Document:

Warrant to Purchase Common Stock

 Exhibit 10.3 
  
 WARRANT TO PURCHASE COMMON STOCK 
  
 THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
  
 WARRANT TO PURCHASE COMMON STOCK 
  

			
	 Number of Shares:
	  	Up to                      shares (subject to adjustment)
		
	 Warrant Price:
	  	$                      per share
		
	 Issuance Date:
	  	                        , 2004
		
	 Expiration Date:
	  	                        , 2007

  
 THIS WARRANT CERTIFIES THAT for
value received,                      or its registered assigns (hereinafter called the “Holder”) is entitled to
purchase from Global ePoint, Inc. (hereinafter called the “Company”), the above referenced number of fully paid and nonassessable shares (the “Shares”) of common stock (the “Common
Stock”), of Company, at the Warrant Price per Share referenced above; the number of shares purchasable upon exercise of this Warrant referenced above being subject to adjustment from time to time as described herein. This Warrant is
issued in connection with that certain Subscription Agreement dated as of                  , 2004, by and between the Company and Holder (the
“Subscription Agreement”). The exercise of this Warrant shall be subject to the provisions, limitations and restrictions contained herein. 
  
 1. Term and Exercise. 
  
 1.1 Term. This Warrant is exercisable in whole or in part (but not as to any fractional share of Common Stock), at any time and from time to time after the
date hereof prior to 6:00 p.m. on the Expiration Date set forth above. 
  
 1.2
Warrant Price. The Warrant shall be exercisable at the Warrant Price equal to $            . 
  
 1.3 Maximum Number of Shares. The maximum number of Shares of Common Stock exercisable pursuant to this Warrant is
                     Shares. However, notwithstanding anything herein to the contrary, in no event shall the Holder be permitted to exercise
this Warrant for a number of Shares greater than the number that would cause the aggregate beneficial ownership of the Company’s Common Stock (calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of the Holder
and all persons affiliated with the Holder to equal 9.99% of the Company’s Common Stock then outstanding.  
  
 1.4 Procedure for Exercise of Warrant. Holder may exercise this Warrant by delivering the following to the principal office of the Company in accordance
with Section 5.1 hereof: (i) a duly executed Notice of Exercise in substantially the form attached as Schedule A, (ii) payment of the Warrant Price then in effect for each of the Shares being purchased, as designated in the Notice of Exercise, and
(iii) this Warrant. Payment of the Warrant Price may be made by certified or official bank check payable to the order of the Company, or wire transfer of funds to the Company’s account (or any combination of any of the foregoing) in the amount
of the Warrant Price for each share being purchased.  
  
 1.5
Delivery of Certificate and New Warrant. In the event of any exercise of the rights represented by this Warrant, a certificate or certificates for the shares of Common Stock so purchased, registered in the name of the Holder or such other
name or names as may be designated by the Holder, together with any other securities or other property which the Holder is entitled to receive upon exercise of this Warrant, shall be delivered to the Holder hereof, at the Company’s expense,
within a reasonable time, not exceeding fifteen (15) calendar days, after the rights represented by this Warrant shall have been so exercised in accordance with Section 1.4; and, unless this Warrant has expired, a new Warrant representing the number
of Shares (except a remaining fractional share), if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder hereof within such time. The person in whose name any certificate for shares of Common
Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was received by the Company,
irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is on a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such
Shares at the close of business on the next succeeding date on which the stock transfer books are open. 
  
 1.6 Restrictive Legend. Each certificate for Shares shall bear a restrictive legend in substantially the form as follows, together with any additional legend required by (i) any applicable state
securities laws and (ii) any securities exchange upon which such Shares may, at the time of such exercise, be listed: 
  
 “The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended and may not be sold, offered for
sale, transferred or pledged in the absence of such registration or an exemption therefrom under such Act.” 
  
 Any certificate issued at any time in exchange or substitution for any certificate bearing such legend shall also bear such legend unless, in the opinion of counsel for
the Holder thereof (which counsel shall be reasonably satisfactory to the Company), the securities represented thereby are not, at such time, required by law to bear such legend. 
  
 1.7 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of
Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying to Holder an amount
computed by multiplying the fractional interest by the Current Market Price (as defined below) of a full Share. For purposes of this Warrant, the “Current Market Price” of one share of Common Stock as of a particular date
shall be determined as follows: (i) if traded on a national securities exchange or through the Nasdaq Stock Market, the Current Market Price shall be deemed to be the volume weighted average 

 trading price of the Common Stock on such exchange as of five business days immediately prior to such date (or if no
reported sales took place on such day, the last date on which any such sales took place prior to the date of exercise); (ii) if traded over-the-counter but not on the Nasdaq Stock Market, the Current Market Price shall be deemed to be the average of
the closing bid and asked prices as of five business days immediately prior to such date; and (iii) if there is no active public market, the Current Market Price shall be the fair market value of the Common Stock as of such date, as determined in
good faith by the Board of Directors of the Company. 
  
