ex4-2



 



Exhibit 4.2



NEITHER THIS WARRANT NOR
THE SHARES UNDERLYING THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (“ACT”), OR APPLICABLE STATE LAW. THIS WARRANT AND THE
SHARES UNDERLYING IT MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE
ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED.


THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS
CONTAINED IN A SUBSCRIPTION AGREEMENT BETWEEN THE COMPANY AND THE INVESTOR, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.


VOID AFTER 5:00 P.M. EASTERN TIME, AUGUST 26, 2007


WARRANT


For the Purchase of


______Shares of Common Stock

of


VIDEO NETWORK COMMUNICATIONS, INC.


1.     Warrant.


        THIS CERTIFIES THAT, in consideration for purchasing a $______
in original principal amount unsecured 9% promissory note (“Note”) from Video
Network Communications, Inc. (“Company”), ______
(“Holder”), as registered owner of this Warrant, is entitled, at any time or
from time to time at or after August 26, 2002 (“Commencement Date”), and at or
before 5:00 p.m., Eastern Time on August 26, 2007 (“Expiration Date”), but not
thereafter, to subscribe for, purchase and receive, in whole or in part, up to
______(______) shares of the common stock of the Company (“Common
Stock”). If the Expiration Date is a day on which banking institutions are
authorized by law to close, then this Warrant may be exercised on the next
succeeding day that is not such a day in accordance with the terms herein.
During the period ending on the Expiration Date, the Company agrees not to take
any action that would terminate the Warrant. This Warrant is being issued
together with Warrants of like tenor and Notes in a private offering of Notes
and Warrants by the Company (“Offering”).


2.     Exercise.


        2.1     Exercise Price. This Warrant is initially exercisable at an initial
exercise price equal to $1.30 per share of Common Stock purchased; provided,
however, that upon the occurrence of any of the events specified in Section 6
hereof, the rights granted by this Warrant, including the exercise price, and
in certain circumstances the number of shares of Common Stock to be received
upon such exercise, shall be adjusted as therein specified. The term “Exercise
Price” shall mean the initial exercise price or the adjusted exercise price,
depending on the context, of a share of Common Stock.


        2.2     Exercise Notice; Payment for Shares. In order to exercise this
Warrant, the exercise notice form attached hereto must be duly executed and
completed and delivered to the Company, together with this Warrant and payment
of the Exercise Price (except as provided in Section 2.4 hereof) in cash or by
certified check or official bank check for the shares being purchased. If this
Warrant has not been wholly exercised at or before 5:00 p.m., Eastern time, on
the Expiration Date, this Warrant shall become and be void without further
force or effect, and all rights represented hereby shall cease and expire.


 







 



        2.3     Legend. Each certificate for shares of Common Stock purchased under
this Warrant shall bear the following legends, unless the issuance of such
shares of Common Stock have been registered under the Securities Act of 1933,
as amended (“Act”):



		
	 	“The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended
(“Act”) or applicable state law. The shares may not be
pledged, sold, assigned or transferred in the absence of an
effective registration statement with respect thereto under
the Act and any applicable state securities law, or unless
the Company receives an opinion of counsel, satisfactory to
the Company, that such registration is not required.”
	 
	 	“The shares represented by this certificate are subject to
the restrictions contained in the Subscription Agreement
between the Company and the Holder, a copy of which is on
file with the Secretary of the Company.”



