exv10w3



 


Exhibit 10.3




VOTING AND NOTEHOLDER AGREEMENT



     
This VOTING AND NOTEHOLDER AGREEMENT (this
“Agreement”), dated as of December 1, 2005, is by
and among Fluke Electronics Corporation, a Delaware corporation
(the “Buyer”), HEA Corporation, a Delaware corporation
and a wholly-owned subsidiary of the Buyer (the “Transitory
Sub”), and each entity listed in Exhibit I hereto
(each, a “Noteholder” and together, the
“Noteholders”).



     
WHEREAS, the Buyer, the Transitory Sub and Visual Networks, Inc.
(the “Company”) propose to enter into an Agreement and
Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented pursuant to the terms thereof, the
“Merger Agreement”) providing for the merger of the
Company with and into Transitory Sub (the “Merger”),
upon the terms and subject to the conditions set forth in the
Merger Agreement;



     
WHEREAS, as of the date hereof, each Noteholder is the record
owner of (i) the principal amount of the Company’s
5% Senior Secured Convertible Notes due December 31,
2007 (collectively as to such Noteholder, such Noteholder’s
“Existing Notes” and, together with any principal
amount of the Company’s 5% Senior Secured Convertible
Notes due December 31, 2007 acquired by such Noteholder
after the date hereof, such Noteholder’s “Notes”)
listed next to such Noteholder’s name in Exhibit I and
(ii) the number of shares of Company Common Stock listed
next to such Noteholder’s name in Exhibit I
(collectively as to such Noteholder, such Noteholder’s
“Existing Shares” and, together with any shares of
Company Common Stock, and/or any other voting securities of the
Company acquired by such Noteholder after the date hereof,
whether upon the exercise of warrants, options or other rights
(including the 2002 Warrants held by such Noteholder), the
conversion of any Notes or other convertible or exchangeable
securities or by means of purchase, dividend, distribution or
otherwise, such Noteholder’s “Shares”);



     
WHEREAS, as an inducement and a condition to entering into the
Merger Agreement, the Buyer has required that each Noteholder,
severally and not jointly, agree, and each Noteholder has
agreed, severally and not jointly, to enter into this Agreement;



     
WHEREAS, each Noteholder and the Buyer desire to set forth their
agreement with respect to the conversion or tender of the Notes
in certain circumstances and the voting of the Shares in
connection with the Merger and each Noteholder desires to grant
to the Transitory Sub a right of first refusal with respect to
transfers of its Shares, in each case upon the terms and subject
to the conditions set forth herein; and



     
WHEREAS, capitalized terms used but not defined herein shall
have the meanings set forth in the Merger Agreement.



     
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
set forth below, the parties agree as follows:






		
	 	     
    1. Conversion or Tender of Notes at Effective Time.






		
	 	     
    (a) Each Noteholder hereby agrees, severally and not
    jointly, that:






		
	 	     
    (i) if the Notes are, by their terms, convertible into
    shares of Company Common Stock at or prior to the Effective Time
    of the Merger, such Noteholder shall convert all of such
    Noteholder’s Notes into Company Common Stock effective
    immediately prior to the Effective Time in accordance with the
    terms of the Notes; and
	 
	 	     
    (ii) if the Notes are not, by their terms, convertible into
    shares of Company Common Stock at the Effective Time of the
    Merger, such Noteholder shall tender to the Transitory Sub at
    the Effective Time such Noteholder’s Notes for an amount in
    cash equal to the “Repurchase Price” as specified and
    defined in Section 4(a) of the Notes payable to such
    Noteholder in immediately available funds as soon as practicable
    following the Effective Time. The notice provisions of
    Section 4 of the Notes shall not apply to any such tender
    for payment.




It is understood and agreed that this Section 1(a) shall
not be deemed to constitute a waiver of any event of default
under the Notes or to restrict any Noteholder’s ability to
take any actions as a result of any such event of default.



