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EXHIBIT 4.5
THIS PURCHASE OPTION HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THIS PURCHASE OPTION AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS PURCHASE OPTION MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN
EXEMPTION THEREFROM UNDER THE ACT AND SUCH LAWS, SUPPORTED BY AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
THIS PURCHASE OPTION MAY NOT, IN ANY EVENT, BE TRANSFERRED TO ANY PERSON OR
ENTITY THAT IS NOT AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501,
PROMULGATED UNDER THE ACT.
UNIT PURCHASE OPTION
FOR THE PURCHASE OF
264,000 UNITS, EACH UNIT CONSISTING OF
ONE SHARE OF COMMON STOCK AND ONE WARRANT
OF
VIDEO NETWORK COMMUNICATIONS, INC.
(A DELAWARE CORPORATION)
1. Purchase Option.
THIS CERTIFIES THAT, in consideration of $100 and other good and valuable
consideration duly paid by or on behalf of _________________________ ("Holder"),
as registered owner of this Purchase Option, to Video Network Communications,
Inc. ("Company"), Holder is entitled, at any time or from time to time after one
day following the six month anniversary of the date hereof ("Commencement
Date"), and at or before 5:00 p.m., Eastern Time, ______ __, ____ [54 months
after the Commencement Date] ("Expiration Date"), but not thereafter, to
subscribe for, purchase and receive, in whole or in part, up to 264,000 units
("Units") of the Company. If the Expiration Date is a day on which banking
institutions are authorized by law to close, then this Purchase Option may be
exercised on the next succeeding day that is not such a day in accordance with
the terms herein. During the period ending on the Expiration Date, the Company
agrees not to take any action that would terminate the Purchase Option.
Each Unit consists of one share of the Company's common stock
("Share(s)") and one warrant ("Warrant(s)"). The Warrants are identical to the
warrants of the Company currently trading on Nasdaq under the symbol "VNCIW"
("Public Warrants"). Notwithstanding the foregoing, (i) the Holder agrees that
the Warrants may not be exercised until one day following the six-month
anniversary of the closing ("Closing") of the VNCI Private Placement (as defined
below); (ii) the Company will register the Warrants, and Extra Warrants, if any
(as defined below) and the shares underlying such warrants in accordance with
the registration rights described hereinbelow and as granted to the subscribers
in the VNCI Private Placement; and (iii) the Company agrees not to redeem the
Warrants (even if the conditions to redemption set forth in the Warrant
Agreement have been satisfied) until (a) one day following the six-month
anniversary of the Closing and (b) the Warrants, Extra Warrants and the shares
underlying such warrants are registered in accordance with the registration
rights described hereinbelow and as granted to the subscribers in the VNCI
Private Placement. Each Unit is identical to those securities issued to
investors pursuant to the Company's Confidential Private Placement Memorandum
dated ______ __, 2000 ("Memorandum"). This Purchase Option is initially
exercisable at a price per Unit equal to $______[, THE GREATER OF (i) $1.625 OR
(ii) $0.125 ABOVE THE CLOSING SALES PRICE OF A SHARE ON THE DAY PRIOR TO THE
CLOSING]; provided, however, that upon the occurrence of any of the events
specified in Section 6 hereof, the rights granted by this Purchase Option,
including the exercise price and the number of shares of
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Common Stock, Warrants and Extra Warrants, if any, to be received upon such
exercise, shall be adjusted as therein specified. The term "Exercise Price"
shall mean the initial exercise price or, if adjustments thereto have been made,
the adjusted exercise price. The Units and the shares of Common Stock and
Warrants comprising the Units, including the "Extra Warrants" (as described in
Section 5 hereof), are sometimes collectively referred to herein as the
"Securities." This Purchase Option is being issued in connection with the
issuance and sale by the Company of identical securities to investors in a
private placement for which EarlyBirdCapital, Inc. ("EBC") has acted as
placement agent ("VNCI Private Placement").
2. Exercise.
2.1 Exercise Form. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Option and payment of the Exercise
Price (except as provided in Section 2.3 hereof) in cash or by certified check
or official bank check for the Units being purchased. If the subscription rights
represented hereby shall not be exercised at or before 5:00 p.m., Eastern time,
on the Expiration Date, except as otherwise provided in Section 1 hereof, this
Purchase Option shall become null and be void without further force or effect,
and all rights represented hereby shall cease and expire.