        2.4     Conversion Right.


                 2.4.1     Determination of Amount. In lieu of the payment of the Exercise
Price in the manner required by Section 2.2, the Holder shall have the right
(but not the obligation) to convert any exercisable but unexercised portion of
this Warrant into securities (“Conversion Right”) as follows: Upon exercise of
the Conversion Right, the Company will deliver to the Holder (without payment
by the Holder of any of the Exercise Price in cash) that number of shares of
Common Stock equal to the quotient obtained by dividing (x) the “Value” (as
defined below) of the portion of the Warrants being converted by (y) the
“Market Price” (as defined below). The “Value” of the portion of the Warrants
being converted will equal the remainder derived from subtracting (a) the
Exercise Price multiplied by the number of shares of Common Stock underlying
the portion of the Warrants being converted from (b) the Market Price
multiplied by the number of shares of Common Stock underlying the portion of
the Warrants being converted. As used herein, the term “Market Price” is
deemed to be product of (x) the last reported sale price of the Common Stock on
the date prior to the date the Conversion Right is exercised, or, in case no
such reported sale takes place on such day, the average of the last reported
sale prices for the immediately preceding three trading days, in either case as
officially reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common Stock is not listed
or admitted to trading on any national securities exchange or if any such
exchange on which the Common Stock is listed is not its principal trading
market, the last reported sale price as furnished by the National Association
Securities Dealers, Inc. through the Nasdaq National Market or SmallCap Market,
or, if applicable, the OTC Bulletin Board, or if the Common Stock is not listed
or admitted to trading on any of the foregoing markets, or similar
organization, as determined in good faith by resolution of the Board of
Directors of the Company, based on the best information available to it.


                 2.4.2     Mechanics of Conversion Right. The Conversion Right may be
exercised by the Holder on any business day on or after the Commencement Date
and not later than the Expiration Date, by delivering to the Company the
Warrants with a duly executed exercise form attached hereto with the conversion
section completed exercising the Conversion Right.


3.     Transfer.


        3.1     General Restrictions. The registered Holder of this Warrant, by its
acceptance hereof, agrees that it will not sell, transfer or assign or
hypothecate this Warrant to anyone except upon compliance with, or pursuant to
exemptions from, applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with this Warrant and payment of
all transfer taxes, if any, payable in connection therewith. The Company shall
promptly transfer this Warrant on the books of the Company and shall execute
and deliver a new Warrant or Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the aggregate number of
shares of Common Stock purchasable hereunder or such portion of such number as
shall be contemplated by any such assignment.


        3.2     Restrictions Imposed by the Securities Act. This Warrant and the
shares of Common Stock underlying this Warrant shall not be transferred unless
and until (i) the Company has received the opinion of counsel for the Holder
that such securities may be sold pursuant to an exemption from registration
under the Act, and


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 applicable state law, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement
relating to such securities has been filed by the Company and declared
effective by the Securities and Exchange Commission (“Commission”) and
compliance with applicable state law.


4.     New Warrants to be Issued.


        4.1     Partial Exercise or Transfer. Subject to the restrictions in Section
3 hereof, this Warrant may be exercised or assigned in whole or in part. In
the event of the exercise or assignment hereof in part only, upon surrender of
this Warrant for cancellation, together with the duly executed exercise or
assignment form and funds (or conversion equivalent) sufficient to pay any
Exercise Price multiplied by the number of shares of Common Stock for which
this Warrant is exercised and/or transfer tax, the Company shall cause to be
delivered to the Holder without charge a new Warrant of like tenor to this
Warrant in the name of the Holder evidencing the right of the Holder to
purchase the aggregate number of shares of Common Stock as to which this
Warrant has not then been exercised or assigned.


        4.2     Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant and of reasonably satisfactory indemnification, the Company shall
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered as a result of such loss, theft, mutilation or
destruction shall constitute a substitute contractual obligation on the part of
the Company.


5.     Registration Rights. The Company has agreed to file a registration
statement with the Commission or include the shares of Common Stock purchasable
under this Warrant on a registration statement, in accordance with the
registration rights set forth in full on and subject to the terms and
conditions set forth on Schedule 1 of the Subscription Agreement signed by the
Company and the original Holder of this Warrant in connection with the
Offering. These registration rights shall inure to the benefit of the
transferees of this Warrant and the shares underlying it.