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    (b) Note Transfer Restrictions. Each Noteholder
    agrees not to sell, transfer, pledge, encumber, assign or
    otherwise dispose of or hypothecate (including by gift or by
    contribution or distribution to any trust or similar instrument
    (collectively, “Transfer”)), or enter into any
    contract, option or other arrangement or understanding
    (including any profit sharing arrangement) with respect to the
    Transfer of, any of such Noteholder’s Notes other than
    pursuant to the terms hereof. Notwithstanding the foregoing,
    nothing herein shall be construed to prohibit the conversion of
    the Notes and any shares of Company Common Stock obtained by a
    Noteholder upon such conversion shall be deemed to constitute
    such Noteholder’s Shares for purposes of Section 2 of
    this Agreement, but shall not be deemed to constitute such
    Noteholder’s Shares for purposes of Section 3 of this
    Agreement. For avoidance of doubt, a Noteholder shall not be
    entitled to Transfer pursuant to Section 3 below any shares
    of Company Common Stock obtained by such Noteholder upon such
    conversion.






		
	 	     
    2. Voting of Shares; Proxies; Etc.






		
	 	     
    (a) Agreement to Vote. Each Noteholder hereby
    agrees, severally and not jointly, that, from and after the date
    hereof and until this Agreement shall have been terminated in
    accordance with Section 8:






		
	 	     
    (i) At any meeting of the stockholders of the Company
    called for purposes that include approval of the Merger and
    adoption of the Merger Agreement, however called, or at any
    adjournment thereof, or in connection with any written consent
    of the stockholders of the Company or in any other circumstances
    in which such Noteholder is entitled to vote, consent or give
    any other approval with respect to the Merger and adoption of
    the Merger Agreement, such Noteholder shall vote (or cause to be
    voted) such Noteholder’s Shares (to the extent such Shares
    are entitled to be voted by such Noteholder and are not so voted
    pursuant to the proxy granted in Section 2(b)) in favor of
    adoption of the Merger Agreement and the approval of the terms
    thereof and each of the other actions contemplated by the Merger
    Agreement and this Agreement.
	 
	 	     
    (ii) At any meeting of the stockholders of the Company,
    however called, or at any adjournment thereof, or in connection
    with any written consent of the stockholders of the Company, or
    in any other circumstances in which such Noteholder is entitled
    to vote, consent or give any other approval, such Noteholder
    shall vote (or cause to be voted) such Noteholder’s Shares
    (to the extent such Shares are entitled to be voted by such
    Noteholder) against the following actions:






		
	 	     
    (1) any proposal for an action by the Company the taking of
    which requires the prior consent of the Buyer under the Merger
    Agreement, including the actions set forth in Section 5.1
    of the Merger Agreement, for which the Buyer has not provided
    such consent;
	 
	 	     
    (2) the adoption or approval by the Company of any
    Acquisition Proposal.






		
	 	     
    (b) Proxies. As security for the agreements of the
    Noteholder provided for herein, each Noteholder hereby grants to
    the Transitory Sub a proxy for the term of this Agreement to
    vote such Noteholder’s Shares as indicated in
    Section 2(a) above. Such Noteholder agrees that this proxy
    shall be irrevocable during the term of this Agreement and
    coupled with an interest and each of the Noteholder and the
    Transitory Sub will, at the Buyer’s sole expense, take such
    further action or execute such other instruments as may be
    reasonably necessary to effectuate the intent of this proxy and
    such Noteholder hereby revokes any proxy previously granted by
    such Noteholder with respect to such Noteholder’s Shares
    with respect to any meeting, other than the meeting of
    stockholders of the Company currently scheduled for
    December 6, 2005 and any adjournments or postponements
    thereof.
	 
	 	     
    (c) Transfer Restrictions. Each Noteholder agrees
    not to (i) Transfer, or enter into any contract, option or
    other arrangement or understanding (including any profit sharing
    arrangement) with respect to the Transfer of, any of such
    Noteholder’s Shares other than pursuant to the terms
    hereof, (ii) enter into any voting arrangement or
    understanding with respect to such Noteholder’s



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    Shares (other than this Agreement), whether by proxy, voting
    agreement or otherwise, or (iii) take any action that could
    make any of its representations or warranties contained herein
    untrue or incorrect in any material respect or would have the
    effect of preventing or disabling such Noteholder from
    performing any of its obligations hereunder. For the avoidance
    of doubt, (i) nothing herein shall be construed to prohibit
    the exercise by any Noteholder of warrants to acquire any
    Company Common Stock or the conversion of the Notes and
    (ii) any shares of Company Common Stock obtained by a
    Noteholder upon such exercise or conversion shall be included in
    such Noteholder’s Shares.
	 
