-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JgMMgEmWWM+g3qqBWoAK/MzhfcvDwsHkh2RFGztBNEhuL48jqet6/FX1IYT3uNW6 rPBIGlnoU8VDjuIS+a3LuQ== 0000950172-02-001121.txt : 20020528 0000950172-02-001121.hdr.sgml : 20020527 20020528170508 ACCESSION NUMBER: 0000950172-02-001121 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20020528 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: VIDEO NETWORK COMMUNICATIONS INC CENTRAL INDEX KEY: 0000944310 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 541707962 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-53297 FILM NUMBER: 02663819 BUSINESS ADDRESS: STREET 1: 50 INTERNATIONAL DRIVE CITY: PORTSMOUTH STATE: NH ZIP: 03801 BUSINESS PHONE: 6033346700 MAIL ADDRESS: STREET 1: 50 INTERNATIONAL DRIVE CITY: PORTSMOUTH STATE: NH ZIP: 03801 FORMER COMPANY: FORMER CONFORMED NAME: OBJECTIVE COMMUNICATIONS INC DATE OF NAME CHANGE: 19970122 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BANK ONE CORP CENTRAL INDEX KEY: 0001067092 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 310738296 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1 BANK ONE PLAZA CITY: CHICAGO STATE: IL ZIP: 60670 BUSINESS PHONE: 3127324000 MAIL ADDRESS: STREET 1: ONE FIRST NATIONAL PLAZA CITY: CHICAGO STATE: IL ZIP: 60670 SC 13D 1 s367398.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Video Network Communications, Inc. (Name of Issuer) Common Stock, $0.01 Par Value (Title of Class of Securities) 674421201 (CUSIP Number) Alexander Russo, Esq. Executive Vice President, Corporate Development and General Counsel Moneyline Telerate Holdings 233 Broadway, New York NY 10279 Telephone: 212-553-2500 With copies to: Joseph A. Coco, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Telephone: 212-735-3000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 16, 2002 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 674421201 13D - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Moneyline Networks, LLC ("Moneyline Networks") - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP [ ] (a) [ ] (b) - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCES OF FUNDS AF - ------------------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF 0 SHARES --------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 36,250,000 REPORTING --------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------------------------------------- 10 SHARED DISPOSITIVE POWER 36,250,000 - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,250,000 - ------------------------------------------------------------------------------ 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.6% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON OO-Limited Liability Company - ------------------------------------------------------------------------------ CUSIP No. 674421201 13D - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Moneyline Telerate Holdings - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP [ ] (a) [ ] (b) - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCES OF FUNDS AF - ------------------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF 0 SHARES --------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 36,250,000** REPORTING --------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------------------------------------- 10 SHARED DISPOSITIVE POWER 36,250,000** - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,250,000** - ------------------------------------------------------------------------------ 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.6% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ ** Represents shares directly beneficially owned by Moneyline Networks. CUSIP No. 674421201 13D - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Bank One Investment Corporation - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP [ ] (a) [ ] (b) - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCES OF FUNDS AF - ------------------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF 0 SHARES --------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 36,250,000** REPORTING --------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------------------------------------- 10 SHARED DISPOSITIVE POWER 36,250,000** - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,250,000** - ------------------------------------------------------------------------------ 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.6% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ ** Represents shares directly beneficially owned by Moneyline Networks. CUSIP No. 674421201 13D - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Banc One Capital Corporation - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP [ ] (a) [ ] (b) - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCES OF FUNDS AF - ------------------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF 0 SHARES --------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 36,250,000** REPORTING --------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------------------------------------- 10 SHARED DISPOSITIVE POWER 36,250,000** - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,250,000** - ------------------------------------------------------------------------------ 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.6% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ ** Represents shares directly beneficially owned by Moneyline Networks. CUSIP No. 674421201 13D - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Banc One Financial Corporation - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP [ ] (a) [ ] (b) - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCES OF FUNDS AF - ------------------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF 0 SHARES --------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 36,250,000** REPORTING --------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------------------------------------- 10 SHARED DISPOSITIVE POWER 36,250,000** - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,250,000** - ------------------------------------------------------------------------------ 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.6% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ ** Represents shares directly beneficially owned by Moneyline Networks. CUSIP No. 674421201 13D - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Bank One Corporation - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP [ ] (a) [ ] (b) - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCES OF FUNDS WC - ------------------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF 0 SHARES --------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 36,250,000** REPORTING -------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 -------------------------------------- 10 SHARED DISPOSITIVE POWER 36,250,000** - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,250,000** - ------------------------------------------------------------------------------ 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.6% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON HC, CO - ------------------------------------------------------------------------------ ** Represents shares directly beneficially owned by Moneyline Networks. Schedule 13D Item 1. Security and Issuer. This statement on Schedule 13D relates to 36,250,000 shares of the common stock, par value $0.01 per share (the "Common Stock"), of Video Network Communications, Inc., a Delaware corporation (the "Company"). The Company's principal executive offices are located at 50 International Drive, Portsmouth, New Hampshire 03801. Item 2. Identity and background. This Schedule 13D is being filed jointly by each of the following pursuant to Sections 13(d) and 23 of the Exchange Act: (i) Moneyline Networks, LLC, a Delaware limited liability company ("Moneyline Networks"), by virtue of its direct beneficial ownership of Common Stock and warrants to purchase Common Stock, (ii) Moneyline Telerate Holdings, a Delaware corporation ("Moneyline"), by virtue of its ownership of all of the outstanding membership interests of Moneyline Networks, (iii) Bank One Investment Corporation a Delaware corporation ("BOIC"), by virtue of its majority ownership interest in Moneyline, (iv) Banc One Capital Corporation, a Delaware corporation ("BOCC"), by virtue of its ownership of all of the capital stock of BOIC, (v) Banc One Financial Corporation, a Delaware corporation ("BOFC"), by virtue of its ownership of all of the capital stock of BOCC, and (vi) Bank One Corporation, a Delaware corporation ("Bank One", and together with BOFC, BOCC, BOIC, Moneyline and Moneyline Networks, the "Reporting Persons"), by virtue of its ownership of all of the outstanding capital stock of BOFC. Information with respect to each of the Reporting Persons is given solely by such reporting Person, and no Reporting Person has responsibility for the accuracy or completeness of information supplied by another Reporting Person. By their signature on this Schedule 13D, each of the Reporting Persons agrees that this Schedule 13D is filed on behalf of such Reporting Person. Attached as Exhibit B is information concerning each executive officer and director or manager, as appropriate, of each of Moneyline Networks, Moneyline, BOIC, BOCC, BOFC and Bank One, which is ultimately in control of Moneyline Networks and Moneyline. Except as otherwise indicated on Exhibit B-subject to confirmation of Robson's citizenship, to the knowledge of each Reporting Person, each executive officer and director of the Reporting Persons named in Exhibit B is a citizen of the United States and principally employed in the position set forth opposite such person's name. Exhibit B is incorporated into and made part of this Schedule 13D. Moneyline Networks is a company formed by Moneyline for the purpose of purchasing shares of Common Stock in the transactions described in Items 3 through 6 of this Schedule 13D. Moneyline is a provider of information and transaction services to financial services firms. BOIC makes private equity investments on behalf of Bank One. BOCC and BOFC are each holding companies used by Bank One in making private equity investments. Bank One is a multibank holding company registered under the Bank Holding Company Act of 1956 and is headquartered in Chicago, Illinois. Bank One became a financial holding company under the Gramm-Leach-Bliley Act of 1999 in August 2001. Bank One was incorporated under the laws of the State of Delaware in 1998 to effect the merger of Banc One Corporation and First Chicago NBD Corporation. The merger became effective on October 2, 1998. Bank One provides domestic retail banking, finance and credit card services, worldwide commercial banking services, and trust and investment management services. Bank One operates banking offices in Arizona, Colorado, Florida, Illinois, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Texas, Utah, West Virginia and Wisconsin and in certain international markets. The address of the principal business and principal office of each of Moneyline Networks and Moneyline is 233 Broadway, New York, New York 10279. The address of the principal business and principal office of each of BOIC, BOCC, BOFC and Bank One is 1 Bank One Plaza, Chicago, Illinois 60670. During the last five years, none of the Reporting Persons, nor to the knowledge of each of the Reporting Persons, any of their respective officers, directors or controlling persons has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. As more fully described herein, on May 16, 2002 (the "Closing Date"), pursuant to a Stock Purchase Agreement, dated as of May 16, 2002 (the "Stock Purchase Agreement"), by and among Moneyline Networks, B2BVideo Network Corp., a Delaware corporation, and the Company, Moneyline Networks purchased 25,000,000 newly issued shares of the Company for an aggregate purchase price of $15,000,000. In addition, the Company issued to Moneyline Networks warrants to purchase up to 11,250,000 shares of Common Stock at a price of $0.60 per share, subject to adjustment as set forth in the Warrant Agreement, dated May 16, 2002 (the "Warrant Agreement"), by and among Moneyline Networks and the Company. The Stock Purchase Agreement is filed as Exhibit C hereto and is incorporated by reference. The Warrant Agreement is filed as Exhibit D hereto and is incorporated by reference. Moneyline Networks obtained the purchase price from a capital contribution from Moneyline. Moneyline obtained the purchase price from its available working capital. Item 4. Purpose of Transaction. The purpose of the acquisition of the shares of Common Stock by Moneyline Networks pursuant to the Stock Purchase Agreement is to acquire a controlling equity interest in the Company. Upon completion of the transactions, Moneyline Networks has a direct beneficial ownership of 60.6% of the Company. Upon the consummation of the transactions contemplated by the Stock Purchase Agreement, the number of directors constituting the entire board of directors of the Company (the "Board") was fixed at seven and simultaneously therewith, four of the members of the Board resigned from the Board and any committees thereof in order to permit the appointment of David Walsh, Jonathan Robson and Alexander Russo to fill such vacancies, each of whom was appointed as an initial Moneyline Nominee (as defined below). The Board also appointed Charles Auster as an initial Moneyline Nominee to the Board, which appointment becomes effective upon the expiration of the ten day period following the filing and transmission to record holders of the information statement required by Section 14(f) and Rule 14f-1 of the Exchange Act with the Securities and Exchange Commission. Such information statement was filed and transmitted on May 22, 2002. Stockholders Agreement Pursuant to the Stock Purchase Agreement, the Company, Moneyline Networks and certain management stockholders of the Company (collectively, the "Management Stockholders") entered into a Stockholders Agreement, dated May 16, 2002 (the "Stockholders Agreement"). With respect to the Management Shareholders, the Stockholders Agreement covers only those shares of Common Stock acquired by each Management Stockholder pursuant to a stock option purchase agreement on or after the Closing Date. The Stockholders Agreement is attached as Exhibit E hereto and is incorporated by reference. Pursuant to the Stockholders Agreement, the Management Stockholders and Moneyline Networks have agreed that, for so long as Moneyline Networks and each person to whom Moneyline Networks transfers its shares of Common Stock (collectively, the "Moneyline Stockholders") own their shares of Common Stock, each of the Management Stockholders and the Moneyline Stockholders shall vote or cause to be voted all shares of Common Stock and any other voting securities of the Company over which each 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 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, 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. For so long as the Moneyline Stockholders own 50% or more of the shares of Common Stock owned by Moneyline Networks or any other voting securities of the Company on the Closing Date, each of the Moneyline Stockholders and the Management Stockholders will vote or cause to be voted all shares of Common Stock and any other voting securities of the Company over which each has control, at any regular or special meeting of stockholders called for the purpose of filling positions on the Board, and shall take all actions necessary, to ensure the election to the Board of four individuals designated by Moneyline Networks (each, a "Moneyline Nominee"), the Chief Executive Officer of the Company and two Independent Directors (as defined below). For purposes of the Stockholders Agreement, "Independent Director" is defined as 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 Networks or its affiliates, and (ii) has no contractual affiliation or compensation, consulting or contractual relationship with Moneyline Networks or its affiliates such that a reasonable person would regard such director as likely to be unduly influenced by any of such persons. 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 Networks on the Closing Date, each of the Moneyline Stockholders and the Management Stockholders will vote or cause to be voted all shares of Common Stock and any other voting securities of the Company over which each has control, at any regular or special meeting of stockholders called for the purpose of filling positions on the Board, and shall take all actions necessary, to ensure the election to the Board of three Moneyline Nominees, the Chief Executive Officer of the Company and three Independent Directors. 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 Networks on the Closing Date, each of the Moneyline Stockholders and the Management Stockholders will vote or cause to be voted all shares of Common Stock and any other voting securities of the Company over which each has control, at any regular or special meeting of stockholders called for the purpose of filling positions on the Board, and shall take all actions necessary, to ensure the election to the Board of two Moneyline Nominees, the Chief Executive Officer of the Company and Independent Directors as the remainder of the directors. So long as a Moneyline Nominee is 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. If a Moneyline Stockholder that designated a Moneyline Nominee pursuant to the Stockholders Agreement requests that such Moneyline Nominee elected as a director be removed (with or without cause), such director shall be removed and each of the Moneyline Stockholders and the Management Stockholders shall vote all shares of Common Stock owned by each and other securities over which such stockholder has voting control to effect such removal or to consent in writing to effect such removal. A director that is a Moneyline Nominee may not be otherwise removed prior to the next election of directors. If at any time a member of the Board resigns or is removed, a new member of the Board shall be designated to replace such member until the next election of directors. If consistent with the Stockholders Agreement, the nominee is to be a Moneyline Nominee, the Moneyline Stockholders shall designate the replacement Moneyline Nominee. If the former member of the Board was the Chief Executive Officer of the Company, the replacement Chief Executive Officer shall be designated to the Board. Except as set forth below, if consistent with the Stockholders Agreement, the replacement director is to be an Independent Director, the remaining members of the Board shall designate the replacement Independent Director. Except as set forth below, if at any time the number of Moneyline Nominees entitled to be nominated to the Board in accordance with the Stockholders 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 the Stockholders Agreement after giving effect to such resignations. Any vacancies created by the resignations shall be filled by Independent Directors. 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 the Stockholders Agreement) 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 Company. 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 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. So long as the Moneyline Stockholders own 25% or more of the shares of Common Stock of the Company, the consent of Moneyline is required prior to any Significant Transaction (as defined below). For purposes of the Stockholders Agreement and the Stock Purchase Agreement, "Significant Transaction" means: (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; (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. Until the effectiveness of the appointment of Charles Auster to the Board, the consent of Moneyline Networks is required prior to any Significant Transaction and no committee of the Board can take any action without the consent of the majority of the Board. The forgoing summaries of certain provisions of the Stock Purchase Agreement and the Stockholders Agreement are qualified in their entirety by the complete text of the Stock Purchase Agreement, which is attached as Exhibit C hereto and the Stockholders Agreement, which is attached as Exhibit E hereto, each of which are incorporated herein by reference. Upon the closing of the transactions contemplated by the Stock Purchase Agreement, the Company amended and restated its By-Laws to reflect the provisions of the Stockholders Agreement. Except as described in this Schedule 13D, the Reporting Persons currently have no plans or proposals which relate to or which would result in any transaction, event or action enumerated in paragraphs (a) through (j) of Item 4 of Schedule 13D promulgated under the Exchange Act. Depending on market conditions and other factors (including evaluation of the Company's business and prospects, availability of funds, alternative uses of funds and general economic conditions), Moneyline Networks or any of its affiliates may from time purchase additional securities of the Company or dispose of all or a portion of its investment in the Company, including, but not limited to, to certain of their respective officers, employees or affiliates. Moneyline Networks may transfer some of its shares of Common Stock to certain of its or its affiliates officers and employees. Item 5. Interest in Securities of the Issuer. (a) Pursuant to the Stock Purchase Agreement, Moneyline Networks beneficially owns an aggregate of 36,250,000 shares of Common Stock, or approximately 60.6% of the Company's outstanding Common Stock (based on 48,610,800 shares of Common Stock outstanding as of May 16, 2002; an additional 11,250,000 shares of Common Stock are issuable upon the exercise of the warrants). Each Reporting Person expressly declares that the filing of this Schedule 13D shall not be construed as an admission that each such Reporting Person is, for the purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial owner of any securities covered by this Schedule 13D other than those securities in which such Reporting Person has a pecuniary interest as set forth in this Item 5. (b) Moneyline Networks, Moneyline, BOIC, BOCC, BOFC and Bank One may be deemed to share the voting and dispositive power of the 36,250,000 shares of Common Stock directly beneficially owned by Moneyline Networks by virtue of, and this form is being filed by BOIC, BOCC, BOFC and Bank One solely because of, Moneylines' 100% ownership interest in Moneyline Networks, BOIC's majority ownership interest in Moneyline, BOCC's 100% ownership interest in BOIC, BOFC's 100% ownership interest in BOCC and Bank One's 100% ownership interest in BOFC. (c) Except as described elsewhere in this Schedule 13D, neither the Reporting Persons nor, to the best knowledge of each Reporting Person, any of the persons named in Exhibit B to this Schedule 13D, has effected a transaction in shares of Common Stock during the past 60 days (excluding transactions that may have been effected by certain subsidiaries of Bank One for managed accounts with funds provided by third party customers). (d) Except for third party customers of certain subsidiaries of Bank One who may have the right to receive or the power to direct the receipt of dividends from, or the proceeds of the sale of, any shares of Common Stock held in managed accounts with funds provided by such customers, no other person is known by any Reporting Person to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the dale of, any shares of Common Stock that will be beneficially owned by and Reporting Person after the Closing Date. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. The responses set forth in Items 3 and 4 of this Schedule 13D are incorporated by reference in their entirety. Item 7. Material to be Filed as Exhibits. Exhibit A Joint Filing Agreement, dated as of May 28, 2002. Exhibit B Executive Officers and Directors. Exhibit C Stock Purchase Agreement, dated as of May 16, 2002, by and among Moneyline Networks, B2BVideo Network Corp. and the Company. Exhibit D Warrant Agreement, dated as of May 16, 2002, by and among Moneyline Networks and the Company. Exhibit E Stockholders Agreement, dated as of May 16, 2002, by and among Moneyline Networks and the Company. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. May 28, 2002 BANK ONE CORPORATION By: /s/ Michael J. Cavanagh ---------------------------- Name: Michael J. Cavanagh Title: Treasurer BANC ONE FINANCIAL CORPORATION By: /s/ Michael J. Cavanagh ----------------------------- Name: Michael J. Cavanagh Title: Treasurer BANC ONE CAPITAL CORPORATION By: /s/ Jeffrey V. Holway ------------------------ Name: Jeffrey V. Holway Title: Managing Director BANK ONE INVESTMENT CORPORATION By: /s/ Daniel J. Selmonosky ---------------------------- Name: Daniel J. Selmonosky Title: Managing Director MONEYLINE TELERATE HOLDINGS By: /s/ Alexander Russo --------------------------- Name: Alexander Russo Title: Executive Vice President, Business Development and General Counsel MONEYLINE NETWORKS, LLC By: /s/ Alexander Russo --------------------------- Name: Alexander Russo Title: Executive Vice President, Business Development and General Counsel EX-99 3 s369915.txt EXHIBIT A EXHIBIT A Joint Filing Agreement The undersigned hereby agree that the Statement on Schedule 13D filed herewith (and any amendments thereto), relating to the common stock, par value $0.01 per share, of Video Network Communications, Inc., is being filed jointly with the Securities and Exchange Commission pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, on behalf of each such person. May 28, 2002 BANK ONE CORPORATION By: /s/ Michael J. Cavanagh ---------------------------- Name: Michael J. Cavanagh Title: Treasurer BANC ONE FINANCIAL CORPORATION By: /s/ Michael J. Cavanagh ----------------------------- Name: Michael J. Cavanagh Title: Treasurer BANC ONE CAPITAL CORPORATION By: /s/ Jeffrey V. Holway ------------------------ Name: Jeffrey V. Holway Title: Managing Director BANK ONE INVESTMENT CORPORATION By: /s/ Daniel J. Selmonosky ---------------------------- Name: Daniel J. Selmonosky Title: Managing Director MONEYLINE TELERATE HOLDINGS By: /s/ Alexander Russo --------------------------- Name: Alexander Russo Title: Executive Vice President, Business Development and General Counsel MONEYLINE NETWORKS, LLC By: /s/ Alexander Russo --------------------------- Name: Alexander Russo Title: Executive Vice President, Business Development and General Counsel EX-99 4 s369922.txt EXHIBIT B EXHIBIT B MONEYLINE NETWORKS, LLC -----------------------
Board of Managers Name Principal Occupation Name, Business and Address Where Employed - ---- -------------------- ----------------------------------------- Lawrence Kinsella Executive Vice President and Chief Moneyline Telerate Holdings Financial Officer of Moneyline 233 Broadway Telerate Holdings New York, NY 10279 Jonathan Robson* Chief Executive Officer Moneyline Telerate Holdings 233 Broadway New York, NY 10279 Alexander Russo Executive Vice President, Business Moneyline Telerate Holdings Development and General Counsel 233 Broadway New York, NY 10279 David Walsh Partner One Equity Partners 320 Park Avenue, 18th Floor New York, NY 10022 * Mr. Robson is a citizen of the United Kingdom.