6.     Adjustments.


        6.1     Adjustments to Exercise Price and Number of Shares. The Exercise
Price and the number of shares of Common Stock underlying this Warrant shall be
subject to adjustment from time to time as hereinafter set forth:


                 6.1.1     Stock Dividends — Recapitalization, Reclassification, Split-Ups.
If, after the date hereof, and subject to the provisions of Section 6.2 below,
the number of outstanding shares of Common Stock is increased by a stock
dividend on the Common Stock payable in shares of Common Stock or by a
split-up, recapitalization or reclassification of shares of Common Stock or
other similar event, then, on the effective date thereof, the number of shares
of Common Stock issuable on exercise of this Warrant shall be increased in
proportion to such increase in outstanding shares.


                 6.1.2     Aggregation of Shares. If after the date hereof, the number of
outstanding shares of Common Stock is decreased by a consolidation,
combination, reverse stock split or reclassification of shares of Common Stock
or other similar event, then, upon the effective date thereof, the number of
shares of Common Stock issuable on exercise of this Warrant shall be decreased
in proportion to such decrease in outstanding shares.


                 6.1.3     Additional Adjustments.




	 	 	 
	(A)	 	
If at any time after the date on
which this Warrant is first issued (the “Issuance
Date”), the Company shall issue (i) any Additional Stock
(as hereinafter defined) without consideration or for a
consideration per share less than the Exercise Price in
effect immediately prior to the issuance of such
Additional Stock, and/or (ii) any Additional Stock,
including any additional Warrants, with a per share
conversion or exercise price less than the Exercise
Price of this Warrant in effect immediately prior to the
issuance of such Additional Stock, then the Exercise
Price of this Warrant in effect immediately prior to
each such



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issuance shall forthwith, respectively, be reduced to
an amount equal to such lower purchase price for such
Additional Stock (or in the case of options and similar
securities, the sum of the consideration received for
the option and the consideration to be received upon
exercise of such option), or, if for no consideration,
$.01.
 
	(B)	 	
If at any time after the Issuance
Date, the Company shall issue additional Warrants solely
in connection with the Offering at an exercise price
different than the Exercise Price of this Warrant, then
the Exercise Price of this Warrant shall be increased or
decreased to match the exercise price of such
subsequently issued Warrant.
 
	(C)	 	
“Additional Stock” as used herein
shall mean any shares of Common Stock issued (or deemed
to have been issued) or rights, warrants, options or
other securities convertible into or exchangeable for
Common Stock (including shares of Common Stock held in
the Company’s treasury) by the Company after the date
hereof, other than Common Stock issuable upon exercise
or conversion of options, warrants, preferred stock and
other rights and convertible securities outstanding as
of the Issuance Date.
 
	(D)	 	
No adjustment of the Exercise Price
pursuant to this paragraph 6.1.3. shall have the effect
of increasing the Exercise Price above the Exercise
Price in effect immediately prior to such adjustment.
 
	(E)	 	
In the case of the issuance of Common
Stock for a consideration in whole or in part other than
cash, the consideration other than cash shall be deemed
to be the fair value thereof as determined in good faith
by the Board.
 
	(F)	 	
In the case of the issuance of
options to purchase or rights to subscribe for Common
Stock, securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or
rights to subscribe for such convertible or exchangeable
securities, the following provisions shall apply for all
purposes of this Section:





	 	 	 
	(1)	 	
The aggregate maximum
number of shares of Common Stock deliverable upon
exercise (assuming the satisfaction of any
conditions to exercisability including, without
limitation, the passage of time, but without
taking into account potential antidilution
adjustments) of such options to purchase or rights
to subscribe for Common Stock shall be deemed to
have been issued at the time such options or
rights were issued and for a consideration equal
to the consideration, if any, received by the
Company upon the issuance of such options or
rights plus the minimum exercise price provided in
such options or rights (without taking into
account potential antidilution adjustments) for
the Common Stock covered thereby.
 