	 	     
    (d) Appraisal Rights. Each Noteholder hereby
    irrevocably waives any and all rights which it may have as to
    appraisal, dissent or any similar or related matter with respect
    to the Merger.
	 
	 	     
    (e) No Solicitation. Each Noteholder will not take
    any action that if taken by the Company would be a breach of
    Section 6.1(a) of the Merger Agreement (disregarding for
    this purpose the second sentence of such Section 6.1(a),
    but subject to the last sentence of this Section 2(e)).







		
	 	     
    3. Permitted Transfers of Shares; Right of First
    Refusal.






		
	 	     
    (a) Each Noteholder agrees that it will not Transfer any of
    such Noteholder’s Shares unless in each such case the
    Noteholder shall have first complied with this Section 3.
	 
	 	     
    (b) Each Noteholder shall be permitted to Transfer such
    Noteholder’s Shares (a “Permitted Transfer”) if
    (i) such Shares are sold in “brokers’
    transactions,” as defined in Rule 144 promulgated
    under the Securities Act of 1933, as amended (the
    “Securities Act”), or directly to a “market
    maker,” as defined in Section 3(a)(38) of the
    Securities Exchange Act of 1934, as amended (the “Exchange
    Act”), (ii) to the best knowledge of such Noteholder,
    no purchaser or any related group (within the meaning of
    Section 13(d)(3) of the Exchange Act) would acquire from
    the Noteholders more than one percent (1%) of the outstanding
    Company Common Stock, (iii) the quoted bid price per share
    at the time the order to sell is given by the Noteholder to such
    broker is at least equal to the sum of (A) the Merger
    Consideration (as defined in the Merger Agreement) and
    (B) $0.25 and (iv) such Noteholder has complied with
    the provisions of paragraphs 3(c) through 3(f) below.
	 
	 	     
    (c) Any Noteholder (a “Selling Noteholder”) that
    proposes to effect a Permitted Transfer shall first notify the
    Transitory Sub by electronic mail and telephone of such proposed
    Transfer, which notification shall (i) indicate the number
    of such Noteholder’s Shares proposed to be Transferred (the
    “Offered Shares”), (ii) the quoted bid price at
    which such Transfer is proposed to be effected (the “Bid
    Price”) and (iii) designate a person to contact
    regarding the proposed Transfer (including his or her electronic
    mail address and telephone number). Such notice shall be given
    during “regular trading hours,” as defined in
    Regulation NMS promulgated under the Exchange Act on a day
    on which the Nasdaq National Market is open by telephone (which
    shall be deemed to have been delivered either by reaching in
    person at least one of the following persons or by leaving a
    voice mail message at each of the telephone numbers set forth
    below) and by electronic mail to each of the following persons:
    (1) Jonathan Schwarz, Danaher Corporation
    (jonathan.schwarz@danaher.com; tel: (202) 419-7674)
    and (2) Daniel Raskas, Danaher Corporation
    (daniel.raskas@danaher.com; tel: (202) 419-7672; alt.
    tel: (202) 997-5505); with a copy to Thomas S.
    Ward, Wilmer Cutler Pickering Hale and Dorr LLP
    (thomas.ward@wilmerhale.com; tel: (617) 526-6374). The
    date on which such notice is given is hereinafter referred to as
    the “Offer Date.” The time at which such notice is
    deemed to be delivered as provided in this Section 3(c) is
    hereinafter referred to as the “Offer Time.”
	 