Executive Officers - ------------------ Name Title - ---- ----- David Walsh President Lawrence Kinsella Executive Vice President and Chief Financial Officer Alexander Russo Executive Vice President, Business Development and General Counsel
MONEYLINE TELERATE HOLDINGS --------------------------- Directors Name Principal Occupation Name, Business and Address Where Employed - ---- -------------------- ----------------------------------------- Bernard Battista President Moneyline Telerate Holdings 233 Broadway New York, NY 10279 George Bobotis Chairman Quick America 2 Wall Street New York, NY 10005 Richard M. Cashin, Jr. Chairman One Equity Partners 320 Park Avenue, 18th Floor New York, NY 10022 Jonathan Robson* Chief Executive Officer Moneyline Telerate Holdings 233 Broadway New York, NY 10279 Daniel J. Selmonosky Partner One Equity Partners 320 Park Avenue, 18th Floor New York, NY 10022 Richard W. Smith Managing Partner Allegra Partners 515 Madison Avenue New York, NY 10022 David Walsh Partner One Equity Partners 320 Park Avenue, 18th Floor New York, NY 10022 David Weinberg DLW Group 139 West 19th Street New York, NY 10011
Executive Officers - ------------------ Name Title - ---- ----- Jonathan Robson* Chief Executive Officer Bernard Battista President Lawrence Kinsella Executive Vice President and Chief Financial Officer Lawerence Ng Executive Vice President and Chief Information Officer Alexander Russo Executive Vice President, Corporate Development and General Counsel
BANK ONE INVESTMENT CORPORATION ------------------------------- Directors - --------- Name Principal Occupation Name, Business and Address Where Employed - ---- -------------------- ----------------------------------------- Richard M. Cashin, Jr. Chairman One Equity Partners 320 Park Avenue, 18th Floor New York, NY 10022
Executive Officers - ------------------ Name Title - ---- ----- Richard M. Cashin, Jr. Chairman of the Board and President Michael E. Brost Senior Vice President and Assistant Treasurer Constance T. Teska Senior Vice President Daniel J. Selmonosky Managing Director
BANC ONE CAPITAL CORPORATION ---------------------------- Directors - --------- Name Principal Occupation Name, Business and Address Where Employed - ---- -------------------- ----------------------------------------- Richard M. Cashin, Jr. Chairman One Equity Partners 320 Park Avenue, 18th Floor New York, NY 10022 Sarah L. McClelland Executive Vice President Bank One Corporation 1 Bank One Plaza Chicago, IL 60670 Charles W. Scharf Executive Vice President Bank One Corporation 1 Bank One Plaza Chicago, IL 60670
Executive Officers - ------------------ Name Title - ---- ----- Charles W. Scharf Chairman of the Board William P. Kusack, Jr. Managing Director Francisco J. Pereiro Managing Director Michael E. Brost Senior Vice President Mit C. Buchanan Managing Director Timothy A. Dugan Managing Director Stephen L. Eastwood Senior Vice President John M. Eber Managing Director James N. Eligator Managing Director Paul A. Gargula Managing Director Eric M. Hillenbrand Senior Vice President Jeffery V. Holway Managing Director Norma J. Lauder Senior Vice President Patrick J. McCarthy Managing Director Burton E. McGillivray Senior Vice President Christie S. McNab Managing Director Maurice E. Moore Managing Director Jean F. Nagatani Managing Director Patrick J. Nash Managing Director Christine Stevens Managing Director Aloysius T. Stonitsch Managing Director Constance T. Teska Senior Vice President
BANK ONE FINANCIAL CORPORATION ------------------------------ Directors - --------- Name Principal Occupation Name, Business and Address Where Employed - ---- -------------------- ----------------------------------------- Michael J. Cavanagh Treasurer Bank One Corporation 1 Bank One Plaza Chicago, IL 60670 Charles W. Scharf Executive Vice President Bank One Corporation 1 Bank One Plaza Chicago, IL 60670
Executive Officers - ------------------ Name Title - ---- ----- Charles W. Scharf Chairman of the Board David H. Schabes Senior Vice President
BANK ONE CORPORATION -------------------- Directors - --------- Name Principal Occupation Name, Business and Address Where Employed - ---- -------------------- ----------------------------------------- James Dimon Chairman of the Board Bank One Corporation 1 Bank One Plaza Chicago, IL 60670 James S. Crown General Partner Henry Crown and Company 222 North LaSalle Street Suite 2000 Chicago, IL 60601 John H. Bryan Retired Chairman and Chief Sara Lee Corporation Executive Officer Three First National Plaza Suite 4400 Chicago, IL 60602 Dr. Maureen A. Fay, O.P. President University of Detroit Mercy 4001 West McNichols Detroit, MI 48221 John R. Hall Retired Chairman and Chief Ashland, Inc. Executive Officer 50 E. RiverCenter Blvd. Covington, KY 41012 Laban P. Jackson, Jr. Chairman and Chief Executive Clear Creek Properties, Inc. Officer 2365 Harrodsburg Rd. #B230 Lexington, KY 40504 John W. Kessler Owner The New Albany Company 6525 W. Campus Oval #100 New Albany, OH 43054 Richard A. Manoogian Chairman and Chief Executive Masco Corporation Officer 21001 Van Born Road Taylor, MI 48180 William T. McCormick, Jr. Chairman and Chief Executive CMS Energy Corporation Officer 330 Town Center Drive Dearborn, MI 48126 David C. Novak Chairman and Chief Executive Tricon Global Restaurants, Inc. Officer 1441 Gardiner Lane Louisville, KY 40213 John W. Rogers, Jr. Chairman and Chief Executive Ariel Capital Management, Inc. Officer 200 E. Randolph Street, Suite 2900 Chicago, IL 60601 Frederick P. Stratton, Jr. Chairman of the Board Briggs & Stratton Corporation 12301 W. Wirth Street Milwaukee, WI 53222
Officers - -------- Name Title - ---- ----- James Dimon Chairman of the Board and Chief Executive Officer Austin A. Adams Executive Vice President Linda Bamman Executive Vice President James S. Boshart, III Executive Vice President David E. Donovan Executive Vice President Christine A. Edwards Executive Vice President Philip G. Heasley Executive Vice President Larry L. Helm Executive Vice President David J. Kundert Executive Vice President Sarah L. McClelland Executive Vice President Heidi G. Miller Executive Vice President Tyree B. Miller Executive Vice President Charles W. Scharf Executive Vice President R. Michael Welborn Executive Vice President
EX-99 5 s364119a.txt EXHIBIT C Exhibit C - ------------------------------------------------------------------------------ STOCK PURCHASE AGREEMENT dated May 16, 2002 by and among MONEYLINE NETWORKS, LLC, B2BVIDEO NETWORK CORP., and VIDEO NETWORK COMMUNICATIONS, INC. - ------------------------------------------------------------------------------ TABLE OF CONTENTS Page ARTICLE 1. PURCHASE AND SALE OF SHARES; WARRANTS. 1.1 Agreement to Purchase and Sell....................................4 1.2 The Closing.......................................................5 ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF VNCI. 2.1 Corporate Organization............................................6 2.2 Due Authorization.................................................7 2.3 Consents and Approvals............................................7 2.4 No Violations.....................................................8 2.5 Capitalization; Subsidiaries......................................9 2.6 Intellectual Property............................................10 2.7 Litigation.......................................................12 2.8 Customers and Suppliers..........................................12 2.9 Financial Statements.............................................13 2.10 Reports..........................................................13 2.11 Absence of Certain Changes.......................................13 2.12 Liabilities......................................................14 2.13 Compliance with Laws; Permits....................................14 2.14 Tax Matters......................................................15 2.15 Affiliated Transactions..........................................17 2.16 Employees, Employee Benefit Plans; ERISA.........................18 2.17 Contracts........................................................22 2.18 Brokers and Finders..............................................23 2.19 Books and Records................................................23 2.20 Board Approval; State Statutes...................................23 2.21 Representations and Warranties by VNCI in Transaction Agreements.......................................................24 2.22 Full Disclosure..................................................24 ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF B2B. 3.1 Corporate Organization...........................................24 3.2 Due Authorization................................................24 3.3 Consents and Approvals...........................................25 3.4 No Violations....................................................25 3.5 Capitalization; Joint Ventures...................................26 3.6 Intellectual Property............................................26 3.7 Litigation.......................................................29 3.8 Customers and Suppliers..........................................29 3.9 Financial Statements.............................................29 3.10 Absence of Certain Changes.......................................29 3.11 Liabilities......................................................30 3.12 Compliance with Laws; Permits....................................30 3.13 Tax Matters......................................................30 3.14 Affiliated Transactions..........................................32 3.15 Employees, Employee Benefit Plans; ERISA.........................33 3.16 Contracts........................................................36 3.17 Brokers and Finders..............................................37 3.18 Books and Records................................................37 3.19 Approvals; State Statutes........................................37 3.20 Representations and Warranties by B2B in Merger Agreement........38 3.21 Full Disclosure..................................................38 ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF MONEYLINE. 4.1 Organization.....................................................39 4.2 Authority........................................................39 4.3 Consents; No Violation...........................................39 4.4 Investment Representation........................................40 4.5 Brokers and Finders..............................................40 4.6 Availability of Funds............................................40 ARTICLE 5. COVENANTS. 5.1 Public Announcements.............................................40 5.2 Board of Directors...............................................40 5.3 Further Assurances...............................................41 5.4 Transaction Fees and Expenses....................................41 5.5 Director Indemnification Agreements..............................42 5.6 Technology License Agreements....................................42 5.7 Significant Transactions.........................................42 5.8 Annual Report Filing.............................................42 ARTICLE 6. INDEMNIFICATION; SURVIVAL. 6.1 Indemnification Obligations......................................42 6.2 Indemnification Procedures.......................................43 6.3 Limitations on Indemnification...................................44 6.4 Survival of Representations, Warranties and Covenants............44 ARTICLE 7. CONDITIONS TO CLOSING. 7.1 Conditions to Obligations of Moneyline...........................45 ARTICLE 8. MISCELLANEOUS PROVISIONS. 8.1 Entire Agreement; Assignment.....................................47 8.2 Notices .........................................................48 8.3 Interpretation...................................................49 8.4 Amendments and Waivers...........................................50 8.5 Severability.....................................................50 8.6 Governing Law; Jurisdiction and Venue............................50 8.7 Schedules and Exhibits...........................................50 8.8 No Third Party Beneficiaries.....................................50 8.9 WAIVER OF JURY TRIAL.............................................51 8.10 Counterparts.....................................................51 8.11 Acknowledgements.................................................51 EXHIBITS TO AGREEMENT Exhibit A.....................................Form of Subscription Agreement Exhibit B...................................................Merger Agreement Exhibit C.............................................Stockholders Agreement Exhibit D.......................................Strategic Alliance Agreement Exhibit E..................................................Warrant Agreement Exhibit F........................Form of Restricted Stock Purchase Agreement Exhibit G......................................Form of B2B Conversion Notice Exhibit H.....................................Form of VNCI Conversion Notice Exhibit I.....................Form of Director, Officer and Employee Release Exhibit J.................................Form of VNCI/B2B/Moneyline Release Exhibit K..................................Form of EBC Agreement and Release Exhibit L..............................................VNCI Fairness Opinion Exhibit M...............................................B2B Fairness Opinion Exhibit N......................................................Press Release Exhibit O.........................Form of Director Indemnification Agreement Exhibit P........................Form of Technology License Agreement (VNCI) Exhibit Q.........................Form of Technology License Agreement (B2B) Exhibit R.......................................Form of Mintz, Levin Opinion Exhibit S....................................Form of Graubard Miller Opinion Exhibit T................................Form of Graubard Miller Tax Opinion Exhibit U....................................Form of Potter Anderson Opinion Exhibit V..............................Form of Mintz, Levin Reliance Letter SCHEDULES TO AGREEMENT Schedule A........................................ B2B Security Conversions Schedule 1.1(b)...........................................List of Investors Schedule 1.2(b)(vi)............................................Resignations Schedule 1.2(b)(vii)(A)..............................B2B Conversion Notices Schedule 1.2(b)(vii)(B).............................VNCI Conversion Notices Schedule 1.2(b)(viii)........................Director and Officer Releasors Schedule 2.1....................................Subsidiaries; Jurisdictions Schedule 2.3.........................................Consents and Approvals Schedule 2.5(a)..............................................Capitalization Schedule 2.5(b)...................................Subsidiary Capitalization Schedule 2.6(b).......................................Intellectual Property Schedule 2.6(c)....................................................Software Schedule 2.6(d)..........................................License Agreements Schedule 2.6(e)..........................Intellectual Property Encumbrances Schedule 2.6(f)...........................Validity of Intellectual Property Schedule 2.6(g)................................Intellectual Property Claims Schedule 2.6(k)........................................Proprietary Software Schedule 2.7.....................................................Litigation Schedule 2.8......................................................Customers Schedule 2.11...............................VNCI Absence of Certain Changes Schedule 2.12(a)................................................Liabilities Schedule 2.12(b)...........................List of Post-Closing Liabilities Schedule 2.14(a)......................................................Taxes Schedule 2.14(a)(i)........................................ Contested Taxes Schedule 2.15(a)....................................Affiliated Transactions Schedule 2.15(b).....................................Affiliated Liabilities Schedule 2.16(a).......................................Labor and Employment Schedule 2.16(c)...................................................WARN Act Schedule 2.16(d)...........................................Employment Plans Schedule 2.16(k)......................................Payments to Employees Schedule 2.16(n).....................Employment Arrangements and Agreements Schedule 2.16(o)......................................Option Holders (VNCI) Schedule 2.16(p).....................Equity Based Awards Other Than Options Schedule 2.17(a)........................................ Material Contracts Schedule 2.17(b)................................Certain Contract Provisions Schedule 2.18....................................Brokers and Finders (VNCI) Schedule 3.1..................................................Jurisdictions Schedule 3.3.....................................B2B Consents and Approvals Schedule 3.4..................................................No Violations Schedule 3.5(a)..........................................B2B Capitalization Schedule 3.5(b)..........................................B2B Joint Ventures Schedule 3.6(b)...................................B2B Intellectual Property Schedule 3.6(c)................................................B2B Software Schedule 3.6(d)......................................B2B License Agreements Schedule 3.6(e)......................B2B Intellectual Property Encumbrances Schedule 3.6(f).......................B2B Validity of Intellectual Property Schedule 3.6(g)............................B2B Intellectual Property Claims Schedule 3.6(k)....................................B2B Proprietary Software Schedule 3.7.................................................B2B Litigation Schedule 3.8..................................................B2B Customers Schedule 3.10................................B2B Absence of Certain Changes Schedule 3.11(a)............................................B2B Liabilities Schedule 3.11(b)..........................List of Post-Closing Indebtedness Schedule 3.13(a)......................................................Taxes Schedule 3.14(a)....................................Affiliated Transactions Schedule 3.14(b).....................................Affiliated Liabilities Schedule 3.15(a).......................................Labor and Employment Schedule 3.15(c)...................................................WARN Act Schedule 3.15(d)...........................................Employment Plans Schedule 3.15(k)......................................Payments to Employees Schedule 3.15(n).....................Employment Arrangements and Agreements Schedule 3.15(o).......................................Option Holders (B2B) Schedule 3.16(a).........................................Material Contracts Schedule 3.16(b)................................Certain Contract Provisions Schedule 3.17.....................................Brokers and Finders (B2B) Schedule 3.19(a)..............................................Merger Voting Schedule 5.4(a)........................................Transaction Expenses Schedule 5.5............................Director Indemnification Agreements Schedule 7.1(g)....................................................Warrants STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of May 16, 2002, is made among Moneyline Networks, LLC, a Delaware limited liability company ("Moneyline"), B2BVideo Network Corp., a Delaware corporation ("B2B"), and Video Network Communications, Inc., a Delaware corporation ("VNCI"). R E C I T A L S WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, VNCI wishes to sell to Moneyline and Moneyline wishes to purchase from VNCI an aggregate of twenty-five million (25,000,000) newly-issued shares (the "Moneyline Shares") of VNCI's common stock, par value $0.01 per share (the "Common Stock"); WHEREAS, upon the terms and subject to the conditions set forth in this Agreement and a Subscription Agreement, the form of which is attached as Exhibit A hereto, VNCI wishes to sell to certain individuals and entities (collectively, the "Investors") introduced to VNCI by EarlyBirdCapital, Inc. ("EBC") and the Investors wish to purchase from VNCI an aggregate of 7,750,000 newly-issued shares (the "Investor Shares" and together with the Moneyline Shares, the "Shares") of Common Stock; WHEREAS, Moneyline, B2B and VNCI desire to provide for the purchase and sale of the Shares and to establish certain rights and obligations in connection therewith; WHEREAS, One Equity Partners LLC, a Delaware limited liability company, or its affiliates (together, "OEP") has provided the funding to Moneyline in connection with the transactions contemplated herein; WHEREAS, concurrently with this Agreement, and as a condition and an inducement to the willingness of Moneyline to enter into this Agreement, VNCI and B2B, have entered into an Agreement and Plan of Merger attached as Exhibit B hereto (the "Merger Agreement") pursuant to which, among other transactions, B2B Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of VNCI, will be merged with and into B2B (the "Merger") with B2B surviving. As a result of the Merger (i) each share of Common Stock, par value $0.01 per share, of B2B (the "B2B Common Stock") (other than the 750,000 shares owned by VNCI), each share of Series A Convertible Preferred Stock, par value $0.01 per share, of B2B ("B2B Series A Preferred Stock"), and each share of Series B Convertible Preferred Stock, par value $0.01 per share, of B2B ("B2B Series B Preferred Stock"), issued and outstanding immediately prior to the Closing Date (as defined below) shall be converted into and become 3,000,000 fully paid and nonassessable shares of Common Stock; (ii) purchase options to purchase B2B Series A Preferred Stock issued and outstanding immediately prior to the Closing Date shall be converted into and become options to purchase an aggregate of 139,123 shares of Common Stock of VNCI; (iii) purchase options to purchase 2.75 Units of B2B, each Unit consisting of (A) 50,000 shares of B2B Series B Preferred Stock and (B) warrants to purchase 50,000 shares of B2B Common Stock, issued and outstanding immediately prior to the Closing Date shall be converted into and become options to purchase an aggregate of 185,497 shares of Common Stock and warrants to purchase 46,374 shares of Common Stock of VNCI; (iv) warrants to purchase in the aggregate 6,625,000 shares of B2B Common Stock issued and outstanding immediately prior to the Closing Date shall be converted into and become warrants to purchase in the aggregate 1,165,328 shares of Common Stock (assuming termination of certain warrants); and (v) each option to purchase 2,099,000 shares of B2B Common Stock issued pursuant to and outside of B2B's 2000 Performance Equity Plan issued and outstanding immediately prior to the Closing Date shall be converted and become options to purchase 707,925 shares of Common Stock, all as set forth on Schedule A hereto. WHEREAS, each of the Board of Directors of B2B (the "B2B Board of Directors") and the stockholders of B2B has approved and consented to the Merger and the other transactions and matters contemplated by the Merger Agreement; WHEREAS, concurrently with the execution of this Agreement, and as a condition and an inducement to the willingness of Moneyline to enter into this Agreement, each holder (the "B2B Noteholders") of $2,500,000 aggregate principal amount of senior secured promissory notes of B2B (the "B2B Promissory Notes") issued and outstanding immediately prior to the Closing Date shall convert such senior secured promissory notes into 4,276,023 shares of Common Stock (the "B2B Conversion Shares"); WHEREAS, concurrently with the execution of this Agreement, and as a condition and an inducement to the willingness of Moneyline to enter into this Agreement, Moneyline, OEP and VNCI will execute a Stockholders Agreement, dated May 16, 2002, in the form attached as Exhibit C hereto (the "Stockholders Agreement"), which sets forth their agreement concerning, among other things, the corporate governance of VNCI following the consummation of the sale of Shares; WHEREAS, concurrently with the execution of this Agreement, VNCI and Moneyline will execute a Strategic Alliance Agreement, dated as of May 16, 2002, in the form attached as Exhibit D hereto (the "Strategic Alliance Agreement"); WHEREAS, concurrently with the execution of this Agreement and as a condition and an inducement to the willingness of Moneyline to enter into this Agreement and the Strategic Alliance Agreement, VNCI will issue to Moneyline a warrant to purchase 11,250,000 shares of Common Stock at a price of $0.60 per share (subject to adjustment) pursuant to the Warrant Agreement attached as Exhibit E hereto (the "Warrant Agreement" and together with the Merger Agreement, the Stockholders Agreement, the Strategic Alliance Agreement and the Warrant Agreement, the "Transaction Agreements"); WHEREAS, Sanmina Corp. has entered into a release (the "Sanmina Release") with respect to all of its outstanding claims in consideration of a payment from VNCI on the date hereof of $1,100,000; WHEREAS, Shaw Pittman LLP has entered into a release (the "Shaw Pittman Release") with respect to its claim in consideration of a payment from VNCI on the date hereof of $250,000; WHEREAS, concurrently with the execution of this Agreement and as a condition and an inducement to the willingness of Moneyline to enter into this Agreement, all of the holders of certain outstanding promissory notes of VNCI (the "Noteholders") in the aggregate principal amount of $3,723,981 (the "Promissory Notes") will convert the Promissory Notes into 6,444,823 shares of Common Stock (the "Note Conversion Shares"); WHEREAS, concurrently with the execution of this Agreement and as a condition and an inducement to the willingness of Moneyline to enter into this Agreement, holders of outstanding warrants to purchase 3,169,800 shares of B2B Common Stock shall terminate such warrants; WHEREAS, concurrently with the execution of this Agreement and as a condition and an inducement to the willingness of Moneyline to enter into this Agreement, holders of outstanding warrants to purchase 280,000 shares of Common Stock shall terminate such warrants; WHEREAS, the Board of Directors of VNCI (the "Board of Directors") has approved and consented to (i) the sale of the Shares by VNCI to Moneyline on the terms set forth herein, and (ii) the transactions and matters contemplated by the Subscription Agreement, the Merger Agreement, the Stockholders Agreement, the Strategic Alliance Agreement, the Technology License Agreement, the Director Indemnification Agreement (as hereinafter defined) and the Warrant Agreement (collectively, the "Related Transactions"); and WHEREAS, subsequent to the consummation of the transactions contemplated hereby and the Related Transactions, VNCI shall offer certain officers of VNCI and its subsidiaries the opportunity to purchase shares of Common Stock pursuant to a Restricted Stock Purchase Agreement in the form of Exhibit F hereto. NOW, THEREFORE, in consideration of the foregoing, the agreements hereafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE 1. PURCHASE AND SALE OF SHARES; WARRANTS. 