horse” bid of approximately $5.2 million for the company from Millennium Technology Value Partners, L.P. and First Virtual’s secured lenders, and;

•   Final approval for a $2 million Debtor in Possession (DIP) credit facility to stabilize business during Chapter 11 reorganization.

“The Company has made great strides to date in its reorganization. First Virtual entered Chapter 11 with a letter of intent for the sale of its assets for $5 million, and the Company is now launching a competitive bidding process for restructuring proposals with a definitive agreement for more than $5.2 million in consideration,” reported CEO Jonathan Morgan. Pursuant to an asset purchase agreement executed on February 12, 2005, an investment partnership led by Millennium Technology Value Partners, L.P. a New York-based private equity fund, and the Company’s other secured lenders made a proposal for substantially all of the Company’s assets through a credit-bid of $5.2 million, $250,000 in cash and assumption of costs payable at closing.

“We recognize the value in the world-class product solutions that First Virtual develops, markets, and supports and we are prepared to assist the company through the DIP period as well as once First Virtual emerges from Chapter 11 reorganization,” said Tom Todaro, a Senior Advisor of Millennium Technology Value Partners, L.P.

“The Company expects a robust competitive process.” Morgan also confirmed. The order approved by the Bankruptcy Court requires that competing proposals for the company be submitted by February 21, 2005. A final determination will be made on February 28, 2005. The initial proposal by the Company’s secured lenders sets the baseline for the bidding process. Any subsequent offers must satisfy the conditions set forth in the Bankruptcy Court’s order in order to qualify for the auction.

Following interim approval of the DIP credit facility on January 26, 2005, the Company recalled 56 employees that had been furloughed at the beginning of January. Final approval allows the company to continue resumed operations as planned. CEO Jonathan Morgan commented, “The Company and its employees are committed to the business and it’s restructuring. We now have the appropriate resources and will continue to provide our next generation products and support to our installed-based customers, partners, and new prospects.”

About First Virtual Communications, Inc.

First Virtual Communications creates leading software products that enable interactive voice, video and data collaboration over IP-based networks. Through its products, First Virtual provides cost-effective, integrated end-to-end solutions for large-scale deployments from the desktop to the conference room. It also enables best-of-breed collaborative conferencing solutions to be extended to ISDN and ATM networks.

The company’s flagship product, Click to Meet™, provides a complete framework for delivering a new generation of video-enabled web collaboration applications. Click to Meet™ can be integrated seamlessly into popular enterprise messaging and collaboration environments such as Microsoft Exchange/Outlook and Windows Messenger as well as IBM Lotus Groupware Environments. First Virtual serves its customers through a worldwide network of resellers and partners. More information about First Virtual Communications can be found at www.fvc.com.

About Millennium Technology Value Partners, L.P.

Millennium Technology Value Partners, L.P., is a New York-based private equity fund formed in 2004 to pursue an innovative value-centric approach to venture capital and technology investing. Transactions range from secondary direct and limited partnership investments to corporate spin-offs of non-core assets to

value-oriented public market investments. For additional information please visit www.mtvlp.com.

Cautionary Statement Regarding Forward-Looking Information and Other Matters
Statements made in this release which address activities, events or developments that we expect or anticipate may occur in the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the company’s current views with respect to current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the company’s operations and business environment which may cause the actual results of the company to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the company to continue as a going concern; the ability of the company to access working capital, including, but not limited to, the use of cash collateral or debtor-in-possession financing; the company’s ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; the ability of the company to develop, prosecute, confirm and consummate one or more transactions for the sale of the company’s assets or other change of control transactions under a plan or plans of reorganization with respect to the Chapter 11 cases; risks associated with third parties seeking and obtaining the Bankruptcy Court’s approval to terminate or shorten the exclusivity period for the company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the ability of the company to obtain and maintain normal terms and relationships with vendors, service providers and employees; the company’s ability to maintain contracts that are critical to its operations; any adverse impact on us from the special investigation and restatement of previously announced financial results; any adverse impact arising from the delay in filing required periodic reports; the company’s potential inability to maintain business relationships with the company’s integrators, distributors and suppliers; and other risk factors set forth in the company Annual Report on Form 10-K for the year ended December 31, 2003 and in the company’s other public filings with the SEC, or in other filings made, from time to time, by the company with the Securities and Exchange Commission. The forward-looking statements speak only as of the date when made and the company does not undertake to update such statements.