	 	     
    (d) In the event that the Transitory Sub wishes to exercise
    its right of first refusal with respect to all or a portion of
    the Offered Shares, the Transitory Sub must advise the Selling
    Noteholder within one (1) hour of the Offer Time that
    the Transitory Sub is exercising its right of first refusal with
    respect to all or a portion of the Offered Shares. Such advice
    shall indicate the portion of the Offered Shares that the
    Transitory Sub elects to purchase and shall be delivered by
    telephone or electronic mail to the person designated for
    receipt thereof in the Selling Noteholder’s notice. In the



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    event that the Transitory Sub timely delivers its advice to the
    Selling Noteholder as provided herein, the Transitory Sub shall
    be irrevocably obligated, subject to the accuracy as of the
    Settlement Date (as defined below) of the Selling
    Noteholder’s representations and warranties under
    Section 4 of this Agreement, to purchase the portion of the
    Offered Securities that the Transitory Sub has advised the
    Noteholder it elects to purchase at the Bid Price no later than
    4:00 p.m., New York time, on the third trading day
    following the Offer Date (the “Settlement Date”).
	 
	 	     
    (e) In the event that the Transitory Sub does not timely
    exercise its right of first refusal for all of the Offered
    Shares as provided in Section 3(d) or exercises its right
    of first refusal for only a portion of the Offered Shares, the
    Selling Noteholder shall have the right to enter into an
    agreement complying with the requirements of Section 3(b)
    to Transfer all or any part of the Offered Shares as to which
    the Transitory Sub has not exercised its right of first refusal
    pursuant to Section 3(d) at any time prior to the end of
    the second trading day following the Offer Date. The Selling
    Noteholder shall notify the Transitory Sub of the identity of
    any purchaser of at least 250,000 shares of Company Common
    Stock known to the Selling Noteholder. For the avoidance of
    doubt, the preceding sentence shall not require the Selling
    Noteholder to identify any broker or market maker used in
    connection with the Permitted Transfer.
	 
	 	     
    (f) Any Offered Shares not acquired by the Transitory Sub
    pursuant to this Section 3 and not otherwise Transferred by
    the Selling Noteholder in accordance with Section 3(e)
    shall once again become subject to the restrictions on Transfer
    specified in this Agreement.







		
	 	     
    4. Representations and Warranties of the Noteholder.
    Each Noteholder hereby represents and warrants to the Buyer and
    the Transitory Sub as of the date hereof as to itself as follows:






		
	 	     
    (a) Organization. Such Noteholder is a corporation,
    limited liability company or limited partnership duly organized,
    validly existing and in good standing under the laws of the
    jurisdiction of its organization.
	 
	 	     
    (b) Authorization; Validity of Agreement; Necessary
    Action. Such Noteholder has all necessary power and
    authority to execute and deliver this Agreement, to perform its
    obligations hereunder and to consummate the transactions
    contemplated hereby. The execution, delivery and performance by
    it of this Agreement and the consummation by it of the
    transactions contemplated hereby have been duly and validly
    authorized by all necessary action and no other proceedings on
    the part of such Noteholder are necessary to authorize the
    execution and delivery by it of this Agreement and the
    consummation by it of the transactions contemplated hereby. This
    Agreement has been duly and validly executed and delivered by
    the Noteholder, and constitutes the legal, valid and binding
    obligation of the Noteholder, enforceable against it in
    accordance with its terms. Neither the execution, delivery or
    performance of this Agreement by such Noteholder nor the
    consummation by it of the transactions contemplated hereby nor
    compliance by it with any of the provisions hereof will violate
    or conflict with (A) any provision of the charter, by-laws
    or other organizational document of such Noteholder,
    (B) any agreement, arrangement or understanding to which
    such Noteholder is a party or to which the Notes or the Shares
    of such Noteholder may be subject or (C) any Governmental
    Regulation or any order, injunction, writ or decree to which
    such Noteholder or the Notes or the Shares of such Noteholder
    may be subject.
	 
	 	     
    (c) Notes and Shares. Such Noteholder’s
    Existing Notes and Existing Shares are, and the Offered Shares
    on any Settlement Date will be, owned of record by such
    Noteholder. Such Noteholder’s Existing Shares constitute
    all of the voting securities of the Company owned of record by
    the Noteholder. All of the Noteholder’s Existing Shares are
    issued and outstanding and such Noteholder does not own, of
    record or beneficially, any warrants, options or other rights to
    acquire any other voting securities of the Company other than
    the 2002 Warrants. Such Noteholder has sole voting power, sole
    power of disposition, sole power to issue instructions with
    respect to the matters set forth in Sections 1, 2 and 3
    hereof, sole power of conversion, sole power to demand appraisal
    rights and sole power to agree to all of the matters set forth
    in this Agreement, in each case with respect to all of such
    Noteholder’s Existing Shares, Shares, Existing Notes or
    Notes, as the case may



