Document:

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                                                                   Exhibit 10.27

            FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

            THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"First Amendment") is dated as of this 6th day of March, 2002, by and between
COMDIAL CORPORATION (the "Company"), a Delaware corporation with an office at
106 Cattlemen Road, Sarasota, Florida 34232 and BANK OF AMERICA, N.A. (the
"Bank"), a national banking association with an office at 100 N. Tampa Street,
Suite 1700, Tampa, Florida 33602.

            The Company and the Bank are parties to an Amended and Restated
Credit Agreement dated as of November 22, 2000 (the "Credit Agreement"),
pursuant to which the Bank agreed, subject to the terms and conditions contained
in the Credit Agreement, to extend a revolving credit facility in the initial
aggregate principal amount not to exceed at any time outstanding $21,500,000, to
provide for a $5,000,000 letter of credit subfacility and to extend an
$18,500,000 term loan facility. The Company and the Bank are also parties to a
letter agreement dated April 10, 2001 (the "April 10 Letter"), pursuant to which
the Bank agreed to modify certain terms of the Credit Agreement as provided
therein. The Company, the Guarantors (as defined in the Credit Agreement) and
the Bank are also parties to a Forbearance Agreement dated as of January 28,
2002 (the "Forbearance Agreement"), pursuant to which the Bank agreed to forbear
from the exercise of certain of its rights and remedies under the Loan Documents
(as defined in the Credit Agreement) for a period of time as specified therein
so that the Company and the Bank could discuss the possibility of restructuring
the Indebtedness (as defined in the Forbearance Agreement).

            The Bank and the Company have agreed to restructure the Indebtedness
so as to (i) exchange $10,000,000 of the Indebtedness for preferred stock of the
Company to be issued to the Bank pursuant to this First Amendment and the
Comdial Corporation Certificate of Designation of Series B Alternate Rate
Cumulative Convertible Redeemable Preferred Stock dated March 6, 2002 (the
"Certificate of Designation"), the Registration Rights Agreement dated March 6,
2002, by and between the Company and the Bank (the "Registration Rights
Agreement"), and the Preferred Stock Investment Agreement dated March 6, 2002,
by and between the Company and the Bank (the "Preferred Stock Investment
Agreement"); (ii) reduce the Revolving Credit Commitment (as defined in the
Credit Agreement) and the amount outstanding under the Revolving Credit Loans
(as defined in the Credit Agreement) to an amount equal to $8,000,000; (iii)
reduce the Term Loan (as defined in the Credit Agreement) to an amount equal to
$4,903,874.69; (iv) reduce the L/C Obligations (as defined in the Credit
Agreement) to an amount equal to $1,500,000; and (v) amend the covenants
contained in the Credit Agreement as set forth herein. The Company has agreed to
all of these terms and conditions. The Certificate of Designation, the
Registration Rights Agreement and the Preferred Stock Investment Agreement shall
collectively be referred to as the "Equity Documents."

            Accordingly, the Company and the Bank hereby agree as follows:

            1. Capitalized terms used in this First Amendment and not otherwise
defined herein shall have the meanings assigned thereto in the Credit Agreement.
<PAGE>

            2. The definition of the term, "Borrowing Base," contained in
Section 1.1 of the Credit Agreement is hereby deleted in its entirety and the
following definition is substituted in its place:

                  "Borrowing Base" means, for any day, the sum of (i) eighty
                   --------------
            percent (80%) of the aggregate Net Unpaid Balance of all Eligible
            Accounts plus (ii) fifty percent (50%) of the value of all Eligible
            Inventory , provided that sub-clause (ii) shall never exceed (A)
            $4,000,000 for the period commencing on March 6, 2002 to and
            including May 30, 2002, (B) $3,000,000 for the period commencing on
            May 31, 2002 to and including August 30, 2002 and (C) $2,000,000 at
            all times thereafter.

            3. The definition of the term, "Default Rate," contained in Section
1.1 of the Credit Agreement is hereby deleted in its entirety and the following
definition is substituted in its place:

                  "Default Rate" means a rate of interest equal to the Prime
                   ------------
            Rate plus six percent (6%) per annum, with such rate to change as of
            the date of each change in the Prime Rate.

            4. The definition of the term, "L/C Fee," contained in Section 1.1
of the Credit Agreement is hereby deleted in its entirety and the following
definition is substituted in its place:

                  "L/C Fee" means, with respect to the Tecom Letter of Credit,
                   -------
            $35,000, and, with respect to the Maxi Switch Letter of Credit,
            $15,000.

            5. The definition of the term, "Revolving Credit Commitment,"
contained in Section 1.1 of the Credit Agreement is hereby deleted in its
entirety and the following definition is substituted in its place:

                  "Revolving Credit Commitment" means Twenty-One Million Five
                   ---------------------------
            Hundred Thousand Dollars ($21,500,000) for the period from the
            Closing Date to and including December 30, 2000, Sixteen Million
            Five Hundred Thousand Dollars ($16,500,000) for the period from
            December 31, 2000 to and including March 5, 2002 and Eight Million
            Dollars ($8,000,000) for the period from March 6, 2002 to the
            Revolving Credit Termination Date.

            6. The definition of the term, "Revolving Credit Termination Date,"
contained in Section 1.1 of the Credit Agreement is hereby deleted in its
entirety and the following definition is substituted in its place:

                  "Revolving Credit Termination Date" means the earlier to occur
                   ---------------------------------
            of (i) March 31, 2003 and (ii) the date on which the Revolving
            Credit Commitment is terminated pursuant to Section 11.

