exv10w24



 



Exhibit 10.24











STOCKHOLDERS AGREEMENT,



dated as of May 16, 2002



by and among



MONEYLINE NETWORKS, LLC,



VIDEO NETWORK COMMUNICATIONS, INC.



and



THE MANAGEMENT STOCKHOLDERS



















 









Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 	

	ARTICLE I CERTAIN DEFINITIONS
	 	 	2	 
	 	1.1	Defined Terms
	 	 	2	 
	ARTICLE II TRANSFERS OF RESTRICTED SECURITIES
	 	 	5	 
	 	2.1	Restrictions Generally; Securities Act
	 	 	5	 
	 	2.2	Legend
	 	 	6	 
	 	2.3	Sale of the Company
	 	 	7	 
	ARTICLE III PREEMPTIVE RIGHTS
	 	 	7	 
	 	3.1	Preemptive Rights
	 	 	7	 
	 	3.2	Notice
	 	 	7	 
	 	3.3	Exercise
	 	 	7	 
	 	3.4	Limitations
	 	 	8	 
	ARTICLE IV CORPORATE GOVERNANCE
	 	 	8	 
	 	4.1	Significant Transactions
	 	 	8	 
	 	4.2	Board of Directors
	 	 	8	 
	 	4.3	Removal
	 	 	10	 
	 	4.4	Vacancies
	 	 	10	 
	 	4.5	By-Laws
	 	 	11	 
	ARTICLE V CERTAIN COVENANTS OF THE PARTIES
	 	 	11	 
	 	5.1	Holdback Obligations
	 	 	11	 
	ARTICLE VI MISCELLANEOUS
	 	 	11	 
	 	6.1	Governing Law
	 	 	11	 
	 	6.2	Entire Agreement; Amendments
	 	 	11	 
	 	6.3	Term
	 	 	12	 
	 	6.4	Certain Actions
	 	 	12	 
	 	6.5	Inspection
	 	 	12	 
	 	6.6	Recapitalization, Exchanges, Etc., Affecting Restricted Securities
	 	 	13	 
	 	6.7	Waiver
	 	 	13	 
	 	6.8	Successors and Assigns
	 	 	13	 
	 	6.9	Remedies
	 	 	13	 
	 	6.10	Invalid Provisions
	 	 	13	 
	 	6.11	Headings
	 	 	14	 
	 	6.12	Further Assurances
	 	 	14	 
	 	6.13	Gender
	 	 	14	 
	 	6.14	Counterparts
	 	 	14	 
	 	6.15	Notices
	 	 	14	 




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EXHIBITS


Exhibit A – Form of Joinder Agreement


Exhibit B – Form of Amended and Restated By-Laws



ii






 



     STOCKHOLDERS AGREEMENT, dated as of May 16, 2002 (the “Effective Date”),
by and among MONEYLINE NETWORKS, LLC, a Delaware limited liability company
(“Moneyline”), and Video Network Communications, Inc., a Delaware corporation
(the “Company”). Capitalized terms used and not otherwise defined herein have
the respective meanings ascribed thereto in Article I.


RECITALS



     WHEREAS, Moneyline, B2BVideo Network Corp. (“B2B”) and the Company are
parties to a Stock Purchase Agreement dated May 16, 2002 (the “Stock Purchase
Agreement”), and the Company and B2B are parties to an Agreement and Plan of
Merger dated May 16, 2002 (the “Merger Agreement”) and, concurrently with this
Agreement, have consummated the transactions contemplated therein (the
“Transactions”), whereby (i) B2B Merger Sub Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company, has merged with and into B2B with B2B
surviving; and (ii) Moneyline beneficially owns 36,250,000 shares of Common
Stock (as defined below);


     WHEREAS, OEP has provided the funding to Moneyline in connection with the
Transactions;


     WHEREAS, pursuant to the Stock Purchase Agreement, the Board (as defined
below), as of the date hereof, consists of six (6) individuals, 3 of whom are
Affiliates (as defined below) of Moneyline or OEP;


     WHEREAS, the Company will file within one day of the date of this
Agreement all filings required by Rule 14f-1 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), with the Commission (as defined below),
and upon the expiration of the ten day period from such filing, will appoint
Charles Auster to the Board;


     WHEREAS, the parties hereto wish to further establish the nature of their
relationship and set forth their agreement concerning the governance of the
Company following consummation of the Transactions as well as certain matters
relating to the ownership of Common Stock by Moneyline.


