TALKPOINT COMMUNICATIONS INC
EXHIBIT 10.12
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<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10-12.txt
<DESCRIPTION>EXHIBIT 10.12
<TEXT>



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June 13, 2003

CONFIDENTIAL

Mr. Carl Muscari
14 Gilboa Ln
Nashua, NH 03062


Re: Understanding Regarding Termination of Employment with Video Network
    Communications, Inc.

Dear Carl:

This letter ("Letter Agreement") is intended to confirm our mutual understanding
regarding the termination of your employment relationship with Video Network
Communications, Inc. and its affiliates (collectively, the "Company"), as
follows:

1. Termination Date. As discussed, your last day of employment with the Company
will be June 13, 2003 (the "Termination Date"). On the Termination Date, you
will resign all of your officer and director positions and will become
non-executive member of the board of directors of the Company to hold such
position at the discretion of the Board Directors and stockholders of the
Company.

2. Payments and Benefits. In full consideration of any amounts that may be owed
to you by the Company pursuant to your employment letter dated May 17, 2002 (the
"Employment Letter"), or any other agreement (whether written or oral) between
you and the Company, you will be entitled to receive only the following payments
and benefits (in each case subject to applicable tax withholding):

         a. Severance Benefits. Effective May 23, 2003, you will no longer
         receive your salary and will instead begin receiving the following
         payments and benefits: The Company will (i) pay you the amount of
         $100,000 through normal payroll over twelve (12) months following the
         Termination Date, and (ii) permit you to remain on VNCI's medical
         benefits plan for the period during which you continue to receive the
         payments noted in (i) above.

         b. Vacation Pay. You agree that you are not due any accrued vacation.




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         c. COBRA. Once you are no longer on the Company's payroll, you will
         have the right to COBRA coverage for an additional 18 months under the
         Company's group medical plan, in accordance with and subject to the
         provisions of COBRA and the Company's group medical plan. This COBRA
         coverage will end if you do not make monthly premium payments or, it
         can end earlier if you experience a "COBRA disqualifying event" (such
         as becoming covered by another group health plan). Specific information
         on your COBRA rights and election forms will be provided to you under
         separate cover upon your request.

         d. 401(k). Any vested account you may have under the Company's 401(k)
         plan will be distributed to you in accordance with the terms of such
         plan. Information regarding the 401(k) plan will be provided to you
         separately. Additionally, you shall be entitled to continue making
         contributions to the Company's 401(k) plan, in accordance with the
         terms of such plan, for so long as you remain on the Company's payroll.

         e. Conditional Severance Payment. In addition to the amounts set forth
         above, you shall be eligible to receive additional severance amounts of
         up to $100,000, conditional upon the Company's achievement of the
         following criterion: In each calendar quarter in which the Company
         achieves $250,000 of net earnings generated from Company revenue (the
         "Target"), you will receive a payment within 45 days of the end of such
         quarter in the amount of $25,000. You shall be eligible to receive such
         payments for a total of four calendar quarters in which the Company
         achieves the Target, for a maximum of $100,000, and your eligibility
         for these payments will continue for a period of three (3) years from
         the end of the current calendar quarter (the "Eligible Period"). Should
         the Company fail to meet the Target during the Eligible Period, you
         shall have no entitlement to any additional severance payments.

3. Cessation of all other Compensation and Benefits. From and after the
Termination Date, you will not receive compensation, payments or benefits of any
kind from the Company other than those set forth in paragraph 2 above, or as
otherwise set forth herein, and you expressly acknowledge and agree that, except
with respect to the payments and benefits specifically set forth in this Letter
Agreement, you are not entitled to any compensation, payment or benefit
whatsoever.

4. Stock Options. Pursuant and subject to the terms of the Company's 1999 Stock
Option Plan, you shall be entitled to retain those of the stock options that
have been granted to you by the Company that have vested as of the date hereof
(your option information is annexed hereto as Exhibit 1). Notwithstanding the
terms of the Stock Option Plan and your Stock Option Agreement, you shall be
entitled to retain your vested stock options for a period of twelve (12) months
from the date hereof, unless otherwise extended by the Board in connection with
the continuation of your participation as a Board Member of the Company.

5. Return of Property. You agree that prior to the Termination Date, you will
have returned to the Company any and all original and duplicate copies of all
files, calendars, books, records, notes, manuals, computer disks, diskettes and
any other magnetic or other media material that


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you have in your possession or under your control belonging to the Company, or
containing confidential or proprietary information concerning the Company or
their clients or operations. You agree that you will also return to the Company
any Company equipment, identification, keys, and card keys and any other
property of the Company. Notwithstanding the foregoing, for so long as you
remain a director of the Company you may continue to keep your Company provided
laptop computer and email account until and unless the Company, in its sole
discretion, determines otherwise. Promptly following the Company's demand, you
shall return the laptop computer to the Company.

6. Employment Letter. You acknowledge that upon the Termination Date, the
Employment Letter shall be of no further force and effect; provided, however,
that as provided in paragraph 16 thereof, the provisions of paragraph 8
(Restrictive Covenants), 9 (Insurance and Indemnification) and 15 (Dispute
Resolution) shall remain in effect in accordance with their terms.

7. Release. As provided in paragraph 7 of the Employment Letter, in order to be
entitled to the severance benefits set forth in paragraph 2(a) above, you must
(i) sign, date and deliver to the Company, no earlier than the Termination Date
and no later than July 7, 2003, the attached Release, and not subsequently
revoke such Release, and (ii) comply and continue to comply with provisions of
paragraph 8 of the Employment Letter. The severance benefits set forth in
paragraph 2(a) will not commence unless and until you have signed and returned
the release and the period during which you may revoke the Release shall have
expired, and during such period, you have not in fact revoked the Release. Once
these severance benefits commence, they will continue only if you comply with
condition (ii) above.