 2. Representations,
Warranties and Covenants. 
  
 2.1 Representations and
Warranties. 
  
 (a) The Company is a corporation duly
organized, validly existing and in good standing under the laws of its state of incorporation and has all necessary power and authority to perform its obligations under this Warrant; 
  
 (b) The execution, delivery and performance of this Warrant has been duly authorized by all necessary actions on the part of
the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms; and 
  
 (c) This Warrant does not violate and is not in conflict with any of the provisions of the Company’s Articles of Incorporation or Certificate of
Determination, Bylaws and any resolutions of the Company’s Board of Directors or stockholders, or any agreement of the Company, and no event has occurred and no condition or circumstance exists that might (with or without notice or lapse of
time) constitute or result directly or indirectly in such a violation or conflict. 
  
 2.2 Issuance of Shares. The Company covenants and agrees that all shares of Common Stock that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. The Company further covenants and agrees that it will pay when due and payable any and all federal and state taxes which may be payable in respect of the
issue of this Warrant or any Common Stock or certificates therefor issuable upon the exercise of this Warrant. The Company further covenants and agrees that the Company will at all times have authorized and reserved, free from preemptive rights, a
sufficient number of shares of Common Stock to provide for the exercise in full of the rights represented by this Warrant. If at any time the number of authorized but unissued shares of Common Stock of the Company shall not be sufficient to effect
the exercise of the Warrant in full, subject to the limitations set forth in Section 1.3 hereto, then the Company will take all such corporate action as may, in the opinion of counsel to the Company, be necessary or advisable to increase the number
of its authorized shares of Common Stock as shall be sufficient to permit the exercise of the Warrant in full, subject to the limitations set forth in Section 1.3 hereto, including without limitation, using its best efforts to obtain any necessary
stockholder approval of such increase. If and so long as the Common Stock issuable upon the exercise of this Warrant is listed on any national securities exchange or the Nasdaq Stock Market, the Company will, if permitted by the rules of such
exchange or market, list and keep listed on such exchange or market, upon official notice of issuance, all shares of such Common Stock issuable upon exercise of this Warrant. 
  
 3. Other Adjustments. 
  
 3.1 Subdivision or Combination of Shares. In case the Company shall at any time subdivide its outstanding Common Stock into a greater number of shares, the
Warrant Price in effect immediately prior to such subdivision shall be proportionately reduced, and the number of Shares subject to this Warrant shall be proportionately increased, and conversely, in case the outstanding Common Stock of the Company
shall be combined into a smaller number of shares, the Warrant Price in effect immediately prior to such combination shall be proportionately increased, and the number of Shares subject to this Warrant shall be proportionately decreased. 

 
 3.2 Dividends in Common Stock, Other Stock or Property. If at any time or
from time to time the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefor: 
  
 (a) Common Stock, Options or any shares or other securities which are at any
time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution; 
  
 (b) any cash paid or payable otherwise than as a regular cash dividend; or

  
 (c) Common Stock or additional shares or other securities or
property (including cash) by way of spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement (other than Common Stock issued as a stock split or adjustments in respect of which shall be covered by the terms of
Section 3.1 above) and additional shares, other securities or property issued in connection with a Change (as defined below) (which shall be covered by the terms of Section 3.4 below), then and in each such case, the Holder hereof shall, upon the
exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clause (b) above and this clause (c)) which such Holder would hold on the date of such exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common
Stock received or became entitled to receive such shares or all other additional stock and other securities and property. 
  
 3.3 Reorganization, Reclassification, Consolidation, Merger or Sale. If any recapitalization, reclassification or reorganization of the share capital of the
Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its shares and/or assets or other transaction (including, without limitation, a sale of substantially all of its assets
followed by a liquidation) shall be effected in such a way that holders of Common Stock shall be entitled to receive shares, securities or other assets or property (a “Change”), then, as a condition of such Change, lawful and
adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby) such shares, securities or other assets or property as may be issued or payable with respect to or in exchange for the number of outstanding Common Stock which such Holder would have been entitled to receive had such
Holder exercised this Warrant immediately prior to the consummation of such Change. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to give effect to the adjustments provided for in this Section 3 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon
exercise of the new Warrant. The provisions of this Section 3.3 shall similarly apply to successive Changes.  
  
 4. Ownership and Transfer. 
  
 4.1 Ownership of This Warrant. The Company may deem and treat the person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary until presentation of this Warrant for registration of transfer as provided
in this Section 4. 
  
 4.2 Transfer and Replacement. Subject to
restrictions on transferability under applicable securities laws, this Warrant and all rights hereunder are transferable in whole or in part upon the books of the Company by the Holder hereof in person or by duly authorized attorney, and a new
Warrant or Warrants, of the same tenor as this Warrant but registered in the name of the transferee or transferees (and in the name of the Holder, if a partial transfer is effected) shall be made and delivered by 
  

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 the Company upon surrender of this Warrant duly endorsed, at the office of the Company in accordance with Section 5.1
hereof. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft or destruction, and, in such case, of indemnity or security reasonably satisfactory to it, and upon surrender of this Warrant if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this Warrant; provided that if the Holder hereof is an instrumentality of a state or local government or an institutional holder or a nominee for such an instrumentality or institutional
holder an irrevocable agreement of indemnity by such Holder shall be sufficient for all purposes of this Warrant, and no evidence of loss or theft or destruction shall be necessary. This Warrant shall be promptly cancelled by the Company upon the
surrender hereof in connection with any transfer or replacement. Except as otherwise provided above, in the case of the loss, theft or destruction of a Warrant, the Company shall pay all expenses, taxes and other charges payable in connection with
any transfer or replacement of this Warrant, other than income taxes and stock transfer taxes (if any) payable in connection with a transfer of this Warrant, which shall be payable by the Holder. Holder will not transfer this Warrant and the rights
hereunder except in compliance with federal and state securities laws and except after providing evidence of such compliance reasonably satisfactory to the Company. 
  