     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:


1






 


ARTICLE I
CERTAIN DEFINITIONS



                 1.1    Defined
Terms  The following capitalized terms, when used in
this Agreement, have the respective meanings set forth below:



		
	 	        “Affiliate” means, with respect to any Person, any other
Person that controls, is controlled by or is under common control with
such Person. For the purposes of this definition, “control” (including,
with its correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of securities, by contract or otherwise.




		
	 	        “Agreement” means this Stockholders Agreement and the
exhibits hereto, as the same may be amended, modified, supplemented or
restated from time to time in accordance with the terms hereof.




		
	 	        “Board” means the Board of Directors of the Company.




		
	 	        “Closing Date” means the date of the closing of the purchase
and sale of shares of Common Stock pursuant to the Stock Purchase
Agreement.




		
	 	        “Commission” means the Securities and Exchange Commission.




		
	 	        “Common Stock” means the Common Stock, par value $.01 per
share, of the Company, any securities into which such Common Stock shall
have been changed or any securities resulting from any reclassification
or recapitalization of such Common Stock, and all other securities of any
class or classes (however designated), other than any participating
preferred stock, of the Company the holders of which have the right,
without limitation as to amount, after payment on any securities entitled
to a preference on dividends or other distributions upon any dissolution,
liquidation or winding-up, either to all or to a share of the balance of
payments upon such dissolution, liquidation or winding-up.




		
	 	        “Diluted Basis” means, with respect to the calculation of the
number of shares of Common Stock, all shares of Common Stock outstanding
at the time of determination and all shares issuable upon the exercise,
conversion or exchange, as applicable, of all outstanding securities
exercisable, convertible or exchangeable for or into shares of Common
Stock.




		
	 	        “Independent Director” means a director of the Company who is
not a Moneyline Nominee and who (i) is not an officer, employee or
director of any of Moneyline or its Affiliates, and (ii) has no
affiliation or compensation, consulting or contractual relationship with
Moneyline or its Affiliates such that a reasonable person would regard
such director as likely to be unduly influenced by any of such Persons.



2






 





		
	 	        “Joinder Agreement” means a Joinder Agreement substantially
in the form attached hereto as Exhibit A.




		
	 	        “Management Stockholders” means any director, officer,
employee, consultant or agent of the Company or any of its subsidiaries
which has executed a Stock Option Purchase Agreement and a Joinder
Agreement, so long as any such Person shall hold Restricted Securities.




		
	 	        “Moneyline Stockholders” means Moneyline and each Person to
whom Moneyline Transfers any Restricted Securities, so long as any such
Person shall hold Restricted Securities.




		
	 	        “OEP” means One Equity Partners LLC, a Delaware limited
liability company.




		
	 	        “Person” means an individual, partnership, corporation,
limited liability company or partnership, trust, unincorporated
organization, joint venture, government (or agency or political
subdivision thereof) or any other entity of any kind.




		
	 	        “Pro Rata” means, with respect to one or more Stockholders,
in proportion to the number of shares of Common Stock on a Diluted Basis
owned by such Stockholder or Stockholders.




		
	 	        “Restricted Securities” means (i) with respect to Moneyline
and OEP, the Common Stock, any other securities exercisable, exchangeable
or convertible for or into Common Stock and any securities issued with
respect to any of the foregoing as a result of any stock dividend, stock
split, reclassification, recapitalization, reorganization, merger,
consolidation or similar event or upon the conversion, exchange or
exercise thereof and any other securities designated as such by the
Board; and (ii) with respect to the Management Group, any shares of
Common Stock issued pursuant to a Stock Option Purchase Agreement.




		
	 	        “Sale of the Company” means the sale of the Company (whether
by merger, consolidation, recapitalization, reorganization, sale of
securities, sale of assets or otherwise) in one transaction or series of
related transactions to a Person or Persons not an Affiliate, directly or
indirectly, of any Moneyline Stockholder pursuant to which such Person or
Persons (together with its Affiliates) acquires (i) securities
representing at least a majority of the voting power of all securities of
the Company, assuming the conversion, exchange or exercise of all
securities convertible, exchangeable or exercisable for or into voting
securities, or (ii) all or substantially all of the Company’s assets on a
consolidated basis.




		
	 	        “Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder.




