Document:

Exhibit 10.2

                            PATENT LICENSE AGREEMENT

                                     between

                       LUCENT TECHNOLOGIES GRL CORPORATION

                                       and

                               COMDIAL CORPORATION

                         Effective as of January 1, 2000

                   Relating to Business Communication Systems

<PAGE>
                            PATENT LICENSE AGREEMENT

                                TABLE OF CONTENTS

ARTICLE I - GRANTS OF LICENSES

1.01         Grant
1.02         Duration
1.03         Scope
1.04         Ability to Provide Licenses
1.05         Joint Inventions
1.06         Publicity

ARTICLE II - ROYALTY AND PAYMENTS

2.01         Royalty Calculation
2.02         Records and Adjustments
2.03         Reports and Payments

ARTICLE III - TERMINATION

3.01         Term
3.02         Breach
3.03         Voluntary Termination
3.04         Survival

ARTICLE IV - MISCELLANEOUS PROVISIONS

4.01         Disclaimer
4.02         Assignability
4.03         Addresses
4.04         Taxes
4.05         Choice of Law
4.06         Integration
4.07         Outside the United States
4.08         Dispute Resolution
4.09     Releases
4.10     Severability
4.11     Modification

APPENDIX A - DEFINITIONS
APPENDIX B - CUSTOMER RELATIONSHIP MANAGEMENT PATENTS

<PAGE>

                            PATENT LICENSE AGREEMENT

This Patent License  Agreement  ("Agreement") is between the following  Parties:
LUCENT  TECHNOLOGIES GRL  CORPORATION,  a Delaware  corporation  ("LUCENT-GRL"),
having an office at Suite 105,  14645 N.W.  77th Avenue,  Miami  Lakes,  Florida
33014, and COMDIAL CORPORATION,  a Delaware corporation  ("COMDIAL"),  having an
office at 1180 Seminole Trail,  Charlottesville,  Virginia 22906. This Agreement
is effective on January 1, 2000 (the  "Effective  Date").  The Parties  agree as
follows:*

                                    ARTICLE I

                               GRANTS OF LICENSES

1.01 Grant

(a) LUCENT-GRL grants to COMDIAL under LUCENT-GRL's PATENTS personal, worldwide,
nonexclusive and  non-transferable  (except as otherwise provided for in Section
4.02) licenses for:

                                LICENSED PRODUCTS

The licenses granted to COMDIAL under this Agreement do not include any licenses
for VOICE PROCESSING PRODUCTS, SPECIALIZED.

(b) COMDIAL grants to LUCENT-GRL under COMDIAL's PATENTS personal, nonexclusive,
worldwide,  royalty-free and non-transferable  (except as otherwise provided for
in Section 4.02) licenses for:

                                LICENSED PRODUCTS

1.02  Duration

All licenses  granted herein under any patent shall terminate at the earlier of:
(i) termination of such licenses pursuant to Article III; or (ii) the expiration
of the entire unexpired term of such patent.  However,  upon commencement of the
LIMITED PERIOD or at the time of earliest filing  specified in the definition of
LUCENT-GRL's  PATENTS or COMDIAL's PATENTS (as the case may be), the grantor has
no rights, or less than full rights, with respect to any of its patents included

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  *Any term in capital  letters which is defined in the APPENDIX A - DEFINITIONS
shall have the meaning specified therein.

<PAGE>

within such  definition,  the license  granted herein under such patent shall be
for as much of such term as, and to the maximum extent that, the grantor has the
right to grant,  subsequent to commencement  of the LIMITED PERIOD,  at or after
such time of earliest filing.

1.03  Scope

(a) The licenses granted herein are licenses to (i) make, have made, use, lease,
sell and  import  LICENSED  PRODUCTS;  (ii)  make,  have  made,  use and  import
machines,  tools,  materials  and  other  instrumentalities,   insofar  as  such
machines,  tools,  materials  and other  instrumentalities  are  involved  in or
incidental  to the  development,  manufacture,  testing  or repair  of  LICENSED
PRODUCTS which are or have been made, used,  leased,  owned, sold or imported by
the grantee of such  license;  and (iii)  convey to any CUSTOMER of the grantee,
with respect to any LICENSED  PRODUCT which is sold or leased by such grantee to
such CUSTOMER, rights to use and resell such LICENSED PRODUCTS as sold or leased
by such  grantee  (whether  or not as part of a larger  combination);  provided,
however,  that no rights may be conveyed to NON END-USER  CUSTOMERS with respect
to any  invention  which covers (1) a combination  of such LICENSED  PRODUCT (as
sold or leased) with any other product  unless the LICENSED  PRODUCT  embodies a
significant  portion of the invention and the LICENSED PRODUCT has a fair market
value of at least  seventy-five  percent (75%) of the total fair market value of
the  combination  as resold  by such a NON  END-USER  CUSTOMER,  (2) a method or
process which is other than the inherent use of such LICENSED PRODUCT itself (as
sold or  leased),  or (3) a method or  process  involving  the use of a LICENSED
PRODUCT to manufacture (including associated testing) any other product.

(b) Except as otherwise  expressly provided in this Agreement,  licenses granted
herein are not to be  construed  either (i) as consent by the grantor to any act
which  may be  performed  by  the  grantee,  or  (ii)  to  include  licenses  to
contributorily  infringe  or induce  infringement  under  U.S.  law or a foreign
equivalent thereof.

(c) Except as otherwise expressly provided in Section 4.02(c) of this Agreement,
the grant of each license by the grantor  hereunder  includes the right to grant
sublicenses  within the scope of such license to a Party's RELATED COMPANIES for
so long as they remain its RELATED  COMPANIES.  Any such  sublicense may be made
effective  retroactively,  but not prior to the Effective Date hereof, nor prior
to the sublicensees becoming a RELATED COMPANY of such Party.

(d) Notwithstanding  Section 1.03(c), no right is given to COMDIAL,  without the
written  consent of  LUCENT-GRL,  to grant a sublicense to a RELATED  COMPANY of
COMDIAL under certain or all of  LUCENT-GRL'S  PATENTS,  if said RELATED COMPANY
was a licensee  under said  certain or all  LUCENT-GRL'S  PATENTS  for  LICENSED
PRODUCTS at any time within a two (2)-year period prior to said company becoming
a RELATED  COMPANY  unless,  however,  said RELATED  COMPANY ceased to be such a
licensee  solely due to the  termination  of the relevant  license  agreement by
lapse of time (as opposed to voluntary termination or termination by breach).

1.04  Ability to Provide Licenses

(a) It is recognized  that certain  actions of the Parties to this Agreement may
limit their ability to provide licenses hereunder without constituting a breach.
In  particular,  (i)  prior  to the  earliest  filing  of a  patent  application
disclosing an invention of a Party or its RELATED COMPANY, such Party or RELATED
COMPANY may assign to a third party the title to patents on such  invention,  or
(ii) prior to the execution of this  Agreement,  a Party or its RELATED  COMPANY
may have  limited by contract  its ability to provide  licenses  hereunder  with
respect to certain patents or technologies.

(b) A Party's failure to meet any obligation hereunder, due to the assignment of
title to any invention or patent, or the granting of any licenses, to the United
States  Government  or any agency or designee  thereof  pursuant to a statute or
regulation of, or contract with, such Government or agency, shall not constitute
a breach of this Agreement.

(c) Each Party  represents  and warrants  that it has all rights (or rights from
third parties) necessary to enter into this Agreement and the power to grant the
rights described in this Agreement.

(d) Either Party may submit to the other Party no more than two (2) inquiries in
writing  per  calendar  year,  each  inquiry  requesting  whether up to ten (10)
specifically  identified  patents fall within the definitions of this Agreement.
The Party to whom  such an  inquiry  is  submitted  shall,  within  twenty  (20)
business  days,  respond  in writing as to  whether  each  identified  patent is
included within  COMDIAL's  PATENTS (if the recipient of the inquiry is COMDIAL)
or LUCENT-GRL's PATENTS (if the recipient of the inquiry is LUCENT-GRL).

1.05  Joint Inventions

(a) There are  countries  (not  including  the United  States) which require the
express  consent of all inventors or their assignees to the grant of licenses or
rights under patents issued in such countries for joint inventions.

(b) Each Party shall give such  consent,  or shall  obtain such consent from its
RELATED  COMPANIES,  its employees or employees of any of its RELATED COMPANIES,
as required to make full and effective  any such licenses and rights  respecting
any joint  invention  granted  to the  grantee  hereunder  by such  Party and by
another licensor of such grantee.

(c) Each Party shall take steps which are reasonable under the  circumstances to
obtain from third parties whatever other consents are necessary to make full and
effective such licenses and rights  respecting any joint invention  purported to
be granted by it hereunder.  If, in spite of such reasonable efforts, such Party
is unable  to obtain  the  requisite  consents  from  such  third  parties,  the
resulting inability of such Party to make full and effective its purported grant
of such  licenses  and  rights  shall not be  considered  to be a breach of this
Agreement.

1.06  Publicity

Nothing in this Agreement  shall be construed as conferring upon either Party or
its  RELATED  COMPANIES  or  sublicensees  any right to include in  advertising,
packaging or other  commercial  activities  related to a LICENSED  PRODUCT,  any
reference to the other Party (or any of its RELATED  COMPANIES or sublicensees),
its trade names,  trademarks  or service marks in a manner which would be likely
to cause  confusion  or to  indicate  that such  LICENSED  PRODUCT is in any way
certified by the other Party hereto or its RELATED COMPANIES or sublicensees.