                                       -2-
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            7. The following defined terms are hereby inserted in the
appropriate alphabetical order in Section 1.1 of the Credit Agreement:

                  "Bank's  Consultant" shall mean Carl Marks Consulting Group,
                   ------------------
            LLC.

                  "Budgeted Consolidated EBITDA" means the projected
                   ----------------------------
            Consolidated EBITDA for a particular calendar month (i) in 2002, as
            set forth in the Comdial Corporation Budgeted Income Statement for
            2002 for such month delivered to the Bank by the Company on February
            27, 2002 and (ii) in 2003, as set forth in the projected income
            statement for the Company and its Subsidiaries for such month
            delivered to the Bank no later than October 1, 2002 in accordance
            with Section 8.19(b).

                  "Capital Expenditures" shall mean, for any period, capital
                   --------------------
            expenditures of the Company and its Subsidiaries for such period.

                  "Cumulative Consolidated EBITDA" means, for any period, ninety
                   ------------------------------
            percent (90%) of the sum of Budgeted Consolidated EBITDA for the
            period commencing on April 1, 2002 to and including the date of
            measurement.

                  "Equity Documents" shall mean, collectively, the Comdial
                   ----------------
            Corporation Certificate of Designation of Series B Alternate Rate
            Cumulative Convertible Redeemable Preferred Stock dated March 6,
            2002, the Registration Rights Agreement dated March 6, 2002, by and
            between the Company and the Bank (the "Registration Rights
            Agreement"), and the Preferred Stock Investment Agreement dated
            March 6, 2002, by and between the Company and the Bank, and all
            amendments, restatements and other modifications to such documents.

                  "Maxi Switch Letter of Credit" means letter of credit number
                   ----------------------------
            3039893 in the face amount of $300,000 issued by the Bank for the
            account of the Company and for the benefit of Maxi Switch, Inc.,
            which letter of credit is scheduled to expire on March 31, 2002.

                  "Tecom Letter of Credit" means letter of credit number 3035219
                   ----------------------
            in the face amount of $1,200,000 issued by the Bank for the account
            of the Company and for the benefit of Tecom Co., Ltd., which letter
            of credit is scheduled to expire on March 31, 2002.

            8. Section 2.1 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  2.1 Revolving Credit Loans. Upon the terms and subject to the
                      ----------------------
            conditions contained in this Agreement, the Bank agrees to make
            loans (herein referred to collectively as the "Revolving Credit
            Loans") to the Company from time to time during the period from the
            date of this Agreement until the Revolving Credit Termination Date;
            provided that (i) for the period commencing on the Closing Date to
            and including March 5, 2002, the aggregate principal amount of

                                       -3-
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            all outstanding Revolving Credit Loans does not at any time exceed
            the lesser of (a) the Revolving Credit Commitment minus the L/C
            Obligations and (b) the Borrowing Base minus the L/C Obligations,
            and (ii) for the period commencing on March 6, 2002 to and including
            the Revolving Credit Termination Date, the aggregate principal
            amount of all outstanding Revolving Credit Loans does not exceed the
            lesser of (a) the Revolving Credit Commitment and (b) the Borrowing
            Base.

            9. The first sentence of Section 2.2 of the Credit Agreement is
hereby deleted in its entirety and the following sentences are substituted in
its place:

            The obligation of the Company to repay the Revolving Credit Loans
            will be evidenced by the Company's promissory note payable to the
            order of the Bank at its office at 8300 Greensboro Drive, Suite 800,
            McLean, Virginia 22102, or such other place as the holder may from
            time to time designate, (i) for the period commencing on the Closing
            Date to and including March 5, 2002, in substantially the form of
            Exhibit A attached hereto with the blanks therein appropriately
            ---------
            completed, dated as of the date of the initial Revolving Credit Loan
            and payable on the Revolving Credit Termination Date (the "Revolving
            Credit Note") and (ii) for the period commencing on March 6, 2002
            and thereafter, in substantially the form of Exhibit A-1 attached
                                                         -----------
            hereto with the blanks therein appropriately completed, dated as of
            March 6, 2002 and payable on the Revolving Credit Termination Date
            (the "Replacement Revolving Credit Note"). Upon the execution and
            delivery of the Replacement Revolving Credit Note, the Replacement
            Revolving Credit Note will supercede and replace the Revolving
            Credit Note and, from and after such date, all references to the
            Revolving Credit Note in this Agreement and the Loan Documents shall
            be deemed to be references to the Replacement Revolving Credit Note.

            10. Section 3.1 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  3.1 Letter of Credit Facility. In accordance with the terms
                      -------------------------
            and conditions contained in this Agreement and in the applicable L/C
            Applications, the Bank has issued the Maxi Switch Letter of Credit
            and the Tecom Letter of Credit (herein referred to collectively as
            the "Letters of Credit") for the account of the Company, and, upon
            the terms and subject to the conditions contained in this Agreement
            and the applicable L/C Applications, the Bank agrees to extend the
            expiration date of each of the Maxi Switch Letter of Credit and the
            Tecom Letter of Credit to March 31, 2003. The Company acknowledges
            and agrees that the Bank has no obligation to issue any other
            Letters of Credit.