		
	 	        “Significant Transaction” means:



3






 





                                             (i) the







authorization, issuance or sale of any capital stock or debt
securities or securities exercisable, convertible or exchangeable for or into
capital stock or debt
securities or any option, warrant or other right to acquire the same, of,
or any other interest in, the Company or any subsidiary of the Company, other
than securities issued pursuant to existing option plans, securities issued
upon exercise of convertible securities existing as of the date hereof, or any
amendment or modification of any security of the Company or any subsidiary of
the Company, whether or not outstanding as of the date hereof;


                                             (ii) the







redemption, purchase or other acquisition of any securities of
the Company or any subsidiary of the Company;


                                             (iii) any







amendment to, or modification, repeal or waiver of any provision
of, the Certificate of Incorporation or By-laws of the Company or any
subsidiary of the Company;


                                             (iv) the







declaration or payment of any dividend or other distribution by
the Company with respect to the capital stock of the Company;


                                             (v) the







entering into, or the adoption of any amendment to or
modification, repeal or waiver of, any provision of any compensation plan,
arrangement, contract or agreement relating to the compensation of, or other
benefits arrangements for, any employee of the Company or any subsidiary of the
Company, in each case, other than ordinary course salary arrangements for
non-executive officers;


                                             (vi) the







dissolution, liquidation or winding-up of the Company or any
subsidiary of the Company;


                                             (vii) the







commencement, initiation, continuation or settlement of any
suit, action or proceeding before any court, governmental or regulatory agency
or arbitral body, relating to the Company or any subsidiary of the Company and
involving amounts in excess of $250,000;


                                             (viii) the







appointment or removal of the independent auditors of the
Company or any subsidiary of the Company or modification of significant
accounting methods or policies of the Company or any subsidiary of the Company;


                                             (ix) the







adoption of any significant change to the business plan and
budget of the Company;


                                             (x) the







filing of a voluntary petition in bankruptcy or commencement of a
voluntary legal procedure for reorganization, arrangement, adjustment, relief
or composition of indebtedness or other similar law now or hereafter in effect,
the consent to the entry of an order for relief in an involuntary case under
such law or the application for or consent to the appointment of a receiver,
liquidator, assignee, custodian or trustee (or similar official) of the Company
or any subsidiary of the Company;



4






 




                                             (xi) any







merger, consolidation, recapitalization or other business
combination to which the Company or any subsidiary of the Company is a party or
any sale of all or substantially all of the assets of the Company or any
subsidiary of the Company;


                                             (xii) the







appointment or removal of any executive officer of the Company
or any subsidiary of the Company;


                                             (xiii) the







establishment of any committee of the Board;


                                             (xiv) the







acquisition by the Company or any subsidiary of the Company of
any equity securities of any Person or securities convertible into or
exercisable or exchangeable for an equity interest in any Person, including,
without limitation, any other instrument of Indebtedness issued by any Person,
where the aggregate purchase price of such securities, whether in one or a
series of related transactions, is greater than $250,000;


                                             (xv) the







acquisition of any assets by the Company or any subsidiary of the
Company in a single transaction or series of related transactions having a
value in excess of $250,000 in the aggregate; and


                                             (xvi) taking







any action, directly or indirectly, in contemplation of any
of the foregoing.



		
	 	        “Stockholders” means each of the Moneyline Stockholders and
the Management Stockholders.




		
	 	        “Stock Option Purchase Agreements” means the Stock Option
Purchase Agreements entered into, at any time or from time to time on or
after the date hereof, by the Company and any Management Stockholder, as
any such agreement may be amended, restated or modified from time to
time, and any other agreement designated as such by the Company.




		
	 	        Transfer” means, directly or indirectly, any sale, transfer,
assignment, hypothecation, pledge or other disposition of any Restricted
Securities or any interests therein.



                              (b) Unless




otherwise provided herein, all accounting terms used in this
Agreement shall be interpreted in accordance with United States generally
accepted accounting principles as in effect from time to time, applied on a
consistent basis.


ARTICLE II 
TRANSFERS OF RESTRICTED SECURITIES



                 2.1
    
Restrictions Generally; Securities Act  Each Management
Stockholder agrees that it will not, directly or indirectly, Transfer any
Restricted Securities in violation of this Agreement. Any attempt by any
Management Stockholder to Transfer any Restricted Securities in violation of


5






 


this Agreement shall be null and void and neither the issuer of such securities
nor any transfer agent of such securities shall give any effect to such
attempted Transfer in its stock records.


                              (b) Each




Management Stockholder agrees that it will not Transfer any
Restricted Securities except pursuant to an effective registration statement
under the Securities Act, or, unless waived by the Board, upon receipt by the
Company of an opinion of counsel to the Stockholder reasonably satisfactory to
the Company or, if agreed by the Board, counsel to the Company, or a no-action
letter from the Commission addressed to the Company, to the effect that no
registration statement is required because of the availability of an exemption
from registration under the Securities Act.