2.2 Legend. The Warrants and any Extra Warrants purchased under this
Purchase Option shall bear the legends contained on the Warrants and any Extra
Warrants issued to investors in the VNCI Private Placement. Each certificate for
Common Stock purchased under this Purchase Option shall bear a legend
substantially as follows unless the issuance of such Securities by the Company
have been registered under the Securities Act of 1933, as amended ("Securities
Act"):
This security has been acquired for investment and has not been
registered under the Securities Act of 1933, as amended, or
applicable state securities laws. The securities may not be sold,
pledged or transferred in the absence of such registration or an
exemption therefrom under said Act and such laws, supported by an
opinion of counsel, reasonably satisfactory to the Company and its
counsel, that such registration is not required.
2.3 Conversion Right.
(1) Determination of Amount. In lieu of the payment of the
Exercise Price (and in lieu of being entitled to receive Common Stock (except as
provided below), Warrants or Extra Warrants) 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 Purchase Option into Common Stock
("Conversion Right") as follows: upon exercise of the Conversion Right, the
Company shall deliver to the Holder (without payment by the Holder of any
portion of the Exercise Price in cash) that number of shares of Common Stock
equal to the quotient obtained by dividing (x) the "Value" (as determined below)
of the portion of the Purchase Option being converted by (y) the Common Market
Price (as defined below) on the second trading day prior to the date the Company
receives this Purchase Option for conversion pursuant to Section 2.3.2 hereof.
The "Value" of the portion of the Purchase Option being converted shall equal
the remainder derived from subtracting (a) (i) the Exercise Price multiplied by
(ii) the number of Units underlying the portion of this Purchase Option being
converted from (b) the product of the number of Units under the portion of the
Purchase Option being converted multiplied by the remainder derived from
subtracting (y) the Exercise Price from (z) the sum of the Common Market Value
plus the Warrant Market Value (as defined below). As used herein, the term
"Common Market Price" at any date shall be deemed to be the average last
reported sale price of the Common Stock for the five trading days immediately
preceding such date, 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 the principal
trading market for the Common Stock, the average last reported sale price of the
Common Stock for the five trading days
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immediately preceding such date as furnished by the National Association of
Securities Dealers, Inc. ("NASD") through the Nasdaq National Market or the
Nasdaq SmallCap, or, if applicable, the OTC Bulletin Board, or if the Common
Stock is not listed or admitted to trading on the Nasdaq National Market or the
Nasdaq SmallCap or OTC Bulletin Board or similar organization, as determined in
good faith by resolution of the Board of Directors of the Company, based on the
best information available to it. As used herein, the term "Warrant Market
Price" at any date shall be deemed to be the average last reported sale price of
the Warrants for the five trading days immediately preceding such date, as
officially reported by the principal securities exchange on which the Warrants
are listed or admitted to trading, or, if the Warrants are not listed or
admitted to trading on any national securities exchange or if any such exchange
on which the Warrants are listed is not the principal trading market for the
Warrants, the average last reported sale price of the Warrants for the five
trading days immediately preceding such date as furnished by the NASD through
the Nasdaq National Market or the Nasdaq SmallCap, or, if applicable, the OTC
Bulletin Board, or if the Warrants are not listed or admitted to trading on the
Nasdaq National Market or the Nasdaq SmallCap or OTC Bulletin Board or similar
organization, then the Common Market Price minus the exercise price of the
Warrants.
(2) Mechanics of Conversion Right. The Conversion Right may be
exercised by the Holder on any business day on or after the Commencement Date
and not later than the Expiration Date, except as otherwise provided in Section
1 hereof, by delivering to the Company this Purchase Option with a duly executed
exercise form attached hereto with the conversion section completed exercising
the Conversion Right.