            11. The first two sentences of Section 3.3 of the Credit Agreement
are hereby deleted in their entirety and the following sentence is substituted
in their place:

            The Company will pay the L/C Fee to the Bank on March 6, 2002, which
            fee will be fully earned and nonrefundable once paid.

                                      -4-
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            12. Section 3.4 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  3.4 Reimbursement Obligations. The Company will pay to the
                      -------------------------
            Bank promptly upon demand any and all amounts paid by the Bank under
            any Letter of Credit, as provided in the applicable L/C Application,
            together with interest on such amount from the date such amount was
            paid by the Bank to the date it receives payment in federal or other
            immediately available funds at the Prime Rate plus four percent (4%)
            per annum, with such rate to be reset on each day on which there is
            a change to the Prime Rate. Such interest shall be computed for the
            actual number of days elapsed over a year of 360 days.

            13. Section 3.5 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  3.5 Expiration of Letters of Credit. Unless the Bank shall
                      -------------------------------
            agree otherwise, all Letters of Credit shall expire on or before
            March 31, 2003.

            14. Section 4.2 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

            The obligation of the Company to repay the Term Loan will be
            evidenced by the Company's promissory note payable to the order of
            the Bank at its office at 8300 Greensboro Drive, Suite 800, McLean,
            Virginia 22102, or such other place as the holder may from time to
            time designate, (i) for the period commencing on the Closing Date to
            and including March 5, 2002, in substantially the form of Exhibit B
                                                                      ---------
            attached hereto with the blanks therein appropriately completed,
            dated as of the date of the single advance under the Term Loan (the
            "Term Loan Note") and (ii) for the period commencing on March 6,
            2002 and thereafter, in substantially the form of Exhibit B-1
                                                              -----------
            attached hereto with the blanks therein appropriately completed,
            dated as of March 6, 2002 (the "Replacement Term Loan Note"). Upon
            the execution and delivery of the Replacement Term Loan Note, the
            Replacement Term Loan Note will supercede and replace the Term Loan
            Note and, from and after such date, all references to the Term Loan
            Note in this Agreement and the Loan Documents shall be deemed to be
            references to the Replacement Term Loan Note. For the period
            commencing on the Closing Date to and including August 31, 2002,
            installments of interest on the Term Loan Note shall be due and
            payable commencing on November 30, 2000 and continuing on the last
            day of each month thereafter to and including August 31, 2002. For
            the period commencing on the Closing Date to and including August
            31, 2002, installments of principal on the Term Loan Note shall be
            due and payable on the following dates in the following amounts:
            June 30, 2001, $2,500,000; September 30, 2001, $2,500,000; and
            December 31, 2001, $2,500,000. For the period commencing on
            September 1, 2002 and continuing to and including February 28, 2003,
            installments of principal and interest, each in an amount equal to
            the

                                      -5-
<PAGE>

            amount necessary to fully amortize the principal balance of the Term
            Loan Note as of September 1, 2002 at an interest rate equal to the
            interest rate provided in Section 5 over an assumed 36-month period,
            shall be due and payable commencing on September 30, 2002 and
            continuing on the last day of each month thereafter to and including
            February 28, 2003. A final installment of the entire unpaid
            principal balance of the Term Loan Note together with all accrued
            interest thereon shall be due and payable on March 31, 2003. The
            Company acknowledges and agrees that, because the Term Loan Note
            will bear interest based on the Prime Rate, the Bank shall have the
            right to adjust the amount of the principal and interest
            installments due after an increase in the Prime Rate during the
            period commencing on March 6, 2002 and continuing to and including
            February 28, 2003. The Company further acknowledges and agrees that,
            although a 36-month period will be used to determine the amount of
            the first seven (7) installments of principal and interest due on
            the Term Loan Note during the period commencing on January 1, 2002
            and continuing to and including February 28, 2003, if not sooner
            paid, the entire unpaid principal balance of the Term Loan Note
            together with all accrued interest thereon shall be immediately due
            and payable on March 31, 2003.

            15. Section 4.4(a)(1) of the Credit Agreement is hereby deleted in
its entirety and the following provision is substituted in its place:

                  (a)(1) [Reserved].

            16. Section 5.2 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  5.2 Interest Rates. The outstanding principal balance of the
                      --------------
            Revolving Credit Loans and the Term Loan as they exist from time to
            time commencing on the Closing Date and continuing to and including
            March 30, 2001 will (subject to Section 5.3) bear interest at an
            annual rate equal to the LIBOR Daily Floating Rate plus three
            percent (3%), with such rate to be initially set by the Bank on the
            Closing Date and with such rate to be reset on each day during such
            period on which there is a change to the LIBOR Daily Floating Rate.
            The outstanding principal balance of the Revolving Credit Loans and
            the Term Loan as they exist from time to time commencing on March
            31, 2001 and continuing to and including January 14, 2002 will
            (subject to Section 5.3) bear interest at an annual rate equal to
            the Prime Rate plus three percent (3%), with such rate to be reset
            on each day on which there is a change to the Prime Rate. The
            outstanding principal balance of the Revolving Credit Loans and the
            Term Loan as they exist from time to time commencing on January 15,
            2002 and continuing until the Revolving Credit Loans and the Term
            Loan are paid in full will (subject to Section 5.3) bear interest at
            an annual rate equal to the Prime Rate plus four percent (4%), with
            such rate to be reset on each day on which there is a change to the
            Prime Rate. Interest on the Revolving Credit Loans and on the Term
            Loan

                                      -6-
<PAGE>

            will be computed on the basis of the actual number of days elapsed
            over a year of 360 days.