                 2.2    Legend
Each certificate representing Restricted Securities
shall be endorsed with the following legends and such other legends as may be
required by applicable state securities laws:



		
	 	“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO A STOCKHOLDERS AGREEMENT, DATED AS OF MAY 16, 2002, AS
SUCH AGREEMENT MAY BE AMENDED, RESTATED OR MODIFIED FROM
TIME TO TIME, AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE WITH THE PROVISIONS THEREOF AND ANY TRANSFEREE OF
THESE SECURITIES SHALL BE SUBJECT TO THE TERMS OF SUCH
AGREEMENT. COPIES OF THE FOREGOING AGREEMENT ARE MAINTAINED
WITH THE CORPORATE RECORDS OF THE ISSUER AND ARE AVAILABLE
FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE ISSUER.”




		
	 	“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD OR TRANSFERRED EXCEPT PURSUANT TO (I) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS OR (II) AN APPLICABLE EXEMPTION FROM
REGISTRATION THEREUNDER OR UNDER APPLICABLE STATE SECURITIES
LAWS.”



                              (b) Any




certificate issued at any time in exchange or substitution for any
certificate bearing such legends (except a new certificate issued upon the
completion of a Transfer
pursuant to a registered public offering under the Securities Act and made
in accordance with the Securities Act) shall also bear such legends, unless in
the opinion of counsel for the Company, the Restricted Securities represented
thereby are no longer subject to the provisions of this Agreement or the
restrictions imposed under the Securities Act or state securities laws, in
which case the applicable legend (or legends) may be removed.


6






 


                 2.3    Sale

of the Company If the Moneyline Stockholders desire to
effect a Sale of the Company, such Moneyline Stockholders shall notify each the
Management Stockholders, in writing, of such desire and the terms and
conditions of such proposed sale. Notwithstanding any other provision of this
Agreement, each such Management Stockholder shall take all necessary and
desirable actions reasonably requested by such Moneyline Stockholders in
connection with the consummation of such Sale of the Company, and if such
transaction is structured as a sale of Restricted Securities, within ten (10)
business days of the receipt of such notice (or such longer period of time as
such Moneyline Stockholders shall designate in such notice) such other
Stockholders shall cause all of their respective Restricted Securities to be
sold to the designated purchaser on the same terms and conditions, for the same
per share consideration and at the same time as the Restricted Securities being
sold by such Moneyline Stockholders. In furtherance of, and not in limitation
of the foregoing, in connection with a Sale of the Company, each Management
Stockholder will, (a) consent to and raise no objections against the Sale of
the Company or the process pursuant to which it was arranged, (b) waive any
dissenter’s rights and other similar rights and (c) execute all documents
containing such terms and conditions as those executed by such Moneyline
Stockholders as directed by such Moneyline Stockholders. All Management
Stockholders will bear their Pro Rata share of the costs and expenses incurred
for the benefit of all Stockholders and not otherwise paid by the Company or
the purchaser in connection with a Sale of the Company. Costs incurred by any
Management Stockholder on its own behalf will not be shared by the Moneyline
Stockholders.


ARTICLE III 
PREEMPTIVE RIGHTS



                 3.1    Preemptive

Rights If, at any time after the Closing Date for so
long as the Moneyline Stockholders shall be entitled to designate at least one
Moneyline Nominee (as defined below) for election to the Board, the Company
proposes to issue and sell shares of Common Stock or any other voting
securities of the Company to any Person, the Moneyline Stockholders shall have
the right to purchase from the Company a number of shares of Common Stock or
any other voting securities of the Company sufficient to maintain following
such transaction the same Pro Rata interest in the shares of Common Stock or
any other voting securities of the Company as immediately prior to such
transaction. Such purchase by the Moneyline Stockholders shall be on the same
terms and conditions as such purchase by such Person. Each such issuance and
sale to any Person shall be subject to the rights set forth in this Article
III.


                 3.2    Notice

If the Company proposes to issue shares of Common Stock
or any other voting securities of the Company in accordance with this Article
III, it shall give the Moneyline Stockholders written notice of such issuance,
describing the price and terms upon
which the Company intends to issue the same and the amount eligible to be
purchased by the Moneyline Stockholders.