                                   ARTICLE II

                              ROYALTY AND PAYMENTS

2.01  Royalty Calculation

(a) In part payment for the grant of rights  hereunder by  LUCENT-GRL to COMDIAL
and in addition to the fees specified in Section  2.01(b),  COMDIAL shall pay to
LUCENT-GRL a  non-refundable  sum of six hundred  fifty  thousand  United States
dollars  (U.S.  $650,000.00)  of which only one hundred  fifty  thousand  United
States dollars (U.S.  $150,000.00)  is creditable with respect to royalties owed
under Sections  2.01(b) and 2.03(b) for the calendar year 2000.  This payment is
due to LUCENT-GRL prior to thirty (30) days after the EXECUTION DATE.

(b) In partial  consideration  for the licenses and rights  exchanged herein for
the  LUCENT-GRL'S  PATENTS and for the  convenience of the Parties,  COMDIAL has
elected  to and  shall  pay to  LUCENT-GRL  in United  States  dollars  for each
calendar  year  beginning  January 1, 2000,  a royalty  amount  calculated  at a
royalty rate of three hundred  seventy-five  thousandths of one percent (0.375%)
of the consolidated  sales of COMDIAL and its RELATED  COMPANIES  ("Consolidated
Sales")  during  such  calendar  year (or  portion  thereof)  during  which this
Agreement  is in effect,  as  reported in its Form 10-K for such  calendar  year
filed with the  Securities  and  Exchange  Commission  ("SEC").  As an  example,
Consolidated  Sales for the year 1998 as reported in the SEC Form 10K-405  filed
on  March  24,  1999  were  one  hundred   twenty-eight   million  nine  hundred
seventy-seven thousand U.S. dollars  ($128,977,000.00 U.S.).  Obligations to pay
accrued  royalties shall survive  termination of licenses and rights pursuant to
Article III.

(c) When a company ceases to be a RELATED  COMPANY of COMDIAL,  royalties  which
have accrued with respect to such company,  but which have not been paid,  shall
become payable with COMDIAL's next scheduled royalty payment.

(d) Notwithstanding any other provisions  hereunder,  royalties shall accrue and
be payable only to the extent that  enforcement  of COMDIAL's  obligation to pay
such royalty would not be prohibited by applicable law.

2.02  Records and Adjustments

(a) LUCENT-GRL will credit to COMDIAL the amount of any overpayment of royalties
made in error which is  identified  and fully  explained in a written  notice to
LUCENT-GRL  delivered  within  two (2) years  after the due date of the  payment
which  included such alleged  overpayment,  provided that  LUCENT-GRL is able to
verify the existence and extent of the overpayment.

(b) No refund,  credit or other  adjustment of royalty payments shall be made by
LUCENT-GRL  except as provided in this Section  2.02.  Rights  conferred by this
Section  2.02 shall not be affected by any  statement  appearing on any check or
other document,  except to the extent that any such right is expressly waived or
surrendered by a Party having such right and signing such statement.

(c) Upon termination of this Agreement or of all the rights and licenses granted
to COMDIAL  herein,  accrued  royalties shall be paid within thirty (30) days of
the date of termination.  LUCENT-GRL shall have the right through its accredited
auditors to make an examination,  during normal business hours, of those records
that are, under recognized accounting practices,  used in the preparation of SEC
filings and that bear upon the amount of royalty payable  hereunder.  Adjustment
shall  be made  within  sixty  (60)  days of the  completion  of such  audit  to
compensate  for any errors or omissions  disclosed by such  examination.  If the
adjustment, if any, reflects an underpayment by COMDIAL in excess of ten percent
(10%) of the amount of royalty  payable as determined by such auditors,  COMDIAL
shall pay the costs of such audit. Otherwise, the audit shall be at LUCENT-GRL's
expense.

2.03  Reports and Payments

(a) COMDIAL shall furnish to LUCENT-GRL, simultaneously with its filing with the
SEC, a copy of each Form 10-Q and each Form 10-K  filed  during the term of this
Agreement.  Such copy shall be sent by first class  mail,  postage  prepaid,  to
LUCENT-GRL at the address specified in Section 4.03.

(b) The annual royalty amount set forth in Section 2.01(b) shall accrue upon the
recognition  of revenues  by COMDIAL  and/or any of its  RELATED  COMPANIES  for
transactions  that would be included in Consolidated  Sales and shall be payable
quarterly.  Such  quarterly  royalty  amount  shall be paid by COMDIAL in United
States  dollars to  LUCENT-GRL  at the address  specified  in Section 4.03 on or
before the date on which COMDIAL files with the SEC its quarterly report on Form
10-Q (as to the first three (3) quarters of each  calendar  year) and its annual
report as to the last quarter of each  calendar  year,  beginning  with the Form
10-Q filed by COMDIAL  with respect to the second  quarter of the calendar  year
2000.  For the first three (3) quarters of each calendar  year,  such  quarterly
royalty  amount  shall  be  calculated  at  a  royalty  rate  of  three  hundred
seventy-five  thousandths  of one  percent  (0.375%) of the  Consolidated  Sales
during such quarter,  as reported in the  respective  Form 10-Q filed by COMDIAL
with the SEC for such quarter.  For the fourth  quarter of each  calendar  year,
such  quarterly  royalty  amount  shall be an amount  equal to a royalty rate of
three  hundred   seventy-five   thousandths  of  one  percent  (0.375%)  of  the
Consolidated Sales during such calendar year, as reported in the respective Form
10-K filed by COMDIAL with the SEC, less the quarterly royalty payments made for
the prior three (3) quarters of that calendar year.  However,  the Parties agree
that for their  convenience the quarterly  royalty payment for the first quarter
of calendar year 2000 shall be one hundred fifty thousand  United States dollars
($150,000.00 U.S.).

(c) Any conversion to United States dollars shall be at the prevailing  rate for
bank  cable  transfers  as quoted for the last day of such  quarterly  period by
leading  United  States banks in New York City  dealing in the foreign  exchange
market.

(d) Overdue payments hereunder shall be subject to a late payment charge for the
period of time such payment is  delinquent  calculated  at an annual rate of one
percentage point (1%) over the prime rate or successive prime rates in effect in
New York City  during  delinquency.  If the amount of such  charge  exceeds  the
maximum permitted by law, such charge shall be reduced to such maximum.

                                   ARTICLE III

                                   TERMINATION

3.01  Term

This Agreement  shall  terminate  upon  termination of the LIMITED PERIOD unless
otherwise  terminated  pursuant to this Article III. Any partial  termination of
rights under this Article III will not affect payments due under Section 2.01.

3.02  Breach

In the event of a breach of this Agreement by either Party, the other Party may,
in addition to any other remedies that it may have, at any time terminate any or
all licenses and rights  granted by it hereunder by not less than two (2) months
written notice  specifying such breach,  unless within the period of such notice
all breaches  specified therein shall have been remedied.  Exercise of the right
of either  Party to terminate  any or all rights and  licenses  pursuant to this
Section 3.02 shall be subject to challenge in  accordance  with Section 4.08, in
which case the  effectiveness  of such  termination  shall be suspended (and the
Parties'  obligations shall continue) until determined by the Dispute Resolution
process  provided  for in  Section  4.08  provided,  however,  that  should  the
breaching Party fail to meet its royalty obligations,  such termination shall be
effective as of such prior written notice of breach.

3.03  Voluntary Termination

By written notice to the other Party, either Party may voluntarily terminate all
or a specified portion of the licenses and rights granted to it hereunder.  Such
notice shall specify the  effective  date (not more than six (6) months from the
giving of said  notice)  of such  termination  and  shall  clearly  specify  any
affected patent, invention or product.

3.04  Survival

(a) If a company ceases to be a RELATED COMPANY of a Party,  licenses and rights
granted  hereunder  with respect to patents of such company that are included in
LUCENT-GRL's  PATENTS  or  COMDIAL's  PATENTS  (as the case may be) shall not be
affected by such cessation.

(b) Any  termination  of licenses and rights of a Party under the  provisions of
this Article III shall not affect such Party's licenses,  rights and obligations
with respect to any LICENSED PRODUCT made prior to such  termination,  and shall
not affect  the other  Party's  licenses  and rights  (and  obligations  related
thereto) hereunder.

                                   ARTICLE IV

                            MISCELLANEOUS PROVISIONS

4.01  Disclaimer

Neither  Party  nor any of its  RELATED  COMPANIES  makes  any  representations,
extends any warranties of any kind,  assumes any  responsibility  or obligations
whatever, or confers any right or license by implication, estoppel or otherwise,
other than the licenses, rights and warranties herein expressly granted.

4.02  Assignability

(a) Each Party has entered  into this  Agreement  in  contemplation  of personal
performance by the other Party and it is each Party's  intention that a transfer
of its  grantee's  licenses or rights not occur,  except as provided for in this
Section 4.02, without the grantor's express written consent.

(b) Except as otherwise  provided for in this Agreement,  neither this Agreement
nor any licenses or rights  hereunder,  in whole or in part, shall be assignable
or transferable  by either Party (by operation of law or otherwise)  without the
other Party's express written consent. Any such purported assignment or transfer
of this  Agreement or licenses or rights  hereunder by either Party  without the
other  Party's  necessary  consent  shall be void  (without  affecting any other
licenses or rights hereunder).