3. Transfer.
3.1 General Restrictions; Accredited Investors Only. The Holder of
this Purchase Option, by its acceptance hereof, agrees that it will not sell,
transfer or assign or hypothecate this Purchase Option prior to the Commencement
Date to anyone other than (i) an officer of EBC or (ii) if the Purchase Option
was issued and sold to a designee of ECN pursuant to Section 1.3 of the Agency
Agreement between the Company and EBC dated ___________, 2000, an officer or
partner of any such designee. On and after the Commencement Date, the Holder of
this Purchase Option may sell, transfer or assign or hypothecate this Purchase
Option to anyone only upon compliance with, or pursuant to exemptions from,
applicable securities laws and only if the transferee shall certify to the
Company that the transferee is an "accredited investor" as defined in Rule 501
promulgated under the Securities Act. In order to make any permitted assignment,
the Holder must deliver to the Company the assignment form attached hereto duly
executed and completed both by the Holder and the transferee as applicable,
together with this Purchase Option and payment of all transfer taxes, if any,
payable in connection therewith. The Company shall immediately transfer this
Purchase Option on the books of the Company and shall execute and deliver a new
Purchase Option or Purchase Options of like tenor to the appropriate assignee(s)
expressly evidencing the right to purchase the aggregate number of shares of
Common Stock and Warrants purchasable hereunder or such portion of such number
as shall be contemplated by any such assignment.
3.2 Restrictions Imposed by the Securities Act. This Purchase Option
and the Securities underlying this Purchase Option shall not be transferred
unless and until (i) the Company has received the opinion of counsel for the
Holder that this Purchase Option or the Securities, as the case may be, may be
transferred pursuant to an exemption from registration under the Securities Act
and applicable state law, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement
relating to such Purchase Option or Securities, as the case may be, has been
filed by the Company and declared effective by the Securities and Exchange
Commission ("Commission") and remains effective and current and is in compliance
with applicable state law.
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4. New Purchase Options to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in
Section 3 hereof, this Purchase Option may be exercised or assigned in whole or
in part. In the event of the exercise or assignment hereof in part only, upon
surrender of this Purchase Option for cancellation, together with the duly
executed exercise or assignment form and funds sufficient to pay any Exercise
Price and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of the Holder evidencing the right of the Holder to purchase the
aggregate number of Units purchasable hereunder as to which this Purchase Option
has not been exercised or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Option and of reasonably satisfactory indemnification, the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation
on the part of the Company.
5. Registration Obligation/Extra Warrants.
5.1 The Holder of this Purchase Option shall be entitled to the same
registration rights with respect to (i) the resale of this Purchase Option, (ii)
the sale of the Common Stock and Warrants issuable upon exercise of this
Purchase Option, (iii) the sale of the Extra Warrants (as defined in the
Subscription Agreement referred to below), and (iv) the sale of the Common Stock
issuable upon exercise of the Warrants included in the Units and the Extra
Warrants (collectively, the "Registrable Securities") as the Company has granted
to investors in the VNCI Private Placement as described in the Subscription
Agreement and Investor Information Statement entered into by the Company and
each such investor a form of which is attached as Exhibit __ to the Memorandum
("Subscription Agreement"), including, without limitation and subject to the
limitations and obligations set forth therein, the mandatory registration
obligation set forth in Section 5.A.(1) of Schedule 1 to the Subscription
Agreement (described in more detail below in subsection 5.3 below) and the
provisions relating thereto as set forth in Section 5.A of Schedule 1 to the
Subscription Agreement.
5.2 Successors and Assigns. The registration rights granted to the
Holders inure to the benefit of all the Holders' successors, heirs, pledgees,
assignees, transferees and purchasers of the Registrable Securities.
5.3 Mandatory Registration Obligation. The Company shall file, within
45 days after the Closing of the VNCI Private Placement ("Closing"), a
Registration Statement ("Registration Statement") under the Securities Act with
the SEC and make appropriate filings in such states as EBC shall reasonably
specify, registering for sale or resale, as the case may be and at the sole
discretion of the Placement Agent, this Purchase Option and the Common Stock,
Warrants and "Extra Warrants" referred to below underlying the Purchase Option.