                 3.3    Exercise

Upon receipt by the Moneyline Stockholders of the
written notice of the Company pursuant to Section 3.2 above, the Moneyline
Stockholders shall have ten (10)


7






 


business days during which to exercise the
right pursuant to Section 3.1 above to purchase the proportionate share of
Common Stock or any other voting securities of the Company proposed to be
issued and sold for the price and upon the terms specified in such notice. If
the Money Stockholders fail to notify the Company of its exercise of such
rights within such twenty (20) business day period, the Money Stockholders
shall have no further rights with regard to such purchase by such Person at the
price and upon the terms specified in the notice, subject to Section 3.4 below.


                 3.4    Limitations

If the Company has not sold the shares of Common
Stock or any other voting securities of the Company identified in the notice
given pursuant to Section 3.2 within ninety (90) days following the expiration
of the twenty (20) business day period referred to in Section 3.3 above, the
Company shall not thereafter issue or sell any such shares to such Person
without also offering the same to the Money Stockholders in the manner provided
above.


ARTICLE IV 
CORPORATE GOVERNANCE



                 4.1    Significant

Transactions For so long as the Moneyline
Stockholders own 25% or more of the shares of Common Stock of the Company, the
consent of Moneyline shall be required prior to entering into any Significant
Transaction.


                 4.2    Board
of Directors Number of Directors. From and after the
date hereof, each Stockholder shall vote or cause to be voted all shares of
Common Stock and any other voting securities of the Company over which such
Stockholder has voting control, or execute a written consent in lieu of such a
meeting of stockholders, and shall take all actions necessary, to ensure the
election to the Board of at least seven (7) individuals. For so long as the
Moneyline Stockholders own 25% or more of the shares of Common Stock of the
Company, if the Moneyline Stockholders request that the number of individuals
constituting the Board be changed, by written notice delivered to the Company,
the size of the Board shall be changed to such number and each Stockholder
hereby agrees to vote all shares of Common Stock owned by such Stockholder and
other securities over which such Stockholder has voting control to effect such
change in the size of the Board or to consent in writing to effect such change
in the size of the Board upon such request.


                              (b)




Election of Moneyline Directors.


                                             (i) For







so long as the Moneyline Stockholders own 50% or more of the
shares of Common Stock or any other voting securities of the Company owned by
Moneyline on the date hereof, each Stockholder shall vote or cause to be voted
all shares of Common Stock and any other voting securities of the Company over
which such Stockholder has voting control, at any regular or special meeting of
stockholders called for the purpose of filling
positions on the Board, or execute a written consent in lieu of such a
meeting of stockholders for the purpose of filling positions on the Board, and
shall take all actions necessary, to ensure the election to the Board of four
(4) individuals to be designated by Moneyline (each, a “Moneyline


8






 


     Nominee”, and collectively, the “Moneyline Nominees”), the Chief
Executive Officer of the Company (the “CEO”) and two (2) Independent Directors.


                                             (ii) For







so long as the Moneyline Stockholders own less than 50% but at
least 25% of the shares of Common Stock or any other voting securities of the
Company owned by Moneyline on the date hereof, each Stockholder shall vote or
cause to be voted all shares of Common Stock and any other voting securities of
the Company over which such Stockholder has voting control, at any regular or
special meeting of stockholders called for the purpose of filling positions on
the Board, or execute a written consent in lieu of such a meeting of
stockholders for the purpose of filling positions on the Board, and shall take
all actions necessary, to ensure the election to the Board of three (3)
Moneyline Nominees, the CEO and three (3) Independent Directors.


                                             (iii) For







so long as the Moneyline Stockholders own less than 25% of the
shares of Common Stock or any other voting securities of the Company owned by
Moneyline on the date hereof, each Stockholder shall vote or cause to be voted
all shares of Common Stock and any other voting securities of the Company over
which such Stockholder has voting control, at any regular or special meeting of
stockholders called for the purpose of filling positions on the Board, or
execute a written consent in lieu of such a meeting of stockholders for the
purpose of filling positions on the Board, and shall take all actions
necessary, to ensure the election to the Board of a number of Moneyline
Nominees that is proportionate to the number of shares of Common Stock or any
other voting securities of the Company held by the Moneyline Stockholder, the
CEO and such number of Independent Directors as is necessary to fill any
remaining position on the Board.


                              (c)




Replacements. If prior to his or her election to the Board
pursuant to Section 3.2(b), any Moneyline Nominee shall be unable or unwilling
to serve as a director of the Company, the Moneyline Stockholders that
nominated such Moneyline Nominee shall nominate a replacement who shall then be
a Moneyline Nominee for purposes of Section 3.2(b).