	(2)	 	
The aggregate maximum
number of shares of Common Stock deliverable upon
conversion of or in exchange (assuming the
satisfaction of any conditions to convertibility
or exchangeability including, without limitation,
the passage of time, but without taking into
account potential antidilution adjustments) for
any such convertible or exchangeable securities or
upon the exercise of options to purchase or rights
to subscribe for such convertible or exchangeable
securities and subsequent conversion or exchange
thereof, shall be deemed to have been issued at
the time such securities were issued or



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such options or rights were issued and for a
consideration equal to the consideration, if any,
received by the Company for any such securities
and related options or rights (excluding any cash
received on account of accrued interest or
accrued dividends), plus the minimum additional
consideration, if any, to be received by the
Company (without taking into account potential
antidilution adjustments) upon the conversion or
exchange of such securities or the exercise of
any related options or rights.
 
	(3)	 	
In the event of any
change in the number of shares of Common Stock
deliverable or in the consideration payable to the
Company upon exercise of such options or rights or
upon conversion of or in exchange for such
convertible or exchangeable securities (excluding
a change resulting solely from the antidilution
provisions thereof if such change results from an
event which gives rise to an antidilution
adjustment under this paragraph), the Exercise
Price, to the extent in any way affected by or
computed using such options, rights or securities,
shall be recomputed to reflect such change;
provided, however, that the Exercise Price shall
not be increased from the Exercise Price in effect
immediately prior to such change, but no further
adjustment shall be made for the actual issuance
of Common Stock or any payment of such
consideration upon the exercise of any such
options or rights or the conversion or exchange of
such securities.
 
	(4)	 	
Common Stock for purposes
of this Section shall be deemed to include
securities ordinarily having the right to vote in
the election of directors (apart from rights
accruing under special circumstances); provided,
however, that the number of shares of Common Stock
deemed issued shall be the number that equals the
number of shares of such security multiplied by a
fraction, the numerator of which is the number of
votes each share of such security has in votes for
the election of directors and the denominator of
which is the number of votes each share of Common
Stock has in votes for the election of directors;
such number of shares of Common Stock deemed
issued shall be recomputed to reflect any change
in the number of votes that either each share of
such other security or the Common Stock has in
votes for the election of directors.



                 6.1.4     No Impairment. The Company will not, by amendment of its Articles
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Company but will at
all times in good faith assist in the carrying out of all the provisions of
this Section 6 and in the taking of all such actions as may be necessary or
appropriate in order to protect against impairment of the rights of the Holder
of this Warrant to adjustments in the Exercise Price.


                 6.1.5     Notice of Adjustment. Upon the happening of any event requiring an
adjustment of the Exercise Price hereunder, the Company shall forthwith give
written notice thereof to the Holder of this Warrant stating the adjusted
Exercise Price and the adjusted number of shares of Common Stock underlying the
Warrants resulting from such event and setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based
(“Price Notice”). The Price Notice shall describe the event causing the change
and the method of calculating same and shall be certified as being true and
accurate by the Company’s President and Chief Financial Officer.


                 6.1.6     Replacement of Shares upon Reorganization, etc. In case of any
reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 6.1.1 hereof or


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 which solely affects the par value of such shares of Common Stock, or in
the case of any merger or consolidation of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), or in the case of
any sale or conveyance to another corporation or entity of the property of the
Company as an entirety or substantially as an entirety in connection with which
the Company is dissolved, the Holder of this Warrant shall have the right
thereafter (until the expiration of the right of exercise of this Warrant) to
receive upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a
dissolution following any such sale or other transfer, by a Holder of the
number of shares of Common Stock of the Company obtainable upon exercise of
this Warrant immediately prior to such event. The provisions of this Section
6.1. shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers.


                 6.1.7     Adjustments in Exercise Price. Whenever the number of shares of
Common Stock purchasable upon the exercise of this Warrant is adjusted, as
provided in this Section 6.1, the Exercise Price shall be adjusted (to the
nearest cent) by multiplying such Exercise Price immediately prior to such
adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of this Warrant
immediately prior to such adjustment, and (y) the denominator of which shall be
the number of shares of Common Stock purchasable immediately thereafter.