The Company shall use its best efforts to have the Registration Statement
declared effective by the 120th day after the Closing ("Target Date"). If the
Registration Statement is not declared effective by the SEC and cleared by the
National Association of Securities Dealers, Inc. ("NASD") by the Target Date,
then on the Target Date and on each monthly anniversary of the Target Date
thereafter until the earlier of the effective date of the Registration Statement
("Effective Date") or the nineteenth monthly anniversary of the Target Date, the
Company shall issue to EBC (and its designees), Warrants ("Extra Warrants") to
purchase a number of shares of Common Stock equal to 5% of the number of
Warrants underlying this Purchase Option. The Extra Warrants shall have the same
terms as the Warrants sold in the Offering. The Company shall keep the
Registration Statement current and effective until all the securities registered
thereunder are sold or can be sold freely under an appropriate exemption,
without limitation. The Company shall bear all fees and expenses incurred by the
Company in connection with the preparation of the Registration Statement and
filing it with the SEC and NASD, including the fees (no more
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than $15,000) of one special counsel for all of the holders of the securities
sold in the VNCI Private Placement and of the Purchase Options.
6. Adjustments.
6.1 Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of Units (as well as the number of any Extra
Warrants issuable hereunder) underlying the Purchase Option shall be subject to
adjustment from time to time as hereinafter set forth:
(1) Stock Dividends, Recapitalization, Reclassification,
Split-Ups. If after the date hereof, and subject to the provisions of Section
6.2 below, the number of outstanding shares of Common Stock is increased by a
stock dividend payable in shares of Common Stock or by a split-up,
recapitalization or reclassification of shares of Common Stock or other similar
event, then, on the effective date thereof, the number of shares of Common Stock
issuable upon exercise of the Purchase Option shall be increased in proportion
to such increase in outstanding shares. Additionally in such event, the number
of Warrants and Extra Warrants, if any, shall be increased on an "as if
exercised" basis, as if the Purchase Option had been exercised, the Warrants and
Extra Warrants, if any, underlying the Purchase Option were outstanding, and
then, in accordance with the terms of the Warrant Agreement between the Company
and Continental Stock Transfer & Trust Company dated June 18, 1999, as amended
August __, 2000 ("Warrant Agreement").
(2) Aggregation of Shares. If after the date hereof, and
subject to the provisions of Section 6.2, the number of outstanding shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event, then, upon the effective date
thereof, the number of shares of Common Stock issuable on exercise of this
Purchase Option shall be decreased in proportion to such decrease in outstanding
shares. Additionally in such event, the number of Warrants and Extra Warrants,
if any, shall be decreased on an "as if exercised" basis, as if the Purchase
Option had been exercised, the Warrants and Extra Warrants, if any, underlying
the Purchase Option were outstanding, and then, in accordance with the terms of
the Warrant Agreement.
(3) Adjustments in Exercise Price. Whenever the number of
shares of Common Stock issuable upon exercise of this Purchase Option is
adjusted, as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying such Exercise Price immediately prior to
such adjustment by a fraction (x) the numerator of which shall be the number of
shares purchasable upon the exercise of this Purchase Option immediately prior
to such adjustment, and (y) the denominator of which shall be the number of
shares so purchasable immediately thereafter.
(4) Replacement of Securities upon Reorganization, etc. In case
of any reclassification or reorganization of the outstanding shares of Common
Stock (other than a change covered by Section 6.1.1 or 6.1.2 hereof or that
solely affects the par value of such shares of Common Stock), or in the case of
any merger or consolidation of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Purchase Option shall have the right thereafter
(until the expiration of the right of exercise of this Purchase Option) to
receive upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution
following any such sale or other transfer, by a Holder of the number of shares
of Common Stock of the Company obtainable upon exercise of this Purchase Option
immediately prior to such event. The provisions of this Section 6.1.4 shall
similarly apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.
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(5) Changes in Form of Purchase Option. This form of Purchase
Option need not be changed because of any change pursuant to this Section, and
Purchase Options issued after such change may state the same Exercise Price and
the same number of securities as are stated in the Purchase Options initially
issued pursuant to this Purchase Option. The acceptance by any Holder of the
issuance of new Purchase Options reflecting a required or permissive change
shall not be deemed to waive any rights to a prior adjustment or the computation
thereof.