 5. Right of Repurchase. The Company may redeem all, but not less than all, of this Warrant at a call price of $.01 per Warrant
upon 20 days prior written notice if: (i) the volume weighted average price of the Corporation’s Common Stock for any period of fifteen (15) consecutive trading days exceeds $10.00 per share, and (ii) there is an effective Registration
Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Shares issuable to the Holder hereunder, and (iii) the Common Stock is listed for trading on a Principal Market (as defined in the
Subscription Agreement). 
  
 6. Miscellaneous
Provisions. 
  
 6.1 Notices. Any notice or other document
required or permitted to be given or delivered to the Holder shall be delivered or forwarded to the Holder at c/o Mercator Advisory Group, LLC, 555 South Flower Street, Suite 4500, Los Angeles, California 90071, Attention: David F. Firestone
(Facsimile No. 213/553-8285), or to such other address or number as shall have been furnished to the Company in writing by the Holder, with a copy to Sheppard Mullin Richter & Hampton LLP, 333 South Hope Street, 48th Floor, Los Angeles, California 90071-1448 Attention David C. Ulich (Facsimile No. 213/620-1398). Any notice or other document
required or permitted to be given or delivered to the Company shall be delivered or forwarded to the Company at 339 South Cheryl Lane, City of Industry, California 91789, Attention Toresa Lou, with a copy to Preston, Gates & Ellis,
LLP, 1900 Main Street, Suite 600, Irvine, California 92614, Attention: Dan Donahue, or to such other address or number as shall have been furnished to Holder in writing by the Company. 
  
 6.2 All notices, requests and approvals required by this Warrant shall be in writing and shall be conclusively deemed to be given (i)
when hand-delivered to the other party, (ii) when received if sent by facsimile at the address and number set forth above; provided that notices given by facsimile shall not be effective, unless either (a) a duplicate copy of such facsimile notice
is promptly given by depositing the same in the mail, postage prepaid and addressed to the party as set forth below or (b) the receiving party delivers a written confirmation of receipt for such notice by any other method permitted under this
paragraph; and further provided that any notice given by facsimile received after 5:00 p.m. (recipient’s time) or on a non-business day shall be deemed received on the next business day; (iii) five (5) business days after deposit in the United
States mail, certified, return receipt requested, postage prepaid, and addressed to the party as set forth below; or (iv) the next business day after deposit with an international overnight delivery service, postage prepaid, addressed to the party
as set forth below with next business day delivery guaranteed; provided that the sending party receives confirmation of delivery from the delivery service provider. 
  
 6.3 No Rights as Shareholder; Limitation of Liability. This Warrant shall not entitle the Holder to any of the rights of a
shareholder of the Company except upon exercise in accordance with the terms hereof. No provision hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder for the Warrant Price hereunder or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 
  
 6.4 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California as applied to agreements among California residents made and to be performed entirely within the State of California, without giving effect to the conflict of law principles thereof. 
  
 6.5 Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets and/or securities. All of the obligations of the Company relating to the Shares issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder. 
  
 6.6 Waiver, Amendments and Headings. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing signed by both parties (either generally or in a particular instance and either retroactively or prospectively). The headings in this Warrant are for purposes of reference
only and shall not affect the meaning or construction of any of the provisions hereof. 
  
 6.7 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed in the State of California. Each of the
parties irrevocably agrees that any and all suits or proceedings based on or arising under this Agreement may be brought only in and shall be resolved in the federal or state courts located in the City of Los Angeles, California and consents to the
jurisdiction of such courts for such purpose. Each of the parties irrevocably waives the defense of an inconvenient forum to the maintenance of such suit or proceeding in any such court. Nothing herein shall affect the right of a Holder to serve
process in any other manner permitted by law. 
  
 6.8 Attorneys’ Fees
and Disbursements. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party or parties shall be entitled to receive from the other party or parties reasonable attorneys’
fees and disbursements in addition to any other relief to which the prevailing party or parties may be entitled. 
  

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 IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer this
     day of             , 2004. 
  

					
	COMPANY:	 	GLOBAL EPOINT, INC.
			