                              (d)




Committees.


                                             (i) For







so long as a Moneyline Nominee shall be a member of the Board,
each committee of the Board, including the executive, audit, nominating and
compensation committees, shall include at least one Moneyline Nominee at all
times.


                                             (ii) From







and after the date hereof and until the appointment of Charles
Auster to the Board in accordance with Section 4.2(e), no committee of the
Board shall take any action and the consent of the majority of the Board (other
than Charles Auster) shall be required to approve and adopt any action for or
on behalf of the Company.


                                   (e)





Composition of Board as of the Date Hereof. Pursuant to the
Stock Purchase Agreement and contemporaneously with the date hereof, the Board
consists of the following six (6) individuals (i) David Walsh, (ii) Alexander
Russo, (iii) Jonathan Robson, (iv) Carl Muscari, (v) Richard S. Friedland, and
(vi) Eugene R. Cacciamani. Upon the expiration of


9






 


the ten day period following
the date of filing of all forms required by Rule 14f-1 of the Exchange Act with
the Commission, the Company, the Board and each Stockholder shall take all
action necessary to appoint Charles Auster to the Board.


                 4.3    Removal

(a) If the Moneyline Stockholders that designated a
Moneyline Nominee pursuant to Section 4.2(b) request, by written notice to the
other Stockholders, that such Moneyline Nominee elected as a director be
removed (with or without cause), such director shall be removed and each
Stockholder hereby agrees to vote all shares of Common Stock owned by such
Stockholder and other securities over which such Stockholder has voting control
to effect such removal or to consent in writing to effect such removal upon
such request. No director that is a Moneyline Nominee shall be removed without
cause except as provided in this Section 4.3.


                 (b) If

at any time a member of the Board resigns or is removed (in
accordance with this Section 4.3 or otherwise), a new member of the Board shall
be designated to replace such member until the next election of directors. If
consistent with Section 4.2(b), the replacement director is to be a Moneyline
Nominee, the Moneyline Stockholders shall designate the replacement Moneyline
Nominee. If the former member was the CEO, the replacement CEO shall be the
replacement. Except as set forth in Section 4.3(d) below, if consistent with
Section 4.2(b), the replacement director is to be an Independent Director, the
remaining members of the Board shall designate the replacement Independent
Director.


                 (c) Subject

to Section 4.3(d) below, if at any time the number of
Moneyline Nominees entitled to be nominated to the Board in accordance with
this Agreement in an election of directors presented to stockholders would
decrease, within 10 days thereafter the Moneyline Stockholders shall cause a
sufficient number of Moneyline Nominees to resign from the Board so that the
number of Moneyline Nominees on the Board after such resignation(s) equals the
number of Moneyline Nominees that the Moneyline Stockholders would have been
entitled to designate had an election of directors taken place at such time.
The Moneyline Stockholders shall also cause a sufficient number of Moneyline
Nominees to resign from any relevant committees of the Board so that such
committees are comprised in the manner contemplated by Section 4.02(d) after
giving effect to such resignations. Any vacancies created by the resignations
required by this Section 4.3(c) shall be filled by Independent Directors.


                 (d) If

at any time the percentage of Common Stock or other voting
securities of the Company held by the Moneyline Stockholders decreases as a
result of an issuance of Common Stock or other voting securities of the
Company, the Moneyline Stockholders may notify the Company that the Moneyline
Stockholders intend to acquire a sufficient amount of additional shares of
Common Stock or other voting securities of the Company necessary to maintain
the Moneyline Stockholders then current level of Board representation within
twenty (20) business days. In such event, until the end of such period (and
thereafter if the Moneyline Stockholders in fact restore their percentage of
Common Stock or other voting securities of the Company during
such period to maintain the requisite level of ownership of Common Stock
or other voting securities in accordance with Section 4.2(b)), the Board shall
continue to have the number of Moneyline Nominees as prior to such issuance of
Common Stock or other voting securities of the


10






 


Company.



                 
4.4    Vacancies

In the event that a vacancy is created on the Board at
any time by the death, disability, retirement, resignation or removal (with or
without cause) of a director who is a Moneyline Nominee, the Moneyline
Stockholders may designate a new Moneyline Nominee to fill the vacancy.