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    be, and will have sole voting power, sole power of disposition,
    sole power to issue instructions with respect to the matters set
    forth in Sections 1, 2 and 3 hereof, sole power of
    conversion, sole power to demand appraisal rights and sole power
    to agree to all of the matters set forth in this Agreement on
    the Closing Date and, with respect to the Offered Shares, on the
    Settlement Date, with no limitations, qualifications or
    restrictions on such rights, subject to applicable securities
    laws and the terms of this Agreement. Such Noteholder has good
    and valid title to its Existing Shares and its Existing Notes,
    at all times during the term hereof and on the Settlement Date
    or the Closing Date will have good and valid title to its Shares
    and at all times during the term hereof and on the Closing Date
    will have good and valid title to its Notes, free and clear of
    all liens, claims, security interests or other charges or
    encumbrances, subject to (x) applicable securities laws,
    (y) the Purchase Agreement, dated as of August 5,
    2005, by and among the Company and the Noteholders (the
    “Note Purchase Agreement”) and (z) the
    Registration Rights Agreement, dated as of August 5, 2005,
    by and among the Company and the Noteholders, and, upon delivery
    of such Noteholder’s Shares or Notes, as the case may be,
    to Transitory Sub against delivery of the consideration therefor
    pursuant to this Agreement, good and valid title thereto, free
    and clear of all liens, claims, security interests or other
    charges or encumbrances (other than any arising as a result of
    actions taken or omitted by the Buyer or the Transitory Sub or
    any arising under applicable securities laws or this Agreement),
    will pass to the Transitory Sub.
	 
	 	     
    (d) No Broker’s Fees. Except for the payment of
    fees by the Noteholders to brokers or market makers in
    connection with Permitted Transfers pursuant to Section 3
    hereof, no broker, finder, investment banker or other Person is
    entitled to any broker’s, finder’s or other fee or
    commission in connection with the transactions contemplated
    hereby based upon arrangements made by or on behalf of the
    Noteholder.







		
	 	     
    5. Representations and Warranties of Buyer and
    Transitory Sub. The Buyer and the Transitory Sub, jointly
    and severally, hereby represent and warrant to the Noteholder as
    of the date hereof as follows:






		
	 	     
    (a) Organization. Each of the Buyer and the
    Transitory Sub is a corporation duly organized, validly existing
    and in good standing under the laws of the jurisdiction of its
    incorporation.
	 
	 	     
    (b) Corporate Authorization; Validity of Agreement;
    Necessary Action. Each of the Buyer and the Transitory Sub
    has all necessary corporate power and authority to execute and
    deliver this Agreement, to perform its obligations hereunder and
    to consummate the transactions contemplated hereby. The
    execution, delivery and performance by each of the Buyer and the
    Transitory Sub of this Agreement and the consummation by them of
    the transactions contemplated hereby have been duly and validly
    authorized by all necessary corporate action and no other
    corporate proceedings on the part of the Buyer or the Transitory
    Sub are necessary to authorize the execution and delivery by
    them of this Agreement and the consummation by them of the
    transactions contemplated hereby. This Agreement has been duly
    and validly executed and delivered by the Buyer and the
    Transitory Sub, and constitutes the legal, valid and binding
    obligation of the Buyer and Transitory Sub, enforceable against
    each of them in accordance with its terms. Neither the
    execution, delivery or performance of this Agreement by the
    Buyer or the Transitory Sub nor the consummation by them of the
    transactions contemplated hereby nor compliance by them with any
    of the provisions hereof will violate or conflict with
    (A) any provision of the charter, by-laws or other
    organizational document of the Buyer or the Transitory Sub,
    (B) any agreement, arrangement or understanding to which
    the Buyer or the Transitory Sub is a party or (C) any
    Governmental Regulation or any order, injunction, writ or decree
    to which the Buyer or the Transitory Sub may be subject.
	 