8. Board Role. In connection with your continuing role as Director of the
Company, the Board may request that you engage in activities on behalf of the
Company beyond your Board responsibilities. Any compensation to be paid to you
for the performance of such activities will be agreed by you and the Board.
While you remain on the Board, you shall not accept employment of any kind with
any person or entity that is a direct competitor of the Company, unless
otherwise agreed in advance by the Company in writing. For the avoidance of
doubt, nothing herein shall preclude you from accepting employment with any
person or entity that is not a direct competitor of the Company.

9. Miscellaneous: Choice of Law. This Letter Agreement may be executed in
several counterparts, each or which shall be deemed to be an original but all of
which together will constitute one and the same instrument. This Letter
Agreement constitutes the entire agreement, and supersedes all prior agreements,
of the parties hereto relating to the subject matter hereof, and there are no
written or oral terms or representations made by either party other than those
contained herein. This Letter Agreement cannot be modified, altered or amended
except by a writing signed by each party. No waiver by either party of any
provision or condition of this Letter Agreement at any time shall be deemed a
waiver of such provision or condition at any prior or subsequent time or of any
provision or condition at the same or any prior or subsequent time. This Letter
Agreement and attached Release shall be governed by 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


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jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.

10. Notices. Signed and dated copies of this Letter Agreement, the Release, or
any revocation of the Release should be sent by mail, courier, or facsimile to
the Company, attention General Counsel, at 233 Broadway, N.Y, N.Y 10279, fax
212-553-9698.

Please indicate your acceptance to the terms of this Letter Agreement by
returning a signed and dated copy no later than July 7, 2003.


Sincerely,


Video Network Communications, Inc.


By: /s/ Lawrence K. Kinsella
    -------------------------------
    Lawrence K. Kinsella
    Chief Financial Officer


ACCEPTED AND AGREED


/s/ Carl Muscari
-----------------------------------
Carl Muscari

Date: June 16, 2003
      -----------------------------


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                                   Schedule 1

Option Information

<TABLE>
<CAPTION>
   Name         Position       Plan    Grant Date     Expiration     Options      Exercise $    Vesting Schedule      Vested
<S>            <C>            <C>     <C>            <C>            <C>          <C>          <C>                   <C>
Muscari, C.        CEO         1999     09/09/99       09/08/04        77,500       $13.13        Per agreement       52,500
Muscari, C.        CEO         1999     12/27/00       12/27/05        15,000       $ 5.16      3         0.3333      10,000
Muscari, C.        CEO         1999     01/24/03       03/27/08       150,000       $ 0.60      3         0.3333      75,000
</TABLE>




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                                     RELEASE

         I, Carl Muscari, the undersigned, irrevocably and unconditionally
release, remise, and forever discharge Video Network Communications, Inc. (the
"Company") and the Releasees (as defined below) from, any and all agreements,
promises, liabilities, claims and demands of any kind, in law or equity, whether
known or unknown, suspected or unsuspected, which I, my heirs, executors,
administrators, successors or assigns ever had, or now have against the Company
or any Releasee, including without limitation any and all contract claims,
benefit claims, tort claims, fraud claims, claims for payments, bonuses,
defamation, disparagement, or any other personal injury claims, claims relating
to retirement, pension or unemployment, arising out of or relating to my status
as a stockholder of the Company, my employment, compensation and benefits with
the Company, and/or the termination thereof, and any and all claims of unfair or
unjust dismissal or discrimination on any basis including but not limited to on
the basis of age, race, gender, disability, ethnic or national origin, sexual
orientation, and claims for costs, expenses and attorneys' fees with respect
thereto existing, in each case arising or occurring at any time up to and
including the date I execute this Release, other than those relating to my
enforcement of the terms of the Letter Agreement between me and the Company,
dated June 5, 2003. This Release specifically includes, without limitation, any
and all claims under the Age Discrimination in Employment Act, 29 U.S.C.
'SS' 621 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C.
'SS' 2000(e), the Americans with Disabilities Act, 42 U.S.C. 1201, et seq., the
Employee Retirement Income Security Act of 1974, any and all other federal,
state and/or local statutes, ordinances, regulations or common laws, and any and
all claims for benefits under any compensation, bonus or benefit plan, program
or policy of the Company or the Releasees. For purposes of this Letter
Agreement, the term "the Company and/or Releasees" includes the Company, its
direct or indirect subsidiaries, insurers, direct or indirect corporate parents,
affiliates, its and their past, present and future predecessors, successors and
assigns, and its and their current, former and future officers, directors,
employees, stockholders, representatives, agents, and attorneys, in their
official and/or individual capacities, jointly and individually.

Because the Release includes a release of claims under the Age Discrimination in
Employment Act, I understand that I have a period of up to 21 days to review
(until July 7, 2003) and consider this Release. I agree not to sign this Release
prior to my last day of employment with the Company. I further understand that
once I have signed this Release, I may revoke it at any time during the 7 days
following its execution by delivering a written notice of revocation during that
period to Company by mail, courier, or facsimile, to the attention of Adam
Ableman, Esq, at 233 Broadway, N.Y., N.Y. 10279, fax 212-553-9698. In the event
that I fail to execute and return this Release by July 7, 2003, or execute it
and then revoke it during the 7-day revocation period, this Release will not be
effective, and I will not be entitled to the severance benefits set forth in
paragraph 2(a) of the Letter Agreement.


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I ACKNOWLEDGE THAT I HAVE READ THIS
RELEASE AND I UNDERSTAND
AND ACCEPT ITS TERMS


   /s/ Carl Muscari
-------------------------
Carl Muscari


   June 16, 2003
-------------------------
Date


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