                 
4.5    By-Laws

The Company shall cause the amendment of its by-laws
(the “By-Laws”) to reflect the provisions of Article IV of this
Agreement (other than Section 4.2(d)(ii)) and such other matters as the parties
hereto may reasonably agree. The form of such amended By-Laws is attached
hereto as Exhibit B. Those provisions of the By-Laws reflecting the
terms of Article IV of this Agreement shall not be amended during the term of
this Agreement without the express written consent of the Moneyline
Stockholders. The Company and the Moneyline Stockholders shall each take or
cause to be taken all lawful action necessary to ensure at all times that the
Company’s certificate of incorporation and the By-Laws are not at ant times
inconsistent with the provisions of this Agreement.


ARTICLE V 
CERTAIN COVENANTS OF THE PARTIES



                 5.1    Holdback

Obligations Unless otherwise agreed to by the Moneyline
Stockholders, each Management Stockholder agrees (a) not to effect any sale or
distribution of equity securities of the Company, or any securities
convertible, exchangeable or exercisable for or into such securities, during
the seven (7) days prior to, and the 180-day period beginning on, the effective
date of any underwritten public offering of Common Stock registered under the
Securities Act (except as part of such underwritten registration), unless the
managing underwriters of the registered public offering otherwise agree and (b)
to enter into such standstill agreements and related agreements as such
managing underwriters may request.


ARTICLE VI 
MISCELLANEOUS


                 6.1    Governing

Law The corporate laws of the State of Delaware will
govern all questions concerning the relative rights of the Company and its
stockholders hereunder. All other questions concerning the construction,
validity and interpretation of this Agreement shall be governed and construed
in accordance with the domestic laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.


                 6.2    Entire

Agreement; Amendments This Agreement constitutes the
entire agreement of the parties with respect to the subject matter hereof and
may be amended, modified or supplemented only by a written instrument duly
executed by the Company and the Moneyline
Stockholders, except that any amendment, modification or supplement that
materially, adversely and disproportionately affects, as a group, the
Management Stockholders shall require the


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consent of the holders representing
more than fifty percent (50%) of the total number of shares of Restricted
Securities on a Diluted Basis then held by the Management Stockholders. In the
event of an amendment, modification or supplement of this Agreement in
accordance with its terms, the Stockholders hereby agree to vote their shares
of Common Stock to approve any necessary amendments to the Certificate of
Incorporation and By-Laws of the Company resulting therefrom.


                 6.3    Term

This Agreement shall terminate upon the earliest to occur
of (a) the tenth anniversary of the Closing Date and (b) a Sale of the Company.


                 6.4    Certain

Actions Unless otherwise expressly provided herein,
whenever any action is required under this Agreement by: the Moneyline
Stockholders, it shall be by the affirmative vote of the holders representing
more than fifty percent (50%) of the total number of shares of Restricted
Securities on a Diluted Basis then held by the Moneyline Stockholders as a
group, or as otherwise agreed in writing by the Moneyline Stockholders as a
group.


                 6.5    Inspection

For so long as this Agreement shall remain in effect,
this Agreement shall be made available for inspection by any Stockholder at the
principal executive offices of the Company.


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                 6.6    
Recapitalization, Exchanges, Etc., Affecting Restricted Securities The
provisions of this Agreement shall apply, to the full extent set forth herein
with respect to the Restricted Securities, to any and all shares of the Company
capital stock or any successor or assign of the Company (whether by merger,
consolidation, sale of assets, or otherwise, including shares issued by a
parent corporation in connection with a triangular merger) which may be issued
in respect of, in exchange for, or in substitution of, Restricted Securities
and shall be appropriately adjusted for any stock dividends, splits, reverse
splits, combinations, reclassifications and the like occurring after the date
hereof.


                 6.7    Waiver

No waiver by any party of any term or condition of this
Agreement, in one or more instances, shall be valid unless in writing, and no
such waiver shall be deemed to be construed as a waiver of any subsequent
breach or default of the same or similar nature.


                 6.8    Successors

and Assigns Except as otherwise expressly provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and assigns (including, without limitation, transferees of Restricted
Securities); provided, however, that (a) nothing contained herein
shall be construed as granting any Management Stockholder the right to Transfer
any Restricted Securities except in accordance with this Agreement, and (b)
unless otherwise provided in the terms of the Transfer, none of the provisions
of this Agreement, other than those set forth in Sections 2.1 and 2.2 to the
extent those Sections require compliance with the Securities Act, delivery of
opinions of counsel and placement of Securities Act (or state securities laws)
legends or other legends, shall apply to any Transfer of Restricted Securities
(or to the transferee thereof) subsequent to a Transfer of those securities
pursuant to a registered public offering under the Securities Act made in
accordance with the Securities Act.