            17. Sections 8.1(a) and 8.1(b) of the Credit Agreement are hereby
deleted in their entirety and the following provisions are substituted in their
respective places:

                  (a) as soon as available, but in no event more than forty-five
            (45) days after the end of each of the Company's fiscal quarters,
            consolidated and consolidating balance sheets of the Company and its
            Subsidiaries as of the end of such quarter and consolidated and
            consolidating income statements of the Company and its Subsidiaries
            to the end of such quarter, each in reasonable detail and in form
            and substance satisfactory to the Bank, prepared in accordance with
            GAAP and certified by the chief financial officer of the Company,
            provided that the Company may deliver, in lieu of the foregoing
            quarterly financial statements, the quarterly report of the Company
            for the applicable fiscal quarter on Form 10-Q filed with the SEC,
            but only as long as the financial statements contained in such
            quarterly report are substantially the same in content as the
            financial statements referred to above in this Section 8.1(a); with
            such quarterly financial statements to be accompanied by (i)
            consolidated and consolidating balance sheets and consolidated and
            consolidating income statements with respect to Material
            Subsidiaries for which there has been any material financial
            activity during the applicable quarter, prepared in the ordinary
            course of the Company's business, and (ii) a compliance certificate,
            in form and detail satisfactory to the Bank and signed by the chief
            financial officer of the Company, which provides a detailed
            calculation of the financial covenants contained herein as of the
            applicable fiscal quarter end and a statement as to whether the
            Company is in compliance with all of the terms and conditions of
            this Agreement;

                  (b) as soon as available, but in no event more than ninety
            (90) days after the end of each of the Company's fiscal years, a
            copy of the annual consolidated and consolidating financial
            statements of the Company and its Subsidiaries in reasonable detail
            and in form and substance satisfactory to the Bank, prepared in
            accordance with GAAP and audited by certified public accountants of
            national standing or otherwise satisfactory to the Bank, which
            financial statements shall include consolidated and consolidating
            balance sheets of the Company and its Subsidiaries as of the end of
            such fiscal year, consolidated and consolidating statements of
            income and retained earnings of the Company and its Subsidiaries for
            such fiscal year, consolidated and consolidating statements of cash
            flows for the Company and its Subsidiaries for such fiscal year, a
            reconciliation of net worth, and all normal and reasonable financial
            notes, provided that the Company may deliver, in lieu of the
            foregoing annual financial statements, the annual report of the
            Company for the applicable fiscal year on Form 10-K filed with the
            SEC, but only as long as the financial statements contained in such
            annual report are substantially the same in content as the financial
            statements referred to above in this Section 8.1(b); with such
            annual financial statements to be accompanied by a compliance
            certificate, in form and

                                      -7-
<PAGE>

            detail satisfactory to the Bank and signed by the chief financial
            officer of the Company, which provides a detailed calculation of the
            financial covenants contained herein as of the applicable fiscal
            year end and a statement as to whether the Company is in compliance
            with all of the terms and conditions of this Agreement;

            18. Section 8.1(f) of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  (f) (1) As soon as available and in any event within fifteen
            (15) days after the end of each fiscal month of the Company, a
            Borrowing Base Certificate executed by the chief financial officer
            of the Company setting forth the Borrowing Base and the Term Loan
            Collateral Value as of the last Business Day of such month, and, if
            the Company or any of its Subsidiaries engaged in any Asset Sales
            during such month in which the value of the assets so sold was less
            than $50,000 or which, when aggregated with the value of all other
            assets sold in connection with other Assets Sales occurring during
            the same fiscal month of the Company, had a value greater than
            $200,000, such Borrowing Base Certificate shall include an
            itemization of the assets sold during such month, the value of such
            assets, and the net consideration received for such assets; and (2)
            as soon as available and in any event by 5:00 pm eastern time on
            March 4, 2002 and not later than 5:00 pm eastern time on each Monday
            thereafter: (i) a Borrowing Base Certificate current as of the
            Friday immediately preceding such Monday prepared by and executed in
            accordance with the requirements of Section 8.1(f)(1) and containing
            all of the information required to be contained in the Borrowing
            Base Certificate required by Section 8.1(f)(1), (ii) a sales report
            in form and substance acceptable to the Bank in its sole discretion
            current as of the Friday immediately preceding such Monday that
            describes all sales of Inventory and other goods by the Company or
            any of its Subsidiaries by the following three (3) customer types:
            supply houses, dealers and national accounts, (iii) a report in form
            and substance acceptable to the Bank in its sole discretion current
            as of the Friday immediately preceding such Monday that identifies
            any officers or key employees that have terminated employment with
            the Company or any of its Subsidiaries or have notified the Company
            or any of its Subsidiaries of such officer's or employee's intention
            to do so, (iv) a report in form and substance acceptable to the Bank
            in its sole discretion current as of the Friday immediately
            preceding such Monday that identifies any material customers of the
            Company or any of its Subsidiaries that have ceased purchasing
            Inventory or other goods from the Company or any of its Subsidiaries
            or that have notified the Company or any of its Subsidiaries of such
            material customer's intention to do so, and (v) a report in form and
            substance acceptable to the Bank in its sole discretion that
            describes the status of the Company's efforts to acquire or be
            acquired by another person or legal entity and the status of the
            Company's efforts to refinance the Revolving Credit Loans and the
            Term Loan.