	 	     
    (c) Financial Resources. No later than the
    applicable Settlement Date, the Transitory Sub will have, and
    the Buyer shall cause the Transitory Sub to have, sufficient
    cash resources in immediately available funds to consummate any
    sale of Offered Shares pursuant to Section 3 hereof.



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    6. Further Agreements of the Noteholders.






		
	 	     
    (a) Each Noteholder hereby authorizes and requests that a
    stop transfer order be entered with the Company with respect to
    all of such Noteholder’s Notes. Such Noteholder agrees
    with, and covenants to, the Buyer that the Noteholder shall not
    request that the Company register the transfer (book-entry or
    otherwise) of any Note or Notes, unless such transfer is made in
    compliance with this Agreement.
	 
	 	     
    (b) Each Noteholder hereby authorizes and requests the
    Company’s counsel to notify the Company’s transfer
    agent that that there is a stop transfer order with respect to
    any shares of Company Common Stock obtained by a Noteholder upon
    any conversion of the Notes (the “Conversion Shares”).
    Such Noteholder agrees with, and covenants to, the Buyer that
    the Noteholder shall not request that the Company register the
    transfer (book-entry or otherwise) of any certificate or
    uncertificated interest representing any of such
    Noteholder’s Conversion Shares.
	 
	 	     
    (c) Each Noteholder and the Company hereby agree that, if
    the Merger is consummated, effective as of the Effective Time
    the Note Purchase Agreement shall terminate, become null
    and void and have no further effect.






		
	 	     
    7. Further Assurances. From time to time prior to
    the Closing, at any other party’s request and without
    further consideration, each party hereto shall execute and
    deliver such additional documents and take all such further
    lawful action as may be reasonably necessary to consummate and
    make effective the transactions contemplated by this Agreement.
	 
	 	     
    8. Termination. This Agreement shall terminate and
    shall become null and void and have no further effect upon the
    earliest to occur of (a) the Effective Time; provided,
    however, that the obligations of the parties hereunder with
    respect to all transactions contemplated hereby to take place
    after the Effective Time shall continue in full force and effect
    until the completion of such transactions, (b) the
    termination of the Merger Agreement in accordance with its terms
    or (c) the failure of the Transitory Sub to make payment on
    any Settlement Date for Offered Shares it has elected to
    purchase pursuant to Section 3 of this Agreement; provided
    that such failure remains uncured for a period of two business
    days from the date that the Noteholder notifies the Transitory
    Sub of such failure. Nothing in this Section 8 shall
    relieve any party of liability for any breach occurring prior to
    the termination of this Agreement.
	 
	 	     
    9. Costs and Expenses. All costs and expenses
    incurred in connection with this Agreement and the consummation
    of the transactions contemplated hereby shall be paid by the
    party incurring such expenses.
	 
	 	     
    10. Amendment and Modification. This Agreement may
    be amended, modified and supplemented in any and all respects
    only by written agreement of the parties hereto.
	 
	 	     
    11. Notices. All notices and other communications
    hereunder (except as otherwise provided in Sections 3(c)
    and 3(d) hereof, which shall be delivered and confirmed in
    accordance with the terms thereof) shall be in writing and shall
    be deemed given if delivered personally, telecopied (which is
    confirmed) or sent by an overnight courier service (providing
    proof of delivery) to the parties at the following addresses (or
    at such other address for a party as it may specify by like
    notice):






			
	 	(i) 	      If to the Buyer or the Transitory Sub, to:






		
	 	     
        Fluke Electronics Corporation
	 	     
        c/o Danaher Corporation
	 	     
        2099 Pennsylvania Avenue, 12th Floor
	 	     
        Washington DC 20006-1813
	 	     
        Attention: Jonathan Schwarz
	 	     
        (202) 828-0860 (fax)



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        with a copy to:
	 
	 	     
        Wilmer Cutler Pickering Hale and Dorr LLP
	 	     
        2445 M Street, NW
	 	     
        Washington, DC 210037
	 	     
        Attn: Mark A. Dewire, Esq.
	 	     
                    Thomas
    S. Ward, Esq.
	 	     