(c) Notwithstanding Sections 4.02(a) and (b), any or all of LUCENT-GRL's rights,
title and interest in this  Agreement and any or all licenses and rights granted
to it hereunder may be assigned without  COMDIAL's consent to any of its RELATED
COMPANIES  at any time and for any  reason  or to  SPINCO  (before  or after its
divestiture  from  Lucent  Technologies  Inc.) or to any  successor  to all or a
portion  of its  business  that is the  subject  matter  of this  Agreement.  If
LUCENT-GRL so assigns its rights,  the terms of this Agreement  shall remain the
same and be  enforceable  by  COMDIAL.  If Lucent  Technologies  Inc.  divests a
portion of its  business and such  divested  business  continues  operation as a
separately  identifiable  business,  then  the  licenses  granted  hereunder  to
LUCENT-GRL  may be sublicensed to such divested  separate  business  without the
consent  of  COMDIAL,  but only (i)  until  the  termination  of this  Agreement
pursuant  to  Article  III;  (ii) to the  extent  and for the time the  divested
business functions as a separately identifiable business, and (iii) for products
and  services  of the  kind  provided  by the  divested  business  prior  to its
divestiture and not to any products or services of any entity which acquires the
divested  business.  This Section 4.02(c) shall apply  regardless of whether the
business is divested by a sale of assets or as a sale of a legal  entity  (e.g.,
sale of a RELATED  COMPANY).  The  sublicensing  rights  specified  herein shall
include any  business  whose  acquisition  is after the  Effective  Date of this
Agreement,  provided  the  acquisition  of such  business was not a sham for the
purpose of extending  rights to the acquired (and then  divested)  business.  In
particular,  the licenses  granted  hereunder to LUCENT-GRL  shall be, solely at
LUCENT-GRL's  option,  sublicensed  to SPINCO upon its  divestiture  from Lucent
Technologies  Inc.  provided,  however,  that the  sublicense to SPINCO will not
include  those ones of  COMDIAL's  PATENTS that issue on any  application  filed
(except those  applications  having a priority date prior to the EXECUTION DATE)
in any or all  countries of the world at any time  subsequent  to the  EXECUTION
DATE.

(d)  Notwithstanding  Sections  4.02(a)  and (b),  COMDIAL may assign all of its
rights  (except as provided  herein) and  obligations  existing or arising under
this  Agreement to any successor to all or a portion of its business that is the
subject matter of this Agreement as the result of an acquisition or merger, with
no  further  right  to  assign,  which  successor  shall  thereafter  be  deemed
substituted  for, and in lieu of, COMDIAL as a Party hereto,  subject to written
acceptance  by the  assignee,  provided  that COMDIAL may so assign upon written
notice to LUCENT-GRL  if: (i) LUCENT-GRL  determines  that such  assignment,  if
made,  or  anticipation  of such  assignment,  would  have or had no effect on a
license  arrangement between itself and such successor (or any entities relating
to such  successor) in effect at any time within a two (2)-year  period prior to
such  assignment,  (ii)  only  products  made  by or for  COMDIAL  prior  to the
acquisition  or merger will be licensed under this Agreement and not products of
the acquiring entity,  except those products of the acquiring entity, its parent
company,  and such parent  company's other  SUBSIDIARIES  that are equivalent to
those products made by or for COMDIAL prior to such  acquisition or merger,  and
(iii) solely for purposes of Section 1.05(b),  1.06, 3.04(a), and the definition
of COMDIAL's  PATENTS,  RELATED  COMPANIES of COMDIAL shall be deemed to include
any parent company of which the acquiring entity is a SUBSIDIARY and such parent
company's  other  SUBSIDIARIES  as of the effective date of the  assignment.  If
COMDIAL so assigns its rights, the terms of this Agreement shall remain the same
and be  enforceable  by  LUCENT-GRL.  The rights so assigned by COMDIAL will not
include any and all rights and licenses under CUSTOMER  RELATIONSHIP  MANAGEMENT
PATENTS granted to COMDIAL pursuant to this Agreement.

(e) In the event  that  COMDIAL  assigns  such  rights  and  obligations  to any
acquiring  entity  pursuant to Section 4.02(d)  ("Assignee"),  the provisions of
Sections  2.01(b),  2.02(c)  and  2.03(a)  and (b)  shall not apply and shall be
replaced with the following provisions. The term "Reportable Product" shall mean
(i) any COMDIAL  product  identical to or equivalent to products  whose sale was
included in Consolidated  Sales prior to such acquisition or merger and (ii) any
product of the  Assignee,  of its RELATED  COMPANIES,  of any parent  company of
which  the  Assignee  is a  SUBSIDIARY,  and  of  such  parent  company's  other
SUBSIDIARIES,  that is  equivalent to any such COMDIAL  product,  whether or not
such a product meets the  definition  of LICENSED  PRODUCT.  The term  "Assignee
Gross  Revenues"  shall mean those  gross  revenues  recognized  for any and all
Reportable Products.

       2.01(b) For the licenses and rights exchanged  herein under  LUCENT-GRL'S
       PATENTS and for the  convenience of the Parties,  Assignee has elected to
       and shall pay to LUCENT-GRL in United States  Dollars a sum calculated at
       a royalty rate of three hundred  seventy-five  thousandths of one percent
       (0.375%) applied to quarterly Assignee Gross Revenues recognized for each
       quarterly  period during which this  Agreement is effective for any time,
       beginning  with the quarterly  period during which the assignment of this
       Agreement by COMDIAL to Assignee  occurs.  Royalty  shall accrue upon the
       invoicing of the sale or lease for any and all such Reportable  Products.
       Upon  termination  of this  Agreement  or of all the rights and  licenses
       granted to COMDIAL herein,  accrued royalties shall be paid within thirty
       (30) days of the date of termination.

       2.02(c) Assignee shall keep full, clear and accurate records with respect
       to  Assignee  Gross  Revenues  and shall  furnish any  information  which
       LUCENT-GRL  may  reasonably   prescribe  from  time  to  time  to  enable
       LUCENT-GRL to ascertain the proper royalty due hereunder.  Assignee shall
       retain such records with respect to Assignee  Gross Revenues for at least
       seven (7) years from the  invoicing  of the sale or lease for any and all
       such  Reportable  Products.  LUCENT-GRL  shall have the right through its
       accredited auditors to make an examination, during normal business hours,
       of all records and accounts bearing upon the amount of royalty payable to
       it  hereunder.  Adjustment  shall be made  within  sixty (60) days of the
       completion  of such  audit to  compensate  for any  errors  or  omissions
       disclosed by such  examination.  If the adjustment,  if any,  reflects an
       underpayment  by COMDIAL in excess of ten percent  (10%) of the amount of
       royalty  payable as  determined by such  auditors,  COMDIAL shall pay the
       costs of such  audit.  Otherwise,  the  audit  shall  be at  LUCENT-GRL's
       expense.

       2.03(a)  Within thirty (30) days after the end of each  quarterly  period
       ending on March 31st, June 30th,  September 30th, or December 31st during
       which this  Agreement  is  effective  for any time,  commencing  with the
       quarterly period during which the assignment of this Agreement by COMDIAL
       to Assignee  occurs,  Assignee shall furnish to LUCENT-GRL at the address
       specified in Section 4.03 a statement certified by a responsible official
       of Assignee showing, in a manner acceptable to LUCENT-GRL, Assignee Gross
       Revenues.

       2.03(b) Within such thirty (30) days, Assignee shall pay in United States
       dollars to  LUCENT-GRL  at the  address  specified  in  Section  4.03 the
       royalties payable in accordance with such statement.

4.03  Addresses

(a) Any notice or other  communication  hereunder shall be sufficiently given to
COMDIAL  when sent by certified  mail  addressed  to Comdial  Corporation,  1180
Seminole Trail,  Charlottesville,  Virginia 22906, Attention:  President, with a
copy to Robert E. Stroud, c/o McGuire,  Woods, Battle & Boothe LLP, Court Square
Building, 310 Fourth Street, N.E., Suite 300, Charlottesville, Virginia 22902 or
to LUCENT-GRL  when sent by certified mail addressed to Contract  Administrator,
Intellectual Property Organization,  Lucent Technologies GRL Corporation,  Suite
105,  14645 N.W.  77th Avenue,  Miami Lakes,  Florida  33014,  United  States of
America. Changes in such addresses may be specified by written notice.

(b) Payments by COMDIAL shall be made to LUCENT-GRL at Lucent  Technologies  GRL
Corporation, General Post Office, P.O. Box 6219, New York, New York, 10087-6219,
United States of America.  Alternatively,  payments to LUCENT-GRL may be made by
bank wire transfers to  LUCENT-GRL's  account at Chase  Manhattan  Bank:  Lucent
Technologies GRL Corporation,  Account No. 323857752,  Swift Code: CHASUS33, ABA
Code: 021000021.  Changes in such address or account may be specified by written
notice.