	 	 	By	 	  

	 	 	Print Name:	 	  

	 	 	Title:	 	  

  

 Page 4 

 SCHEDULE A 
  

FORM OF NOTICE OF EXERCISE 
  
 [To be signed only upon exercise of the Warrant] 
  
 TO BE EXECUTED BY THE REGISTERED HOLDER 
 TO EXERCISE THE WITHIN WARRANT 
  
 The undersigned hereby elects
to purchase              shares of Common Stock (the “Shares”) of Global ePoint, Inc. under the Warrant to Purchase Common Stock dated
                  , 2004, which the undersigned is entitled to purchase pursuant to the terms of such Warrant. The undersigned has delivered
$            , the aggregate Warrant Price for              Shares purchased herewith, in full by certified or
official bank check or wire transfer. 
  
 Please issue a
certificate or certificates representing such shares of Common Stock in the name of the undersigned or in such other name as is specified below and in the denominations as is set forth below: 
  

	
	  

	 [Type Name of Holder as it should appear on the stock certificate]
  
  

	 [Requested Denominations – if no denomination is specified, a single certificate will be issued]

	
	 The initial address of such Holder to be entered on the books of Company shall be:

	  

	  

	  

  
 The undersigned hereby
represents and warrants that the undersigned is acquiring such shares for his own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof. 
  

			
	 By:
	 	  

	 Print Name:
	 	  

	 Title:
	 	  

	 Dated:
	 	  

  

 -1- 

 FORM OF ASSIGNMENT 
 (ENTIRE) 
  
 [To be
signed only upon transfer of entire Warrant] 
  
 TO BE
EXECUTED BY THE REGISTERED HOLDER 
 TO TRANSFER THE WITHIN WARRANT 
  
 FOR VALUE RECEIVED
                     hereby sells, assigns and transfers unto
                     all rights of the undersigned under and pursuant to the within Warrant, and the undersigned does hereby irrevocably
constitute and appoint                      Attorney to transfer the said Warrant on the books of
                         , with full power of substitution. 
  

			
	  

	 [Type Name of Holder]

  

			
		
	 By:
	 	  

	 Title:
	 	  

	 Dated:
	 	  

  
 NOTICE 
  
 The signature to the foregoing Assignment must correspond exactly to the name as written
upon the face of the within Warrant, without alteration or enlargement or any change whatsoever. 
  

 -1- 

 FORM OF ASSIGNMENT 
 (PARTIAL) 
  
 [To be
signed only upon partial transfer of Warrant] 
  
 TO BE
EXECUTED BY THE REGISTERED HOLDER 
 TO TRANSFER THE WITHIN WARRANT 
  
 FOR VALUE RECEIVED
                         hereby sells, assigns and transfers unto
                         (i) the rights of the undersigned to purchase
                         shares of Common Stock under and pursuant to the within Warrant, and (ii) on a non-exclusive
basis, all other rights of the undersigned under and pursuant to the within Warrant, it being understood that the undersigned shall retain, severally (and not jointly) with the transferee(s) named herein, all rights assigned on such non-exclusive
basis. The undersigned does hereby irrevocably constitute and appoint                          Attorney to transfer the
said Warrant on the books of Global ePoint, Inc., with full power of substitution. 
  

	
	

	 [Type Name of Holder]

  

			
	 By:
	 	  

	 Title:
	 	  

	 Dated:
	 	  

  
 NOTICE 
  
 The signature to the foregoing Assignment must correspond exactly to the name as written
upon the face of the within Warrant, without alteration or enlargement or any change whatsoever. 
  

 -1-Exhibit 10.40

 Exhibit 10.40 
  
 EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (this “Agreement”) is entered into as of June 4, 2004 , by and between Visual Networks Operations, Inc.,
a company organized under the laws of Delaware (“Visual” or the “Employer”), and Donald E. Clarke, an individual (hereafter the “Executive”). 
  
 WITNESSETH: 
  
 WHEREAS, VISUAL desires to employ the Executive, and the Executive desires to
accept such employment, on the terms and conditions set forth herein; 
  
 WHEREAS, VISUAL and the Executive shall enter into a Confidentiality, Non-Disclosure, And Non-Solicitation Agreement (the “Non-Solicitation Agreement”), attached hereto as Exhibit A; 
  
 NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, VISUAL and Executive hereby agree as follows: 
  
 ARTICLE 1 
  
 POSITION OF EMPLOYMENT 
  

	1.1	Title and Position. VISUAL agrees to employ Executive in the following position: Executive Vice President and Chief Financial Officer. 

  

	1.2	Start Date. July 12, 2004 (the “Start Date”). 

  

	1.3	Exclusive Devotion of Business Time. VISUAL agrees to employ the Executive and the Executive agrees to devote his full business time, effort, skills and loyalty to the
business of VISUAL, to effectively carry out his responsibilities to VISUAL hereunder and to render his services and skills in the furtherance of the business of VISUAL, except for during permitted vacation periods and reasonable periods of illness
or other incapacity. This Section 1.3 does not prevent the Executive from: (i) serving on civic and charitable boards, subject to VISUAL’s policies and standards; and (ii) managing his investments and the investments of his immediate family,
subject VISUAL’s policies and standards. Despite anything in this Section 1.3 to the contrary, the activities referenced in clauses (i) and (ii) above shall not, individually or in the aggregate, interfere with the performance of the
Executive’s duties under this Agreement. To the extent that Executive desires to act as a member of the Board of Directors of another entity, VISUAL and the Executive shall reasonably discuss and attempt to come to an arrangement suitable to
both the Executive and VISUAL. 