        Telephone: (202) 663-6000
	 	     
        Facsimile: (202) 633-6363






			
	 	(ii) 	
      if to a Noteholder, to:






		
	 	     
        Special Situations Fund
	 	     
        153 East 53rd Street,
    55th Floor
	 	     
        New York, New York 10022
	 	     
        Attn: Austin W. Marxe and
    David M. Greenhouse
	 	     
        Telephone: (212) 207-6500
	 	     
        Facsimile: (212) 207-6515
	 
	 	     
        with a copy to:
	 
	 	     
        Lowenstein Sandler PC
	 	     
        65 Livingston Avenue
	 	     
        Roseland, NJ 07068
	 	     
        Attn: John D. Hogoboom
	 	     
        Telephone: (973) 597-2382
	 	     
        Facsimile: (973) 597-2383






		
	 	     
    12. Interpretation. When a reference is made in this
    Agreement to Sections, such reference shall be to a Section of
    this Agreement unless otherwise indicated. Whenever the words
    “include,” “includes” or
    “including” are used in this Agreement they shall be
    deemed to be followed by the words “without
    limitation.” The phrases “the date of this
    Agreement,” “the date hereof,” and terms of
    similar import, unless the context otherwise requires, shall be
    deemed to refer to December 1, 2005.
	 
	 	     
    13. Counterparts. This Agreement may be executed in
    two or more counterparts, all of which shall be considered one
    and the same agreement and shall become effective when two or
    more counterparts have been signed by each of the parties and
    delivered to the other parties, it being understood that all
    parties need not sign the same counterpart.
	 
	 	     
    14. Entire Agreement; No Third Party Beneficiaries.
    This Agreement constitutes the entire agreement and supersedes
    all prior agreements and understandings, both written and oral,
    among the parties with respect to the subject matter hereof, and
    is not intended to confer upon any person other than the parties
    hereto any rights or remedies hereunder.
	 
	 	     
    15. Severability. If any term or other provision of
    this Agreement is invalid, illegal or incapable of being
    enforced by any rule of law, or public policy, all other
    conditions and provisions of this Agreement shall nevertheless
    remain in full force and effect so long as the economic or legal
    substance of the transactions contemplated hereby is not
    affected in any manner materially adverse to any party.






		
	 	
    All rights, powers and remedies provided under this Agreement or
    otherwise available in respect hereof at law or in equity shall
    be cumulative and not alternative, and the exercise of any
    thereof by any party shall not preclude the simultaneous or
    later exercise of any other such right, power or remedy by such
    party.






		
	 	     
    16. Governing Law; Consent to Jurisdiction; Waiver of
    Jury Trial. This Agreement shall be governed and construed
    in accordance with the laws of the State of Delaware without
    giving effect to the principles of conflicts of law thereof.
    Each of the parties hereto irrevocably submits to the exclusive
    jurisdiction of the Chancery Court of the State of Delaware and
    the United States District Court for the District of Delaware
    for the purpose of any suit, action, proceeding or judgment
    relating to or arising out



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    of this Agreement and the transactions contemplated hereby.
    Service of process in connection with any such suit, action or
    proceeding may be served on each party hereto anywhere in the
    world by the same methods as are specified for the giving of
    notices under this Agreement. Each of the parties hereto
    irrevocably consents to the jurisdiction of any such court in
    any such suit, action or proceeding and to the laying of venue
    in such court. Each party hereto irrevocably waives any
    objection to the laying of venue of any such suit, action or
    proceeding brought in such courts and irrevocably waives any
    claim that any such suit, action or proceeding brought in any
    such court has been brought in an inconvenient forum. EACH OF
    THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY
    IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS
    THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
    WAIVER.
	 
	 	     
    17. Assignment. Neither this Agreement nor any of
    the rights, interests or obligations hereunder shall be assigned
    by any of the parties hereto (whether by operation of law or
    otherwise) without the prior written consent of the other
    parties, except that (1) the Buyer and the Transitory Sub
    may assign, in the Buyer’s sole discretion, any or all of
    their respective rights, interests and obligations hereunder to
    any direct or indirect wholly owned Subsidiary of the Buyer and
    (2) the Noteholders may assign, in their sole discretion,
    any or all of their respective rights, interest and obligations
    hereunder to any member of the related group (within the meaning
    of Section 13(d)(3) of the Exchange Act) controlled by
    Austin W. Marxe and David M. Greenhouse; provided,
    however, that no such assignment shall relieve a party from any
    of its obligations hereunder. Subject to the preceding sentence,
    this Agreement will be binding upon, inure to the benefit of and
    be enforceable by the parties and their respective successors
    (including the Company as successor to the Transitory Sub
    pursuant to the Merger), heirs, agents, representatives, trust
    beneficiaries, attorneys, affiliates and associates and all of
    their respective predecessors, successors, permitted assigns,
    heirs, executors and administrators.
	 