                 6.1.8     Changes in Form of Warrant. This form of Warrant need not be
changed because of any change pursuant to this Section, and Warrants issued
after such change may state the same Exercise Price and the same number of
shares of Common Stock and Warrants as are stated in the Warrants initially
issued pursuant to this Agreement. The acceptance by the Holder of the
issuance of new Warrants reflecting a required or permissive change shall not
be deemed to waive any rights to a prior adjustment or the computation thereof.


        6.2     Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of this Warrant, nor shall it be required to issue scrip or
pay cash in lieu of any fractional interests, it being the intent of the
parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock or other
securities, properties or rights.


7.     Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of this Warrant, such number of shares of Common
Stock or other securities, properties or rights as shall be issuable upon the
exercise thereof. The Company covenants and agrees that, upon exercise of the
Warrants and payment of the Exercise Price therefor, all shares of Common Stock
and other securities issuable upon such exercise shall be duly and validly
issued, fully paid and non-assessable and not subject to preemptive rights of
any stockholder. As long as the Warrants shall be outstanding, the Company
shall use its best efforts to cause all shares of Common Stock issuable upon
exercise of the Warrants to be listed (subject to official notice of issuance)
on all securities exchanges (or, if applicable on Nasdaq or the OTC Bulletin
Board) on which the Common Stock is then listed and/or quoted.


8.     Certain Notice Requirements.


        8.1     Holder’s Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holder the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as
having any rights whatsoever as a stockholder of the Company. If, however, at
any time prior to the expiration of the Warrants and their exercise, any of the
events described in Section 8.2 shall occur, then, in one or more of said
events, the Company shall use its best efforts to give written notice of such
event at least fifteen days prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the stockholders
entitled to such dividend, rights offering, merger or reorganization, or
entitled to vote on such proposed dissolution, liquidation, winding up or sale.
Such notice shall specify such record date or the date of the closing of the
transfer books, as the case may be.


        8.2     Events Requiring Notice. The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events:
(i) if the Company shall take a record of the holders of its


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shares of Common Stock for the purpose of entitling them to receive a
dividend or distribution, (ii) the Company shall offer to all the holders of
its Common Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital stock of the
Company, or any option, right or warrant to subscribe therefor, (iii) the
signing of a merger or reorganization agreement pursuant to which the Company
is not the surviving party or (iv) a dissolution, liquidation or winding up of
the Company (other than in connection with a consolidation or merger) or a sale
of all or substantially all of its property, assets and business shall be
proposed.


        8.3     Transmittal of Notices. All notices, requests, consents and other
communications under this Warrant must be in writing and is sufficiently given
if delivered to the addressees in person, by overnight courier service, or, if
mailed, postage prepaid, by certified mail (return receipt requested), and will
be effective three days after being placed in the mail if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed as follows: (i) if to the
registered Holder of this Warrant, to the address of such Holder as shown on
the books of the Company, or (ii) if to the Company, to its principal executive
office.


9.     Miscellaneous.


        9.1     Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Warrant.


        9.2     Entire Agreement. This Warrant (together with the other agreements
and documents being delivered pursuant to or in connection with this Warrant)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings
of the parties, oral and written, with respect to the subject matter hereof.


        9.3     Binding Effect. This Warrant shall inure solely to the benefit of and
shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Warrant or any provisions herein contained.