1.1 Agreement to Purchase and Sell. (a) Concurrently with the execution of this Agreement, VNCI shall sell to Moneyline and Moneyline shall purchase from VNCI the Moneyline Shares for a price per Share equal to $.60 or an aggregate purchase price of $15,000,000 (the "Moneyline Issuance Price"). Moneyline shall pay the Moneyline Issuance Price to VNCI in cash by wire transfer to an account or accounts designated by VNCI. (b) Concurrently with the execution of this Agreement, VNCI shall issue to Moneyline warrants to purchase twenty-five million (25,000,000) shares of Common Stock pursuant to the Warrant Agreement. (c) Concurrently with the execution of this Agreement, VNCI shall sell to each of the Investors and each of the Investors shall purchase from VNCI the amount of Investor Shares set forth opposite such Investor's name on Schedule 1.1(b) for a price per Share equal to $.60 or an aggregate purchase price of $4,650,000 (the "Investors Issuance Price" and together with the Moneyline Issuance Price, the "Issuance Price"). Each of the Investors shall pay the Investors Issuance Price to VNCI in cash by wire transfer to an account or accounts designated by VNCI. (d) Concurrently with the execution of this Agreement, (i) the Noteholders shall convert the Promissory Notes into the Note Conversion Shares, and (ii) the B2B Noteholders shall convert the B2B Promissory Notes into the B2B Conversion Shares. 1.2 The Closing. (a) The closing (the "Closing") of the purchase and sale of the Shares hereunder shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New York 10036 at 9:00 a.m. on May 16, 2002 (the "Closing Date"). (b) At the Closing, VNCI shall deliver or cause to be delivered to Moneyline: (i) one or more certificates representing the Moneyline Shares being sold by VNCI; (ii) an executed Warrant Agreement, dated as of the Closing Date; (iii) a certificate certifying the existence and good standing of VNCI issued by the Secretary of State of Delaware as of a recent date; (iv) a certificate from the appropriate officers of VNCI certifying as to matters contemplated by Section 7.1(a); (v) a certificate from the appropriate officers of B2B certifying as to matters contemplated by Section 7.1(c); (vi) executed resignations, dated as of the Closing Date, from those directors and officers of VNCI and B2B as set forth on Schedule 1.2(b)(vi); (vii) executed conversion notices (A) in the form of Exhibit G hereto and dated as of the Closing Date, from those persons set forth on Schedule 1.2(b)(vii)(A) with respect to the B2B Promissory Notes dated October 3, 2001, October 12, 2001, December 12, 2001, February 20, 2002, April 8, 2002, April 16, 2002 and/or May 2, 2002, and (B) in the form of Exhibit H hereto and dated as of the Closing Date, from those persons set forth on Schedule 1.2(b)(vii)(B) with respect to the Promissory Notes (collectively, the "Conversion Notices"); (viii) executed releases, (A) in the form of Exhibit I hereto and dated as of the Closing Date, from those officers, directors and employees of VNCI and B2B and other entities set forth on Schedule 1.2(b)(viii) (collectively, the "Director, Officer and Employee Releases") and (B) in the form of Exhibit J hereto and dated as of the Closing Date, from VNCI, B2B and Moneyline (the "VNCI/B2B/Moneyline Release"); (ix) an executed release, in the form of Exhibit K hereto and dated as of the Closing Date, from EBC (together with the Director, Officer and Employee Releases and the VNCI/B2B/Moneyline Release, the "Releases"); (x) an executed Sanmina Release; (xi) and executed Shaw Pittman Release; (xii) an opinion, dated as of the Closing Date, and in the form attached to as Exhibit L, from Capitalink LC as to the fairness, from a financial point of view, to the stockholders of VNCI of the transactions contemplated by this Agreement and the Merger Agreement (the "VNCI Fairness Opinion"); and (xiii) an opinion, dated as of May 13, 2002, and in the form attached to as Exhibit M, from Seidman & Co. Inc. as to the fairness, from a financial point of view, to the stockholders of B2B of the transactions contemplated by this Agreement and the Merger Agreement (the "B2B Fairness Opinion"). (c) At the Closing, VNCI shall deliver or cause to be delivered to each Investor one or more certificates representing the Investor Shares being sold by VNCI to such Investor against receipt by VNCI of the portion of the Investors Issuance Price payable for such Investors Shares; (d) At the Closing, VNCI shall deliver or cause to be delivered to each B2B Noteholder one or more certificates representing the B2B Conversion Shares against receipt by VNCI of such B2B Noteholder's B2B Promissory Notes; (e) At the Closing, VNCI shall deliver or cause to be delivered to each Noteholder one or more certificates representing the Note Conversion Shares against receipt by VNCI of such Noteholder's Promissory Notes; (f) At the Closing, Moneyline shall deliver or cause to be delivered to VNCI $15,000,000 (the "Moneyline Consideration"). ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF VNCI. VNCI hereby represents and warrants to Moneyline, as of the date hereof, the following: 2.1 Corporate Organization. Each of VNCI and the subsidiaries of VNCI set forth on Schedule 2.1, which constitute all of the subsidiaries of VNCI (each, a "Subsidiary" and, collectively, the "Subsidiaries"), is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite corporate power and authority to own, lease, operate or otherwise hold its properties and assets and to carry on its business as now being conducted. Each of VNCI and the Subsidiaries is duly qualified or licensed and in good standing as a foreign corporation, authorized to do business under the laws of each jurisdiction where the character of the properties owned, leased or used by it or the nature of its activities makes such qualification or licensing necessary, except where non-qualification would not be a Material Adverse Effect (as defined in Section 2.3 hereof). Schedule 2.1 sets forth a complete and correct list of all jurisdictions in which each of VNCI and the Subsidiaries is qualified or licensed to do business. As used in this Agreement, the "subsidiary" of any person shall mean (a) any corporation, association, partnership, limited liability company or other business entity of which more than 50% of the total voting power of shares of capital stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such person, (b) any partnership of which such person is a general partner, or (c) any other person in which such person, directly or indirectly, has more than 50% of the outstanding partnership or similar ownership interests or has the power, by contract or otherwise, to direct or cause the direction of the policies, management and affairs thereof. 2.2 Due Authorization. VNCI has full power and authority necessary to execute, deliver and perform its obligations under this Agreement and each of the Transaction Agreements and to carry out its respective obligations hereunder and thereunder. The execution and delivery by VNCI of this Agreement and the Transaction Agreements and the consummation of the transactions contemplated hereby and thereby by VNCI has been duly authorized by all necessary corporate action on the part of VNCI. This Agreement and the Transaction Agreements have been duly and validly executed and delivered by VNCI and constitute the valid and legally binding obligations of VNCI, enforceable against VNCI in accordance with their respective terms, except as may be limited by any applicable bankruptcy, reorganization, insolvency, or other laws affecting creditors' rights generally or by general principles of equity. 2.3 Consents and Approvals. (a) No vote or approval of holders of any class or series of the Company's capital stock is required (i) to approve the issuance of the Shares or warrants to purchase shares of Common Stock pursuant to the Warrant Agreement or (ii) to approve and adopt this Agreement, the Strategic Alliance Agreement, the Stockholders Agreement or the Technology License Agreement. (b) Except as set forth on Schedule 2.3, no consent, approval, authorization of, declaration, filing, or registration with, any court, governmental, regulatory or administrative body, agency or authority, department, commission, agency, self-regulatory organization, instrumentality or arbitrator whether federal, state, local or foreign (each, a "Governmental Authority" and collectively, the "Governmental Authorities"), is required to be made or obtained by VNCI in connection with the execution, delivery, and performance of this Agreement or any of the Transaction Agreements and the consummation of the transactions contemplated hereby and thereby, except for consents, approvals, authorizations, declarations, filings and registrations the lack of which would not have a Material Adverse Effect. For purposes of this Agreement, a "Material Adverse Effect" shall mean any event, change or development which has had or could be expected to have, individually or in the aggregate, a material adverse effect, either in the short-term or in the long-term, on the business, results of operations, assets, liabilities or condition (financial or otherwise) of VNCI and the Subsidiaries taken as a whole (including VNCI's or B2B's ability to consummate the transactions contemplated by this Agreement and the Transaction Agreements). 2.4 No Violations. Neither the execution, delivery or performance by VNCI of this Agreement and the Transaction Agreements nor the consummation of the transactions contemplated hereby and thereby, will (i) conflict with or result in a breach of any provision of the certificate of incorporation or by-laws or similar organizational documents of VNCI or any Subsidiary; (ii) violate, or conflict with, or result in a breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or give rise to a right of termination, cancellation, modification or acceleration of the performance required by or a loss of a benefit under, any note, bond, mortgage, indenture, deed of trust, loan or credit agreement, lease, license, permit, agreement, commitment, contract or other instrument or obligation to which VNCI or any Subsidiary is a party or by which its respective properties or assets are bound or affected; (iii) violate any order, judgment, writ, injunction, decree, statute, rule or regulation (each, an "Order") applicable to VNCI or any Subsidiary, or by which its respective properties or assets is bound or affected; or (iv) result in the creation of any liens, charges, pledges, security interests, claims, mortgages, options, rights of first refusal, encumbrances and other prescriptions, restrictions, conditions or covenants or similar rights whatsoever (each, an "Encumbrance"). 2.5 Capitalization; Subsidiaries. (a) The authorized capital stock of VNCI consists solely of 90,000,000 shares of Common Stock and 2,500,000 shares of Preferred Stock (the "Preferred Stock"). Schedule 2.5(a) sets forth (i) the issued and outstanding shares of capital stock of VNCI as of the date hereof, and (ii) the issued and outstanding shares of capital stock of VNCI after giving effect to the transactions contemplated hereby and the Related Transactions. No other class of capital stock of VNCI is authorized or outstanding and there are no securities convertible into or exchangeable for any shares of its capital stock. All of the outstanding shares of capital stock of VNCI have been duly authorized and validly issued and are fully paid and non-assessable and not subject to any preemptive or similar rights. Except as set forth on Schedule 2.5(a), there are no (i) warrants, options, agreements, calls, conversion rights, exchange rights, preemptive rights or other rights or commitments or understandings which call for the issuance, sale, pledge or other disposition of any shares of capital stock of VNCI or any securities convertible into or other rights to acquire, any shares of capital stock of VNCI or obligate VNCI to grant, offer or enter into any of the foregoing; or (ii) bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders may vote, issued or outstanding. Schedule 2.5(a) sets forth each holder of any of the securities listed in the immediately preceding sentence and the amounts of such securities held. Except as set forth on Schedule 2.5(a), none of the outstanding shares of capital stock of VNCI is subject to any voting trust, transfer restrictions or other similar arrangements that relates to the voting or control of such capital stock or partnership interests or rights. Upon the Closing, Moneyline will be the sole owner of all right, title and interest in (i) the Moneyline Shares and (ii) warrants for 11,250,000 shares of Common Stock on the terms set forth in the Warrant Agreement. (b) Except as set forth on Schedule 2.5(b) hereto, all of the outstanding shares of capital stock or any other ownership interests of each of the Subsidiaries are duly authorized and validly issued, fully paid, nonassessable and free of preemptive rights and are owned, directly or indirectly, by VNCI, free and clear of all Encumbrances. There is no subscription, option, warrant, call, right agreement or commitment relating to the issuance, sale, delivery, transfer or redemption by VNCI or the Subsidiaries (including any right of conversion or exchange under any outstanding security or other instrument) of the capital stock or partnership interests or any other ownership interests of the Subsidiaries. Except for the Subsidiaries, VNCI does not have, directly or indirectly, any joint venture, partnership or similar relationship with, or any ownership interest in, any person. 2.6 Intellectual Property. (a) As used in this Agreement, the term "Intellectual Property" means the following items that are held for use or used in the businesses of VNCI and the Subsidiaries as conducted as of the date hereof or as presently contemplated to be conducted and any licenses to use any of the following: all trademarks, service marks, trade names, Internet domain names, designs, logos, slogans and general intangibles of like nature, together with the goodwill, registrations and applications relating to the foregoing, and any material unregistered trademarks or service marks (collectively, "Trademarks"); patents, patent applications and any continuations, divisionals, continuations-in-part, renewals, reissues for any of the foregoing (collectively, "Patents"); copyrights (including registrations and applications for any of the foregoing and material common law or unregistered copyrights) (collectively, "Copyrights"); computer programs, including any and all software implementations of algorithms, models and methodologies whether in source code or object code form, databases and compilations, including any and all data and collections of data, all documentation, including user manuals and training materials, related to any of the foregoing and the content and information contained on any Web site (collectively, "Software"); confidential information, technology, know-how, inventions, processes, formulae, algorithms, models and methodologies (collectively, "Trade Secrets"). (b) Schedule 2.6(b) sets forth, with respect to all Intellectual Property owned or licensed by VNCI and the Subsidiaries, a complete and accurate list, of all U.S. and foreign: (i) Patents; (ii) Trademarks (including Internet domain name registrations); and (iii) Copyrights. (c) Schedule 2.6(c) lists all contracts for Software (other than readily available commercial Software programs having an acquisition price of less than $1,000) that is licensed, leased or otherwise used by any of VNCI or the Subsidiaries (collectively, "Third Party Software"), and all Software that is owned by any of VNCI or the Subsidiaries (collectively, "Proprietary Software"), and identifies which Software is owned, licensed, leased, or otherwise used, as the case may be. (d) Schedule 2.6(d) sets forth a complete and accurate list of all agreements granting, obtaining, or restricting any rights to use or to practice any rights under any Intellectual Property to which any of VNCI or the Subsidiaries (as applicable) is a party or otherwise bound, as licensee or licensor thereunder, including, without limitation, agreements for Third Party Software, agreements for Proprietary Software, other license agreements, settlement agreements and covenants not to sue (collectively, "License Agreements"). No royalties, honoraria or other fees are payable by any of VNCI or the Subsidiaries to any third parties for the use of or right to use any Intellectual Property except pursuant to the License Agreements. VNCI and the Subsidiaries have not licensed or sublicensed any of their rights in any Intellectual Property, or received or been granted any such rights, other than pursuant to the License Agreements. (e) Except as set forth on Schedule 2.6(e), VNCI and the Subsidiaries own or have the right to use all Intellectual Property, free and clear of all Encumbrances, and each of VNCI and the Subsidiaries (as applicable) are listed in the records of the appropriate United States, state, or foreign registry as the sole current owner of record for each application and registration listed in Schedule 2.6(b). (f) Except as set forth on Schedule 2.6(f), any Intellectual Property owned or used by any of VNCI or the Subsidiaries has been duly maintained, is valid and subsisting, is in full force and effect and has not been cancelled, expired or abandoned. (g) Except as set forth on Schedule 2.6(g), there is no pending or threatened claim, suit, arbitration or other adversarial proceeding before any court, agency, arbitral tribunal, or registration authority, in any jurisdiction, and none of VNCI or the Subsidiaries has received written notice regarding any of the foregoing, involving: (i) the Intellectual Property owned by any of VNCI or the Subsidiaries, (ii) the Intellectual Property licensed to any of VNCI or the Subsidiaries, (A) alleging that the activities or the conduct of the businesses of VNCI and the Subsidiaries infringe upon, violate, or constitute the unauthorized use of the intellectual property rights of any third party, or (B) challenging the ownership rights of any of VNCI or the Subsidiaries in, or validity, enforceability, and registrability of, any Intellectual Property. (h) No third party is misappropriating, infringing, diluting or violating any Intellectual Property owned by any of VNCI or the Subsidiaries. (i) The License Agreements are valid and binding obligations of VNCI or Subsidiary (as applicable) enforceable in accordance with their respective terms, except as may be limited by any applicable bankruptcy, reorganization, insolvency, or other laws affecting creditors' rights generally or by general principles of equity, and to VNCI's knowledge there exists no event or condition which will result in a violation or breach of, or constitute a default by any of VNCI or the Subsidiaries or the other party thereto, under any such License Agreement. VNCI will not, as a result of the execution of and delivery of this Agreement and the Transaction Agreements and the transactions contemplated hereby and thereby, be in breach of or suffer any loss of rights under any License Agreement. (j) Each of VNCI and the Subsidiaries takes reasonable measures to protect the confidentiality of Trade Secrets. To VNCI's knowledge, no Trade Secret of any of VNCI or the Subsidiaries has been disclosed or authorized to be disclosed to any third party other than pursuant to a written nondisclosure agreement that adequately protects the proprietary interests of VNCI and the Subsidiaries in and to such Trade Secrets. (k) Except as set forth on Schedule 2.6(k), all Proprietary Software set forth on Schedule 2.6(c) was either developed (i) by employees of VNCI and the Subsidiaries within the scope of their employment, or (ii) by independent contractors who have assigned all of their rights to any of VNCI or the Subsidiaries pursuant to a written agreement. (l) To VNCI's knowledge, there is no material defect in design, manufacture, materials or workmanship, including any failure to warn or alleged breach of express or implied warranty or representation, relating to any product manufactured, distributed or sold by or on behalf of VNCI. To VNCI's knowledge, there is no material impediment to any upgrade of any product currently manufactured, distributed or sold by or on behalf of VNCI that VNCI is currently developing. 2.7 Litigation. Except as set forth on Schedule 2.7, (i) there is no claim, action, suit, inquiry, judicial or administrative proceeding, arbitration or investigation (each, an "Action") pending or, to VNCI's knowledge, threatened, by or against any of VNCI or the Subsidiaries before any court, arbitrator or administrative or governmental body, and (ii) there is no Order of any Governmental Authorities outstanding against any of VNCI or the Subsidiaries. There is no Action pending or threatened against any of VNCI or the Subsidiaries which (i) challenges the transactions contemplated hereby or by the Transaction Agreements; (ii) would prevent or materially interfere with or delay the consummation of the transactions contemplated hereby and by the Transaction Agreements; or (iii) seeks damages in connection with the transactions contemplated hereby or by any of the Transaction Agreements. 2.8 Customers and Suppliers. Except as set forth on Schedule 2.8, none of VNCI or the Subsidiaries has received any notice that any current customer or supplier of any of VNCI or the Subsidiaries will terminate or adversely and materially modify its business relationship with VNCI or such Subsidiary. Schedule 2.8 sets forth a complete and correct list of the ten (10) largest customers (by net sales) and five (5) largest suppliers (by dollar volume) of VNCI for the fiscal year ended December 31, 2001. 2.9 Financial Statements. VNCI has delivered to Moneyline true, correct and complete copies of the unaudited consolidated financial statements of VNCI as of and for the 12-month period ended December 31, 2001 and the three month period ended March 31, 2002 (collectively, the "Financial Statements"). The Financial Statements (including the footnotes thereto) present fairly in all material respects the financial position of VNCI and the Subsidiaries as of the dates thereof and their results of operations and cash flows for the periods then ended, in accordance with generally accepted accounting principles applied on a consistent basis ("GAAP") throughout the period. 2.10 Reports. Other than VNCI's Form 10-K for the period ending December 31, 2001, the filings required to be made by VNCI and its Subsidiaries since December 31, 1998 under the Securities Act of 1933, as amended (the "Securities Act") and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), have been filed with the Securities and Exchange Commission (the "SEC") including all forms, statements, reports, all documents, exhibits, amendments and supplements appertaining thereto, and complied, as of their respective dates, in all material respects with all applicable requirements of the appropriate statutes and the rules and regulations thereunder. "VNCI SEC Reports" shall mean each report, schedule, registration statement and definitive proxy statement filed with the SEC by VNCI pursuant to the requirements of the Securities Act or Exchange Act since December 31, 1998 (as such documents have since the time of their filing been amended). As of their respective dates, the VNCI SEC Reports did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. True, accurate and complete copies of the Articles of Incorporation and by-laws of VNCI, as in effect on the date hereof, are included (or incorporated by reference) in the VNCI SEC Reports. 2.11 Absence of Certain Changes. Since December 31, 2001, other than as disclosed in Schedule 2.11 or the VNCI SEC Reports, VNCI has conducted its business in the ordinary and usual course and consistent with past practice, and has not: (i) entered into or terminated any material transaction, contract or commitment which is not in the ordinary course of business and consistent with past practice; (ii) incurred, or assumed or become subject to, whether directly or by way of guarantee or otherwise, any indebtedness or any other liability, including purchase money indebtedness, except trade or business obligations or indebtedness incurred in the ordinary course of business and consistent with past practice or compromised, settled or otherwise discharged any audit or claim with respect to Taxes in the aggregate not in excess of $10,000; (iii) authorized, issued, pledged or otherwise encumbered or sold any shares of its capital stock, or issued, sold or created any securities convertible into, or options or other rights with respect to, or warrants to purchase or rights to subscribe to, any shares of its capital stock; (iv) declared, set aside, paid or made any dividend or other distribution with respect to its capital stock, whether payable in cash, stock or property, or redeemed any shares of capital stock; (v) suffered any damage, destruction or other casualty or loss (whether or not covered by insurance); (vi) increased the compensation payable or to become payable by VNCI to any of its officers or employees or increased any bonus, insurance, pension or other employee benefit plan, payment or arrangement made by VNCI, for or with any such officers or employees; (vii) acquired or disposed of any substantial assets; (viii) changed its certificate of incorporation or by-laws or similar documents; (ix) made any change in a Tax or financial accounting practice or made or changed any Tax election except as required by GAAP or applicable Law; (x) suffered a Material Adverse Effect or the occurrence of any event or circumstances that would be reasonably likely to result in a Material Adverse Effect; or (xi) entered into an agreement to do, or which would result in, any of the foregoing. 