4.04  Taxes

(a) In anticipation of payments being received from a U.S. corporation and under
current law as of the Effective  Date, the Parties do not  contemplate  that any
taxes (except income taxes),  duties, levies, or similar charges will be imposed
as a result of the  existence or operation of this  Agreement.  However,  in the
event such  charges  are  imposed,  COMDIAL  agrees  that it shall bear all such
charges (and any related interest and penalties), however designated, imposed as
a result of the  existence or operation  of this  Agreement,  except (i) any tax
imposed upon  LUCENT-GRL in a jurisdiction  other than the United States if such
tax is  allowable  as a  credit  against  the  United  States  income  taxes  of
LUCENT-GRL;  and (ii) any net income tax imposed upon  LUCENT-GRL  by the United
States or any  governmental  entity  within  the United  States  (the fifty (50)
states and the District of Columbia).  In order for the  exception  contained in
(i) to apply, COMDIAL must furnish LUCENT-GRL with evidence issued by the taxing
authority in such jurisdiction that such tax has been paid. The evidence must be
furnished  within thirty (30) days of issuance by the taxing  authority and must
be sufficient to satisfy United States taxing authorities that such tax has been
paid.

(b) If COMDIAL is required to bear a tax, duty,  levy or similar charge pursuant
to Section  4.04(a)  above,  COMDIAL shall pay such tax,  duty,  levy or similar
charge  and any  additional  amounts  as are  necessary  to ensure  that the net
amounts received by LUCENT-GRL hereunder after all such payments or withholdings
equal the amounts to which LUCENT-GRL is otherwise entitled under this Agreement
as if such tax, duty, levy or similar charge did not apply.

4.05  Choice of Law

The Parties are  familiar  with the  principles  of New York law, and desire and
agree that the law of New York  (exclusive  of its  conflict of laws  provision)
shall apply in any dispute arising with respect to this Agreement.

4.06  Integration

This Agreement,  together with a letter of assurance by Lucent Technologies Inc.
and a letter  of  assurance  by  COMDIAL,  set forth the  entire  agreement  and
understanding between the Parties as to the subject matter hereof and merges all
prior discussions between them.  However,  the Parties agree that nothing herein
or in such letters of assurance is intended to bind Lucent  Technologies Inc. in
any manner,  except as to the truth of the statements in its such letter. Lucent
Technologies  Inc.  has no  obligations  or duties  pursuant  to the  letters of
assurance, this Agreement, and the subject matter hereof. Neither of the Parties
shall be bound by any warranties, understandings or representations with respect
to such subject matter other than as expressly  provided  herein or in a writing
signed with or subsequent to execution hereof by an authorized representative of
the Party to be bound thereby.

4.07  Outside the United States

(a)  There are  countries  in which the owner of an  invention  is  entitled  to
compensation,   damages  or  other  monetary  award  for  another's   unlicensed
manufacture,  sale, lease, use or importation  involving such invention prior to
the date of  issuance of a patent for such  invention  but on or after a certain
earlier  date,   hereinafter   referred  to  as  the   invention's   "protection
commencement  date" (e.g., the date of publication of allowed claims or the date
of  publication  or  "laying  open" of the filed  patent  application).  In some
instances, other conditions precedent must also be fulfilled (e.g., knowledge or
actual notification of the filed patent application). The Parties agree that (i)
an invention which has a protection commencement date in any such country may be
used in such  country  pursuant to the terms of this  Agreement on and after any
such date, and (ii) all such conditions  precedent are deemed  satisfied by this
Agreement.  There  may be  countries  in which a Party  hereto  may  have,  as a
consequence of this  Agreement,  rights against  infringers of the other Party's
patents licensed hereunder.  Each Party hereby waives any such right it may have
by reason of any third  party's  infringement  or alleged  infringement  of such
patents.

(b) COMDIAL hereby agrees to register or cause to be  registered,  to the extent
required by  applicable  law, and without  expense to  LUCENT-GRL  or any of its
RELATED COMPANIES,  any agreements  wherein  sublicenses are granted by it under
LUCENT-GRL's  PATENTS.  COMDIAL  hereby  waives any and all claims or  defenses,
arising by virtue of the  absence  of such  registration,  that might  otherwise
limit or affect its obligations to LUCENT-GRL.

(c)  LUCENT-GRL  hereby  agrees to  register or cause to be  registered,  to the
extent  required by applicable law, and without expense to COMDIAL or any of its
RELATED COMPANIES,  any agreements  wherein  sublicenses are granted by it under
COMDIAL'S  PATENTS.  LUCENT-GRL  hereby  waives any and all claims or  defenses,
arising by virtue of the  absence  of such  registration,  that might  otherwise
limit or affect its obligations to COMDIAL.

4.08  Dispute Resolution

(a) If a dispute  arises  out of or relates to this  Agreement,  or the  breach,
termination  or validity  thereof,  the Parties agree to submit the dispute to a
sole mediator  selected by the Parties or, at any time at the option of a Party,
to  mediation  by the  American  Arbitration  Association  ("AAA").  If not thus
resolved,  it shall be  referred  to a sole  arbitrator  selected by the Parties
within thirty (30) days of the mediation,  or in the absence of such  selection,
to AAA arbitration which shall be governed by the Federal Arbitration Act.

(b) Any award made (i) shall be a bare award limited to a holding for or against
a Party and affording  such remedy as is deemed  equitable,  just and within the
scope of the Agreement;  (ii) shall be without findings as to issues  (including
but not limited to patent  validity and/or  infringement)  or a statement of the
reasoning  on which the award  rests;  (iii)  may in  appropriate  circumstances
(other than  patent  disputes)  include  injunctive  relief;  (iv) shall be made
within four (4) months of the appointment of the arbitrator;  (v) may be entered
in any court; and (vi) shall be binding.

(c) The requirement  for mediation and arbitration  shall not be deemed a waiver
of any right of termination  under this Agreement but the exercise of such right
is subject to the provisions of Section 3.02. The arbitrator is not empowered to
act or make any award other than based solely on the rights and  obligations  of
the Parties prior to any such termination.

(d) The arbitrator shall be knowledgeable in the legal and technical  aspects of
this Agreement and shall determine  issues of  arbitrability  but may not limit,
expand or otherwise modify the terms of this Agreement.

(e)    The place of mediation and arbitration shall be Washington, D.C.

(f) Each  Party  shall  bear  its own  expenses,  except  those  related  to the
compensation  and expenses of the mediator and  arbitrator  which shall be borne
equally.

(g) A request by a Party to a court for interim  measures  shall not be deemed a
waiver of the obligation to mediate and arbitrate.

(h) The  arbitrator  shall not have authority to award punitive or other damages
in excess of compensatory  damages and each Party  irrevocably  waives any claim
thereto.

(i) The Parties, their representatives,  other participants and the mediator and
arbitrator  shall  hold the  existence,  content  and  result of  mediation  and
arbitration in confidence.

4.09  Releases

(a) Subject to Section  4.09(c) and to the receipt by  LUCENT-GRL of the payment
by COMDIAL  pursuant  to  Section  2.01(a),  LUCENT-GRL,  for itself and for its
present RELATED  COMPANIES (i.e.,  RELATED  COMPANIES as of the Effective Date),
hereby releases  COMDIAL and its present RELATED  COMPANIES,  all of the present
and former officers and directors of COMDIAL and its present RELATED  COMPANIES,
and all CUSTOMERS  under any claim that solely  LUCENT-GRL or any of its present
RELATED  COMPANIES  has for patent  infringement  arising prior to the Effective
Date for which the rights and licenses expressly granted under this Agreement to
COMDIAL and its present RELATED  COMPANIES  would be a complete  defense to such
claim had this  Agreement  been in effect at the time such  patent  infringement
arose.

(b) Subject to Section 4.09(c),  COMDIAL, for itself and for its present RELATED
COMPANIES,  hereby releases LUCENT-GRL and its present RELATED COMPANIES, all of
the present and former  officers  and  directors of  LUCENT-GRL  and its present
RELATED COMPANIES,  and all CUSTOMERS under any claim that solely COMDIAL or any
of its present RELATED  COMPANIES has for patent  infringement  arising prior to
the  Effective  Date for which the rights and licenses  expressly  granted under
this  Agreement  to  LUCENT-GRL  and its present  RELATED  COMPANIES  would be a
complete  defense  to such claim had this  Agreement  been in effect at the time
such  patent  infringement  arose.  For the  purposes of this  Section  4.09(b),
RELATED  COMPANIES of LUCENT-GRL also includes Lucent  Technologies Inc. and its
SUBSIDARIES as they formerly existed as part of AT&T Corp.

(c) The  releases in  Sections  4.09(a) and (b) shall not operate to release any
CUSTOMER  of  COMDIAL  or any of its  RELATED  COMPANIES  who is a party  to any
lawsuit  involving  allegations  of patent  infringement,  patent  invalidity or
patent  unenforceability  in which LUCENT-GRL or any of its RELATED COMPANIES is
an adverse party as of two weeks prior to the EXECUTION DATE.

4.10  Severability

If any paragraph or provision of this Agreement  shall be deemed void or invalid
as a matter of law, the remaining  paragraphs  or  provisions of this  Agreement
shall  nevertheless  remain in full force and effect and be  interpreted  to the
extent possible to effect the overall  intention of the Parties at the EXECUTION
DATE of this Agreement.

4.11  Modification

This Agreement may not be amended,  modified or altered in any way,  except in a
writing identified as such and signed by both Parties hereto.

<PAGE>

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
in duplicate originals by its duly authorized  representatives on the respective
dates entered below.