  

	1.4	Conflict with Company Policies. The terms and conditions of Executive’s employment will, to the extent not addressed in this Agreement, be governed by VISUAL’s
company policies (“Policies”). In the event of a conflict between this Agreement and the Policies, the terms of this Agreement shall govern. 

  
 ARTICLE 2 
  
 DUTIES, AUTHORITY AND PERFORMANCE 
  

	2.1	 Performance. Executive acknowledges and agrees that he is being offered a position of employment by VISUAL with the understanding that he possesses a unique
set of skills, abilities, 

  

 1 

	 	 
and experiences which will benefit VISUAL. Executive agrees that his continued employment with VISUAL is contingent upon his successfully performing his
duties as set forth in this Agreement. 

  

	2.2	Duties and responsibilities. VISUAL agrees to employ the Executive as the Executive Vice President and Chief Financial Officer of VISUAL. Executive shall report to the Chief
Executive Officer (the “CEO”) of Visual Networks, Inc. The primary responsibilities of the Executive shall be determined by the CEO from time to time. On the date hereof, the duties and responsibilities of the Executive
generally are as follows: 

  
 2.2.1  Executive
shall render to the very best of his ability, on behalf of VISUAL, and shall undertake diligently, all duties assigned to him by the CEO. 
  
 2.2.2  In the performance of the Executive’s duties hereunder, he must comply in each and every respect with applicable laws, rules and
regulations applicable to VISUAL. 
  
 2.2.3  As Executive
Vice President and Chief Financial Officer of VISUAL, and in support of the duties assigned to him by the CEO, Executive is responsible for strategic direction, structure and effective management of the financial operations of VISUAL and for
providing functional leadership and direction in the areas of accounting, reporting, treasury, cash management, planning/forecasting, capital spending, risk management, investor relations, human resources, and legal. Executive must also effectively
manage and administer the day-to-day execution of these areas. 
  
 2.2.4  The Executive acknowledges that he may have to travel to different locations for business reasons from time to time as is reasonably necessary or advisable for the performance of his duties hereunder. 
  

	2.3	Cooperation. During the term of this Agreement and any time thereafter, the Executive agrees to give prompt written notice to VISUAL of any claim or injury relating to
VISUAL, and to fully cooperate in good faith and to the best of his ability with VISUAL in connection with all pending, potential or future claims, investigations or actions which directly or indirectly relate to any transaction, event or activity
about which the Executive may have knowledge because of his employment with VISUAL. Such cooperation shall include all assistance that VISUAL, its counsel, or its representatives may reasonably request, including reviewing and interpreting
documents, meeting with counsel, providing factual information and material, and appearing or testifying as a witness. Should Executive be required to cooperate under the provisions of this Section 2.3 after termination of his employment with
VISUAL, then he shall be reasonably remunerated by VISUAL for his time and reimbursed by VISUAL for all reasonable costs and expenses related to his cooperation hereunder. 

  

	2.4	Duty of Loyalty. Executive acknowledges and agrees that he owes a fiduciary duty of loyalty to act at all times in the best interests of VISUAL. 

  

	2.5	Business Opportunities. All business opportunities presented to Executive: (i) by reason of Executive’s employment by VISUAL; or (ii) relating to the businesses and
activities engaged in (or contemplated to be engaged in) by VISUAL or any affiliate of VISUAL prior to and as of the date hereof or during the term hereof, shall be owned by, and belong exclusively to, VISUAL, and the Executive shall have no
personal interest or rights therein or thereto. Executive shall promptly disclose any such business opportunity to VISUAL and execute and deliver to VISUAL, without additional compensation, such instruments as VISUAL may require from time to time to
evidence its ownership of any such business opportunity. 

  
 ARTICLE 3 
  
 COMPENSATION AND BENEFITS

  

	3.1	 Base Salary. Executive shall be paid a base salary of two hundred twenty-five thousand dollars ($225,000) annually (the “Base
Salary”), subject to applicable federal, state, and local 

  

 2 

	 	 
withholding, such Base Salary to be paid to Executive on a semi-monthly basis. VISUAL may, in its sole discretion, increase the amount of Base Salary
effective for any specified year or part thereof during the term of this Agreement. 

  

	3.2	Options. Subject to Board approval, Executive shall be granted nonstatutory stock options to purchase three hundred thousand (300,000) shares of common stock of VISUAL (the
“Initial Grant”), issued and pursuant to the applicable Nonstatutory Stock Option Grant Agreement between VISUAL and Executive. Vesting of the Initial Grant shall be as described in the applicable Grant Agreement. Stock
options are subject to the terms and conditions established by Visual’s Board. 