2.12 Liabilities. (a) Schedule 2.12(a) sets forth all material liabilities of VNCI and the Subsidiaries, whether accrued, contingent, absolute, determined, indeterminable or otherwise, which have been created since December 31, 2001. (b) Set forth on Schedule 2.12(b) is a list of all indebtedness of VNCI which will be outstanding after the closing. 2.13 Compliance with Laws; Permits. (a) Each of VNCI and the Subsidiaries is not in violation in any material respect of any Orders and has complied in all material respects with all applicable laws, statutes, regulations or other requirements (collectively, "Laws") of any Governmental Authority. (b) Each of VNCI, the Subsidiaries and their respective employees has all material licenses, franchises, permits and authorizations of any Governmental Authority as are material or necessary for the lawful conduct of the business of VNCI and the Subsidiaries (collectively, "Permits"), and such Permits are in full force and effect. None of VNCI, the Subsidiaries or any of such employees has received any notice of revocation of, or default under, any Permits. 2.14 Tax Matters. (a) Except as set forth on Schedule 2.14(a): (i) Each of VNCI and the Subsidiaries has (i) timely filed all Tax Returns required to be filed by it and all such Tax Returns are true, correct and complete in all material respects, (ii) paid in full all material Taxes required to be paid by it, and (iii) established in its most recent Financial Statements reserves that are adequate, in accordance with GAAP, for the payment of any Taxes not yet due and payable or which are being contested in good faith. Schedule 2.14(a)(i) sets forth all Taxes which are being contested in good faith. Since the date of VNCI's most recent Financial Statements, none of VNCI or the Subsidiaries has incurred any liability for material Taxes other than in the ordinary course of business consistent with past practice; (ii) There are no Encumbrances for material Taxes upon any assets of any of VNCI or the Subsidiaries, except statutory Encumbrances for Taxes not yet due and payable; (iii) No deficiency for any Taxes has been proposed in writing, asserted in writing or assessed in writing by any Tax authority against any of VNCI or any of the Subsidiaries that has not been resolved and paid in full. No waiver, extension or comparable consent given by any of VNCI or any of the Subsidiaries regarding the application of the statute of limitations with respect to any Taxes or Tax Return is outstanding, nor is any written request for any such waiver or consent pending; (iv) Each of VNCI and the Subsidiaries has complied with all applicable Laws relating to the withholding of material Taxes and has timely withheld and paid over to the relevant Tax authority all material amounts required to be so withheld and paid over for all periods under all applicable Laws, including withholding in connection with payments to employees, independent contractors, creditors, stockholders, partners or other third parties; (v) None of VNCI or the Subsidiaries has granted any power of attorney which is currently in force with respect to Taxes or Tax Returns; (vi) None of VNCI or the Subsidiaries has been a member of any federal, state, local or foreign consolidated, unitary, combined or similar group other than a group with VNCI as its common parent; (vii) To the knowledge of VNCI and its Subsidiaries, there are no federal, state, local or foreign audits, actions, suits, proceedings, investigations, claims or administrative proceedings relating to Taxes or any Tax Returns of any of VNCI or any of the Subsidiaries now pending, and none of VNCI or any of the Subsidiaries has received any notice of any proposed audits, investigations, claims or administrative proceedings relating to Taxes or any Tax Returns; (viii) None of VNCI or the Subsidiaries has agreed or is required to make any adjustments under section 481(a) of the Internal Revenue Code of 1986, as amended (the "Code") (or any similar provision of state, local and foreign Law) by reason of a change in accounting method or otherwise for any Tax period for which the applicable statute of limitations, including all valid extensions thereof, has not yet expired; (ix) None of VNCI or the Subsidiaries has received a ruling from any Tax authority. No closing agreement pursuant to section 7121 of the Code (or any similar provision of state, local or foreign Law) has been entered into by or with respect to any of VNCI or a Subsidiary; (x) None of VNCI or the Subsidiaries has filed a consent pursuant to section 341(f) of the Code (or any predecessor provision) or has agreed to have section 341(f)(2) of the Code apply to the disposition of a subsection (f) asset (as such term is defined in section 341(f)(4) of the Code) owned by any of VNCI or the Subsidiaries; (xi) No jurisdiction where any of VNCI or the Subsidiaries does not file a Tax Return has made a written claim that any of VNCI or the Subsidiaries is required to file a Tax Return for such jurisdiction; (xii) Other than the Transaction Agreements, none of VNCI or the Subsidiaries (i) is a party to, is bound by or has any obligation under, any Tax sharing agreement, Tax indemnification agreement or similar contract or arrangement or (ii) has any potential liability or obligation to any person as a result of, or pursuant to, any such agreement, contract or arrangement; (xiii) Each of the Subsidiaries is a "United States person" (as defined under section 7701(a)(30) of the Code); and (b) Other than any Tax Returns which have not yet been required to be filed, each of VNCI and the Subsidiaries has made available to Moneyline true and correct copies of the United States federal income Tax Return and any state, local or foreign Tax Return for any jurisdiction that represents five percent (5%) or more of the taxable income of VNCI and the Subsidiaries as filed by any of VNCI or the Subsidiaries for each of the taxable years ended December 31, 2000, 1999 and 1998. (c) VNCI and the Subsidiaries have previously delivered or made available to Moneyline complete and accurate copies of each of (i) all audit reports, letter rulings, technical advice memoranda, and similar documents issued by any Tax authority relating to the United States federal, state, local or foreign Taxes due from or with respect to any of VNCI or the Subsidiaries, and (ii) any closing agreements entered into by any of VNCI or the Subsidiaries with any Tax authority in each case existing on the date hereof. Each of VNCI and the Subsidiaries will deliver to Moneyline all materials with respect to the foregoing for all matters arising after the date hereof. (d) As used in this Agreement, (i) "Tax" or "Taxes" means (x) any and all taxes, assessments, customs, duties, levies, fees, tariffs, imposts, deficiencies and other governmental charges of any kind whatsoever (including, but not limited to, taxes on or with respect to net or gross income, franchise, profits, gross receipts, capital, sales, use, ad valorem, value added, transfer, real property transfer, transfer gains, inventory, capital stock, license, payroll, employment, social security, unemployment, severance, occupation, real or personal property, estimated taxes, rent, excise, occupancy, recordation, bulk transfer, intangibles, alternative minimum, doing business, withholding and stamp), together with any interest thereon, penalties, fines, damages costs, fees, additions to tax or additional amounts with respect thereto, and (ii) the term "Tax Return" includes all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes. 2.15 Affiliated Transactions. (a) Except as set forth on Schedule 2.15(a) or in the SEC Reports, no officer, director, or employee of any of VNCI or the Subsidiaries, or a relative, spouse (or relative of such spouse), director, officer, stockholder or affiliate of the foregoing: (i) has any direct or indirect financial interest in any competitor, supplier or customer of any of VNCI or the Subsidiaries; provided, however, that the ownership of securities representing no more than one percent (1%) of the outstanding voting power of any competitor, supplier or customer, which securities are listed on any national securities exchange or traded actively in the national over-the-counter market, shall not be deemed to be a "financial interest" so long as the person owning such securities has no other connection or relationship with such competitor, supplier or customer; (ii) owns, directly or indirectly, in whole or in part, or has any interest in any tangible or intangible property which any of VNCI or the Subsidiaries uses or has used in the conduct of the business of VNCI and the Subsidiaries or otherwise; or (iii) has borrowed money or other property of any of VNCI or the Subsidiaries. (b) Except as set forth on Schedule 2.15(b), VNCI and the Subsidiaries have no liabilities, debts or any other obligation of any nature whatsoever to any of Moneyline or EBC or any officer, director or employee of any of VNCI or the Subsidiaries or to any relative, spouse (or relative of such spouse), stockholder, director, officer or affiliate of any of the foregoing, other than, in the case of any such officer or employee of a VNCI or Subsidiary, in respect of accrued wages, the reimbursement of expenses and the extension of benefits to such person made in the ordinary course of business consistent with past practice. 2.16 Employees, Employee Benefit Plans; ERISA. (a) Except as set forth on Schedule 2.16(a), there is no (i) collective bargaining agreement or any other agreement with any labor organization to which any of VNCI or the Subsidiaries is a party applicable to the employees of any of VNCI or the Subsidiaries; (ii) unfair labor practice complaint or charge pending or threatened against any of VNCI or the Subsidiaries before the National Labor Relations Board or any other federal, state, local or foreign agency; (iii) pending or, to VNCI's knowledge, threatened strike, slowdown, work stoppage, lockout or other collective labor action by or with respect to any employees of any of VNCI or the Subsidiaries; (iv) grievance, unfair dismissal or arbitration proceeding pending against any of VNCI or the Subsidiaries; (v) pending, or to VNCI's knowledge, threatened complaint, charge, lawsuit or other proceeding against any of VNCI or the Subsidiaries by employees of any of VNCI or the Subsidiaries alleging discrimination, (vi) pending or, to VNCI's knowledge, threatened representation question or union organizing activities with respect to any employees of any of VNCI or the Subsidiaries; (vii) pending or, to VNCI's knowledge, threatened notice of the intent of any federal, state, local or foreign agency responsible for the enforcement of labor or employment Laws, including, but not limited to, occupational safety and health, to conduct an investigation and no such investigation is in progress with respect to any employees of any of VNCI or the Subsidiaries; (viii) complaint, charge, lawsuit or other proceeding pending or, to VNCI's knowledge, threatened in any forum by or on behalf of any present or former employee of any of VNCI or the Subsidiaries, any applicant for employment or classes of the foregoing alleging breach of any express or implied contract or employment, any Law governing employment or the termination thereof or other discriminatory, wrongful or tortious conduct concerning the employment relationship; and (ix) written personnel policy, rule or procedure applicable to employees of any of VNCI or the Subsidiaries, other than those set forth on Schedule 2.16(a). VNCI and the Subsidiaries are, and since January 1, 1998 have been, in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment, wages, hours of work, and occupational safety and health. (b) VNCI and the Subsidiaries have at all times properly classified each of their respective employees as employees and each of their independent contractors as independent contractors, as applicable. There is no action, suit or investigation pending or threatened against any of VNCI or the Subsidiaries by any person challenging or questioning the classification by any of VNCI or the Subsidiaries of any person as an independent contractor, including any claim for unpaid benefits, for or on behalf of, any such persons. (c) Within the 12 months preceding the date of this Agreement, there has not been (i) a "plant closing" (as defined in the Worker Adjustment and Restraining Notification Act (the "WARN Act") affecting any site of employment or one or more facilities or operating units within any site of employment or facility of any of VNCI or the Subsidiaries; or (ii) a "mass layoff" (as defined in the WARN Act) affecting any site of employment or facility of any of VNCI or the Subsidiaries; nor have any of VNCI or the Subsidiaries been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar state, local or foreign Law. Except as set forth on Schedule 2.16(c), the employees of VNCI and the Subsidiaries have not suffered an "employment loss" (as defined in the WARN Act) since six (6) months prior to the date of this Agreement. (d) Schedule 2.16(d) contains a true and complete list of (i) each deferred compensation and each bonus or other incentive compensation, stock purchase, stock option and other equity compensation plan, program, agreement or arrangement; (ii) each severance or termination pay, medical, surgical, hospitalization, life insurance and other "welfare" plan, fund or program (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA); (iii) each profit-sharing, stock bonus or other "pension" plan, fund or program (within the meaning of Section 3(2) of ERISA); (iv) each employment, termination or severance agreement; and (v) each other employee benefit plan, fund, program, agreement or arrangement, in each case, that is sponsored, maintained or contributed to or required to be contributed to by any of VNCI, any of the Subsidiaries, or by any trade or business, whether or not incorporated (an "ERISA Affiliate), that together with VNCI would be deemed a "single employer" within the meaning of Section 4001(b) of ERISA, or to which any of VNCI, any of the Subsidiaries, or an ERISA Affiliate is party, whether written or oral, for the benefit of any employee or former employee of any of VNCI or the Subsidiaries (each, a "Plan"). No Plan is subject to Section 302 or Title IV of ERISA or section 412 of the Code and none of VNCI, any of the Subsidiaries, or any ERISA Affiliate has sponsored, maintained, contributed to or been required to contribute to any such plan within the past six (6) years prior to the date hereof. None of VNCI, any of the Subsidiaries or any ERISA Affiliate has any formal plan or commitment to (i) create any additional Plan, or (ii) materially modify or change any existing Plan. No Plan is a "multiemployer plan" within the meaning of Section 3(37) of ERISA. (e) True and complete copies of the following documents relating to each Plan, where applicable, have been delivered or made available to Moneyline: (i) the Plan document, including all amendments thereto; (ii) the most recent summary plan description required under ERISA with respect thereto, summary of material modifications and all material employee communications relating to such Plan; (iii) a copy of the annual report, if required under ERISA, with respect to each such Plan for the last two (2) years; (iv) a copy of the actuarial report, if required under ERISA, with respect to each such Plan for the last two (2) years; (v) if the Plan is funded through a trust or any other funding vehicle, a copy of the trust or other funding agreement (including all amendments thereto) and the latest financial statements thereof; and (vi) the most recent determination letter received from the Internal Revenue Service with respect to each Plan that is intended to be qualified under section 401 of the Code. (f) No liability under Title IV of ERISA has been incurred by any of VNCI or the Subsidiaries or any ERISA Affiliate since the effective date of ERISA that has not been satisfied in full, and no condition exists that presents a material risk to any VNCI or Subsidiary or any ERISA Affiliate of incurring a liability under such Title, other than liability for premiums due the Pension Benefit Guaranty Corporation ("PBGC"), which payments have been or will be made when due. (g) There are no pending or, to VNCI's knowledge, threatened or anticipated claims (other than routine claims for benefits) by, on behalf of, or against, any of the Plans or any trust related thereto. (h) None of VNCI, any of the Subsidiaries, any of the Plans, any trust created thereunder or any trustee, fiduciary or administrator thereof have engaged in a transaction or have taken or failed to take any action in connection with which any of the Plans, any such trust, any trustee, fiduciary or administrator thereof, or any party dealing with the Plans or any such trust could be subject to either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a Tax (as defined below) imposed pursuant to section 4975, 4976 or 4980B of the Code. (i) Each of the Plans has been established, operated and administered in all material respects in accordance with its terms and applicable Laws, including but not limited to ERISA and the Code. All contributions that are required to be made to the Plans have been timely made or have been properly accrued. (j) Each of the Plans that is intended to be "qualified" within the meaning of section 401(a) of the Code is so qualified and no circumstances exist that could result in the disqualification of such Plan and the trusts maintained thereunder are exempt from taxation under section 501(a) of the Code. Each Plan intended to satisfy the requirements of section 501(c)(9) has satisfied such requirements. (k) Except as set forth in Schedule 2.16(k), the consummation of the transactions contemplated by this Agreement and the Transaction Agreements will not, either alone or in combination with another event, (i) entitle any current or former employee or officer of any of VNCI, any of the Subsidiaries, or any ERISA Affiliate to severance pay, unemployment compensation or any other payment, except as expressly provided in this Agreement, or (ii) accelerate the time of payment or vesting, or increase the amount of compensation due any such employee or officer. (l) No amounts payable under the Plans or any other agreement or arrangement to which any of VNCI or the Subsidiaries is a party will fail to be deductible for federal income tax purposes by virtue of section 280G of the Code. (m) No Plan provides benefits, including, without limitation, death or medical benefits (whether or not insured), with respect to current or former employees after retirement or other termination of service (other than (i) coverage mandated by applicable Law, (ii) death benefits or retirement benefits under any "employee pension benefit plan," as that term is defined in Section 3(2) of ERISA, or (iii) benefits, the full cost of which is borne by the current or former employee (or his or her beneficiary)). No condition exists that would prevent any of VNCI or the Subsidiaries from amending or terminating any Plan providing health or medical benefits in respect of any active or former employee of any of VNCI or the Subsidiaries. (n) Except as set forth on Schedule 2.16(n), none of VNCI or any of the Subsidiaries is a party to (i) any employee benefit arrangements which contain "change of control," retention bonus or similar provisions, (ii) any severance agreements, arrangements or understandings with employees of any of VNCI or the Subsidiaries, or (iii) any oral or written employment contracts or agreements. (o) At the Closing Date, those employees of VNCI set forth in Schedule 2.16(o) shall hold options to purchase shares of Common Stock in the amount, and at such price, as set forth opposite their name in Schedule 2.16(o). (p) Except as set forth on Schedule 2.16(p), as of the Closing Date, no equity-based awards, other than options to purchase Common Stock, have been granted under any of the Plans. (q) As of the Closing Date, no Plan, other than the VNCI 1999 Stock Incentive Plan, allows for the granting of options to purchase Common Stock. Each Plan, other than the VNCI 1999 Stock Incentive Plan, that previously allowed for the granting of options to purchase Common Stock has been terminated except with respect to option grants made prior to such terminations. 2.17 Contracts. (a) Except as set forth in Schedule 2.17(a), VNCI, or any Subsidiary, is not a party to, or bound by, any (i) indenture, mortgage, note, installment obligation, agreement or other instrument relating to the borrowing of money, in excess of $10,000; (ii) license or distribution agreement; or (iii) agreements, commitments, purchase orders, or contracts, to which VNCI or a Subsidiary is a party or to which VNCI or a Subsidiary is bound (any of (i), (ii) or (iii), a "Contract") which (x) involve the annual payment or receipt by or to VNCI or a Subsidiary, of more than $10,000, (y) are not cancelable by VNCI or a Subsidiary on less than sixty (60) days' notice, or (z) otherwise materially affect the business of VNCI or a Subsidiary (including all non-competition and management agreements and arrangements) (collectively, the "Material Contracts"). Each of the Material Contracts is a legal, valid and binding obligation of VNCI or a Subsidiary, as applicable, enforceable by and against it in accordance with its terms, except as may be limited by any applicable bankruptcy, reorganization, insolvency, or other laws affecting creditors' rights generally or by general principles of equity. There is not, under any of the agreements or other obligations specified in Schedule 2.17(a), any event of default or event which, with notice of lapse of time or both, would constitute an event of default on the part of VNCI or a Subsidiary. (b) Schedule 2.17(b) sets forth all Contracts containing any provision or term relating to (i) a change of control of VNCI, (ii) non-competition obligations of VNCI, (iii) management agreements and arrangements and (iv) agreements to register shares of capital stock of VNCI or other registration rights agreements. 2.18 Brokers and Finders. Except as set forth on Schedule 2.18, upon the consummation of the transactions contemplated by this Agreement and the Transaction Agreements, no agent, broker, investment banker or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from VNCI in connection with any of the transactions contemplated by this Agreement and the Transaction Agreements. 2.19 Books and Records. The books of account, minute books, stock record books, and other records of each of VNCI and the Subsidiaries, all of which have been made available to Moneyline, are complete and correct in all material respects and have been maintained substantially in accordance with sound business practices, including the maintenance of an adequate system of internal controls. The minute books of each of VNCI and the Subsidiaries contain accurate and substantially complete records of all meetings held of, and corporate or partnership action taken by, the stockholders and the board of directors (and any committees thereof) (or equivalent bodies) of each of VNCI and the Subsidiaries. 2.20 Board Approval; State Statutes. (a) The Board of Directors, at a meeting duly called and held, has consented to (i) the sale of the Shares to each of Moneyline and the Investors pursuant to this Agreement and the other transactions contemplated hereby, and (ii) each of the Transaction Agreements and the transactions contemplated thereby, and has not amended, rescinded or modified such consents as of the Closing Date. (b) The Board of Directors has taken all actions necessary or advisable so that the restrictions contained in Section 203 of the DGCL applicable to a "business combination" (as defined in such Section) will not apply to the execution of this Agreement, any of the Transaction Agreements and the transactions contemplated hereby and thereby. The execution, delivery and the performance of this Agreement and the Transaction Agreements will not cause to be applicable to VNCI any "fair price," "moratorium," "control share acquisition" or other similar antitakeover statute or regulation enacted under state or federal laws. (c) No state statute granting appraisal rights to stockholders of VNCI is applicable to this Agreement, the Transaction Agreements and the transactions contemplated hereby and thereby. 2.21 Representations and Warranties by VNCI in Transaction Agreements. The representations and warranties made by VNCI in each of the Transaction Agreements shall be true and correct, in each case as of the date of such Transaction Agreement and as of the Closing Date as if made at and as of such date. 2.22 Full Disclosure. The information furnished by VNCI and the Subsidiaries to Moneyline in connection with this Agreement and the Transaction Agreements does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements made, in light of the circumstances under which they were made, not false or misleading. ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF B2B. B2B hereby represents and warrants to Moneyline, as of the date hereof, the following: 3.1 Corporate Organization. B2B is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite corporate power and authority to own, lease, operate or otherwise hold its properties and assets and to carry on its business as now being conducted. B2B is duly qualified or licensed and in good standing as a foreign corporation, authorized to do business under the laws of each jurisdiction where the character of the properties owned, leased or used by it or the nature of its activities makes such qualification or licensing necessary, except where non-qualification would not be a B2B Material Adverse Effect (as defined in Section 3.3 hereof). Schedule 3.1 sets forth a complete and correct list of all jurisdictions in which B2B is qualified or licensed to do business. 3.2 Due Authorization. B2B has full power and authority necessary to execute, deliver and perform its obligations under this Agreement and the Merger Agreement and to carry out its respective obligations thereunder. The execution and delivery by B2B of this Agreement and the Merger Agreement and the consummation of the transactions contemplated thereby has been duly authorized by all necessary corporate action on the part of B2B. Each of this Agreement and the Merger Agreement has been duly and validly executed and delivered by B2B and constitutes the valid and legally binding obligations of B2B, enforceable against B2B in accordance with their respective terms, except as may be limited by applicable bankruptcy, reorganization, insolvency, or other laws affecting creditors' rights generally or by general principles of equity. 