        9.4     Governing Law; Submission to Jurisdiction. This Warrant will be
deemed to have been made and delivered in New York City and will be governed as
to validity, interpretation, construction, effect and in all other respects by
the internal laws of the State of New York. Each of the Company and the Holder
hereby (i) agrees that any legal suit, action or proceeding arising out of or
relating to this Warrant will be instituted exclusively in New York State
Supreme Court, County of New York, or in the United States District Court for
the Southern District of New York, (ii) waives any objection to the venue of
any such suit, action or proceeding and the right to assert that such forum is
not a convenient forum for such suit, action or proceeding, (iii) irrevocably
consents to the jurisdiction of the New York State Supreme Court, County of New
York, and the United States District Court for the Southern District of New
York in any such suit, action or proceeding, (iv) agrees to accept and
acknowledge service of any and all process that may be served in any such suit,
action or proceeding in New York State Supreme Court, County of New York or in
the United States District Court for the Southern District of New York and (v)
agrees that service of process upon it mailed by certified mail to its address
set forth in Section 8.3 hereof will be deemed in every respect effective
service of process upon it in any suit, action or proceeding.


        Waiver, Etc. The failure of the Company or the Holder to at any time
enforce any of the provisions of this Warrant shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of
this Warrant or any provision hereof or the right of the Company or any Holder
to thereafter enforce each and every provision of this Warrant. No waiver of
any breach, non-compliance or non-fulfillment of any of the provisions of this
Warrant shall be effective unless set forth in a written instrument executed by
the party or parties against whom or which enforcement of such waiver is
sought; and no waiver of any such breach, non-compliance or non-fulfillment
shall be construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.


        IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer as of the 28th day of March, 2002.



	 	VIDEO NETWORK COMMUNICATIONS, INC.




	 	By:________________________

Name: Robert H. Emery

Title: Chief Financial Officer



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Form to be used to exercise Warrant:


____________________________

____________________________

____________________________


Date: ______, 200______


        The undersigned hereby elects irrevocably to exercise the within Warrant
and to purchase ______shares of Common Stock of Video Network
Communications, Inc. and hereby makes payment of $______(at the rate of
$          per share of Common Stock) in payment of the Exercise Price pursuant
thereto. Please issue the Common Stock as to which this Warrant is exercised
in accordance with the instructions given below.


or


        The undersigned hereby elects irrevocably to exercise the within Warrant
to purchase ______shares of Common Stock of Video Network Communications,
Inc. by surrender of the unexercised portion of the within Warrant. Please
issue the shares of Common Stock in accordance with the instructions given
below.


and


        As of the date of exercise of this Warrant, the undersigned hereby
represents and warrants to the Company that it is an “Accredited Investor”
within the meaning of the Securities Act of 1933, as amended (the “Act”), and
is acquiring these securities for its own account and not with a view to, or
for sale in connection with, any distribution thereof, nor with any present
intention of distributing or selling the same. The undersigned further
represents that it does not have any contract, agreement, understanding or
arrangement with any person to sell, transfer or grant the shares of Common
Stock issuable under the Warrant. The undersigned understands that the shares
it will be receiving are “restricted securities” under Federal securities laws
inasmuch as they are being acquired from Video Network Communications, Inc., in
transactions not including any public offering and that under such laws such
shares may be sold without registration under the Act only in limited
circumstances. The undersigned is familiar with Rule 144 promulgated under the
Act, as presently in effect, and understands the resale limitations imposed
thereby and by the Act. The undersigned is a resident of or has its principal
place of business and executive offices located in the State of ______.
The undersigned understands and acknowledges that the Company will rely on the
accuracy of these representations and warranties in issuing the securities
underlying the Warrant.


__________________

Signature


        NOTICE: The signature to this form must correspond with the name as
written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever.


INSTRUCTIONS FOR REGISTRATION OF SECURITIES


Name __________________________________________

                                        (Print in Block Letters)


Address ____________________________


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Form to be used to assign Warrant:


ASSIGNMENT



(To be executed by the registered Holder to effect a transfer of the
within Warrant):


           FOR VALUE RECEIVED, ______does hereby sell,
assign and transfer unto ______the right to
purchase ______shares of Common Stock of Video Network
Communications, Inc. (“Company”) evidenced by the within Warrant and does
hereby authorize the Company to transfer such right on the books of the
Company.


Dated:______, 200______



	 	______________________________

Signature



           NOTICE: The signature to this form must correspond with the name as
written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever.



9