  

	3.3	Annual Bonus. A bonus pool equal to fifty percent (50%) of Executive’s Base Salary (the “Annual Bonus”) shall be available for Executive to earn. The CEO, with
approval from the Board of Directors of Visual (the “Board”), will determine the performance metrics required for earning of all or part of the Annual Bonus as well as payout intervals, if any. The CEO, with approval from the
Board, shall, in his sole discretion, determine what portion of the Annual Bonus pool, if any, has been earned and will be paid to Executive. During the one-time period from Start Date through December 31, 2004 (the “Guaranteed Bonus
Period”), Executive shall receive a guaranteed minimum bonus of a portion of $112,500.00, prorated semi-monthly (“Guaranteed Bonus”). (For example, if Executive’s Start Date is July 1, 2004, the Guaranteed Bonus Period shall be
for the time period between July 1, 2004 and December 31, 2004 and the Guaranteed Bonus shall be 12/24 of $112,500.00 or $56,250.00). The Guaranteed Bonus shall be paid in semi-monthly instalments of $4,687.50 through regular payroll, provided that
Executive remains actively employed, in good standing, with VISUAL as of the date each of the above payments becomes payable. After December 31, 2004, Executive is no longer eligible to receive a Guaranteed Bonus. 

  

	3.4	Signing Bonus. Executive shall receive a one time signing bonus of fifty thousand dollars ($50,000.00). One half of this bonus ($25,000) will be paid on the first regularly
scheduled payroll following Executive’s date of hire and will be subject to all federal, state, and local withholdings as required by law. The remaining half of the bonus ($25,000) will be paid during the first quarter of 2005 and will be
subject to all federal, state, and local withholdings as required by law. 

  

	3.5	Employee Benefits. During the period that Executive is employed by VISUAL and for such longer period as required by applicable law, Executive shall be eligible to participate
in all employee benefit plans, policies, programs, or perquisites in which other VISUAL employees participate. Executive shall accrue Paid Time Off (“PTO”) at the rate of fifteen (15) days per year. 

 
 Details of VISUAL’s insurance plans, including benefit amounts,
limitations and restrictions are described in the summary plan descriptions provided to the Executive. If there is any difference between the summary plan descriptions and the information set forth in this Agreement, then the information contained
in the summary plan descriptions takes precedence. 
  

	3.6	Reimbursement for expenses. VISUAL shall reimburse the Executive for all ordinary, necessary and reasonable out-of-pocket expenses incurred by the Executive for the benefit
of VISUAL upon presentation of appropriate documentation in accordance with VISUAL’s Policies in effect from time to time. 

  
 ARTICLE 4 
  
 TERMINATION OF EMPLOYMENT 
  

	4.1	 Term. Executive‘s employment by VISUAL shall extend for a one (1) year term from Start Date (the “Initial Term”). After the
Initial Term, Executive’s employment shall automatically be extended for subsequent one (1) year terms (each, an “Annual Renewal”), unless either Executive or VISUAL provides the other party with notice of non-renewal at
least forty-five (45) days before the end of the Initial Term or any Renewal Term. Additionally, either VISUAL or Executive may terminate this employment relationship at any time, for any reason or for no 

  

 3 

	 	 
reason, with notice given as provided in Sections 4.2 and 4.3 hereof. 

  

	4.2	Executive’s Right to Terminate 

  
 4.2.1  Executive’s Right to Terminate without Good Reason. The Executive has the right to terminate his employment under this Agreement
at any time during the course of this Agreement by giving forty five (45) days notice in writing to the Board (the “Notice Period”). The Notice Period may be shortened by mutual agreement of the parties. During the Notice
Period, Executive must fulfill all his duties and responsibilities set forth in this Agreement, and use his best efforts to train and support his replacement, if any. Executive’s salary and benefits will remain unchanged during the Notice
Period. 
  
 4.2.2  Executive’s Right to Terminate
for Good Reason. The Executive may resign his employment for “Good Reason” by giving Notice as described in paragraph 4.2.1 above. For purposes of this Agreement, “Good Reason” is defined as
follows: (i) forced relocation of the Executive’s position by VISUAL to a location that is outside of a 25 mile radius of Visual’s offices in Rockville, Maryland; (ii) willful failure by the Company to provide the Executive the base salary
and benefits in accordance with the terms of this Agreement; or (iii) material reduction in the Executive’s job title or responsibilities, without the Executive’s consent, that would constitute a material demotion or diminution of
responsibility. In each such event listed in (i) through (iii) above, the Executive shall give the Company notice thereof which shall specify in reasonable detail the circumstances constituting Good Reason, and there shall be no Good Reason with
respect to any such circumstances if cured by the Company within thirty (30) days after such notice. 
  