3.3 Consents and Approvals. Except as set forth on Schedule 3.3, no consent, approval, authorization of, declaration, filing, or registration with, any Governmental Authority, is required to be made or obtained by B2B in connection with the execution, delivery, and performance of this Agreement and the Merger Agreement and the consummation of the transactions contemplated hereby and thereby, except for (i) consents, approvals, authorizations, declarations, filings and registrations the lack of which would not reasonably be expected to have a B2B Material Adverse Effect (as defined below), (ii) the filing and recordation of the Certificate of Merger with the Secretary of State of Delaware as required by the laws of the State of Delaware, and (iii) the notice, required by Section 262 of the DGCL, to be given to those B2B stockholders whom did not consent to the Merger Agreement and the Merger. For purposes of this Agreement, a "B2B Material Adverse Effect" shall mean any event, change or development which has had or could reasonably be expected to have, individually or in the aggregate, a material adverse effect, either in the short-term or in the long-term, on the business, results of operations, assets, liabilities or condition (financial or otherwise) of B2B taken as a whole (including B2B's ability to consummate the transactions contemplated by this Agreement and the Merger Agreement). 3.4 No Violations. Neither the execution, delivery or performance by B2B of this Agreement and the Merger Agreement nor the consummation of the transactions contemplated hereby and thereby, will (i) conflict with or result in a breach of any provision of the certificate of incorporation or by-laws or similar organizational documents of B2B; (ii) except as set forth in Schedule 3.4, violate, or conflict with, or result in a breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or give rise to a right of termination, cancellation, modification or acceleration of the performance required by or a loss of a benefit under, any note, bond, mortgage, indenture, deed of trust, loan or credit agreement, lease, license, permit, agreement, commitment, contract or other instrument or obligation to which B2B is a party or by which its properties or assets are bound or affected; (iii) violate any Order applicable to B2B, or by which its properties or assets is bound or affected; or (iv) except as set forth in Schedule 3.4, result in the creation of any Encumbrance. 3.5 Capitalization; Joint Ventures. (a) The authorized capital stock of B2B consists solely of 30,000,000 shares of B2B Common Stock, 1,512,500 shares of B2B Series A Preferred Stock and 2,875,000 shares of B2B Series B Preferred Stock. Schedule 3.5(a) sets forth the issued and outstanding shares of capital stock of B2B. No other class of capital stock of B2B is authorized or outstanding and there are no securities convertible into or exchangeable for any shares of its capital stock. All of the outstanding shares of capital stock of B2B have been duly authorized and validly issued and are fully paid and non-assessable and not subject to any preemptive or similar rights, except as set forth on Schedule 3.5(a). Except as set forth on Schedule 3.5(a), there are no (i) warrants, options, agreements, calls, conversion rights, exchange rights, preemptive rights or other rights or commitments or understandings which call for the issuance, sale, pledge or other disposition of any shares of capital stock of B2B or any securities convertible into or other rights to acquire, any shares of capital stock of B2B or obligate B2B to grant, offer or enter into any of the foregoing; or (ii) bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders may vote, issued or outstanding. Except as set forth on Schedule 3.5(a), none of the outstanding shares of capital stock of B2B is subject to any voting trust, transfer restrictions or other similar arrangements that relates to the voting or control of such capital stock or partnership interests or rights. Upon the consummation of the Merger, VNCI will be the sole owner of all right, title and interest in all issued and outstanding shares of capital stock of B2B. (b) Except as set forth on Schedule 3.5(b) hereto, and excluding its relationship with VNCI, B2B does not have, directly or indirectly, any joint venture, partnership or similar relationship with, or any ownership interest in, any person. 3.6 Intellectual Property. (a) As used in this Agreement, the term "B2B Intellectual Property" means the following items that are held for use or used in the businesses of B2B as conducted as of the date hereof and any licenses to use any of the following: all trademarks, service marks, trade names, Internet domain names, designs, logos, slogans and general intangibles of like nature, together with the goodwill, registrations and applications relating to the foregoing, and any material unregistered trademarks or service marks (collectively, "B2B Trademarks"); patents, patent applications and any continuations, divisionals, continuations-in-part, renewals, reissues for any of the foregoing (collectively, "B2B Patents"); copyrights (including registrations and applications for any of the foregoing and material common law or unregistered copyrights) (collectively, "B2B Copyrights"); computer programs, including any and all software implementations of algorithms, models and methodologies whether in source code or object code form, databases and compilations, including any and all data and collections of data, all documentation, including user manuals and training materials, related to any of the foregoing and the content and information contained on any Web site (collectively, "B2B Software"); confidential information, technology, know-how, inventions, processes, formulae, algorithms, models and methodologies (collectively, "B2B Trade Secrets"). (b) Schedule 3.6(b) sets forth, with respect to all B2B Intellectual Property owned or licensed by B2B, a complete and accurate list, of all U.S. and foreign: (i) B2B Patents; (ii) B2B Trademarks (including Internet domain name registrations); and (iii) B2B Copyrights. (c) Schedule 3.6(c) lists all contracts for B2B Software (other than readily available commercial B2B Software programs having an acquisition price of less than $1,000) that is licensed, leased or otherwise used by B2B (collectively, "B2B Third Party Software"), and all B2B Software that is owned by any of B2B (collectively, "B2B Proprietary Software"), and identifies which B2B Software is owned, licensed, leased, or otherwise used, as the case may be. (d) Schedule 3.6(d) sets forth a complete and accurate list of all agreements granting, obtaining, or restricting any rights to use or to practice any rights under any B2B Intellectual Property to which B2B (as applicable) is a party or otherwise bound, as licensee or licensor thereunder, including, without limitation, agreements for B2B Third Party Software, agreements for B2B Proprietary Software, other license agreements, settlement agreements and covenants not to sue (collectively, "B2B License Agreements"). No royalties, honoraria or other fees are payable by B2B to any third parties for the use of or right to use any B2B Intellectual Property except pursuant to the B2B License Agreements. B2B has not licensed or sublicensed any of its rights in any B2B Intellectual Property, or received or been granted any such rights, other than pursuant to the B2B License Agreements. (e) Except as set forth on Schedule 3.6(e), B2B owns or have the right to use all B2B Intellectual Property, free and clear of all Encumbrances, and B2B is listed in the records of the appropriate United States, state, or foreign registry as the sole current owner of record for each application and registration listed in Schedule 3.6(b). (f) Any B2B Intellectual Property owned or used by B2B has been duly maintained, is valid and subsisting, is in full force and effect and has not been cancelled, expired or abandoned. (g) There is no pending or threatened claim, suit, arbitration or other adversarial proceeding before any court, agency, arbitral tribunal, or registration authority, in any jurisdiction, and B2B has not received written notice regarding any of the foregoing, involving: (i) the B2B Intellectual Property owned by B2B (ii) the B2B Intellectual Property licensed to B2B, (A) alleging that the activities or the conduct of the businesses of B2B infringe upon, violate, or constitute the unauthorized use of the intellectual property rights of any third party, or (B) challenging the ownership rights of B2B in, or validity, enforceability, and registrability of, any B2B Intellectual Property. (h) No third party is misappropriating, infringing, diluting or violating any B2B Intellectual Property owned by B2B. (i) The B2B License Agreements are valid and binding obligations of B2B enforceable in accordance with their respective terms, except as may be limited by applicable bankruptcy, reorganization, insolvency, or other laws affecting creditors' rights generally or by general principles of equity, and to B2B's knowledge there exists no event or condition which will result in a violation or breach of, or constitute a default by B2B or the other party thereto, under any such B2B License Agreement. B2B will not, as a result of the execution of and delivery of this Agreement and Merger Agreement and the transactions contemplated hereby and thereby, be in breach of or suffer any loss of rights under any B2B License Agreement. (j) B2B takes reasonable measures to protect the confidentiality of B2B Trade Secrets. To B2B's knowledge, no Trade Secret of B2B has been disclosed or authorized to be disclosed to any third party other than pursuant to a written nondisclosure agreement that adequately protects the proprietary interests of B2B in and to such B2B Trade Secrets. (k) Except as set forth on Schedule 3.6(k), all B2B Proprietary Software set forth on Schedule 3.6(c) was either developed (i) by employees of B2B within the scope of their employment, or (ii) by independent contractors who have assigned all of their rights to B2B pursuant to a written agreement. (l) To B2B's knowledge, there is no material defect in design, manufacture, materials or workmanship, including any failure to warn or alleged breach of express or implied warranty or representation, relating to any product manufactured, distributed or sold by or on behalf of B2B. To B2B's knowledge, there is no material impediment to any upgrade of any product currently manufactured, distributed or sold by or on behalf of B2B that B2B is currently developing. 3.7 Litigation. Except as set forth on Schedule 3.7, (i) there is no Action pending or, to B2B's knowledge, threatened, by or against B2B before any court, arbitrator or administrative or governmental body, and (ii) there is no Order of any Governmental Authorities outstanding against B2B. There is no Action pending or, to B2B's knowledge, threatened against B2B which (i) challenges the transactions contemplated by this Agreement or the Merger Agreement; (ii) would prevent or materially interfere with or delay the consummation of the transactions contemplated by this Agreement or the Merger Agreement; or (iii) seeks damages in connection with the transactions contemplated by this Agreement or the Merger Agreement. 3.8 Customers and Suppliers. Except as set forth on Schedule 3.8, B2B has not received any notice that any current customer or supplier of B2B will terminate or adversely and materially modify its business relationship with B2B. Schedule 3.8 sets forth a complete and correct list of the ten (10) largest customers (by net sales) and five (5) largest suppliers (by dollar volume) of B2B for the fiscal year ended December 31, 2001. 3.9 Financial Statements. (a) B2B has delivered to Moneyline true, correct and complete copies of the unaudited consolidated financial statements of B2B as of and for the 12-month periods ended December 31, 2001, December 31, 2000 and December 31, 1999 and the three month period ending March 31, 2002 (collectively, the " B2B Financial Statements"). The B2B Financial Statements (including the footnotes and schedules thereto) present fairly in all material respects the financial position of B2B as of the dates thereof and its results of operations and cash flows for the periods then ended, in accordance with GAAP throughout the period. 3.10 Absence of Certain Changes. Since March 31, 2002, other than as disclosed in Schedule 3.10, B2B has conducted its business in the ordinary and usual course and consistent with past practice, and has not: (i) entered into or terminated any material transaction, contract or commitment which is not in the ordinary course of business and consistent with past practice; (ii) incurred, or assumed or become subject to, whether directly or by way of guarantee or otherwise, any indebtedness or any other liability, including purchase money indebtedness, except trade or business obligations or indebtedness incurred in the ordinary course of business and consistent with past practice or compromised, settled or otherwise discharged any audit or claim with respect to Taxes in the aggregate not in excess of $10,000; (iii) authorized, issued, pledged or otherwise encumbered or sold any shares of its capital stock, or issued, sold or created any securities convertible into, or options or other rights with respect to, or warrants to purchase or rights to subscribe to, any shares of its capital stock; (iv) declared, set aside, paid or made any dividend or other distribution with respect to its capital stock, whether payable in cash, stock or property, or redeemed any shares of capital stock; (v) suffered any damage, destruction or other casualty or loss (whether or not covered by insurance); (vi) increased the compensation payable or to become payable by B2B to any of its officers or employees or increased any bonus, insurance, pension or other employee benefit plan, payment or arrangement made by B2B, for or with any such officers or employees; (vii) acquired or disposed of any substantial assets; (viii) changed its certificate of incorporation or by-laws or similar documents; (ix) made any change in a Tax or financial accounting practice or made or changed any Tax election except as required by GAAP or applicable Law; (x) suffered a B2B Material Adverse Effect or the occurrence of any event or circumstances that would be reasonably likely to result in a B2B Material Adverse Effect; or (xi) entered into an agreement to do any of the foregoing. 3.11 Liabilities. (a) Schedule 3.11(a) sets forth all material liabilities of B2B, whether accrued, contingent, absolute, determined, indeterminable or otherwise, which have been created since March 31, 2002. (b) Set forth on Schedule 3.11(b) is a list of all indebtedness, for money borrowed, of B2B which will be outstanding after the Closing. 3.12 Compliance with Laws; Permits. (a) B2B is not in violation in any material respect of any Orders and has complied in all material respects with all applicable Laws of any Governmental Authority. (b) B2B and its employees has all material Permits, and such Permits are in full force and effect. Neither B2B nor any of such employees has received any notice of revocation of, or default under, any Permits. 3.13 Tax Matters. (a) Except as set forth on Schedule 3.13(a): (i) B2B has (i) timely filed all Tax Returns required to be filed by it and all such Tax Returns are true, correct and complete in all material respects, (ii) paid in full all material Taxes required to be paid by it, and (iii) established in its most recent B2B Financial Statement reserves that are adequate for the payment of any Taxes not yet due and payable or which are being contested in good faith. Since the date of B2B 's most recent B2B Financial Statement, B2B has not incurred any liability for material Taxes other than in the ordinary course of business consistent with past practice; (ii) There are no Encumbrances for material Taxes upon any assets of B2B, except statutory Encumbrances for Taxes not yet due and payable; (iii) No deficiency for any Taxes has been proposed in writing, asserted in writing or assessed in writing by any Tax authority against B2B that has not been resolved and paid in full. No waiver, extension or comparable consent given by B2B regarding the application of the statute of limitations with respect to any Taxes or Tax Return is outstanding, nor is any written request for any such waiver or consent pending; (iv) B2B has complied with all applicable Laws relating to the withholding of material Taxes and has timely withheld and paid over to the relevant Tax authority all material amounts required to be so withheld and paid over for all periods under all applicable Laws, including withholding in connection with payments to employees, independent contractors, creditors, stockholders, partners or other third parties; (v) B2B has not granted any power of attorney which is currently in force with respect to Taxes or Tax Returns; (vi) B2B has not been a member of any federal, state, local or foreign consolidated, unitary, combined or similar group other than a group with B2B as its common parent; (vii) To the knowledge of B2B, there are no federal, state, local or foreign audits, actions, suits, proceedings, investigations, claims or administrative proceedings relating to Taxes or any Tax Returns of B2B now pending, and B2B has not received any notice of any proposed audits, investigations, claims or administrative proceedings relating to Taxes or any Tax Returns; (viii) B2B has not agreed or is required to make any adjustments under section 481(a) of the Code (or any similar provision of state, local and foreign Law) by reason of a change in accounting method or otherwise for any Tax period for which the applicable statute of limitations, including all valid extensions thereof, has not yet expired; (ix) B2B has not received a ruling from any Tax authority. No closing agreement pursuant to section 7121 of the Code (or any similar provision of state, local or foreign Law) has been entered into by or with respect to B2B; (x) B2B has not filed a consent pursuant to section 341(f) of the Code (or any predecessor provision) or has agreed to have section 341(f)(2) of the Code apply to the disposition of a subsection (f) asset (as such term is defined in section 341(f)(4) of the Code) owned by B2B; (xi) No jurisdiction where B2B does not file a Tax Return has made a written claim that B2B is required to file a Tax Return for such jurisdiction; (xii) Other than the Transaction Agreements, B2B (i) is not a party to, is not bound by and does not have any obligation under, any Tax sharing agreement, Tax indemnification agreement or similar contract or arrangement and (ii) does not have any potential liability or obligation to any person as a result of, or pursuant to, any such agreement, contract or arrangement; (b) Other than any Tax Returns which have not yet been required to be filed, B2B has made available to Moneyline true and correct copies of the United States federal income Tax Return and any state, local or foreign Tax Return for any jurisdiction that represents five percent (5%) or more of the taxable income of B2B as filed by B2B for each of the taxable years ended December 31, 2000, 1999 and 1998. (c) B2B has previously delivered or made available to Moneyline complete and accurate copies of each of (i) all audit reports, letter rulings, technical advice memoranda, and similar documents issued by any Tax authority relating to the United States federal, state, local or foreign Taxes due from or with respect to B2B, and (ii) any closing agreements entered into by B2B with any Tax authority in each case existing on the date hereof. 3.14 Affiliated Transactions. (a) Except as set forth on Schedule 3.14(a), no officer, director, or employee of B2B, or a relative, spouse (or relative of such spouse), director, officer, stockholder or affiliate of the foregoing: (i) has any direct or indirect financial interest in any competitor, supplier or customer of B2B, other than VNCI; provided, however, that the ownership of securities representing no more than one percent (1%) of the outstanding voting power of any competitor, supplier or customer, which securities are listed on any national securities exchange or traded actively in the national over-the-counter market, shall not be deemed to be a "financial interest" so long as the person owning such securities has no other connection or relationship with such competitor, supplier or customer; (ii) owns, directly or indirectly, in whole or in part, or has any interest in any tangible or intangible property which B2B uses or has used in the conduct of the business of B2B or otherwise; or (iii) has borrowed money or other property of B2B. (b) Except as set forth on Schedule 3.14(b), B2B has no liabilities, debts or any other obligation of any nature whatsoever to any of Moneyline or any officer, director or employee of B2B or to any relative, spouse (or relative of such spouse), stockholder, director, officer or affiliate of any of the foregoing, other than, in the case of any such officer or employee of B2B, in respect of accrued wages, the reimbursement of expenses and the extension of benefits to such person made in the ordinary course of business consistent with past practice. 3.15 Employees, Employee Benefit Plans; ERISA. (a) Except as set forth on Schedule 3.15(a), there is no (i) collective bargaining agreement or any other agreement with any labor organization to which B2B is a party applicable to the employees of B2B; (ii) unfair labor practice complaint or charge pending or, to B2B's knowledge, threatened against B2B before the National Labor Relations Board or any other federal, state, local or foreign agency; (iii) pending or, to B2B's knowledge, threatened strike, slowdown, work stoppage, lockout or other collective labor action by or with respect to any employees of B2B; (iv) grievance, unfair dismissal or arbitration proceeding pending against B2B; (v) pending or, to B2B's knowledge, threatened complaint, charge, lawsuit or other proceeding against B2B by employees of B2B alleging discrimination, (vi) pending or, to B2B's knowledge, threatened representation question or union organizing activities with respect to any employees of B2B; (vii) pending or, to B2B's knowledge, threatened notice of the intent of any federal, state, local or foreign agency responsible for the enforcement of labor or employment Laws, including, but not limited to, occupational safety and health, to conduct an investigation and no such investigation is in progress with respect to any employees of B2B; (viii) complaint, charge, lawsuit or other proceeding pending or, to B2B's knowledge, threatened in any forum by or on behalf of any present or former employee of B2B, any applicant for employment or classes of the foregoing alleging breach of any express or implied contract or employment, any Law governing employment or the termination thereof or other discriminatory, wrongful or tortious conduct concerning the employment relationship; and (ix) material written personnel policy, rule or procedure applicable to employees of B2B, other than those set forth on Schedule 3.15(a). B2B is, and since December 1, 1999 has been, in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment, wages, hours of work, and occupational safety and health. (b) B2B has at all times properly classified each of their respective employees as employees and each of their independent contractors as independent contractors, as applicable. There is no action, suit or investigation pending or, to the knowledge of B2B, threatened against B2B by any person challenging or questioning the classification by B2B of any person as an independent contractor, including any claim for unpaid benefits, for or on behalf of, any such persons. (c) Within the 12 months preceding the date of this Agreement, there has not been (i) a "plant closing" (as defined in the WARN ACT) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of B2B; or (ii) a "mass layoff" (as defined in the WARN Act) affecting any site of employment or facility of B2B; nor has B2B been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar state, local or foreign Law. Except as set forth on Schedule 3.15(c), the employees of B2B have not suffered an "employment loss" (as defined in the WARN Act) since six (6) months prior to the date of this Agreement. (d) Schedule 3.15(d) contains a true and complete list of (i) each deferred compensation and each bonus or other incentive compensation, stock purchase, stock option and other equity compensation plan, program, agreement or arrangement; (ii) each severance or termination pay, medical, surgical, hospitalization, life insurance and other "welfare" plan, fund or program (within the meaning of Section 3(1) of ERISA; (iii) each profit-sharing, stock bonus or other "pension" plan, fund or program (within the meaning of Section 3(2) of ERISA); (iv) each employment, termination or severance agreement; and (v) each other employee benefit plan, fund, program, agreement or arrangement, in each case, that is sponsored, maintained or contributed to or required to be contributed to by B2B or by any trade or business, whether or not incorporated (a "B2B ERISA Affiliate"), that together with B2B would be deemed a "single employer" within the meaning of Section 4001(b) of ERISA, or to which B2B or an ERISA Affiliate is party, whether written or oral, for the benefit of any employee or former employee of B2B (each, a "B2B Plan"). No B2B Plan is subject to Section 302 or Title IV of ERISA or section 412 of the Code and none of B2B or any B2B ERISA Affiliate has sponsored, maintained, contributed to or been required to contribute to any such plan within the past six (6) years prior to the date hereof. None of B2B or any B2B ERISA Affiliate has any formal plan or commitment to (i) create any additional B2B Plan, or (ii) materially modify or change any existing B2B Plan. No B2B Plan is a "multiemployer plan" within the meaning of Section 3(37) of ERISA. (e) True and complete copies of the following documents relating to each B2B Plan, where applicable, have been delivered or made available to Moneyline: (i) the B2B Plan document, including all amendments thereto; (ii) the most recent summary plan description required under ERISA with respect thereto, summary of material modifications and all material employee communications relating to such B2B Plan; (iii) a copy of the annual report, if required under ERISA, with respect to each such B2B Plan for the last two (2) years; (iv) a copy of the actuarial report, if required under ERISA, with