             LUCENT TECHNOLOGIES GRL CORPORATION

             By:   /s/ G. G. Partlow
                -------------------------------
                       G. G. Partlow
                        Chairman of the Board

             Date:          March 17, 2000
                   --------------------------------

             COMDIAL CORPORATION

             By:         /s/ William G. Mustain
                   --------------------------------------

             Name:       William G. Mustain
                   --------------------------------------

             Title:      Chairman/President/CEO
                   --------------------------------------

             Date:    March 22, 2000
                   --------------------

              THIS AGREEMENT DOES NOT BIND OR OBLIGATE EITHER PARTY
                IN ANY MANNER UNLESS DULY EXECUTED BY AUTHORIZED
                        REPRESENTATIVES OF BOTH PARTIES.Exhibit 10.1

                             STERLING NATIONAL BANK

                       GENERAL LOAN AND SECURITY AGREEMENT

      In consideration of financial accommodations  heretofore extended or to be
extended or continued to undersigned or to others at the request of, or upon the
guarantee of undersigned,  by STERLING  NATIONAL BANK ("Bank") and/or any of its
affiliates, undersigned hereby agrees as follows:

      1. As security for the full and prompt payment of any and all  Liabilities
(as hereinafter defined),  undersigned hereby sells, assigns, pledges, transfers
and sets over to Bank and  grants  Bank a  continuing  first and prior  security
interest in all Security (as  hereinafter  defined).  Said grant is made for the
benefit of Bank,  its  affiliates  and/or any others having a  participation  or
other interest in any of the  Liabilities,  in such proportions as Bank shall in
its sole discretion determine.

      2. The term "Liabilities" as used herein shall include all liabilities and
obligations of any kind of undersigned (or any  partnership,  limited  liability
partnership,  limited  liability  company,  or other  group or  entity  of which
undersigned  is a member) to (a) Bank,  (b) any  affiliates  of Bank and (c) any
other  person  if  Bank or its  affiliates  has a  participation,  intercreditor
agreement  or  other  interest  in such  liabilities  or  obligations  or in the
Security therefor,  and all whether for the account of Bank or its affiliates or
as agent for others,  whether  acquired  directly or  indirectly  by Bank or its
affiliates from undersigned or others, absolute or contingent, joint or several,
secured or unsecured, liquidated or unliquidated, due or not due, matured or not
matured,  contractual or tortious, now existing or hereafter arising or created,
and whether  incurred by undersigned as obligor,  principal,  surety,  endorser,
guarantor or otherwise, and including without limitation all costs and expenses,
including attorneys' fees, incurred by Bank or its affiliates in connection with
any such  liabilities or obligations or any Security  therefor and including all
costs and expenses of Bank or its  affiliates  in complying  with or opposing or
seeking to limit any restraining notices,  levies,  subpoenas, or information or
discovery  requests served upon Bank or its  affiliates,  all in accordance with
customary charges of Bank or its affiliates therefor, including, but not limited
to,  copying,  research  and staff  costs,  including  overtime  costs,  if any,
transportation, legal fees and expenses.

      3. The term  "Obligor" as used herein shall  include  undersigned  and, in
addition,  any  maker,  drawer,  acceptor,  endorser,  guarantor,  hypothecator,
surety,  accommodation party, or any other party directly or contingently liable
for any of the  Liabilities,  and the term "Bank" as used herein shall be deemed
to include Bank and its  affiliates,  whether or not so  designated,  unless the
context of such reference is expressly to the contrary.

      4. The term  "Security"  as used  herein  shall  include all now owned and
hereafter arising, created or acquired property and assets of undersigned of any
kind or nature,  wherever located,  and whether or not in the possession of Bank
or placed in any safe  deposit  box leased by Bank to  undersigned  or under the
control of or in transit to Bank or any of its  affiliates,  nominees

<PAGE>

or agents for any  purpose,  and whether or not  accepted  for the  purposes for
which  delivered  including,  without  limitation:  the balance of every deposit
account of  undersigned  with Bank or any of Bank's  nominees  or agents and all
other  obligations of Bank or any of its nominees or agents to undersigned;  and
all other personal property of undersigned,  including,  without limitation, all
securities,  Book Entry Securities (as hereinafter defined), notes, instruments,
documents,  chattel  paper,  choses in action,  leases,  repurchase  agreements,
money, accounts,  contract rights and all other general intangibles,  including,
without limitation,  all customer lists, credit files, supplier lists, catalogs,
formulations,  manufacturing  procedures,  quality control  procedures,  product
specifications,  sales  materials,  records  and  service  marks,  brand  names,
patents, patent rights, patent applications,  franchises,  copyrights, licenses,
permits,  processes,  trademarks,  trademarks  rights,  trade names,  trade name
rights,  trade  styles and trade  secrets,  together  with the  goodwill  of the
business  represented  thereby,  and all blueprints,  bids,  proposals,  claims,
rights, credits and adjustments and interest of undersigned in any goods thereby
represented;  and all claims for money due, including,  without limitation,  tax
refunds from any federal,  state or municipal government,  or agency thereof, or
any taxing authority; and all goods, including, without limitation, all consumer
goods,  machinery and  equipment,  furniture,  furnishings  and  fixtures,  farm
products and inventory (including,  without limitations,  all goods intended for
sale or lease, or to be furnished  under  contracts of service,  work in process
and raw materials, and all materials and supplies of every nature used or usable
in  connection  with  packing,  shipping,   advertising,   selling,  leasing  or
furnishing  of such goods),  all  substitutions,  accretions,  component  parts,
replacement parts,  replacements  thereof and additions thereto,  as well as all
accessories,  motors,  engines,  auxiliary  parts  used  in  connection  with or
attached  thereto and any packing material in which such goods may be contained;
and all renewals and  substitutions  for, all accessions to, all accessories on,
all  replacements  for,  all  additions  to,  all  income,  dividends  and other
distributions from or on, all rights,  privileges,  options, and profits from or
on or relating to or declared or granted in  connection  with,  and all proceeds
and products of all of the foregoing in any form whatsoever,  including, without
limitation,  all payments and proceeds of insurance  thereon,  and all books and
records, including, without limitation, computer programs and data files, discs,
diskettes,  drives,  print-outs  and other  computer  materials  and  records of
Obligor  pertaining to all of the  foregoing.  Bank does not assume nor shall it
become liable for the  performance of any obligation or duty with respect to any
Security.

      5. The right is granted to Bank in its  discretion,  to file this  General
Loan and Security  Agreement  or a carbon,  photographic  or other  reproduction
thereof  and/or  one or  more  financing  statements,  (with,  or to the  extent
permitted  by law,  without  the  signature  of  undersigned)  under the Uniform
Commercial  Code  naming  undersigned  as debtor and Bank as  secured  party and
indicating  therein  the  types  or  describing  the  items of  Security  herein
specified.  Undersigned will execute, file and record any notices, affidavits or
other documents and take all such other actions as Bank may deem  appropriate to
protect or  perfect  its  security  interest  in the  Security  or to  otherwise
accomplish the purposes of this agreement.  Undersigned  hereby agrees to pay on
demand,  and/or  authorizes Bank to charge its account with the cost of, any and
all filing,  recording and other fees and expenses which Bank deems  appropriate
in order to protect or perfect  its  security  interest  in the  Security  or to
otherwise   accomplish  the  purposes  of  this  agreement,   including  without
limitation the cost of all reports and searches of public records as Bank in its
sole  discretion  shall require.  Undersigned  will promptly  notify Bank of the
imposition at any time of any lien or encumbrance upon any of the Security.

                                      -2-
<PAGE>

Notwithstanding the foregoing,  undersigned  represents,  warrants and covenants
that all of the Security now existing or hereafter created,  arising or acquired
is and will be owned by  undersigned  free and clear of all  security  interest,
liens and encumbrances of any kind, except for the liens and security  interests
herein  granted to Bank.  Undersigned  shall promptly pay when due all taxes and
transportation,  storage and warehousing charges affecting or arising out of the
Security. Undersigned will defend the Security against all claims and demands of
all persons at any time  claiming  the same or any interest  therein  adverse to
Bank.

      Notwithstanding the foregoing, Bank shall have no obligation to comply
with any recording, re-recording, filing, re-filing, or other legal requirements
necessary to establish or maintain the validity, priority or enforceability of,
or Bank's right in or to, the Security or any part thereof.