            19. Section 8.16 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                                      -8-
<PAGE>

                  8.16 Establishment of Lock-Box Account and Notification to
                       -----------------------------------------------------
            Account Debtors. On or before April 30, 2002, the Company shall
            ---------------
            execute and deliver to the Bank all documents required by the Bank
            to establish and administer a lock-box account for the Accounts.
            Immediately after such lock-box account has been established, the
            Company and each Material Subsidiary shall promptly notify each
            Account Debtor in respect of any Account that any payments due or to
            become due in respect of such Account are to be made in the name of
            the Company or such Material Subsidiary to such address and post
            office box as shall be specified by the Bank.

            20. Section 8 of the Credit Agreement is hereby amended by inserting
the following new sections immediately following Section 8.18:

                  8.19 Implementation of Procedures and Systems.
                       ----------------------------------------

                  (a) In no event later than February 28, 2002, the Company and
            its Subsidiaries shall implement procedures and systems that are
            necessary to provide the Bank with the following financial
            information, all of which information shall be in form and substance
            acceptable to the Bank in its sole discretion:

                        (i) a projected income statement for the Company for
            each calendar month in calendar year 2002 and for calendar year 2002
            taken as a whole, which procedures and systems shall have the
            ability to (A) be updated monthly, (B) create revised projected
            income statements for each calendar month in calendar year 2002 and
            for calendar year 2002 taken as a whole, and (C) provide an analysis
            that compares the actual income and expenses for each line item in
            each such projection for the month then ended and year to date to
            the income and expenses that had been projected for the period being
            measured. Commencing on March 15, 2002 and continuing on the
            fifteenth (15th) day after the end of each calendar month
            thereafter, the Company shall provide such reports to the Bank by
            5:00 pm eastern time on such fifteenth day after the end of each
            calendar month, each such report being current as of the end of the
            immediately preceding calendar month.

                        (ii) a projected cash flow statement for the period
            commencing on the date of measurement and terminating thirteen weeks
            thereafter, which procedures and systems shall have the ability to
            (A) be updated weekly, (B) create revised projected cash flow
            statements for the period commencing on the date of measurement and
            terminating thirteen week thereafter, and (C) provide an analysis
            that compares the actual income and expenses for each line item in
            each such projection for the week then ended to the income and
            expenses that had been projected for such week. Commencing on the
            March 11, 2002 and continuing on each Monday thereafter, the Company
            shall provide such reports to the Bank by 5:00 pm eastern time on
            each such Monday, each such report being current as of the Friday
            immediately preceding each such Monday.

                                      -9-
<PAGE>

                        (iii) a weekly cash receipts statement that summarizes
            all cash receipts, compares the actual cash receipts to the cash
            receipts that had been projected for that week, and identifies the
            amount of cash on hand. Commencing on March 11, 2002 and continuing
            on each Monday thereafter, the Company shall provide such reports to
            the Bank by 5:00 pm eastern time on each such Monday, each such
            report being current as of the Friday immediately preceding each
            such Monday.

                  (b) In no event later than October 1, 2002, the Company and
            its Subsidiaries shall implement procedures and systems that are
            necessary to provide the Bank with a projected income statement for
            the Company for each calendar month in calendar year 2003 and for
            calendar year 2003 taken as a whole, which procedures and systems
            shall have the ability to (A) be updated monthly, (B) create revised
            projected income statements for each calendar month in calendar year
            2003 and for calendar year 2003 taken as a whole, and (C) provide an
            analysis that compares the actual income and expenses for each line
            item in each such projection for the month then ended and year to
            date to the income and expenses that had been projected for the
            period being measured, all of which information shall be in form and
            substance acceptable to the Bank in its sole discretion. Commencing
            on January 15, 2003 and continuing on the fifteenth (15th) day after
            the end of each calendar month thereafter, the Company shall provide
            such reports to the Bank by 5:00 pm eastern time on such fifteenth
            day after the end of each calendar month, each such report being
            current as of the end of the immediately preceding calendar month.

                  8.20 Expense Reduction Report. Commencing on March 11, 2002
                       ------------------------
            and continuing on the first day of each calendar month thereafter,
            the Company shall provide to the Bank by 5:00 pm eastern time on
            each such day a report in form and substance acceptable to the Bank
            in its sole discretion that describes the progress the Company and
            its Subsidiaries have made in implementing and executing the plan to
            reduce the Company's and its Subsidiaries' consolidated operating
            expenses to an amount not greater than the Company's and its
            Subsidiaries' consolidated operating income, each such report being
            current as of the end of the immediately preceding calendar month.

                  8.21 Bank's Consultant. The Company shall cooperate fully with
                       -----------------
            the Bank's Consultant, which cooperation shall include, without
            limitation, allowing the Bank's Consultant reasonable access to
            observe the Company's and its Subsidiaries' respective operations
            and the opportunity to inspect their respective financial and other
            reports and projections. Furthermore, the Company hereby agrees to
            pay all costs and expenses arising from or in connection with the
            Bank's Consultant in accordance with the consulting agreement
            between the Company and the Bank's Consultant dated as of
            ________________ ___, 2002 and attached hereto as Exhibit I (the
                                                              ---------
            "Consulting Agreement"), and the Company hereby

                                      -10-
<PAGE>

            irrevocably authorizes the Bank to charge any and all accounts of
            the Company maintained at the Bank for the amount of such costs and
            expenses as and when due in accordance with the Consulting
            Agreement. Any portion of such fees not paid when due shall bear
            interest at the Default Rate until paid in full.