respect to each such B2B Plan for the last two (2) years; (v) if the B2B Plan is funded through a trust or any other funding vehicle, a copy of the trust or other funding agreement (including all amendments thereto) and the latest financial statements thereof; and (vi) the most recent determination letter received from the Internal Revenue Service with respect to each B2B Plan that is intended to be qualified under section 401 of the Code. (f) No liability under Title IV of ERISA has been incurred by B2B or any ERISA Affiliate since the effective date of ERISA that has not been satisfied in full, and no condition exists that presents a material risk to any of B2B or any B2B ERISA Affiliate of incurring a liability under such Title, other than liability for premiums due the PBGC, which payments have been or will be made when due. (g) There are no pending or, to B2B's knowledge, threatened or anticipated claims (other than routine claims for benefits) by, on behalf of, or against, any of the B2B Plans or any trust related thereto. (h) None of B2B, any of the B2B Plans, any trust created thereunder or any trustee, fiduciary or administrator thereof have engaged in a transaction or have taken or failed to take any action in connection with which any of the B2B Plans, any such trust, any trustee, fiduciary or administrator thereof, or any party dealing with the B2B Plans or any such trust could be subject to either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a Tax imposed pursuant to section 4975, 4976 or 4980B of the Code. (i) Each of the B2B Plans has been established, operated and administered in all material respects in accordance with its terms and applicable Laws, including but not limited to ERISA and the Code. All contributions that are required to be made to the B2B Plans have been timely made or have been properly accrued. (j) Each of the B2B Plans that is intended to be "qualified" within the meaning of section 401(a) of the Code is so qualified and no circumstances exist that could result in the disqualification of such B2B Plan and the trusts maintained thereunder are exempt from taxation under section 501(a) of the Code. Each B2B Plan intended to satisfy the requirements of section 501(c)(9) has satisfied such requirements. (k) Except as set forth on Schedule 3.15(k), the consummation of the transactions contemplated by this Agreement and the Transaction Agreements will not, either alone or in combination with another event, (i) entitle any current or former employee or officer of any of B2B or any B2B ERISA Affiliate to severance pay, unemployment compensation or any other payment, except as expressly provided in this Agreement, or (ii) accelerate the time of payment or vesting, or increase the amount of compensation due any such employee or officer. (l) No amounts payable under the B2B Plans or any other agreement or arrangement to which B2B is a party will fail to be deductible for federal income tax purposes by virtue of section 280G of the Code. (m) No B2B Plan provides benefits, including, without limitation, death or medical benefits (whether or not insured), with respect to current or former employees after retirement or other termination of service (other than (i) coverage mandated by applicable Law, (ii) death benefits or retirement benefits under any "employee pension benefit plan," as that term is defined in Section 3(2) of ERISA, or (iii) benefits, the full cost of which is borne by the current or former employee (or his or her beneficiary)). No condition exists that would prevent B2B from amending or terminating any B2B Plan providing health or medical benefits in respect of any active or former employee of B2B. (n) Except as set forth on Schedule 3.15(n), B2B is not a party to (i) any employee benefit arrangements which contain "change of control," retention bonus or similar provisions, (ii) any severance agreements, arrangements or understandings with employees of B2B, or (iii) any oral or written employment contracts or agreements. (o) At the Closing Date, those employees of B2B set forth in Schedule 3.15(o) shall hold options to purchase shares of Common Stock in the amount, and at such price, set forth opposite their name in Schedule 3.15(o). 3.16 Contracts. (a) Except as set forth in Schedule 3.16(a), B2B is not a party to, or bound by, any (i) indenture, mortgage, note, installment obligation, agreement or other instrument relating to the borrowing of money, in excess of $10,000; (ii) license or distribution agreement; or (iii) agreements, commitments, purchase orders, or contracts, to which B2B is a party or to which B2B is bound (any of (i), (ii) or (iii), a ("B2B Contract") which (i) involve the annual payment or receipt by or to B2B, of more than $10,000, (ii) are not cancelable by B2B on less than sixty (60) days' notice, or (iii) otherwise materially affect the business of B2B (including all non-competition and management agreements and arrangements) (collectively, the " B2B Material Contracts"). Each of the B2B Material Contracts is a legal, valid and binding obligation of B2B, enforceable by and against it in accordance with its terms, except as may be limited by applicable bankruptcy, reorganization, insolvency, or other laws affecting creditors' rights generally or by general principles of equity. There is not, under any of the agreements or other obligations specified in Schedule 3.16(a), any event of default or event which, with notice of lapse of time or both, would constitute an event of default on the part of B2B. (b) Schedule 3.16(b) sets forth all B2B Contracts containing any provision or term relating to (i) a change of control of B2B, (ii) non-competition obligations of B2B, (iii) management agreements and arrangements and (iv) agreements to register shares of capital stock of B2B or other registration rights agreements. 3.17 Brokers and Finders. Except as set forth on Schedule 3.17, upon the consummation of the transactions contemplated by this Agreement and the Transaction Agreements, no agent, broker, investment banker or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from B2B in connection with any of the transactions contemplated by this Agreement and the Transaction Agreements. 3.18 Books and Records. The books of account, minute books, stock record books, and other records of B2B, all of which have been made available to Moneyline, are complete and correct in all material respects and have been maintained substantially in accordance with sound business practices, including the maintenance of an adequate system of internal controls. The minute books of B2B contain accurate and substantially complete records of all meetings held of, and corporate or partnership action taken by, the stockholders and the board of directors (and any committees thereof) (or equivalent bodies) of B2B. 3.19 Approvals; State Statutes. (a) The B2B Board of Directors, at a meeting duly called and held, has consented to the Merger and other transactions and matters contemplated by this Agreement and the Merger Agreement, and has not amended, rescinded or modified such consents as of the Closing Date. The Merger Agreement has been approved by a vote of at least 95% of each class of capital stock of B2B entitled to vote on the Merger and Schedule 3.19(a) sets forth the votes of each class of B2B capital stock in favor of the Merger. (b) The Board of Directors has taken all actions necessary or advisable so that the restrictions contained in Section 203 of the DGCL applicable to a "business combination" (as defined in such Section) will not apply to the execution of this Agreement, any of the Transaction Agreements and the transactions contemplated hereby and thereby. The execution, delivery and the performance of this Agreement and the Transaction Agreements will not cause to be applicable to B2B any "fair price," "moratorium," "control share acquisition" or other similar antitakeover statute or regulation enacted under state or federal laws. (c) The stockholders of B2B who have voted in favor of the Merger Agreement (i) have duly consented to the Merger and the other transactions and matters contemplated by the Merger Agreement in accordance with Section 228 of the DGCL, and (ii) do not have any appraisal rights pursuant to Section 262 of the DGCL with respect to any shares of the capital stock of B2B. 3.20 Representations and Warranties by B2B in Merger Agreement. The representations and warranties made by B2B in the Merger Agreement shall be true and correct, as of the date of the Merger Agreement, and as of the Closing Date as if made at and as of such date. 3.21 Full Disclosure. The information furnished by B2B to Moneyline in connection with this Agreement and the Transaction Agreements does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements made, in light of the circumstances under which they were made, not false or misleading. ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF MONEYLINE. Moneyline hereby represents and warrants to VNCI, as of the date hereof, the following: 4.1 Organization. Moneyline is a limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite power and authority to carry on its business as now being conducted. 4.2 Authority. Moneyline has full power and authority necessary to execute, deliver and perform its obligations under this Agreement and each of the Transaction Agreements to which it is a party and to carry out its respective obligations hereunder and thereunder. The execution and delivery by Moneyline of this Agreement and the Transaction Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby by Moneyline has been duly authorized by all necessary action on the part of Moneyline. Moneyline has duly and validly executed and delivered this Agreement and the Transaction Agreements to which it is a party and such agreements constitute the valid and legally binding obligations of Moneyline, enforceable against Moneyline in accordance with their respective terms. 4.3 Consents; No Violation. Neither the execution, delivery or performance by Moneyline of this Agreement and the Transaction Agreements to which it is a party nor the consummation of the transactions contemplated hereby and thereby, will (i) conflict with or result in a breach of any provision of the certificate of formation or limited liability company agreement of Moneyline; (ii) violate, or conflict with, or result in a breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or give rise to a right of termination, cancellation, modification or acceleration of the performance required by or a loss of a benefit under, any material note, bond, mortgage, indenture, deed of trust, lease, license, agreement, commitment, contract or other instrument or obligation to which Moneyline is a party or by which its respective properties are bound or affected; (iii) violate any Order applicable to Moneyline or by which its properties is bound or affected; (iv) result in the creation of any material Encumbrance; or (v) require any consent, approval or authorization of, notification to, filing with, or exemption or waiver by, any Governmental Authority or any other Person on the part of Moneyline. 4.4 Investment Representation. Moneyline is accepting the Moneyline Shares being acquired by it hereunder for investment purposes only and without any view to distribute, resell or otherwise transfer the same, except in compliance with applicable securities laws. 4.5 Brokers and Finders. Upon the consummation of the transactions contemplated by this Agreement and the Transaction Agreements, no agent, broker, investment banker or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from Moneyline in connection with any of the transactions contemplated by this Agreement and the Transaction Agreements. 4.6 Availability of Funds. Moneyline has available sufficient funds to pay the Moneyline Consideration. ARTICLE 5. COVENANTS. 5.1 Public Announcements. The parties hereto agree that no press release, public announcement or response to any press inquiry concerning this Agreement or any of the Transaction Agreements or the transactions contemplated hereby and thereby shall be made without advance approval thereof by the other parties hereto; provided that if any announcement is required by Law or the rules of any securities exchange or market to be made by any party hereto, prior to making such announcement, such party will, to the extent practicable, deliver a draft of such announcement to the other parties hereto and shall give the other parties reasonable opportunity to comment thereon. Upon execution hereof and upon the Closing, VNCI and Moneyline shall issue a press release, in the form attached as Exhibit N hereto, regarding this Agreement and the Transaction Agreements and the transactions contemplated hereby and thereby, and VNCI shall file an 8-K attaching this Agreement and the Transaction Agreements as exhibits thereto. 5.2 Board of Directors. (a) Immediately following the Closing, VNCI and the Board of Directors shall exercise all authority under applicable law necessary to duly appoint David Walsh, Alexander Russo and Jonathan Robson (collectively, the "Moneyline Directors") to the Board of Directors and upon such appointments the Board of Directors shall consist of a total of six directors, comprised of the Moneyline Directors and 3 other directors, all of whom were existing members of the Board of Directors immediately prior to the Closing. (b) Upon the Closing, VNCI shall file, or caused to be filed, with the SEC, all filings required by Rule 14f-1 of the Exchange Act in order to cause the appointment of Charles Auster to the Board of Directors. On the eleventh day following such filing, VNCI and the Board of Directors shall exercise all authority under applicable law necessary to duly appoint Charles Auster to the Board of Directors on such date. 5.3 Further Assurances. Any time after the Closing, VNCI shall, or cause its proper officers and directors to, from time to time, at the reasonable request of Moneyline, execute and deliver such other instruments of conveyance and transfer and to take such other actions as Moneyline may reasonably request, in order to consummate the transactions contemplated hereby and by the Transaction Agreements and to vest in Moneyline, the Noteholders or the B2B Noteholders, the right, title and interest in and to the number of Moneyline Shares, Note Conversion Shares, or the B2B Conversion Shares, as applicable. 5.4 Transaction Fees and Expenses. (a) Except as provided in this Section 5.4, each party hereto shall be responsible for all of its respective legal, accounting, advisory and other fees and expenses ("Transaction Expenses") incurred in connection with this Agreement and the Transaction Agreements and the consummation of the transactions contemplated hereby and thereby. The Transaction Expenses incurred by VNCI and the Subsidiaries shall be paid by VNCI at closing, are set forth in Schedule 5.4(a). The Transaction Expenses incurred by B2B shall be paid by VNCI at closing and are set forth in Schedule 5.4(a), and together with the Transaction Expenses incurred by VNCI and the Subsidiaries shall not exceed $2,000,000. (b) Any and all sales, use, transfer, stamp, duties, gains, recording or similar Taxes ("Transfer Taxes") arising pursuant to the purchase and sale of Shares under this Agreement shall be paid by VNCI. (c) Any Tax Returns that must be filed in connection with any Transfer Taxes shall be prepared and filed when due by the party primarily or customarily responsible under the applicable Law for filing such Tax Returns. If such party is Moneyline, VNCI shall pay to Moneyline in immediately available funds, the Transfer Taxes reported on such Tax returns prior to the due date for such Tax Returns. 5.5 Director Indemnification Agreements. Concurrently with the execution of this Agreement, VNCI shall enter into indemnification agreements in the form attached as Exhibit O hereto, with those individuals set forth on Schedule 5.5. 5.6 Technology License Agreements. Concurrently with the execution of this Agreement, (i) VNCI and Moneyline shall enter into a license agreement with respect to the technology of VNCI in the form of Exhibit P hereto and (ii) B2B and Moneyline shall enter into a license agreement with respect to the technology of B2B in the form of Exhibit Q hereto. 5.7 Significant Transactions. During the period commencing on the Closing Date and terminating on the date of the due appointment of Charles Auster to the Board of Directors, the Company shall not enter into, or agree to enter into, any Significant Transaction (as such term is defined in the Stockholders Agreement). 5.8 Annual Report Filing. On the date hereof, VNCI shall cause its Annual Report on Form 10-K to be duly filed with the SEC. ARTICLE 6. INDEMNIFICATION; SURVIVAL. ------------------------- 6.1 Indemnification Obligations. (a) VNCI shall indemnify, defend and hold harmless OEP and Moneyline, each of their respective subsidiaries and affiliates, their successors and assigns, and their officers, directors, stockholders, employees and affiliates from and against and shall reimburse the same for and in respect of any and all losses, costs, fines, liabilities, claims, penalties, damages and expenses (including all legal fees and expenses) of any nature or kind, known or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated (collectively "Losses") which may be claimed or assessed against any of them or to which any of them may be subject in connection with any and all claims, suits or asserted Losses which arise from or are related to (i) any misrepresentation or breach of any representation or warranty made by VNCI in this Agreement or any of the Transaction Agreements; or (ii) any breach of any covenant or agreement made by VNCI in this Agreement or any of the Transaction Agreements. (b) Moneyline shall indemnify, defend and hold harmless VNCI, its subsidiaries and affiliates, its successors and assigns, and its officers, directors, stockholders, employees and affiliates from and against and shall reimburse the same for and in respect of any and all Losses which may be claimed or assessed against any of them or to which any of them may be subject in connection with any and all claims, suits or asserted Losses which arise from or are related to (i) any misrepresentation or breach of any representation or warranty made by Moneyline in this Agreement or any of the Transaction Agreements; or (ii) any breach of any covenant or agreement made by Moneyline in this Agreement or any of the Transaction Agreements. 6.2 Indemnification Procedures. (a) Notice. A party entitled to indemnification under this Article 6 (an "Indemnified Party") agrees to give each party obligated to provide indemnification pursuant to this Article 6 (an "Indemnifying Party") prompt written notice (the "Claim Notice") of any claim, assertion, event, condition or proceeding by or in respect of any third party (each, a "Third Party Claim") of which it has knowledge concerning any liability or damage as to which it may request indemnification hereunder, provided, however, that failure of the Indemnified Party to give the Claim Notice will not relieve the Indemnifying Party from liability hereunder unless solely and to the extent the Indemnifying Party did not otherwise learn of such Third Party Claim and such failure results in the forfeiture by the Indemnifying Party of substantial rights and defenses, and will not in any event relieve the Indemnifying Party from any obligations to the Indemnified Party other than the indemnification obligation provided herein. A Claim Notice shall describe the Third Party Claim in reasonable detail and shall indicate the amount (estimated if necessary) of the Loss that has been or may be sustained by or is claimed against such Indemnified Party. (b) Conduct of Defense. An Indemnifying Party shall have the right, upon written notice to the Indemnified Party (the "Defense Notice") within five (5) days of its receipt from the Indemnified Party of the Claim Notice, to conduct at its expense the defense against such Third Party Claim in its own name, or, if necessary, in the name of the Indemnified Party. When the Indemnifying Party assumes the defense, the Indemnified Party shall have the right to approve the defense counsel and the Indemnified Party will have no liability for any compromise or settlement of any such claim that is effected without its prior written consent, unless the sole relief provided is monetary damages that are paid in full by the Indemnifying Party and such compromise or settlement includes a release of each Indemnified Party from any liabilities arising out of such Third Party Claim. In the event that the Indemnifying Party does deliver a Defense Notice and thereby elects to conduct the defense of such Third Party Claim, the Indemnified Party will, at the Indemnifying Party's sole expense, cooperate with and make available to the Indemnifying Party such assistance, personnel, witnesses and materials as the Indemnifying Party may reasonably request. Regardless of which party defends such Third Party Claim, the other party shall have the right at its expense to participate in the defense assisted by counsel of its own choosing. In the event that the Indemnifying Party shall fail to give the Defense Notice within the time prescribed by this Section 6.2(b), the Indemnified Party shall have the sole right to conduct such defense and the Indemnified Party may pay, compromise or defend such claim or proceeding at the Indemnifying Party's expense. In the event any Indemnified Party should have a claim against any Indemnifying Party hereunder which does not involve a Third Party Claim, the Indemnified Party shall promptly transmit to the Indemnifying Party a written notice (the "Indemnity Notice") describing in reasonable detail the nature of the claim and the basis of the Indemnified Party's request for indemnification under this Agreement, provided, however, that failure of the Indemnified Party to give the Indemnity Notice will not relieve the Indemnifying Party from liability hereunder unless solely and to the extent the Indemnifying Party did not otherwise learn of such claim and such failure results in the forfeiture by the Indemnifying Party of substantial rights and defenses, and will not in any event relieve the Indemnifying Party from any obligations to the Indemnified Party other than the indemnification obligation provided herein. 6.3 Limitations on Indemnification. Notwithstanding anything to the contrary in this Agreement, (i) the maximum aggregate liability of VNCI pursuant to Section 6.1(a)(i) shall be the Issuance Price; and (ii)the maximum aggregate liability of Moneyline pursuant to Section 6.1(b) shall be the Moneyline Consideration. No claim may be made against VNCI by Moneyline for indemnification with respect to breaches of representations and warranties pursuant to Section 6.1(a)(i) with respect to any Losses unless the aggregate amount of the Losses incurred by Moneyline thereunder exceeds $250,000. Any amount payable by an Indemnifying Party pursuant to this Article 6, shall be calculated net of any payments that the Indemnified Party has received under any insurance policy with respect to such Losses. 6.4 Survival of Representations, Warranties and Covenants. Except as set forth in this Section 6.4, the representations and warranties of the parties contained herein shall survive until the second anniversary of the Closing (the "Expiration Date"), and no party may seek indemnification under this Article 6 with respect to a breach of a representation or warranty after the Expiration Date; provided, however, that the representations and warranties contained in Sections 2.1, 2.2, 2.5, 2.6, 2.14, 2.15, 2.16, 3.1, 3.2, 3,5, 3.6, 3.13, 3.14 and 3.15 shall survive until 90 days after the applicable statute of limitations (including any and all valid extensions thereof) and a party may seek indemnification with respect to a breach of such representation or warranty any time prior to the expiration of such statute of limitations. Notwithstanding anything to the contrary contained herein, all representations and warranties made by each of VNCI, B2B and Moneyline in this Agreement or in any schedule or other document delivered pursuant hereto, and the liability with respect thereto, shall not terminate with respect to any claim, whether or not fixed as to liability or liquidated as to amount, with respect to which such party has been given written notice stating the nature of the claim prior to the date on which such representation or warranty expires. The parties' respective covenants and agreements contained in this Agreement or in any certificate, schedule, list, exhibit, agreement, document or other writing delivered pursuant hereto or in connection with the transactions contemplated hereby shall survive indefinitely unless otherwise set forth herein or therein. Notwithstanding anything to the contrary in this Agreement, (a) no investigation by, or knowledge of, a party shall affect the representations, warranties, covenants and agreements of the other parties under this Agreement or in any certificate, schedule, list, exhibit, agreement, document or other writing delivered pursuant hereto or in connection with the transactions contemplated hereby and by the Transaction Agreements furnished or to be furnished to the other parties and (b) such representations, warranties, covenants and agreements shall not be affected or deemed waived by reason of the Closing or of the fact that the other party or parties knew or should have known that any of the same is or might be inaccurate in any respect. ARTICLE 7. CONDITIONS TO CLOSING. 