      6. The right is granted to Bank, in its  discretion,  at any time,  (a) to
transfer to or register in its name or any of its nominees any of the  Security,
and  whether  or not so  transferred  or  registered,  to  receive  the  income,
interest,   dividends  and  profits  thereon,   including  stock  dividends  and
subscription rights, and to hold the same as a part of the Security and/or apply
the same as  hereinafter  provided;  (b) to notify any third  party  (including,
without  limitation,  any  account  debtor,  insurance  company or bailee) as to
Bank's security interest in the Security; (c) to direct any such third party (or
to require  undersigned)  to make any  payment on or with  respect to any of the
Security  to Bank  (regardless  of whether an Event of Default  (as  hereinafter
defined) has  occurred);  (d) to exchange any of the Security for other property
upon  any  reorganization,   recapitalization,  or  other  readjustment  and  in
connection  therewith  to deposit  any of the  Security  with any  committee  or
depository  upon such  terms as Bank may  determine;  (e) in any  bankruptcy  or
similar  proceeding to file a proof of claim for the full amount of the Security
and to vote such claim for or against  any  arrangement  or with  respect to any
other  matter;  (f) in its own name or in the name of  undersigned  or any other
appropriate person. to demand, sue for, collect or receive any money or property
at any time payable or  receivable on account of or in exchange for, or make any
compromise  or  settlement  it may deem  desirable  with  respect to, any of the
Security;   (g)  to  extend  the  time  of  payment,   arrange  for  payment  in
installments, or otherwise modify the terms of, or release, any of the Security;
(h)  to  contest,  pay  and/or  discharge  all  liens,  encumbrances,  taxes  or
assessments on, or claims,  actions or demands against,  any of the Security and
to  take  all  actions  and  proceedings  in its  own  name  or in the  name  of
undersigned or any other  appropriate  person in order to remove or contest such
liens,  encumbrances,  taxes,  assessments,  claims,  actions or demands;  or to
refrain from doing any of the foregoing,  all without  affecting the Liabilities
and  the  Security  and  without  notice  or  liability  to or  the  consent  of
undersigned   except  to  account  for  property   actually  received  by  Bank.
Undersigned  hereby  irrevocably  appoints  Bank  its   attorney-in-fact,   with
authority to receive,  open and dispose of all mail addressed to undersigned and
to notify the Post Office or other  private  carrier  authorities  to change the
address for delivery of mail  addressed to  undersigned  to such address as Bank
may designate;  to endorse the name of undersigned on any  instruments  that may
come into Bank's  possession;  to sign the name of undersigned on any notices to
account  debtors of undersigned and requests for  verification  of accounts;  to
sign  the  name  of  undersigned  on any  assignment  or  other  instruments  of
conveyance  or  transfer  of any of the  Security;  and to take all  such  other
actions as Bank may deem appropriate to carry out and enforce this agreement and
to exercise Bank's rights  hereunder.  Bank shall have no duty to collect income
or  principal,  or to send notices,  perform  services or take any action of any
kind  respecting the management of

                                      -3-
<PAGE>

any  Security.  Bank shall not be obligated  to exercise any  authority or right
granted to it hereunder  and shall not be liable for any action taken or omitted
or the manner of taking any action, except for its willful misconduct, and in no
event for consequential damages.

      7. Undersigned  will pay to Bank all costs and expenses  incurred and sums
paid by Bank (including without limitation  attorneys' fees,  insurance premiums
and sales  commissions)  in connection  with the exercise of any right or remedy
given Bank under this  agreement.  All such  amounts  shall be  included  in the
definition of Liabilities  (and therefore  secured by the Security) and shall be
payable on demand.

      8. At any time and from time to time,  upon  demand  by Bank,  undersigned
will  (a)  deliver  to Bank,  endorsed  and/or  accompanied  by  instruments  of
assignment  and  transfer,  in such form and  containing  such terms as Bank may
request,  any and all instruments,  documents and/or chattel paper  constituting
part of the Security,  as Bank may specify in its demand;  (b) mark all Security
and all books and records  relating  thereto in such manner as Bank may require;
and (c) permit  representatives  of Bank at any time to inspect the Security and
to inspect,  copy and make abstracts from any of undersigned's books and records
and to answer  promptly all of the Bank's written or oral inquiries with respect
thereto.  If  undersigned,  as registered  holder of any of the Security,  shall
receive any stock certificate, option or right, whether as an addition to, or in
substitution or exchange for, any Security, or otherwise,  undersigned agrees to
accept the same as Bank's  agent and to hold the same in trust for Bank,  and to
forthwith   deliver  the  same  to  Bank  in  the  exact  form  received,   with
undersigned's  endorsement  thereof if requested by Bank,  to be held by Bank as
part of the Security.  Undersigned  assigns to Bank all of  undersigned's  right
(but none of its  obligations)  in, to and  under  all  collateral,  guarantees,
subordinations  and other  rights and  benefits  now or  hereafter  received  by
undersigned  with respect to the  Security  and agrees to deliver to Bank,  upon
demand, all agreements,  instruments and/or documents  evidencing same, endorsed
and/or  accompanied by instruments of assignment and transfer,  in such form and
containing such terms as Bank may request.

      9.  Upon  demand  from Bank at any time  that any of the  Liabilities  are
outstanding or there is any agreement  between Bank and undersigned  under which
Liabilities  may be incurred,  undersigned  will assign and transfer to Bank and
grant  to Bank a  security  interest  in  additional  Security  of a  value  and
character  satisfactory  to  Bank  or  make  such  payment  on  account  of  the
Liabilities as Bank may require.

      10. Upon the occurrence of an Event of Default (as  hereinafter  defined),
(a)  any  or  all  of  the  Liabilities   shall,  at  the  option  of  Bank  and
notwithstanding  any time or credit  allowed by any  instrument  evidencing  the
Liabilities,   be  immediately  due  and  payable  without  notice,   demand  or
presentment;  (b) Bank may, in its  discretion,  take possession of the Security
and, for that  purpose,  may enter,  with the  assistance  of any  persons,  any
premises  where the  Security or any part  thereof  may be  located,  and retain
possession  of the  Security at such  premises  (and take such steps as it deems
appropriate  to restrict  access to such  premises or  otherwise  safeguard  the
Security) or remove the same therefrom; (c) undersigned shall, at the request of
Bank,  assemble the Security at such places as Bank may  designate and cooperate
in all other  respects  with Bank in the exercise of its rights  hereunder;  (d)
Bank may vote any shares of stock or other  securities  and  exercise all or any
powers with respect  thereto with the same force and effect as an absolute owner
thereof;  (e) Bank may sell any of the  Security or cause the same to be sold in
the Borough

                                      -4-
<PAGE>

of Manhattan,  New York City, or elsewhere,  in one or more sales or parcels, at
such price and on such terms as Bank may deem advisable,  for cash or on credit,
for immediate or future delivery,  without assumption of any credit risk, at any
public or private sales or other  dispositions,  without  demand of  performance
(which  demand  is  hereby  expressly  waived),  on at  least 5 days  notice  to
undersigned  (if any notice is  required  by law) of any public sale or the time
after  which a  private  sale or other  disposition  may be made  (which  notice
undersigned  acknowledges is reasonable),  and in connection therewith may grant
options and may impose reasonable  conditions thereon, and the purchasers of any
of the Security so sold shall thereafter hold the same absolutely, free from any
claim or right of any kind,  including any equity of  redemption of  undersigned
(any such equity being hereby expressly waived and released), and Bank or any of
its  nominees  or agents  may buy the  Security  at any  public  sale and if the
Security is of a type sold in a recognized  market, or is of a type which is the
subject of widely  distributed  standard price  quotations,  buy the Security at
private  sale;  and (f) in  addition  to and  notwithstanding  any other  rights
granted  by law or  herein  (or any  limitations  contained  herein  on any such
rights), Bank shall have the rights and remedies with respect to the Security of
a secured  party  under the  Uniform  Commercial  Code of the State of New York.
Undersigned  agrees  that any  action  taken  by Bank in  accordance  with  this
paragraph shall be deemed to be commercially reasonable.

      11. As used in this agreement, the term "Event of Default" shall mean: (a)
nonpayment  when  due of any of the  Liabilities  or  failure  on the part of an
Obligor  (as  hereinbefore  defined)  to  observe or perform  any  agreement  or
obligation to be observed or performed hereunder or under any other agreement or
instrument  relating to the  Liabilities or to any other liability or obligation
of an  Obligor  to Bank or its  affiliates;  (b)  making  by an  Obligor  of any
misrepresentation to Bank or its affiliates or failure on the part of an Obligor
to disclose to Bank or its  affiliates  any  material  fact in  connection  with
obtaining credit or an extension of credit, either contemporaneously herewith or
at any time prior or  subsequent  to the  execution  hereof;  (c)  failure of an
Obligor  to furnish  financial  information  forthwith  on demand by Bank or its
affiliates or to permit the  inspection of any books or records;  (d) failure of
an Obligor to pay,  withhold,  collect  or remit when  assessed  or due any tax,
assessment  or other sum payable with respect to any of the Security  (including
without  limitation any premium on any insurance  policy assigned to Bank or its
affiliates as part of the Security), or the making of any tax assessment against
any Obligor by the United States or any state or local governments; (e) entry of
judgment against, or issuance of any writ or order of attachment, injunction, or
garnishment,  or the  existence of any other lien against or with respect to any
property of an Obligor; (f) death of an Obligor, if an individual, or any member
of an Obligor, if a partnership or joint venture;  (g) dissolution,  liquidation
or other  termination  of  existence,  or  adoption  of any  resolution  for the
dissolution,  liquidation or other termination of existence,  of an Obligor; (h)
suspension of the usual business of an Obligor or the condemnation or seizure of
a substantial  part of an Obligor's  property by any  governmental  authority or
court at the instance  thereof;  (i) failure of an Obligor to generally  pay its
debts as they become due or insolvency or business failure of an Obligor, filing
of an application  for or appointment  of a trustee,  custodian,  conservator or
receiver for an Obligor or of any part of an Obligor's property,  assignment for
the benefit of creditors by an Obligor, filing of a petition in bankruptcy by or
against an Obligor,  or  commencement by or against an Obligor of any proceeding
under any  bankruptcy or insolvency  law or any other law relating to the relief
of  debtors,   readjustment  of  indebtedness,   reorganization,   receivership,
composition or extension; (j) failure to comply with the provisions of any lease
covering  premises  where any of the Security is located or of any statue,  law,
ordinance or rule applicable