            21. Section 9.2 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  9.2 Minimum EBITDA. The Company will not permit Consolidated
                      --------------
            EBITDA or Consolidated EBITDA to Budgeted Consolidated EBITDA to be
            less than the following amounts or percentages, as applicable,
            measured as of the end of the fiscal quarters of the Company shown
            below for the periods shown below:

                                      -11-
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                       Budgeted               Minimum                Cumulative
Measurement Period     Consolidated EBITDA    Consolidated EBITDA    Consolidated EBITDA
========================================================================================
<S>                    <C>                    <C>                    <C>
March 1, 2002 to       <$2,649.00>            <$3,311.00>            N/A
and including
March 31, 2002
----------------------------------------------------------------------------------------
April 1, 2002 to       $280,060.00            $224,048.00            $249,670.00
and including
April 30, 2002
----------------------------------------------------------------------------------------
May 1, 2002 to and     $650,027.00            $520,022.00            $834,694.00
including May 31,
2002
----------------------------------------------------------------------------------------
June 1, 2002 to        $437,952.00            350,362.00             $1,228,851.00
and including June
30, 2002
----------------------------------------------------------------------------------------
July 1, 2002 to        $646,124.00            $516,899.00            $1,810,363.00
and including July
31, 2002
----------------------------------------------------------------------------------------
August 1, 2002 to      $604,371.00            $483,497.00            $2,354,297.00
and including
August 31, 2002
----------------------------------------------------------------------------------------
September 1, 2002      $391.872.00            $313,498.00            $2,706,981.00
to and including
September 30, 2002
----------------------------------------------------------------------------------------
October 1, 2002 to     $973,413.00            $778,730.00            $3,583,053.00
and including
October 31, 2002
----------------------------------------------------------------------------------------
November 1, 2002       $574,828.00            $459,862.00            $4,100,398.00
to and including
November 30, 2002
----------------------------------------------------------------------------------------
December 1, 2002       $617,179.00            $493,743.00            $4,655,859.00
to and including
December 31, 2002
----------------------------------------------------------------------------------------
January 1, 2003 to     [As set forth in       [80% of Budgeted       [90% of the sum
and including          the projected          Consolidated EBITDA    of Budgeted
January 31, 2003       income statement       for the period         Consolidated
                       required by Section    January 1, 2003 to     EBITDA for the
                       8.19(b) for the        and including          period April 1,
                       period January 1,      January 31, 2003]      2002 to and
                       2003 to and                                   including
                       including January                             January 31, 2003]
                       31, 2003]
----------------------------------------------------------------------------------------
February 1, 2003       [As set forth in       [80% of Budgeted       [90% of the sum
to and including       the projected          Consolidated EBITDA    of Budgeted
February 28, 2003      income statement       for the period         Consolidated
                       required by Section    February 28, 2003      EBITDA for the
                       8.19(b) for the        to and including       period April 1,
                       period February 1,     February 28, 2003]     2002 to and
                       2003 to and                                   including
                       including February                            February 28,
                       28, 2003]                                     2003]
----------------------------------------------------------------------------------------
</TABLE>

                                      -12-
<PAGE>

            22. Section 10.3 of the Credit Agreement is hereby amended by
deleting clause (i) and renumbering clauses (ii), (iii) and (iv) as clauses (i),
(ii) and (iii) respectively.

            23. Section 10.4 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  10.4 Acquisitions. Acquire, or permit any Subsidiary to
                       ------------
            acquire, in one transaction or a series of transactions, all or any
            substantial part of the capital stock (or other ownership interests)
            or assets of any other Person.

            24. Section 10 of the Credit Agreement is hereby amended by
inserting the following new section immediately following Section 10.9:

                  10.10 Capital Expenditures. Expend, or permit any of its
                        --------------------
            Subsidiaries to expend, for Capital Expenditures an amount in excess
            of $300,000 during any fiscal quarter of the Company occurring
            during the period January 1, 2002 to and including March 31, 2003.

            25. Sections 11.9 and 11.10 of the Credit Agreement are hereby
deleted in their entirety and the following two provisions are substituted in
their respective places:

                  11.9 Any default shall be made in the performance of any other
            obligation incurred in connection with any indebtedness for borrowed
            money of the Company or any Material Subsidiary aggregating $25,000
            or more, if the effect of such default is to permit the holder of
            such indebtedness (or a trustee on behalf of such holder) to cause
            it to become due prior to its stated maturity or to do so with the
            giving of notice or passage of time, or both, or any such
            indebtedness becomes due prior to its stated maturity or shall not
            be paid when due; or

                  11.10 One or more final judgments for the payment of money
            aggregating in excess of $25,000 which is or are not adequately
            insured or indemnified against shall be rendered at any time against
            the Company or any Material Subsidiary and the same shall remain
            undischarged for a period of thirty (30) days during which time
            execution shall not be effectively stayed; or

            26. Section 11.13 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  11.13 A default or an event of default shall have occurred
            under any of the other Loan Documents or under any of the Equity
            Documents; provided, however, that no such default shall constitute
            an Event of Default hereunder if the default is remedied to the
            Bank's satisfaction within any applicable grace or cure period;