7.1 Conditions to Obligations of Moneyline. The obligations of Moneyline under this Agreement are subject to the satisfaction or waiver in writing at or prior to the Closing Date of the following conditions: (a) (i) VNCI shall have performed in all material respects its obligations under this Agreement and the Transaction Agreements required to be performed by it at or prior to the Closing Date and (ii) the representations and warranties of VNCI contained in this Agreement shall be true and correct in all respects as of the Closing Date as if made at and as of such dates. (b) Moneyline shall have received a certificate, signed by the chief executive officer and chief financial officer of VNCI, dated the Closing Date, to the effect that, to the best of such officers' knowledge, the condition set forth in Section 7.1(a) has been satisfied. (c) (i) B2B shall have performed in all material respects its obligations under this Agreement and the Merger Agreement required to be performed by it at or prior to the Closing Date and (ii) the representations and warranties of B2B contained in this Agreement shall be true and correct in all respects as of the Closing Date as if made at and as of such dates. (d) Moneyline shall have received a certificate, signed by the chief executive officer and chief operating officer of B2B, dated the Closing Date, to the effect that, to the best of such officers' knowledge, the condition set forth in Section 7.1(c) has been satisfied. (e) VNCI shall have caused to be delivered to Moneyline (i) the opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., special counsel to VNCI, or such other counsel reasonably acceptable to Moneyline, in the form of opinion attached hereto as Exhibit R; (ii) the opinion of Graubard Miller, special counsel to B2B, or such other counsel reasonably acceptable to Moneyline, in the form of opinion attached hereto as Exhibit S; (iii) the opinion of Graubard Miller, special tax counsel to B2B, or such other counsel reasonably acceptable to Moneyline, in the form of opinion attached hereto as Exhibit T; (iv) the opinion of Potter Anderson & Corroon LLP, special Delaware counsel to B2B, or such other counsel reasonably acceptable to Moneyline, in the form of opinion attached hereto as Exhibit U; and (v) the reliance letter of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., special counsel to VNCI, or such other counsel reasonably acceptable to Moneyline, regarding such special counsel's opinion pursuant to the Merger Agreement, in the form of letter attached hereto as Exhibit V. The failure of VNCI to deliver any opinion or letter required by this Section 7.1(e) shall constitute a breach of Section 5.3 by VNCI. (f) The Stockholders Agreement shall have been executed by VNCI and remain in full force and effect as of the Closing Date. (g) (i) The Promissory Notes shall have been converted into shares of Common Stock by the Noteholders concurrently with the Closing and evidence of each such conversion shall have been delivered to Moneyline; (ii) each of the Conversion Notices shall have been executed and delivered to Moneyline and shall be in full force and effect as of the Closing Date; (iii) the B2B Promissory Notes shall have been converted into shares of Common Stock by the holders thereof pursuant to such Conversion Notice immediately prior to or concurrently with the Closing; and (iv) the holders set forth on Schedule 7.1(g) of the warrants set forth on Schedule 7.1(g) shall have agreed to terminate such warrants and satisfactory evidence thereof shall have been delivered to Moneyline. (h) Each of the Releases shall have been executed and delivered to Moneyline and shall be in full force and effect as of the Closing Date. (i) The Sanmina Release shall have been executed and delivered to VNCI and be in full force and effect as of the Closing Date. (j) The Shaw Pittman Release shall have been executed and delivered to VNCI and be in full force and effect as of the Closing Date. (k) Holders of the Promissory Notes have executed an authorization for VNCI to file all necessary filings required to terminate such holders' security interests in the intellectual property of VNCI, including, without limitation, any filings required by the Uniform Commercial Code and any required filings, recordations, assignments and releases with the United States Patent and Trademark Office, the United States Copyright Office and the corresponding offices in the applicable foreign jurisdictions. (l) VNCI shall have delivered to Moneyline a final and binding settlement executed by both parties with respect to that litigation entitled Hamouth Family Trust v. VNCI, filed February 11, 2002 in the Delaware Court of Chancery. (m) Concurrently with this Agreement, the Board of Directors shall have caused the termination of each of VNCI's 1999 Stock Incentive Plan, 1996 Stock Incentive Plan and 1994 Stock Incentive Plan. (n) All closing deliveries of Section 1.2(b) shall have been made. (o) The Subscription Agreements shall have been executed by the Investors and VNCI and remain in full force and effect as of the Closing Date. (p) The Director Indemnification Agreements shall have been executed by VNCI and the individual directors. ARTICLE 8. MISCELLANEOUS PROVISIONS. 8.1 Entire Agreement; Assignment. This Agreement (including the Exhibits and the Schedules and the other documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties, with respect to the subject matter hereof. This Agreement and the rights and obligations may not be assigned in whole or in part by any party hereto, including by operation of law or otherwise except (a) with the written consent of the other parties hereto (b) by Moneyline to one or more direct or indirect subsidiaries or other Affiliates of it, which assignment shall not relieve Moneyline of any of its obligations hereunder, or (c) by Moneyline as collateral security to any entity providing direct or indirect financing to Moneyline or any of its Affiliates. 8.2 Notices All notices, requests, consents, instructions and other communications required or permitted to be given hereunder shall be in writing and shall be deemed given upon (a) confirmation of receipt of a facsimile transmission, (b) confirmed delivery by a standard overnight carrier or when delivered by hand, or (c) the expiration of three (3) business days after the day when mailed by registered or certified mail (postage prepaid, return receipt requested), addressed to the respective parties at the following addresses (or such other address for a party as shall be specified by like notice): (a) if to Moneyline, to: MONEYLINE NETWORKS, LLC 233 Broadway New York, New York 10279 Attention: Alexander Russo Fax: 212-553-2598 and ONE EQUITY PARTNERS LLC 320 Park Avenue, 18th Floor New York, New York 10022 Attention: David Walsh Fax: 212-553-2599 with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Attention: Joseph A. Coco, Esq. Fax: 917-777-3050 (b) if to VNCI, to: Video Network Communications, Inc. 50 International Drive Portsmith, New Hampshire 03801 Attention: President Fax: (603) 334-6472 with a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. 666 Third Avenue, 25th Floor New York, New York 10017 Attention: Kenneth Koch, Esq. Fax: 212-983-3115 (c) if to B2B, to: B2BVIDEO NETWORK CORP. 301 Route 17 North, Suite 705 Rutherford, New Jersey 07070 Attention: President Fax: (201) 935-4936 with a copy to: Graubard Miller 600 Third Avenue New York, New York 10016 Attention: David Alan Miller, Esq. Fax: 212-983-3115 or such other address or persons as the parties may from time to time designate in writing in the manner provided in this Section 8.2. Copies of all notices pursuant to this Section 8.2 shall also be sent to EarlyBirdCapital, Inc., One State Street Plaza, New York, New York, 10004, Attention: Investment Banking Department. 8.3 Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. As used in this Agreement, "Person" shall mean any individual, corporation, partnership, limited liability company, joint venture, estate, trust, association, division, organization, labor union or entity of any kind whatsoever, including any Governmental Authority. References to a Person are also to its permitted successors and assigns. 8.4 Amendments and Waivers This Agreement may be amended, superseded, cancelled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by each of Moneyline and VNCI or, in the case of a waiver, by the party waiving compliance or his or her representative. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any waiver on the part of any party of any such right, power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege. 8.5 Severability This Agreement shall be deemed severable and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. 8.6 Governing Law; Jurisdiction and Venue This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to choice of law principles. Except as set forth herein, each party hereto hereby agrees that any proceeding relating to this agreement and the transactions contemplated hereby shall be brought in a State Court of New York or a federal court located in the City of New York. Each party hereto hereby consents to personal jurisdiction in any such action brought in any such New York or federal court, consents to service of process by registered mail made upon such party and such party's agent and waives any objection to venue in any such New York or federal court and any claim that any such New York or federal court is an inconvenient forum. 8.7 Schedules and Exhibits. The Schedules and Exhibits attached hereto are a part of this Agreement as if fully set forth herein. 8.8 No Third Party Beneficiaries Except as expressly contemplated in this Agreement, this Agreement shall be binding upon and inure solely to the benefit of each party hereto and nothing in this Agreement is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement. 8.9 WAIVER OF JURY TRIAL EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, AND (iii) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.9. 8.10 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. 8.11 Acknowledgements. The parties hereto acknowledge and agree that (i) each party has reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to contribute to its revision, and (ii) each party has been represented by counsel in reviewing and negotiating such terms and provisions. Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party. [Signature Page Follows] IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. MONEYLINE NETWORKS, LLC By: /s/ Alexander Russo --------------------------------------- Name: Alexander Russo Title: Executive Vice President, Corporate Development and General Counsel VIDEO NETWORK COMMUNICATIONS, INC. By: /s/ Robert Emery -------------------------------------- Name: Robert Emery Title: Chief Financial Officer B2BVIDEO NETWORK CORP. By: /s/ Cheryl Snyder -------------------------------------- Name: Cheryl Snyder Title: Chief Executive Officer EX-99 6 s367527a.txt EXHIBIT D Exhibit D NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER THE ACT ON AN EXEMPTION THEREFROM. Warrant No.___ 11,250,000 Shares VIDEO NETWORK COMMUNICATIONS, INC. Warrant to Purchase 11,250,000 Shares (Subject to Adjustment) of Common Stock of THIS WARRANT EXPIRES May 16, 2012. THIS IS TO CERTIFY THAT Moneyline Networks, LLC, a Delaware limited liability company ("Moneyline"), or its registered assigns, is entitled, at any time prior to the Expiration Date (such term, and certain other capitalized terms used herein being hereinafter defined), upon the terms and conditions set forth herein, to purchase from Video Network Communications, Inc., a Delaware corporation (the "Company"), 11,250,000 shares (subject to adjustment as provided herein) of the Company's Common Stock (as hereinafter defined) at purchase price of $0.60 per share (the initial "Exercise Price", subject to adjustment as provided herein). ARTICLE I DEFINITIONS. As used in this Warrant, the following terms have the respective meanings set forth below: "Affiliate" of any Person means any other Person which directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term "control" (including the terms "controlled by" and "under common control with") as used with respect to any Person means the possession, directly or indirectly, of the power to direct, influence or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. "Agreed Rate" means the rate of interest announced publicly by Citibank, N.A. in New York, New York, from time to time, as Citibank, N.A.'s base rate. "Board of Directors" means the Board of Directors of the Company. "Business Day" means any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of New York. "Commission" means the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws. "Common Stock" means the Common Stock of the Company, par value $.01 per share, as constituted on the Original Issue Date, and any capital stock into which such Common Stock may thereafter be changed, and shall also include (i) capital stock of the Company of any other class (regardless of how denominated) issued to the holders of shares of any Common Stock upon any reclassification thereof which is also not preferred as to dividends or liquidation over any other class of stock of the Company and which is not subject to redemption and (ii) shares of common stock of any successor or acquiring corporation (as defined in Section 4.6 hereof) received by or distributed to the holders of Common Stock of the Company in the circumstances contemplated by Section 4.6 hereof. "Designated Office" has the meaning set forth in Section 9 hereof. "Excluded Stock" means (i) the issuance of Common Stock upon exercise of any options to purchase up to 828,112 shares of Common Stock awarded to employees or directors of the Company pursuant to an employee stock option plan or restricted stock plan approved by the Company's Board of Directors, (ii) the issuance of up to 7,750,000 shares of Common Stock to purchasers introduced by EarlyBirdCapital, Inc., or (iii) an issuance of Common Stock as a dividend, subdivision or split in respect of which an adjustment provided in Section 4.4 applies. "Exercise Date" has the meaning set forth in Section 2.1 hereof. "Exercise Notice" has the meaning set forth in Section 2.1 hereof. "Exercise Price" means, in respect of a share of Common Stock at any date herein specified, the Exercise Price set forth in the preamble of this Warrant as adjusted from time to time pursuant to Section 4 hereof. "Expiration Date" means May 16, 2012. "Fair Market Value" means, as to any security, the fair market value determined by the Board of Directors in its good faith judgment. "GAAP" means United States generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, which are in effect from time to time. "Holder" means (a) with respect to this Warrant, the Person in whose name the Warrant set forth herein is registered on the books of the Company maintained for such purpose and (b) with respect to any other Warrant or shares of Warrant Stock, the Person in whose name such Warrant or Warrant Stock is registered on the books of the Company maintained for such purpose. "Lien" means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the Uniform Commercial Code or comparable law of any jurisdiction). "Original Issue Date" means May 16, 2002. "Person" means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, incorporated organization, association, corporation, institution, public benefit corporation, entity or government (whether federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof). "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "Subsidiary" means any corporation, association trust, limited liability company, partnership, joint venture or other business association or entity (i) at least 50% of the outstanding voting securities of which are at the time owned or controlled directly or indirectly by the Company; or (ii) with respect to which the Company possesses, directly or indirectly, the power to direct or cause the direction of the affairs or management of such Person. "Transfer" means any disposition of any of this Warrant or Warrant Stock or of any interest therein, which would constitute a "sale" thereof or a transfer of a beneficial interest therein within the meaning of the Securities Act. "Warrant Price" means an amount equal to (i) the number of shares of Common Stock being purchased upon exercise of this Warrant pursuant to Section 2.1 hereof, multiplied by (ii) the Exercise Price (as adjusted pursuant to Section 4). "Warrants" means this Warrant and all Warrants issued upon transfer, division or combination of, or in substitution for, this Warrant or any other such subsequently issued Warrant. All Warrants shall at all times be identical as to terms and conditions, except as to the number of shares of Common Stock for which they may be exercised and their date of issuance. "Warrant Stock" means the shares of Common Stock issued, issuable or both (as the context may require) upon the exercise of Warrants. ARTICLE II EXERCISE OF WARRANT. 2.1 Manner of Exercise. (a) During the period commencing the date hereof and terminating at 5:00 P.M., New York time, on the Expiration Date, the Holder of this Warrant may from time to time exercise this Warrant, on any Business Day, for all or any part of the number of shares of Common Stock purchasable hereunder. In order to exercise this Warrant, in whole or in part, the Holder shall (i) deliver to the Company at its Designated Office a written notice of the Holder's election to exercise this Warrant (an "Exercise Notice"), which Exercise Notice shall be irrevocable and specify the number of shares of Common Stock to be purchased, together with this Warrant and (ii) pay to the Company the Warrant Price (the date on which both such delivery and payment shall have first taken place being hereinafter sometimes referred to as the "Exercise Date"). Such Exercise Notice shall be in the form of the exercise form appearing at the end of this Warrant as Annex A, duly executed by the Holder or its duly authorized agent or attorney. (b) Upon receipt by the Company of such Exercise Notice, the Warrant and payment, the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the aggregate number of full shares of Common Stock issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereafter provided. The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Notice and shall be registered in the name of the Holder or, subject to compliance with Section 3, such other name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the Exercise Date. (c) Payment of the Warrant Price shall be made at the option of the Holder by delivery of a certified or official bank check or by wire transfer of immediately available funds in the amount of such Warrant Price payable to the order of the Company. (d) If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing the shares of Common Stock being issued, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased shares of Common Stock called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant. (e) All Warrants delivered for exercise shall be canceled by the Company. 2.2 Payment of Taxes. All shares of Common Stock issuable upon the exercise of this Warrant pursuant to the terms hereof shall be validly issued, fully paid and nonassessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all Liens (other than any created by actions of the Holder). The Company shall pay all expenses in connection with, and all sales, use, transfer, stamp, duty, recording or similar taxes and other governmental charges, but excluding income taxes ("Transfer Taxes") that may be imposed with respect to, the issue or delivery thereof. 2.3 Fractional Shares. The Company shall not be required to issue a fractional share of Common Stock upon exercise of any Warrant. As to any fraction of a share that the Holder of one or more Warrants, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash equal to such fraction multiplied by the Fair Market Value of one share of Common Stock on the Exercise Date. 2.4 Conversion Right. (a) In lieu of the payment of the Warrant Price in the manner required by Section 2.1, 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 Warrant 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. 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 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. (b) The Conversion Right may be exercised by the Holder on any business day on or after the Original Issuance 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. ARTICLE III TRANSFER, DIVISION AND COMBINATION. 3.1 Transfer. The Holder of this Warrant, by acceptance hereof, agrees to comply in all respects with the provisions of this Section 3.1. Prior to any proposed transfer of this Warrant or the Warrant Stock, unless there is in effect a registration statement under the Securities Act covering the proposed transfer, the Holder of such securities shall give written notice to the Company of such Holder's intention to effect such transfer. Each such notice shall describe the manner and circumstances of the proposed transfer in sufficient detail, and shall be accompanied (except in transactions in compliance with Rule 144) by either (i) a written opinion of legal counsel who shall be reasonably satisfactory to the Company addressed to the Company and reasonably satisfactory in form and substance to the Company's counsel, to the effect that the proposed transfer of the Warrant and/or Warrant Stock may be effected without registration under the Securities Act, or (ii) a "no action" letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that enforcement action be taken with respect thereto, whereupon the Holder of such securities shall be entitled to transfer such securities in accordance with the terms of the notice delivered by the Holder to the Company. Notwithstanding the provisions of subsections (i) and (ii) above, no such registration statement, opinion of counsel or "no action" letter shall be necessary for a transfer by a Holder that is a limited liability company to a member or Affiliates, or by a Holder that is a corporation to its stockholders or Affiliates, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if he, she or it were an original Holder hereunder. Each new certificate evidencing the Warrant and/or Warrant Stock so transferred shall bear the appropriate restrictive legends set forth on the first page of this Warrant, except that such certificate shall not bear such restrictive legend, if, in the opinion of counsel for the Company, such legend is not required in order to establish or assist in compliance with any provisions of the Securities Act or any applicable state securities laws. Upon compliance with the provisions of this Section 3.1, each transfer of this Warrant and all rights hereunder, in whole or in part, shall be registered on the books of the Company to be maintained for such purpose, upon surrender of this Warrant at the Designated Office, together with a written assignment of this Warrant in the form of Annex B hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any Transfer Taxes in connection with the making of such transfer. Upon such surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned and this Warrant shall promptly be cancelled. A Warrant may be exercised by the new Holder for the purchase of shares of Common Stock without having a new Warrant issued. 3.2 Division and Combination. Subject to compliance with the applicable provisions of this Warrant, this Warrant may be divided or combined with other Warrants upon presentation hereof at the Designated Office, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with the applicable provisions of this Warrant as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. 3.3 Expenses. The Company shall prepare, issue and deliver at its own expense any new Warrant or Warrants required to be issued under this Section 3. 3.4 Maintenance of Books. The Company agrees to maintain, at the Designated Office, books for the registration and transfer of the Warrants. ARTICLE IV ANTIDILUTION PROVISIONS. The number of shares of Common Stock for which this Warrant is exercisable and the Exercise Price shall be subject to adjustment from time to time as set forth in this Section 4. 4.1 Upon Issuance of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, issue to any Person other than the Holder or any of its Affiliates any shares of 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, other than Excluded Stock, without consideration or for consideration per share less than the Exercise Price in effect immediately prior to the issuance of such Common Stock, then such Exercise Price shall forthwith be lowered to a price equal to the consideration per share for which such Common Stock, securities or options were issued. 4.2 Upon Acquisition of Common Stock. If the Company or any Subsidiary shall, at any time or from time to time after the Original Issue Date, directly or indirectly, redeem, purchase or otherwise acquire from any Person other than the Holder or any of its Affiliates any shares of Common Stock, 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, for a consideration per share greater than the Fair Market Value (plus, in the case of such options, rights, or securities, the additional consideration required to be paid to the Company upon exercise, conversion or exchange) for shares of Common Stock in effect immediately prior to such event, then the Exercise Price shall forthwith be lowered to a price equal to the price obtained by multiplying: (i) the Exercise Price in effect immediately prior to such event by: (ii) a fraction of which (x) the denominator shall be the Fair Market Value per share of Common Stock immediately prior to such event and (y) the numerator shall be the result of dividing: (A) (1) the product of (a) the number of shares of Common Stock outstanding on a fully-diluted basis and (b) the Fair Market Value per share of Common Stock, in each case immediately prior to such event, minus (2) the aggregate consideration paid by the Company in such event (plus, in the case of such options, rights, or convertible or exchangeable securities, the aggregate additional consideration to be paid by the Company upon exercise, conversion or exchange), by (B) the number of shares of Common Stock outstanding on a fully-diluted basis immediately after such event. 