6.2 Redemption of Warrants. Notwithstanding anything to the contrary
contained in the form of Warrants issued to investors in the VNCI Private
Placement, the Warrants and Extra Warrants, if any, issuable upon exercise of
this Purchase Option cannot, under any circumstances, be redeemed by the Company
until such time as they have been issued to the Holder.
6.3 Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of a share of Common Stock
issuable upon the exercise or transfer of this Purchase Option, nor shall it be
required to issue scrip or pay cash in lieu of any fractional interests, it
being the intent of the parties that all fractional interests shall be
eliminated by rounding any fraction up or down to the nearest whole number of
shares of Common Stock or other securities, properties or rights.
6.4 Notice of Adjustment. Upon the happening of any event requiring an
adjustment of the Exercise Price hereunder, the Company shall forthwith give
written notice thereof to the Holders stating the adjusted Exercise Price and
the adjusted number of shares of Common Stock issuable upon exercise of this
Purchase Option resulting from such event and setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
7. Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of this Purchase Option, the number of shares of
Common Stock and the Warrants and Extra Warrants, if any, issuable upon exercise
of this Purchase Option, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise thereof.
The Company covenants and agrees that, upon exercise of the Purchase Options and
payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon the exercise of this Purchase Option and the securities
underlying the Purchase Option shall be duly and validly issued, fully paid and
non-assessable and not subject to preemptive rights of any stockholder. As long
as the Purchase Options shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock, Warrants and Extra Warrants, if
any, issuable upon exercise of the Purchase Options and the Common Stock
issuable upon exercise of the Warrants and Extra Warrants, if any, underlying
the Purchase Options to be listed (subject to official notice of issuance) on
all securities exchanges (or, if applicable, on Nasdaq) on which the Common
Stock and/or Warrants are then listed and/or quoted.
8. Notices of Record Date. Nothing herein shall be construed as conferring
upon the Holders the right to vote or consent as a stockholder for the election
of directors or any other matter, or as having any right whatsoever as a
stockholder of the Company, other than as set forth in Section __ of the Agency
Agreement between EBC and the Company dated ________ __, 2000. In case:
(a) the Company shall take a record of the holders of its Common Stock
and Warrants (and/or other stock or securities at the time deliverable upon the
exercise of this Purchase Option) for the purpose of entitling or enabling them
to receive any dividend or other distribution, or to receive any right to
subscribe for or purchase any shares of any class or any other securities, or to
receive any other right, or
(b) of any capital reorganization of the Company, any reclassification
of the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity), or any transfer of all or substantially
all of the assets of the Company, or
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(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will deliver
or cause to be delivered to the Holder a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at the
time deliverable upon the exercise of this Purchase Option) shall be entitled to
exchange their shares of Common Stock, Warrants and/or Extra Warrants, if any,
(or such other stock or securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at least ten
(10) days prior to the record date or effective date for the event specified in
such notice, provided that the failure to mail such notice shall not affect the
legality or validity of any such action.
8.1 Transmittal of Notices. All notices, requests, consents and other
communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made on the date of delivery if delivered personally or
sent by overnight courier, with acknowledgment of receipt to the party to whom
notice is given, or on the fifth day after mailing if mailed to the party to
whom notice is to be given, by registered or certified mail, return receipt
requested, postage prepaid and properly addressed as follows: (i) if to the
registered Holder of the Purchase Option, to the address of such Holder as shown
on the books of the Company, or (ii) if to the Company, to its principal
executive office.
9. Miscellaneous.
9.1 Amendments. The Company and EBC may from time to time supplement
or amend this Purchase Option without the approval of any of the Holders in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or to make any other provisions in regard to matters or questions arising
hereunder that the Company and EBC may deem necessary or desirable and that the
Company and EBC deem shall not adversely affect the interest of the Holders. All
other modifications or amendments shall require the written consent of the party
against whom enforcement of the modification or amendment is sought.
9.2 Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase
Option.
9.3 Entire Agreement. This Purchase Option (together with the
registration rights provisions in the Subscription Agreement referred to in this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
9.4 Binding Effect. This Purchase Option shall inure solely to the
benefit of and shall be binding upon, the Holder and the Company and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Purchase Option or any provisions
herein contained.