                                      -13-
<PAGE>

            27. Section 13.4 of the Credit Agreement is hereby deleted in its
entirety and the following provision is substituted in its place:

                  13.4 Notices. All notices, requests and other communications
                       -------
            to either party hereunder will be in writing and will be given at
            its address or telecopy number set forth below or such other address
            or telecopy number as such party may hereafter specify in writing
            for this purpose by notice to the other party:

                  If to the Company:

                  Comdial Corporation
                  106 Cattleman Road
                  Sarasota, Florida 34232
                  Attention: Chief Financial Officer
                  Telecopy Number: (941) 925-7989

                  With a copy to:

                  Shumaker, Loop & Kendrick, LLP
                  Bank of America Plaza
                  101 East Kennedy Boulevard
                  Suite 2800
                  Tampa, Florida 33602
                  Attention: Darrell C. Smith, Esquire
                  Telecopy Number: (813) 229-1660

                  If to the Bank:

                  Bank of America, N.A.
                  100 N. Tampa Street, Suite 1700
                  Tampa, Florida 33602
                  Attention: Daniel Langelier
                  Telecopy Number: (813) 276-7813

                  With a copy to:

                  Troutman Sanders LLP
                  1111 East Main Street, 20th Floor
                  Richmond, Virginia 23219
                  Attention: Thomas E. duB. Fauls, Esquire
                  Telecopy Number: (804) 697-1339

                  Each such notice, request or other communication will be
            effective if delivered by hand delivery or sent by telecopy,
            recognized overnight courier service or certified mail, return
            receipt requested, and shall be presumed to be

                                      -14-
<PAGE>

            received by a party hereto (i) on the date of delivery if delivered
            by hand or sent by telecopy, (ii) on the next Business Day if sent
            by recognized overnight courier service, charges prepaid, and (iii)
            on the third Business Day following the date sent by certified mail,
            return receipt requested, postage prepaid.

            28. The Bank hereby waives all Defaults and Events of Default that
existed (i) under the Term Loan Note because of the Company's failure to pay
timely the principal installments that were due on each of September 30, 2001
and December 31, 2001, (ii) under Section 9.1 of the Credit Agreement for the
period ending December 31, 2000, (iii) under Section 9.2 of the Credit Agreement
for the periods ending March 31, 2001, June 30, 2001, September 30, 2001 and
December 31, 2001 and (iv) under Section 8.16 because the Company failed to
establish a lock-box by December 31, 2000, but the Bank expressly does not waive
any other Defaults or Events of Default that have occurred or exist as of the
date of this First Amendment or any Defaults or Events of Default that may occur
or exist after the date of this First Amendment under the Credit Agreement, as
amended by this First Amendment, or any of the other Loan Documents.

            29. Simultaneously upon the satisfaction of all of the conditions
precedent set forth in paragraph 33 of this First Amendment and the Bank's
execution and delivery of this First Amendment, the Company and the Bank agree
that the Bank shall exchange (A)(i) $7,500,000 of the indebtedness under the
Revolving Credit Loans (so that the resulting principal balance outstanding
under the Revolving Credit Loans shall be, as of the date of this First
Amendment, $8,000,000), which Revolving Credit Loans shall hereafter be
evidenced by the Replacement Revolving Credit Note, and (ii) $2,500,000 of the
indebtedness under the Term Loan (so that the resulting principal balance
outstanding under the Term Loan shall be, as of the date hereof, $4,903,874.69),
which Term Loan shall hereafter be evidenced by the Replacement Term Loan Note,
for (B) 1,000,000 shares of Series B Alternate Rate Cumulative Convertible
Redeemable Preferred Stock issued by the Company pursuant to the Equity
Documents.

            30. The Company hereby absolutely and unconditionally agrees to pay
to the Bank a fee (the "Restructuring Fee") in the amount of $150,000 in
immediately available funds with respect to this First Amendment, which
Restructuring Fee the Company hereby acknowledges and agrees is fully earned as
of the date of this First Amendment and not subject to diminution for any
reason. The Restructuring Fee shall be payable as follows: $50,000 on the date
of this First Amendment, $50,000 on April 5, 2002, and $50,000 on May 5, 2002.
If the Company shall fail to pay any portion of the Restructuring Fee in
accordance with the immediately preceding sentence, such failure shall be an
Event of Default that is not subject to any grace or cure period and the Bank
shall have all of the rights and remedies set forth in the Credit Agreement, as
amended by this First Amendment, and the other Loan Documents.

            31. The Credit Agreement is hereby amended to add a new exhibit,
which exhibit shall be in the form of Exhibit A-1 attached to this First
Amendment and shall be labeled Exhibit A-1. The Credit Agreement is hereby
                               -----------
amended to add a second new exhibit, which second exhibit shall be in the form
of Exhibit B-1 attached to this First Amendment and shall be labeled Exhibit
                                                                     -------
B-1. The Credit Agreement is hereby amended to add a third new exhibit, which
---

                                      -15-
<PAGE>

third exhibit shall be in the form of Exhibit I attached to this First Amendment
                                      ---------
and shall be labeled Exhibit I.
                     ---------

            32. The Company hereby represents and warrants to the Bank (which
representations and warranties shall survive the execution and delivery of this
First Amendment) that, as of the date of the execution of this First Amendment:

                  (a) It is in compliance with all of the terms, covenants and
conditions of the Credit Agreement, as amended by this First Amendment, and each
of the other Loan Documents.

