EXHIBIT 10.10 TEMPORARY FOREBEARANCE AGREEMENT

 

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                                                                   EXHIBIT 10.10

 

 

 

                        TEMPORARY FOREBEARANCE AGREEMENT

 

        This Temporary Forbearance Agreement is entered into as of September 13,

2004 between Silicon Valley Bank ("Silicon"), and First Virtual Communications,

Inc ("First Virtual") and Cuseeme Networks, Inc. ("Cuseeme") (First Virtual and

Cuseeme being referred to herein jointly and severally as "Borrower"), with

reference to the following facts:

 

        A. Silicon and the Borrower are parties to that certain Loan and

Security Agreement dated April 3, 2003 (as amended, the "Loan Agreement").

(Capitalized terms used in this Agreement, which are not defined herein, shall

have the meanings set forth in the Loan Agreement. The Loan Agreement and all

other present and future documents, instruments and agreements relating thereto

are referred to herein collectively as the "Loan Documents".)

 

        B. Material Events of Default have occurred and are continuing under the

Loan Documents. Said material Events of Default include without limitation the

following (the "Existing Defaults"): (i) Borrower is in breach of the liquidity

covenant set forth in Section 5(B) of the Schedule to the Loan Agreement; (ii)

Borrower is not generally paying its debts as they become due; and (iii)

Material Adverse Changes have occurred and are continuing.

 

        E. Borrower and Silicon are discussing a longer-term forbearance and

restructuring agreement, and Borrower has requested that Silicon agree to a

short-term forbearance, to enable those discussions to continue.

 

        NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

 

1. Forbearance.

 

        1.1. Forbearance. Silicon agrees to forbear from exercising its rights

and remedies against the Borrower, as a result of the Existing Defaults, until

the earlier of the following dates (the "Forbearance Period"): (i) September 21,

2004, or (ii) the date any Additional Default shall occur. In agreeing to

forbear from exercising its rights and remedies, Silicon is not waiving the

Existing Defaults or any rights or remedies in connection therewith, all of

which are expressly reserved. Upon the expiration of the Forbearance Period,

Silicon may, at its option, exercise any and all rights or remedies in

connection with the Existing Defaults, without further notice.

 

        1.2. "Additional Default." As used in this Agreement, "Additional

Default" means any of the following (but not including the Existing Defaults):

(i) any present or future Default or Event of Default under any Loan Document

(including, without limitation, any breach of any term or provision of this

Agreement, and any Default or Event of Default under any other Loan Document

which has occurred as of this date, but of which Silicon does not have actual

knowledge on this date), (ii) any event which, with notice or passage of time or

both, would constitute a Default or Event of Default under any Loan Document,

(iii) any breach of any representation or warranty in this Agreement or any

other Loan Document. Without limiting any other provision of this Agreement,

Silicon may, in its sole and absolute discretion, waive an Additional Default,

but only in a specific written waiver signed by Silicon, and no such waiver

shall imply or constitute an agreement on the part of Silicon to waive any other

Additional Defaults, whether or not similar to the Additional Default waived.

 

 

 

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        1.3. Rights and Remedies. Borrower agrees that the exercise by Silicon

of any and all rights or remedies in connection with the Existing Defaults and

(if applicable) any Additional Default, upon the expiration of the Forbearance

Period, or the occurrence of any Additional Default, shall not be affected by

reason of this Agreement, and the Borrower shall not assert as a defense thereto

the passage of time, estoppel, laches or any statute of limitations.

 

        1.4. No Commitment as to Further Forbearance. Borrower acknowledges that

Silicon, by entering into this Agreement and discussing further forbearance

and/or restructuring with respect to the Loan Agreement, is not agreeing or

committing to any further forbearance and/or restructuring with respect to the

Loan Agreement, and no such agreement or commitment shall be effective against

Silicon unless set forth in a specific written agreement signed by Silicon.

 

2. Acknowledgment of Default. Borrower acknowledges that: (i) material Events of

Default have occurred and presently exist under the Loan Documents, (ii) the

unpaid principal balance of the Obligations is $3,000,000, as of September 13,

2004, plus interest accruing after August 31, 2004, plus reasonable costs

and attorneys fees as set forth in the Loan Documents; (iii) the Obligations are

due and owing from Borrower to Silicon without any defense, offset or

counterclaim of any kind; (iv) pursuant to the Loan Documents, Silicon has a

valid perfected first priority security interest in all of the Borrower's

present and future accounts, general intangibles, inventory, equipment,

documents, instruments, and all other property and assets of the Borrower and

the proceeds and products thereof (collectively, the "Collateral"), subject to

Permitted Liens; and (v) Silicon is not obligated to make any additional Loans

to the Borrower, under the Loan Documents or otherwise.

 

3. Fee. In consideration for Silicon entering into this Agreement, Borrower

shall concu