	4.3	VISUAL’s Right to Terminate. VISUAL has the right to terminate immediately the Executive’s employment under this Agreement at any time for any of the following
reasons: 

  
 4.3.1 Executive’s death; or

  
 4.3.2 Executive’s
“Disability”, which for purposes of this Agreement means the Executive’s incapacitation by accident, sickness or other circumstances which, in the reasonable good faith determination of the Board, renders Executive
mentally or physically incapable of performing the duties and services required of him hereunder in substantially the same manner and to the extent required hereunder prior to the commencement of such Disability, either with or without reasonable
accommodation, on a full-time basis for a period of at least 90 consecutive days or for a period of six (6) non-consecutive months of the preceding eighteen (18) month period; or 
  
 4.3.3 For “Cause”, which for purposes of this Agreement shall mean: 
  
 4.3.3.1 The Executive has engaged in conduct which: (A) resulted in a
conviction of or plea of guilty or no contest to a misdemeanor involving moral turpitude or involving the property of VISUAL; or (B) resulted in a conviction of or plea of guilty or no contest to a felony under the laws of the United States or any
state or political subdivision thereof; or 
  
 4.3.3.2 The
Executive: (A) commits a breach of his fiduciary duty to VISUAL or any of its affiliates; or (B) commits an act of gross negligence; or (C) engages in willful misconduct; or (D) engages in any transaction which the Executive knows or should have
known would constitute self-dealing or a conflict of interest between the Executive and VISUAL and in which the Executive does or would receive any direct or indirect economic or pecuniary benefit without prior disclosure of such transaction to
VISUAL; or 
  
 4.3.3.3. The Executive violates the internal
procedures or policies of VISUAL in a manner which has a material adverse effect on the reputation, business or prospects of VISUAL, such as “but not limited to”, conduct constituting employment discrimination or sexual harassment; or

  

 4 

 4.3.3.4 Material default or other material breach by Executive of his obligations hereunder; or

  
 4.3.3.5 Failure by to perform diligently and competently his
duties hereunder after written notice from VISUAL of such failure and thirty (30) days to remedy the deficiency described in such notice. 
  

	4.4	Effect of Termination on Compensation. 

  
 4.4.1 Termination by VISUAL Without Cause, Upon Change of Control, or Upon Visual’s Non-Renewal of this Agreement, or Upon Resignation by
Executive for Good Reason. If Executive’s employment hereunder shall be terminated by the Employer without Cause, upon a Change of Control (as defined in Section 6(a)(ii) of the Visual Networks, Inc. 2003 Stock Incentive Plan), or upon
Visual’s non-renewal of this Agreement under Section 4.1 above, or by the Executive for Good Reason, VISUAL agrees to provide Executive with severance pay, payable according to normal payroll practice, amounting to twelve (12) months of the
Executive’s then applicable Base Salary, less applicable withholdings (the “Severance Pay”). In the event that Executive breaches any of the provisions of this Agreement (including but not limited to Executive’s
obligation to cooperate during the Notice Period and/or the Non-Solicitation Agreement incorporated herein), all compensation and benefits hereunder shall cease immediately, Executive’s termination shall be treated as if it had been a
termination for Cause, and Executive shall be required to repay VISUAL any Severance Pay received hereunder. 
  
 4.4.2 Termination by Executive’s Resignation without Good Reason or by Employer for Cause or Death. If Executive’s employment is
terminated by Executive by a voluntary resignation (other than for Good Reason), or for death, or Cause (as that term is defined in section 4.3.3 herein), all compensation and benefits payable hereunder shall terminate contemporaneously with the
date of the Executive’s termination of employment. 
  
 4.4.3
Termination by Employer for Disability. If Executive’s employment is terminated by VISUAL due to the Disability of the Executive (as defined in section 4.3.2 herein) VISUAL agrees to provide Executive with Severance Pay (as defined in
section 4.4.1) provided, however, that VISUAL shall reduce the amount of Severance Pay paid to Executive on each payroll pay period by the amount of long term disability paid to Executive for that pay period under the then-applicable Visual long
term disability plan, subject to the terms of such plan as may be amended. . Amounts paid to Executive by VISUAL under this section 4.4.3 shall in no way reduce the amount of long term disability benefits to which Executive would otherwise be
entitled. 
  
 ARTICLE 5 
  
 GENERAL PROVISIONS 
  

	5.1	Notices. All notices and other communications required or permitted by this Agreement to be delivered by VISUAL or Executive to the other party shall be delivered in writing
to the address shown below, either personally, by facsimile transmission or by registered, certified or express mail, return receipt requested, postage prepaid, to the address for such party specified below or to such other address as the party may
from time to time advise the other party, and shall be deemed given and received as of actual personal delivery, on the first business day after the date of delivery shown on any such facsimile transmission (with confirmed receipt) or upon the date
or actual receipt shown on any return receipt if registered, certified or express mail is used, as the case may be. 

  

			
	Employer:	  	Visual Networks Operations, Inc.
		
	 	  	Attention: Jill Mayer
	 	  	Director of Human Resources
	 	  	2092 Gaither Road
	 	  	Rockville, Maryland 20850
		
	Executive:	  	Donald E. Clarke
	 	  	At Executive’s address as reflected on VISUAL’s records

  

 5 

	5.2	Amendments and Termination; Entire Agreement. This Agreement may not be amended or terminated except by a writing executed by all of the parties hereto. This Agreement
constitutes the entire agreement of VISUAL and Executive relating to the subject matter hereof, and supersedes all prior oral and written understandings and agreements, whether written or oral. Notwithstanding anything herein to the contrary, this
Agreement shall not affect the applicability of the Non-Solicitation Agreement executed by Executive, and the Non-Solicitation Agreement shall remain in full force and effect notwithstanding this Agreement. 