                                      -5-
<PAGE>

to the conduct of an  Obligor's  business;  (k) making or sending  notice of any
intended bulk transfer by an Obligor;  (l) failure on the part of undersigned or
any of the Security to comply with  Regulation U of the Federal Reserve Board or
any comparable  provision of law hereinafter  enacted;  (m) such a change in the
condition or affairs (financial or otherwise) of an Obligor as in the opinion of
Bank or its affiliates impairs the Security or increases the risk of Bank or its
affiliates  with respect to the  Liabilities or if Bank or its  affiliates  deem
themselves insecure;  (n) default with respect to any indebtedness of an Obligor
to any other  individual or entity if such default would enable said  individual
or entity to accelerate the maturity of such indebtedness; (o) any Obligor shall
seek to rescind or revoke its  guarantee or otherwise to terminate its liability
for  future  Liabilities;  (p) if at any time the market  value of any  security
should decline to such an extent as in the sole and unrestricted opinion of Bank
or its affiliates,  may make the equity insufficient collateral security for the
payment of the  Liabilities;  or (q) if at any time the  collateral or any other
security held by Bank or its affiliates  shall,  in their sole and  unrestricted
judgment, be unsatisfactory.

      12. Notwithstanding any possession of the Security by Bank, whether on its
own  behalf or on behalf of  others,  undersigned  shall  remain  liable for the
payments  in full of the  Liabilities.  Undersigned  assumes all  liability  and
responsibility  for the Security,  and the  obligation of undersigned to pay the
Liabilities shall in no way be affected or diminished by reason of the fact that
any of the Security  may be lost,  destroyed,  stolen,  damaged or for any other
reason  whatsoever be or become  unavailable to undersigned or that the value of
the Security shall be  diminished.  In the event of any partial or complete loss
or destruction of any of the Security by any means,  undersigned  shall,  at its
own expense,  cause such repairs to be made as Bank may deem appropriate for its
protection  or, at the option of Bank,  replace the  Security  with new Security
having a value  equal to the value of the lost or  destroyed  Security  prior to
such loss or destruction.  Undersigned  agrees, at its own expense,  to keep all
insurable  Security  insured against loss or damage by fire,  theft or any other
risk to which the Security may be subject  (including  without  limitation  such
hazards  as Bank may  specify),  for the full  insurable  value  thereof,  under
policies and with insurers  acceptable to Bank,  which polices shall provide for
all losses to be payable to Bank as an additional  named insured and provide for
at least 30 days prior notice to Bank of any intended  nonrenewal,  cancellation
or  modification  of the  policy.  Undersigned  will  deliver to Bank on request
policies  or  certificates  of such  insurance  with  evidence of payment of the
premium  thereon.  If  undersigned  fails to maintain said  insurance,  then, in
addition to any other right or remedy that Bank may have and without waiving the
consequences  of such  default,  Bank may but need not obtain and maintain  said
insurance, at the expense of undersigned,  which expense shall be deemed part of
the  Liabilities  and shall be payable to Bank on  demand.  Bank is  irrevocably
authorized  to file  claims and shall  have the sole  right to retain  insurance
claims adjustors, adjust, settle and collect claims under said insurance by such
means, at such times,  on such terms and in the name of Bank or undersigned,  as
Bank  may see fit,  and in the name and on  behalf  of  undersigned  to  execute
releases and endorse  checks or drafts  payable in respect of any such insurance
claims.  All sums received by Bank from any such  insurance  may, in Bank's sole
discretion,  be held  as part of the  Security  and/or  applied  as  hereinafter
provided.

      13. Bank, at any time, at its option, may apply all or any part of any net
cash  receipts,  after  deducting  all costs and expenses of every kind incurred
therein or  incidental to the retaking.  holding,  preparing for sale,  selling,
leasing,  or the like of the  Security  or in any way  relating to

                                      -6-
<PAGE>

the rights of Bank  thereunder,  including  attorneys'  fees and legal expenses,
from the Security  (whether received on a sale of the Security or, on collection
as proceeds of insurance in accordance with this agreement, or otherwise) to the
payment,  in whole or in part. of principal of and/or  interest on any or all of
the Liabilities, whether or not then due, allocating the same as it shall elect,
making  rebate of interest  or discount to the extent  required by law and so as
not to make the rate of interest  charged  unlawful with respect to undersigned.
If any Liabilities  shall be contingent,  Bank may retain a sufficient amount of
the net cash receipts from the Security to cover the largest aggregate sum which
may become due or owing thereunder with prospective  interest,  costs,  expenses
and attorneys'  fees and shall not be chargeable  with any interest with respect
thereto.

      14.  Until the  occurrence  of an Event of  Default  or  notice  from Bank
terminating  or limiting the right of  undersigned to do so (which notice may be
sent by Bank at any time in its sole discretion,  and whether or not an Event of
Default  has  occurred  or is  threatened),  or,  in  the  case  of  collection,
compromise,  or adjustment of accounts  receivable,  until Bank takes any action
pursuant to this agreement, undersigned may sell or lease in the ordinary course
of its regular  business  inventory  constituting a part of the Security and may
collect,  compromise and adjust accounts  receivable  constituting a part of the
Security,  all on such terms as undersigned  may in good faith deem advisable in
the  ordinary  course  of its  regular  business,  and may  retain  all  sums so
collected.  Except as permitted  by this  paragraph,  undersigned  may not sell,
lease,  assign or  otherwise  dispose of any of the  Security  without the prior
written  consent  of Bank.  In  addition,  undersigned  may not sell,  assign or
otherwise  dispose  of any  shares  of stock or other  securities  now  owned or
hereafter acquired by undersigned which are issued by the same issuer and are of
the same class as any shares of stock or other securities constituting a part of
the Security.  Undersigned  shall keep all of the Security  which is not held at
Bank or at some other place designated by Bank, at undersigned's premises listed
below and shall not remove any of the Security  therefrom  without  Bank's prior
written consent.

      15. If in its sole discretion Bank deems it desirable, Bank may remove any
Security held by Bank from the place where such Security may now or hereafter be
located to any other place and deal with such Security there as herein provided.

      16.  Upon  the  occurrence  of an  Event  of  Default,  and  at  any  time
thereafter, Bank shall have and may exercise, without further notice, a right of
set-off and/or  banker's lien against and in respect of any of the Security then
or  thereafter  held by Bank.  Any right of  set-off  exercise  by Bank shall be
deemed to have  been  exercised  immediately  on the  occurrence  of an Event of
Default,  even  though  such  set-off  is made or  entered  on the books of Bank
subsequent thereto.

      17. Bank shall not be deemed to have  modified or waived any of its rights
hereunder or any terms or conditions hereof unless such modification or waver is
in writing and signed by a duly authorized officer of Bank. No such modification
or waiver,  unless so  expressly  stated  herein,  shall be  effective as to any
transaction  which occurs  subsequent to the date of such modification or waiver
nor shall it  constitute  a  continuing  modification  or  waiver.  No course of
dealing  between  undersigned and Bank shall be effective to change or modify or
to  discharge in whole or part this  agreement.  No delay on the part of Bank in
exercising any power or right hereunder  shall operate as a waiver thereof;  nor
shall any single or partial  exercise of any power or right  hereunder  preclude
any other or further  exercise  thereof of the  exercise  of any other

                                      -7-
<PAGE>

power or right.  All rights and remedies of Bank with respect to the Liabilities
or Security,  whether  evidence hereby or by any other  instrument,  document or
otherwise, shall be cumulative and may be exercised singularly or concurrently.

      18. Bank may assign  and/or  transfer to any assignee or transferee of any
Liabilities, any or all of the Security and Bank's rights hereunder with respect
thereto,  and thereafter Bank shall be fully discharged from all  responsibility
with respect to the Security so assigned  and/or  transferred.  Such assignee or
transferee  shall be vested  with all powers and rights of Bank  hereunder  with
respect to such  Security,  but Bank shall  retain all rights and powers  hereby
given with  respect  to any of the  Security  not so  assigned  or  transferred.
Undersigned  will not assert  against any assignee or  transferee  of any of the
Liabilities any claims or defenses it may have against Bank. Bank may pledge any
of the Security  hereunder (either alone or with others) to the United States or
to the  Federal  Reserve  Bank of New York,  in its own right or as agent of the
United States,  or to others, to secure deposits or other obligations of Bank of
any amounts whatever.

      19. Undersigned hereby waives presentment,  notice of dishonor and protest
with respect to all instruments included in or evidencing the Liabilities or the
Security and, except as specified herein,  any and all other notices and demands
whatsoever, whether or not relating to such instruments.

      20. Undersigned will indemnify and save Bank harmless from and against all
loss, damage,  claims and actions,  whether groundless or otherwise,  arising in
connection with this agreement,  the Liabilities or the Security,  and all costs
and expenses  (including  attorneys'  fees) incurred by Bank in respect thereof.
Undersigned  agree that,  whenever an attorney is used to enforce this agreement
or to enforce,  declare,  collect or adjudicate any rights or obligations  under
this agreement or with respect to the  Liabilities or the Security or collateral
security, whether by suit or by any other means whatsoever, an attorney's fee of
15% of the  principal and interest  then due  thereunder  or hereunder  shall be
payable by such of undersigned  against whom this agreement or any obligation or
right hereunder is sought to be enforced, declared or adjudicated.