4.3 Provisions Applicable to Adjustments. For the purposes of any adjustment of the number of shares of Common Stock purchasable on the exercise of the Warrants pursuant to Section 4.1 or 4.2, the following provisions shall be applicable: (a) In the case of the issuance of Common Stock for cash in a public offering or private placement, the consideration shall be deemed to be the amount of cash paid therefor before deducting therefrom any discounts, commissions or placement fees payable by the Company to any underwriter or placement agent in connection with the issuance and sale thereo. (b) 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 Market Value thereof; provided that if the consideration does not consist of securities, as for example in a strategic alliance, the Board of Directors shall determine the value of such consideration in good faith. (c) 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: (i) the aggregate maximum number of shares of Common Stock deliverable upon exercise 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 (determined in the manner provided in subparagraphs (a) and (b) above), if any, received by the Company upon the issuance of such options or rights plus the minimum purchase price provided in such options or rights for the Common Stock covered thereby; (ii) the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange of 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, options, or rights were issued and for a consideration equal to the consideration 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 additional consideration, if any, to be received by the Company upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in paragraphs (a) and (b) above); (iii) on any change in the number of shares or exercise price of Common Stock deliverable upon exercise of any such options or rights or conversions of or exchanges for such securities, other than a change resulting from the antidilution provisions thereof, the Exercise Price shall forthwith be readjusted to such Exercise Price as would have been obtained had the adjustment made upon the issuance of such options, rights or securities not converted prior to such change or options or rights related to such securities not converted prior to such change been made upon the basis of such change; and (iv) no further adjustment of the Exercise Price adjusted upon the issuance of any such options, rights, convertible securities or exchangeable securities shall be made as a result of the actual issuance of Common Stock on the exercise of any such rights or options or any conversion or exchange of any such securities. 4.4 Upon Dividends, Subdivisions or Splits. If, at any time after the Original Issue Date, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock, then, following the record date for the determination of holders of Common Stock entitled to receive such stock dividend, or to be affected by such subdivision or split-up, the Exercise Price shall be appropriately decreased so that the number of shares of Common Stock purchasable on exercise of the Warrants shall be increased in proportion to such increase in outstanding shares. 4.5 Upon Combinations. If, at any time after the Original Issue Date, the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then, following the record date to determine shares affected by such combination, the Exercise Price shall be appropriately increased so that the number of shares of Common Stock purchasable on exercise of the Warrants shall be decreased in proportion to such decrease in outstanding shares. 4.6 Upon Reclassifications, Reorganizations, Consolidations or Mergers. In the event of any capital reorganization of the Company, any reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), or any consolidation or merger of the Company with or into another Person (where the Company is not the surviving Person or where there is a change in or distribution with respect to the Common Stock), each Warrant shall after such reorganization, reclassification, consolidation, or merger be exercisable into the kind and number of shares of stock or other securities or property of the Company or of the successor Person resulting from such consolidation or surviving such merger, if any, to which the holder of the number of shares of Common Stock deliverable (immediately prior to the time of such reorganization, reclassification, consolidation or merger) upon exercise of such Warrant would have been entitled upon such reorganization, reclassification, consolidation or merger. The provisions of this clause shall similarly apply to successive reorganizations, reclassifications, consolidations, or mergers. The Company shall not effect any such reorganization, reclassification, consolidation or merger unless, prior to the consummation thereof, the successor corporation (if other than the Company) resulting from such reorganization, reclassification, consolidation, shall assume, by written instrument, the obligation to deliver to the Holders of the Warrants such shares of stock, securities or assets, which, in accordance with the foregoing provisions, such Holders shall be entitled to receive upon such conversion. 4.7 Adjustment of Number of Shares Purchasable. Upon any adjustment of the Exercise Price as provided in Section 4.2, 4.4, 4.5 and 4.6, the Holders of the Warrants shall thereafter be entitled to purchase upon the exercise thereof, at the Exercise Price resulting from such adjustment, the number of shares of Common Stock (calculated to the nearest 1/100th of a share) obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock issuable on the exercise hereof immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. 4.8 Notice of Adjustment of Warrants. Whenever the Exercise Price is adjusted as herein provided: (i) the Company shall compute the adjusted Exercise Price accordance with this Section 4 and shall prepare a certificate signed by the Treasurer or Chief Financial Officer of the Company setting forth such adjusted Exercise Price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at each office or agency maintained for such purpose or exercise of Warrants; and (ii) a notice stating that the Exercise Price has been adjusted and setting forth the adjusted Exercise Price shall forthwith be prepared by the Company, and as soon as practicable after it is prepared, such notice shall be mailed by the Company at its expense to all Holders at their last addresses as they shall appear in the stock register. 4.9 Adjustment Upon Exercise of Outstanding Securities. (a) If, at any time or from time to time after the Original Issue Date, any Person other than the Holder or its Affiliates (an "Exercising Person") that owns or holds options or warrants to purchase or other rights to subscribe for Common Stock or any other voting securities of the Company as of the Original Issue Date at a purchase price or with an exercise price equal to or greater than $1.00 (each, an "Exercisable Security" and collectively, "Exercisable Securities"), notifies the Company of its intent to exercise such options or warrants to purchase or other rights to subscribe, the Company shall provide the Holder the right to purchase from the Company a number of shares of Common Stock or any other voting securities of the Company issuable upon exercise of such Exercisable Securities in an amount equal to and on the same terms and conditions provided to such Exercising Person. (b) If an Exercising Person notifies the Company of its intent to exercise such Exercisable Securities, the Company shall promptly, but in no event later than forty-eight (48) hours following receipt of such notice, notify the Holder of the Exercising Person's intent to exercise such Exercisable Securities and the terms and conditions provided to such Exercising Person. (c) Upon receipt by the Holder of the written notice of the Company pursuant to Section 4.9(b) above, the Holder shall have twenty (20) business days during which to exercise the right pursuant to Section 4.9(a) above to purchase from the Company a number of shares of Common Stock or any other voting securities of the Company issuable upon exercise of such Exercisable Securities for the price and upon the terms specified in such notice. If the Holder fails to notify the Company of its exercise of such rights within such twenty (20) business day period, the Holder shall have no further rights with regard to such purchase at the price and upon the terms specified in the notice. ARTICLE V NO IMPAIRMENT; REGULATORY COMPLIANCE AND COOPERATION; NOTICE OF EXPIRATION 5.1 The Company shall not by any action, including, without limitation, amending its charter documents or through any reorganization, reclassification, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other similar voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company shall take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, free and clear of all Liens, and shall use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. 5.2 The Company shall deliver to each Holder of Warrants, after the 60th day but before the 30th day prior to the Expiration Date, advance notice of such Expiration Date. If the Company fails to fulfill in a timely manner the notice obligation set forth in the prior sentence, it shall provide such notice as soon as possible thereafter. ARTICLE VI RESERVATION AND AUTHORIZATION OF COMMON STOCK. 6.1 From and after the Original Issue Date, the Company shall at all times reserve and keep available for issuance upon the exercise of the Warrants such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants. All shares of Common Stock issuable pursuant to the terms hereof, when issued upon exercise of this Warrant with payment therefor in accordance with the terms hereof, shall be duly and validly issued and fully paid and nonassessable, not subject to preemptive rights and shall be free and clear of all Liens. Before taking any action that would result in an adjustment in the number of shares of Common Stock for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction over such action. If any shares of Common Stock required to be reserved for issuance upon exercise of Warrants require registration or qualification with any governmental authority under any federal or state law (other than under the Securities Act or any state securities law) before such shares may be so issued, the Company will in good faith and as expeditiously as possible and at its expense endeavor to cause such shares to be duly registered. 6.2 Before taking any action that would cause an adjustment reducing the Exercise Price below the par value of the shares of Common Stock deliverable upon exercise of the Warrant or that would cause the number of shares of Common Stock issuable upon exercise of the Warrant to exceed (when taken together with all other outstanding shares of Common Stock) the number of shares of Common Stock that the Company is authorized to issue, the Company will take any corporate action that, in the opinion of its counsel, is necessary in order that the Company may validly and legally issue the full number of fully paid and nonassessable shares of Common Stock issuable upon exercise of the Warrant at such adjusted Exercise Price. ARTICLE VII NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS 7.1 Notices of Corporate Actions. In case: (a) the Company shall take an action or an event shall occur, that would require an Exercise Price adjustment pursuant to Section 4; or (b) the Company shall grant to the holders of its Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class; or (c) of any reclassification of the Common Stock (other than a subdivision or combination of the outstanding shares of Common Stock), or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or (e) the Company or any Subsidiary shall commence a tender offer for all or a portion of the outstanding shares of Common Stock (or shall amend any such tender offer to change the maximum number of shares being sought or the amount or type of consideration being offered therefor); then, the Company shall cause to be filed at each office or agency maintained for such purpose, and shall cause to be mailed to all Holders at their last addresses as they shall appear in the stock register, at least 30 days prior to the applicable record, effective or expiration date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record who will be entitled to such dividend, distribution, rights or warrants are to be determined, (y) the date on which such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up, or (z) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of the amendment thereto). Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Exercise Price and the number and kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon exercise of the Warrants. Neither the failure to give any such notice nor any defect therein shall affect the legality or validity of any action described in clauses (a) through (e) of this Section 7.1. 7.2 Taking of Record. In the case of all dividends or other distributions by the Company to the holders of its Common Stock with respect to which any provision of any Section hereof refers to the taking of a record of such holders, the Company will in each such case take such a record and will take such record as of the close of business on a Business Day. 7.3 Closing of Transfer Books. The Company shall not at any time, except upon dissolution, liquidation or winding up of the Company, close its stock transfer books or Warrant transfer books so as to result in preventing or delaying the exercise or transfer of any Warrant. ARTICLE VIII LOSS OR MUTILATION. Upon receipt by the Company from any Holder of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Warrant and an indemnity reasonably satisfactory to it (it being understood that the written indemnification agreement of or affidavit of loss of the Holder, shall be a sufficient indemnity) and, in case of mutilation, upon surrender and cancellation hereof, the Company will execute and deliver in lieu hereof a new Warrant of like tenor to such Holder; provided, however, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation. ARTICLE IX OFFICE OF THE COMPANY. As long as any of the Warrants remain outstanding, the Company shall maintain an office or agency, which may be the principal executive offices of the Company (the "Designated Office"), where the Warrants may be presented for exercise, registration of transfer, division or combination as provided in this Warrant. Such Designated Office shall initially be the office of the Company. The Company may from time to time change the Designated Office to another office of the Company or its agent within the United States by notice given to all registered Holders at least ten (10) Business Days prior to the effective date of such change. ARTICLE X DILUTION FEE. (a) In the event that any dividends are declared or paid or any other distribution is made on or with respect to the Common Stock, the Holder of this Warrant as of the record date established by the Board of Directors for such dividend or distribution on the Common Stock shall be entitled to receive a fee (the "Dilution Fee") in an amount (whether in the form of cash, securities or other property) equal to the amount (and in the form) of the dividends or distribution that such Holder would have received had the Warrant been exercised as of the date immediately prior to the record date for such dividend or distribution, such Dilution Fee to be payable on the same payment date established by the Board of Directors for the payment of such dividend or distribution; provided, however, that if the Company declares and pays a dividend or distribution on the Common Stock consisting in whole or in part of Common Stock, then no such Dilution Fee shall be payable in respect of the Warrant on account of the portion of such dividend or distribution on the Common Stock payable in Common Stock and in lieu thereof the adjustment in Section 4 hereof shall apply. The record date for any such Dilution Fee shall be the record date for the applicable dividend or distribution on the Common Stock, and any such Dilution Fee shall be payable to the Persons in whose name the Warrant is registered at the close of business on the applicable record date. (b) No dividend shall be paid or declared on any share of Common Stock (other than dividends payable in Common Stock for which an adjustment was made pursuant to Section 4 hereof), unless the Dilution Fee, payable in the same consideration and manner, is simultaneously paid or provided for, as the case may be, in respect of this Warrant in an amount determined as set forth above. For purposes hereof, the term "dividends" shall include any pro rata distribution by the Company, out of funds of the Company legally available therefor, of cash, property, securities (including, but not limited to, rights, warrants or options) or other property or assets to the holders of the Common Stock, whether or not paid out of capital, surplus or earnings other than liquidation. (c) Prior to declaring any dividend or making any distribution on or with respect to shares on Common Stock, the Company shall take all prior corporate action necessary to authorize the issuance of any securities payable as the Dilution Fee in respect of the Warrant. ARTICLE XI MISCELLANEOUS. 11.1 Nonwaiver. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Company or the Holder shall operate as a waiver of such right or otherwise prejudice the rights, powers or remedies of such Person. 11.2 Notice Generally. Any notice, demand, request, consent, approval, declaration, delivery or communication hereunder to be made pursuant to the provisions of this Warrant shall be sufficiently given or made if in writing and either delivered in person with receipt acknowledged, transmitted by facsimile with immediate telephonic confirmation thereafter or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: (a) if to any Holder of this Warrant or of Warrant Stock issued upon the exercise hereof, at its last known address appearing on the books of the Company maintained for such purpose; (b) if to the Company, at the Designated Office; (c) or at such other address as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Every notice, demand, request, consent, approval, declaration, delivery or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered or transmitted by facsimile, with receipt acknowledged or immediate telephonic confirmation, respectively, or three (3) Business Days after the same shall have been deposited in the United States mail, or one (1) Business Day after the same shall have been sent by Federal Express or another recognized overnight courier service. 11.3 Expenses. Except as otherwise provided in this Agreement, each party agrees to pay its own expenses incurred in connection with the preparation and negotiation of this Warrant and the consummation of the transactions contemplated hereby. 11.4 Indemnification. If the Company fails to make, when due, any payments provided for in this Warrant, the Company shall pay to the Holder hereof (a) interest at the Agreed Rate on any amounts due and owing to such Holder and (b) such further amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees and expenses incurred by such Holder in collecting any amounts due hereunder. The Company shall indemnify, save and hold harmless the Holder hereof and the Holders of any Warrant Stock issued upon the exercise hereof from and against any and all liability, loss, cost, damage, reasonable attorneys' and accountants' fees and expenses, court costs and all other out-of-pocket expenses incurred in connection with or arising from any default hereunder by the Company. This indemnification provision shall be in addition to the rights of such Holder or Holders to bring an action against the Company for breach of contract based on such default hereunder. 11.5 Limitation of Liability. No provision hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of the Holder hereof, shall give rise to any liability of such Holder to pay the Exercise Price for any Warrant Stock other than pursuant to an exercise of this Warrant or any liability as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 11.6 Remedies. Each Holder of Warrants and/or Warrant Stock, in addition to being entitled to exercise its rights granted by law, including recovery of damages, shall be entitled to specific performance of its rights provided under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees, in an action for specific performance, to waive the defense that a remedy at law would be adequate. 11.7 Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the permitted successors and assigns of the Holder hereof. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and to the extent applicable, all Holders of shares of Warrant Stock issued upon the exercise hereof (including transferees), and shall be enforceable by any such Holder. 11.8 Amendment. This Warrant and all other Warrants may be modified or amended or the provisions hereof waived only with the written consent of the Company and the Holder. 11.9 Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant. 11.10 Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. 11.11 Governing Law; Jurisdiction; Waiver of Jury Trial. THE INTERNAL LAWS, AND NOT THE LAWS OF CONFLICTS (OTHER THAN SECTION 5-1401 GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), OF NEW YORK SHALL GOVERN THE ENFORCEABILITY AND VALIDITY OF THIS WARRANT, THE CONSTRUCTION OF ITS TERMS AND THE INTERPRETATION OF THE RIGHTS AND DUTIES OF THE COMPANY. ANY SUIT, ACTION OR PROCEEDING SEEKING TO ENFORCE ANY PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION WITH, THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE BROUGHT IN ANY FEDERAL OR STATE COURT LOCATED IN THE STATE OF NEW YORK, AND THE COMPANY HEREBY CONSENTS TO THE JURISDICTION OF SUCH COURTS (AND OF THE APPROPRIATE APPELLATE COURTS THEREFROM) IN ANY SUCH SUIT, ACTION OR PROCEEDING AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT ANY SUCH SUIT, ACTION OR PROCEEDING WHICH IS BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE SERVED ON THE COMPANY ANYWHERE IN THE WORLD, WHETHER WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY. [Execution Page Follows] IN WITNESS WHEREOF, the Company has executed this Warrant as of the Original Issue Date. VIDEO NETWORKS COMMUNICATIONS, INC. By: /s/ Robert Emery ------------------------------- Name: Robert Emery Title: Chief Financial Officer AGREED AND ACCEPTED: MONEYLINE NETWORKS, LLC By: /s/ Alexander Russo --------------------------------------- Name: Alexander Russo Title: Executive Vice President, Corporate Development and General Counsel ANNEX A EXERCISE FORM [To be executed only upon exercise or conversion of Warrant] The undersigned registered owner of this Warrant irrevocably exercises this Warrant for the purchase of ______ shares of Common Stock of VV and herewith makes payment therefor in __________, all at the price and on the terms and conditions specified in this Warrant and requests that certificates for the shares of Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to ___________ whose address is _____________________________________ and, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares of Common Stock issuable hereunder be delivered to the undersigned. OR The undersigned registered owner of this Warrant hereby elects irrevocably to exercise the within Warrant to purchase __________ shares of Common Stock of VV, Inc. all at the price and on the terms and conditions specified in this Warrant and requests that certificates for the shares of Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to ___________ whose address is ___________________________ and, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares of Common Stock issuable hereunder be delivered to the undersigned. [signature page follows] -------------------------------- (Name of Registered Owner) -------------------------------- (Signature of Registered Owner) -------------------------------- (Street Address) -------------------------------- (City) (State) (Zip Code) NOTICE: The signature on 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. ANNEX B ASSIGNMENT FORM FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the assignee named below all of the rights of the undersigned under this Warrant, with respect to the number of shares of Common Stock set forth below: No. of Shares of Name and Address of Assignee Common Stock and does hereby irrevocably constitute and appoint ________ _____________ attorney-in-fact to register such transfer onto the books of VV maintained for the purpose, with full power of substitution in the premises. Dated: _____________________ Print Name: ____________________________ Signature: _________________________ Witness: ______________________________ NOTICE: The signature on this assignment 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. EX-99 7 s364943.txt EXHIBIT E Exhibit E 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..........................................................6 ARTICLE III PREEMPTIVE RIGHTS............................................................................7 3.1 Preemptive Rights............................................................7 3.2 Notice.......................................................................7 3.3 Exercise.....................................................................7 3.4 Limitations..................................................................7 ARTICLE IV CORPORATE GOVERNANCE..........................................................................8 4.1 Significant Transactions.....................................................8 4.2 Board of Directors...........................................................8 4.3 Removal......................................................................9 4.4 Vacancies...................................................................10 4.5 By-Laws.....................................................................10 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........................................................................11 6.4 Certain Actions.............................................................11 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
i EXHIBITS Exhibit A - Form of Joinder Agreement Exhibit B - Form of Amended and Restated By-Laws ii 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: ARTICLE I CERTAIN DEFINITIONS 1.1 Defined Terms (a) 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. "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: (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; (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 (a) 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 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 (a) 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. 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) 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 (a) 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 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 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 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 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. 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 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. (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. 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: /s/ Robert Emery ------------------------------------- Name: Robert Emery Title: Chief Financial Officer MONEYLINE STOCKHOLDERS: ----------------------- MONEYLINE NETWORKS, LLC By: /s/ Alexander Russo ------------------------------------- Name: Alexander Russo Title: Executive Vice President, Business Development and General Counsel -----END PRIVACY-ENHANCED MESSAGE-----