  

	5.3	Severability; Provisions Subject to Applicable Law. All provisions of this Agreement shall be applicable only to the extent that they do not violate any applicable law, and
are intended to be limited to the extent necessary so that they will not render this Agreement invalid, illegal or unenforceable under any applicable law. If any provision of this Agreement or any application thereof shall be held to be invalid,
illegal or unenforceable, the parties agree and stipulate that any court of competent jurisdiction may enforce these restrictions to the maximum extent deemed reasonable, rather than declare any provision unenforceable. 

  

	5.4	Waiver of Rights. No waiver by VISUAL or Executive of a right or remedy hereunder shall be deemed to be a waiver of any other right or remedy or of any subsequent right or
remedy of the same kind. 

  

	5.5	Definitions, Headings and Number. A term defined in any part of this Employment Agreement shall have the defined meaning wherever such term is used herein. The headings
contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Employment Agreement. Where appropriate to the context of this Agreement, use of the singular shall be deemed also
to refer to the plural, and use of the plural to the singular. 

  

	5.6	Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original but all of which taken together shall constitute but one and
the same instrument. 

  

	5.7	Governing Law. The parties acknowledge and expressly agree that this Agreement shall be governed by and interpreted in accordance with federal law and the laws of the State
of Maryland. 

  

	5.8	Attorneys Fees. If VISUAL incurs costs to enforce the terms of this Agreement (including but not limited to a declaratory judgment action), Executive shall reimburse VISUAL
all of its costs and expenses, including reasonable attorneys’ fees. If Executive incurs costs to enforce the terms of this Agreement, VISUAL shall reimburse Executive all of Executive’s costs and expenses, including reasonable
attorneys’ fees. 

  
 The parties hereto agree that any disputes
shall be resolved by the District Court of Maryland for Montgomery County, the Circuit Court of Maryland for Montgomery County, or the United States District Court for the District of Maryland, as may be appropriate. 
  

 6 

 IN WITNESS WHEREOF, VISUAL and Executive have signed this Agreement. 
  

			
	 VISUAL NETWORKS OPERATIONS, INC.

		
	 By:
	 	 /s/ Lawrence S. Barker

	 	 	 Lawrence S. Barker

	 	 	 President and Chief Executive Officer

		
	 Date:
	 	 June 4, 2004

		
	 	 	 /s/ Donald E. Clarke

	 	 	 Donald E. Clarke

		
	 Date:
	 	 June 4, 2004

  

 7 

 Confidentiality, Non-Disclosure, And Non-Solicitation 
  
 In consideration of your employment with Visual Networks Operations, Inc. (the
“Company”): 
  

	1.	Employee hereby agrees to disclose and assign to the Company, its successor, and assigns all discoveries, inventions, and improvements made by Employee alone or jointly with others,
during the period of Employee’s employment with the Company that relate to the historical or planned business of the Company and result from tasks Employee performed in the regular course of Employee’s employment with the Company.

  

	2.	Employee agrees that upon request of the Company, Employee will join and render assistance in any proceedings, and execute any papers necessary to vest title to, and to maintain and
enforce in any and all countries, patents, trademarks, registrations, and/or copyrights with respect to any discoveries, inventions, or improvements assigned by Employee to the Company. 

  

	3.	Employee agrees that Employee will not, while in the employ of the Company or anytime thereafter, disclose any information not in the public domain relating to the Company’s
business, except as may be consistent with Employee’s duties as an Employee of the Company or as may be required by subpoena or other court order requiring such disclosure. Employee further agrees that upon termination of Employee’s
employment with the Company for any reason, Employee will deliver to the Company all property and documents of the Company and all information (computerized or hard copy) relating to the Company’s business then in Employee’s possession.
Employee will not take from the Company any documents or confidential or proprietary information in any form without the written consent of an authorized officer of the Company. 

  

	4.	Employee agrees that during the period of Employee’s employment with the Company and for a period of one (1) year after the termination of Employee’s employment with the
Company, Employee will not engage in or be directly and/or materially financially interested in any business activity that is directly competitive with the Company. For the purposes of this agreement, a “directly competitive” activity is
defined as any activity related to hardware and/or software products to be embedded in a network infrastructure, the primary purpose of which is to aid in the performance management and network management of wide-area data communications networks
based on Frame Relay, SMDS, Asynchronous Transfer Mode, or Internet access technologies. Employee understands and agrees that this definition is meant to reflect the core business of the Company at any given time, and that it may be modified or
interpreted by the Company accordingly. 

  

	5.	Employee agrees that during the period of Employee’s employment with the Company and for a period of one (1) year after the termination of Employee’s employment with the
Company for any reason, Employee will not directly or indirectly solicit, entice, or otherwise influence any Employee, contractor, or client employed or engaged by or doing business with the Company to terminate his/her/its employment or contractual
relationship with the Company or to cease doing business with the Company. 

  
 The terms of this agreement supersede and negate all prior agreements between the Employee and the Company that are otherwise inconsistent with this agreement. 
  

					
	ACCEPTED BY:	 	 	 	 
			
	 /s/ Donald E. Clarke
	 	 	 	 June 4, 2004

	Donald E. Clarke	 	 	 	Date

  

 8

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