      21. If any term,  condition or  provision  of this  agreement or any other
agreement or document executed in connection  herewith or in connection with any
of the  Liabilities  or Security is determined  to be invalid or  unenforceable,
such determination  shall not affect the validity or enforceability of any other
term, condition or provision.

      22. Any demand upon or notice to  undersigned  that Bank may elect to give
shall be effective if deposited in the mails addressed to or otherwise delivered
to  undersigned  at the address set forth below or if  undersigned  has notified
Bank in writing by registered  mail of a change of address,  at the last address
of which Bank has  received  notice.  Demands or notices  addressed or otherwise
delivered to the address at which Bank customarily communicates with undersigned
shall also be effective.  Any notice to Bank shall be deemed  effective  only if
sent to and received at the branch,  division or department  of Bank  conducting
the transaction or transactions hereunder.

      23. If any of the  Security  is or is to be attached  to or  installed  or
located  on real  estate,  undersigned  will  upon  demand  furnish  Bank with a
subordination  or  disclaimer  signed by all

                                      -8-
<PAGE>

persons having an interest in said real estate of any interest equal to or prior
to Bank's interest in the Security.

      24. From and after maturity  (whether by acceleration or otherwise) of any
of the  Liabilities,  any unpaid  balance  remaining  shall bear interest at the
higher of 12% per annum or 3% in excess of the rate  specified in the instrument
evidencing the Liability until payment is actually made (regardless of whether a
judgment is obtained prior to such  payment).  Anything in this agreement or any
other agreement,  instrument or document to the contrary notwithstanding,  in no
event shall interest on any Liability  exceed the maximum rate  permitted  under
any applicable law or regulation,  and if any provision of this agreement or any
other  agreement,  instrument or document is in contravention of any such law or
regulation,  such  provision  shall be deemed amended to provide for interest at
said maximum rate.

      25.  Undersigned,  if more than one. shall be jointly and severally liable
hereunder and all provisions  hereof regarding the Liabilities or Security shall
apply to any  Liability  or any Security of any or all of them.  This  agreement
shall be  binding  upon the heirs,  executors,  administrators,  successors  and
assigns of undersigned and shall inure to the benefit of Bank and its successors
and assigns.  All rights,  powers and authority of Bank under this  agreement or
otherwise permitted by law shall be exercisable by any affiliate of Bank whether
or not  such  affiliate  may be an  obligee  of any of the  Liabilities.  If all
Liabilities  shall at any time be paid in full, this agreement shall nonetheless
remain in full  force and effect  with  respect  to any  Liabilities  thereafter
incurred. If undersigned is a corporation,  this agreement shall be binding upon
any  other   corporation  into  or  with  which  undersigned  shall  be  merged,
consolidated.  reorganized or absorbed,  or which shall  acquired  undersigned's
business  or  all  or  substantially  all of its  assets.  If  undersigned  is a
partnership,  the members  thereof shall also be  individually  bound and liable
hereunder and this agreement shall continue in force  notwithstanding any change
in or  termination  of such  partnership,  whether  such change  occurs  through
voluntary  withdrawal,  death,  retirement  or  otherwise.  Except as  otherwise
provided in this  agreement,  all terms used in this agreement which are defined
in the Uniform  Commercial Code of the State of New York shall have the meanings
therein  stated.  Undersigned  hereby  expressly  consent  to and ratify all the
terms,  provisions  and  conditions of any note or  instrument  now or hereafter
executed,  delivered  or taken in  connection  with any of the  Liabilities  and
further waive any further notice of the creation, maturity and nonpayment of any
such note or instrument or of any of the Liabilities  evidenced thereby. If this
agreement  shall differ in terms with. any ctner  agreement or obligation or the
terms of any of the  Liabilities,  that which gives Bank the greater right shall
prevail.

      26.  If  any  of  the  Security  is  applied  on  account  of  any  of the
Liabilities,  neither  undersigned  nor any other  party shall have any right of
subrogation  to Bank's right in any other  Security held by Bank with respect to
the Liabilities or any right of contribution from Bank by reason thereof.

      27. Bank is authorized to correct  patent errors  herein.  This  agreement
shall take effect  immediately upon execution by undersigned,  and the execution
hereof by Bank shall not be required as a condition to the effectiveness of this
agreement or otherwise.

                                      -9-
<PAGE>

      28.  "Book  Entry  Securities"  shall be  deemed  to  include  any and all
book-entry  U.S.  Treasury   securities  and  other  book-entry   securities  of
undersigned  and  maintained  in an account at or for the  benefit of Bank,  and
whether  maintained  with the Federal  Reserve System or otherwise.  Undersigned
authorizes  Bank  to  serve  as  its  bailee  and  agent  with  respect  to  the
aforementioned  Book Entry Securities and to take such action and to execute and
deliver  such  documents  on behalf of  undersigned  as Bank deems  necessary or
desirable in order to perfect  Bank's  security  interest  therein.  Undersigned
hereby gives notice to Bank, in Bank's  capacity as bailee and agent,  of Bank's
security interest in the aforementioned Book Entry Securities.

      29. In any litigation or legal proceeding  arising out of, or relating to,
this  agreement or any of the  Liabilities  or the  Security,  in which Bank and
undersigned shall be adverse parties,  undersigned waives the right to interpose
any defense  (including  without limitation any statue of limitations and/or any
claim of  laches),  set-off or  counterclaim  of any kind not  directly  arising
herefrom or therefrom,  as the case may be, and also waives the right to a trail
by jury.  In the  event  that  Bank  brings  any  action or suit in any court to
enforce any or all of the  Liabilities  or any of Bank's  rights  hereunder  and
irrespective   of  whether   undersigned   now  or  hereafter  are  resident  or
non-resident of the State of New York, undersigned hereby waive personal service
of any and all  process and consent  that all such  service of process  shall be
made by certified or registered  mail,  return  receipt  requested,  directed to
undersigned at the Chief Executive Office address of undersigned set forth below
or to the last known address of  undersigned  in the records of Bank and service
so made  shall be  complete  ten (10)  days  after  the same has been  posted as
aforesaid. Undersigned hereby irrevocably submits to the jurisdiction of any New
York State or Federal  Court  located in New York City over any action,  suit or
proceeding arising out of any dispute between undersigned and Bank.

      30.  This  agreement  shall  be  interpreted,   and  all  the  rights  and
obligations  arising  hereunder  or from any document  relating  hereto shall be
determined, in accordance with the laws of the State of New York.

      Undersigned  represents  and  warrants  to Bank that (a) the  location  of
undersigned's  chief executive  office is as set forth below,  (b) except as set
forth below,  all of the Security is located either at Bank or at  undersigned's
chief  executive  office,  and/or (c) at additional or other  premises set forth
below all of which are owned or leased by undersigned.

                                      -10-
<PAGE>

Chief Executive Office (for corporation    Other Premises where Security is
or partnership)                            located
Principal Residence (for individuals)      (street address, city, county,
(street address, city, county, state,      state, zip code)
zip code):

5900 Hollis Street, Suite R-1              825 Buckley Road
Emeryville, Alameda County                 San Luis Obispo, San Luis Obispo
California  94608                          County
                                           California  93401

New York, New York

August 3, 2000

      IN WITNESS WHEREOF, undersigned have signed, sealed and delivered this
instrument as of the date hereinbefore set forth.

(individuals sign below)            (Corporations or Partnerships sign below)
                                     (SEAL)

x /s/  Thomas J. Hopfensperger ###-##-####     AMERICOM USA, INC. 52-2068322
-------------------------------------------    ---------------------------------
                 SSN                           (Name of Corporation or
                                                     Partnership) TIN

                                               By:
-------------------------------------------    ---------------------------------
x
-------------------------------------------    ---------------------------------
                  SSN
-------------------------------------------    ---------------------------------
      Address                                  Address

                                               ---------------------------------

STATE OF NEW YORK )  SS.:
COUNTY OF         )

On the            day of                  ,     ,      before      me     came
___________________________,  to me  known to be the  individual(s)  described
in, and who executed  the  foregoing  instrument,  and  acknowledged  that _he
executed the same.

                                    -----------------------------------------
                                    Notary Public, State of

                                      -11-
<PAGE>

STATE OF NEW YORK )  SS.:
COUNTY OF         )

On the day of , , before me came ___________________________, to me known to be
a partner of ________________________________, the partnership mentioned and
described in and which executed the foregoing instrument, and the said partner
duly acknowledges to me that _he executed said instrument for and on behalf of
and with the authority of the said partnership for the uses and purposes therein
mentioned.

                                    -----------------------------------------
                                    Notary Public, State of

STATE OF NEW YORK )  ss.:
COUNTY OF         )

On the day of , , before me came ___________________________, to me known, who,
being by me duly sworn, did depose and say that _he resides at
___________________________________________ in _____________________ that _he is
the _____________________ of ________________________________________________
the corporation described in, and which executed the foregoing instrument of
guaranty; that _he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that _he signed h__ name thereto by
like order.

                                    -----------------------------------------
                                    Notary Public, State of

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