                 6.9    Remedies

In the event of a breach by any party to this Agreement
of its obligations under this Agreement, any party injured by such breach, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages and costs (including reasonable attorneys’ fees), will be
entitled to specific performance of its rights under this Agreement. The
parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived.


                 6.10    Invalid

Provisions If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this


13






 


Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.


                 6.11    Headings

The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.


                 6.12    Further

Assurances Each party hereto shall cooperate and shall
take such further action and shall execute and deliver such further documents
as may be reasonably requested by any other party in order to carry out the
provisions and purposes of this Agreement.


                 6.13    Gender

Whenever the pronouns “he” or “his” are used herein they
shall also be deemed to mean “she” or “hers” or “it” or “its” whenever
applicable. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be construed as though in the singular in
all cases where they would so apply.


                 6.14    Counterparts

This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.


                 6.15    Notices

All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission or
mailed by prepaid first class mail, return receipt requested, or mailed by
overnight courier prepaid to the parties at the following addresses or
facsimile numbers:



	 	(a) If to Moneyline:




	 	Moneyline Networks, LLC

233 Broadway

New York, NY 10279

Facsimile No.: 212-553-2598

Attn: Alexander Russo




	 	with a copy to:




	 	Skadden, Arps, Slate, Meagher & Flom LLP

4 Times Square

New York, NY 10036

Facsimile No.: 917-777-3050

Attn: Joseph A. Coco, Esq.



14






 



	 	(b) If to OEP, to:




	 	One Equity Partners LLC

320 Park Avenue, 18th Floor

New York, NY 10022

Attn: Richard M. Cashin, Jr.




	 	(c) If to the Company, to:




	 	Video Network Communications, Inc.

50 International Drive

Portsmouth, New Hampshire 03801

Facsimile No.: (603) 334-6742

Attn: Robert Emery, Chief Financial Officer




	 	with a copy to:




	 	Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

666 Third Avenue, 25th Floor

New York, NY 101017

Facsimile No.: 212-983-3115

Attn: Kenneth Koch, Esq.



                                                     (d) If







to a Stockholder other than a Moneyline Stockholder, to the address
of such Person set forth in the stock records of the Company.


All such notices, requests and other communications will (w) if delivered
personally to the address as provided in this Section 6.15 be deemed given upon
delivery, (x) if delivered by facsimile transmission to the facsimile number as
provided in this Section 6.15 be deemed given upon facsimile confirmation, and
(y) if delivered by mail in the manner described above to the address as
provided in this Section 6.15 upon the earlier of the third business day
following mailing or upon receipt and (z) if delivered by overnight courier to
the address as provided in this Section 6.15, be deemed given on the earlier of
the first business day following the date sent by such overnight courier or
upon receipt (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice is
to be delivered pursuant to this Section 6.15). Any party from time to time
may change its address, facsimile number or other information for the purpose
of notices to that party by giving notice specifying such change to the other
parties hereto.


15






 


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




	 	 	 	 	 
	 	 	COMPANY:	 
	 
	 	 	VIDEO NETWORK COMMUNICATIONS, INC	 
	 
	 	 	By:	 	 
	 	 	 	
	 
	 	 	 	Name:	 
	 	 	 	Title:	 
	 
	 	 	MONEYLINE STOCKHOLDERS:	 
	 
	 	 	MONEYLINE NETWORKS, LLC	 
	 	 	By:	 	 
	 	 	 	
	 
	 	 	 	Name:	 
	 	 	 	Title:	 









 



Exhibit A



Form of Joinder Agreement

Video Network Communications, Inc.

50 International Drive

Portsmouth, New Hampshire 03801


Attn: President


Gentlemen:


In consideration of the issuance to the undersigned of ______shares of Common
Stock, par value $0.01 per share, of Video Network Communications, Inc., a
Delaware corporation (the “Company”), the undersigned agrees that, as of the
date written below, [he] [she] [it] shall become a party to that certain
Stockholders Agreement dated as of May 16, 2002, as such agreement may have
been or may be amended from time to time (the “Agreement”), among the Company
and the persons named therein, and shall be fully bound by, and subject to, the
provisions of the Agreement as though an original party thereto and shall be
deemed a Management Stockholder for purposes thereof.


     Executed as of the    day of          ,        .



	 	 	 	 
	 	NAME:	 	 
	 
	 	Address:	 	 
	 	 	
	 
	 	 	
	 








 



Exhibit B



Form of Amended and Restated By-Laws


[Attached hereto]