9.5 Governing Law; Submission to Jurisdiction. This Purchase Option
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. Each of the
Company and the Holder hereby agrees that any action, proceeding or claim
against it arising out of, or relating in any way to this Purchase Option shall
be brought and enforced in the courts of the State of New York or of the United
States of America for the Southern District of New York, and irrevocably submits
to such jurisdiction, which jurisdiction shall be exclusive. Each of the Company
and the Holder hereby waives any objection to such exclusive jurisdiction and
that such courts represent an inconvenient forum. Any process or summons to be
served upon the Company may be
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served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at its principal business
offices. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The prevailing
party(ies) in any such action shall be entitled to recover from the other
party(ies) all of its reasonable attorneys' fees and expenses relating to such
action or proceeding and/or incurred in connection with the preparation
therefor.
9.6 Waiver, Etc. The failure of the Company or the Holder to at any
time enforce any of the provisions of this Purchase Option shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
9.7 Exchange Agreement. As a condition of the Holder's receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete exercise of this Purchase Option by Holder, if the Company and EBC
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding Purchase Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.
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IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the __ day of ____ , 2000.
VIDEO NETWORK COMMUNICATIONS, INC.
By:
-------------------------------
Name:
Title:
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NOTICE OF EXERCISE
To Be Executed by the Registered Holder
In Order to Exercise this Unit Purchase Option
The undersigned registered Holder hereby irrevocably elects to exercise
the attached Purchase Option and to purchase ___ Units of Video Network
Communications, Inc. (and to receive any Extra Warrants issuable upon such
exercise) and hereby makes payment of $________ (at the rate of $____ per Unit)
in payment of the Exercise Price pursuant thereto. Please issue the securities
comprising the Units as to which this Purchase Option is exercised in accordance
with the instructions given below. The undersigned acknowledges that upon
exercise of this Purchase Option, the Company will issue certificates evidencing
the shares of Common Stock, Warrants, and Extra Warrants underlying the Units
for which this Purchase Option is exercised, and no Units will be issued.
or
The undersigned Registered Holder hereby irrevocably elects to exercise
the attached Purchase Option and to purchase ___ Units of Video Network
Communications, Inc. (and to receive any Extra Warrants issuable upon such
exercise) by surrender of the unexercised portion of the attached Purchase
Option (with a "Value" of $______ based on a "Common Market Price" of $______
and a "Warrant Market Value" of $______). Please issue the securities comprising
the Units as to which this Purchase Option is exercised in accordance with the
instructions given below.
PLEASE ISSUE CERTIFICATES AS FOLLOWS:
---------------------------------------- PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER
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(please print or type name and address)
and be delivered to
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(please print or type name and address)
and if such number of Units exercised shall not be all the Units evidenced by
the attached Purchase Option, that a new Purchase Option for the balance of such
Purchase Option be registered in the name of, and delivered to, the registered
Holder at the address stated below.
Dated:
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(Signature of Registered Holder)
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(Address)
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(Taxpayer Identification Number)
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Signature Guaranteed
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ASSIGNMENT FORM
To be executed by the Registered Holder
In order to Assign Purchase Option
FOR VALUE RECEIVED,______________________ hereby sell, assigns and transfer unto
---------------------------------------- PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER
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(please print or type name and address)
______________________ of the Purchase Options represented by the attached
instrument, and hereby irrevocably constitutes and appoints
________________________ Attorney to transfer these Purchase Options on the
books of the Company, with full power of substitution in the premises.
Dated: X
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(Signature of Registered Holder)
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(Signature Guaranteed)
THE SIGNATURE ON THE ASSIGNMENT OR THE PURCHASE FORM MUST CORRESPOND TO THE NAME
AS WRITTEN UPON THE FACE OF THIS PURCHASE OPTION CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST
BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.
CERTIFICATION OF STATUS OF TRANSFEREE
TO BE EXECUTED BY THE TRANSFEREE OF THIS PURCHASE OPTION
The undersigned transferee hereby certifies to the registered Holder and
to Video Network Communications, Inc. that the transferee is an "accredited
investor" within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended.
Dated: X
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(Signature of Transferee)
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