	 	     
    18. Specific Performance. The parties acknowledge
    and agree that each of the other parties hereto would be
    irreparably damaged if any of the provisions of this Agreement
    are not performed in accordance with their specific terms and
    that any breach of this Agreement could not be adequately
    compensated in all cases by monetary damages alone. Accordingly,
    in addition to any other right or remedy to which any party may
    be entitled, at law or in equity, it shall be entitled to
    enforce any provision of this Agreement by a decree of specific
    performance and temporary, preliminary and permanent injunctive
    relief to prevent breaches or threatened breaches of any of the
    provisions of this Agreement, without posting any bond or other
    undertaking.





[Remainder of Page Intentionally Left Blank]



8







 



     
IN WITNESS WHEREOF, the Buyer, the Transitory Sub and each
Noteholder have caused this Agreement to be signed by their
respective officers or other authorized person thereunto duly
authorized as of the date first written above.






		
	 	
    SPECIAL SITUATIONS FUND III, L.P.






			
	 	By: 	
    /s/ Austin W. Marxe



		
	 	
     

	 	
    Name: Austin W. Marxe



			
	 	Title:	
    General Partner






		
	 	
    SPECIAL SITUATIONS CAYMAN FUND, L.P.






			
	 	By: 	
    /s/ Austin W. Marxe



		
	 	
     

	 	
    Name: Austin W. Marxe



			
	 	Title:	
    General Partner






		
	 	
    SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.






			
	 	By: 	
    /s/ Austin W. Marxe



		
	 	
     

	 	
    Name: Austin W. Marxe



			
	 	Title:	
    General Partner






		
	 	
    SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.






			
	 	By: 	
    /s/ Austin W. Marxe



		
	 	
     

	 	
    Name: Austin W. Marxe



			
	 	Title:	
    General Partner



9







 






		
	 	
    SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P.






			
	 	By: 	
    /s/ Austin W. Marxe



		
	 	
     

	 	
    Name: Austin W. Marxe



			
	 	Title:	
    General Partner




[Signature Page to Voting and Noteholder Agreement]



10







 






		
	 	
    FLUKE ELECTRONICS CORPORATION






			
	 	By: 	
    /s/ Daniel L. Comas



		
	 	
     

	 	
    Name:   Daniel L. Comas



			
	 	Title:	
    Vice President






		
	 	
    HEA CORPORATION






			
	 	By: 	
    /s/ Daniel L. Comas



		
	 	
     

	 	
    Name:   Daniel L. Comas



			
	 	Title:	
    Vice President




Accepted and Agreed only




with respect to Section 6 hereof:




VISUAL NETWORKS, INC.






		
	By: 	
    /s/ Lawrence S. Barker




 





Name:   Lawrence S. Barker



		
	Title:	
    President and Chief Executive Officer 

     and Chairman of the Board of Directors




[Signature Page to Voting and Noteholder Agreement]



11






 




Exhibit I




	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Shares of Company	
	Noteholder	 	Notes		 	Common Stock	
	 	 	 		 	 	
	
    
    Special Situations Fund III, L.P. 

    	 	$	4,195,151	 	 	 	1,926,881	 
	
    
    Special Situations Cayman Fund, L.P. 

    	 	$	1,277,401	 	 	 	586,725	 
	
    
    Special Situations Private Equity Fund, L.P. 

    	 	$	3,685,340	 	 	 	980,786	 
	
    
    Special Situations Technology Fund, L.P. 

    	 	$	130,291	 	 	 	26,019	 
	
    
    Special Situations Technology Fund II, L.P. 

    	 	$	711,818	 	 	 	154,081	 
	 	
    
    Total:

    	 	$	10,000,001	 	 	 	3,674,492