                  (b) There exists no Default or Event of Default under the
Credit Agreement, as amended by this First Amendment, that has not been
expressly waived pursuant to this First Amendment.

                  (c) Except as set forth on Schedule 1 attached hereto, the
                                             ----------
representations and warranties contained in Section 6 of the Credit Agreement
are, except to the extent that they relate solely to an earlier date, true with
the same effect as though such representations and warranties had been made on
the date of this First Amendment; and the Company further represents and
warrants that each of American Telecommunications Corp., Comdial Consumer
Communications Corporation, Comdial Custom Manufacturing Inc., Comdial
Technology Corporation, Comdial Video Telephony Inc., Telecom Technologies Inc.
and Comdial Convergent Communications, Inc. was dissolved in December, 2001.

                  (d) Each of the Company and its Subsidiaries has full
corporate power and authority and has taken all necessary corporate action to
authorize the execution, delivery and performance of this First Amendment, the
new promissory notes (in the forms attached hereto as Exhibit A-1 and Exhibit
                                                      -----------     -------
B-1, respectively, the "Replacement Revolving Credit Note" and the "Replacement
---
Term Loan Note," respectively), the acknowledgment of company and guarantors
attached hereto and made a part hereof as Exhibit C (the "Acknowledgment") and
                                          ---------
the Equity Documents to which it is a party. No consent or approval of the
shareholders of the Company (except for any such approval as may be required by
NASDAQ in connection with the conversion of the Series B Preferred Stock (as
defined in the Certificate of Designation)) or any of its Subsidiaries or
consent or approval of, notice to or filing with, any Governmental Authority,
securities exchange or other securities self-regulatory organization (except for
any such consent, approval, notice, or filing as may be required by the
Securities and Exchange Commission or NASDAQ in connection with the conversion
of the Series B Preferred Stock), is required as a condition to the validity of
or the performance by the Company or any of its Subsidiaries of its obligations
under this First Amendment, either of the promissory notes described in the
immediately preceding sentence, the Acknowledgment or the Equity Documents.

                  (e) This First Amendment, the Replacement Revolving Credit
Note, the Replacement Term Loan Note, the Acknowledgment and the Equity
Documents have been duly executed and delivered by the duly authorized officers
of the Company and each of its Subsidiaries party thereto, and each such
document constitutes the legal, valid and binding obligation of the Company and
the applicable Subsidiaries which are parties thereto, and is

                                      -16-
<PAGE>

enforceable in accordance with their respective terms, except to the extent such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and moratorium laws and similar laws relating generally to the
enforcement of creditors' rights.

                  (f) Except as disclosed on Schedule 1 attached hereto, there
                                             ----------
are no proceedings pending or, to the knowledge of the Company, threatened
before any court or administrative agency that would reasonably be expected, in
any particular case or in the aggregate, to have a material adverse effect upon
the ability of the Company or any of its Subsidiaries to perform any of its
obligations under the Credit Agreement, as amended by this First Amendment, the
Replacement Revolving Credit Note, the Replacement Term Loan Note, the
Acknowledgment, any of the other Loan Documents or any of the Equity Documents,
or could reasonably be expected to have a Material Adverse Effect.

                  (g) The execution, delivery and performance by the Company and
its Subsidiaries of this First Amendment, the Replacement Revolving Credit Note,
the Replacement Term Loan Note, the Acknowledgment and the Equity Documents in
accordance with their respective terms do not (i) require any approval of,
notice to or filing with any Governmental Authority, securities exchange or
other securities self-regulatory organization (except for any such approval,
notice, or filing as may be required by the Securities and Exchange Commission
or NASDAQ in connection with the conversion of the Series B Preferred Stock), or
violate any federal, state or local law, rule or ordinance relating to the
Company or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute a default under the charter, bylaws or preference stock provisions of
the Company or any of its Subsidiaries or any mortgage, indenture, contract or
agreement binding on the Company or any of its Subsidiaries or affecting any of
their respective properties or any approval of any Governmental Authority
relating to the Company or any of its Subsidiaries, or (iii) result in or
require the creation or imposition of any lien, security interest, charge or
other encumbrance (collectively, "Liens") upon or with respect to any property
now owned or hereafter acquired by the Company or any of its Subsidiaries other
than Liens arising under the Loan Documents.

                  (h) This First Amendment and the Equity Documents are not
being made or entered into with the intent to hinder, delay or defraud any
person or entity.

                  (i) Except as set forth on Schedule 1 attached hereto, no
                                             ----------
action or proceeding under any federal or state insolvency or debtor relief law,
including without limitation a voluntary or involuntary petition for bankruptcy
under any chapter of the Federal Bankruptcy Code, has been instituted or, to the
Company's knowledge, threatened against the Company or any of its Subsidiaries.

            33. The Bank's agreement to enter into this First Amendment is
subject to the following conditions precedent:

                  (a) The Company shall have executed and delivered to the Bank
this First Amendment.

                                      -17-
<PAGE>

                  (b) The Company shall have executed and delivered the
Replacement Revolving Credit Note and the Replacement Term Loan Note in the
forms of Exhibit A-1 and Exhibit B-1, respectively, attached hereto with the
blanks therein appropriately completed.

                  (c) The Company shall have delivered to the Bank (i) certified
copies of the resolutions of its board of directors and the boards of directors
of its Subsidiaries authorizing and approving this First Amendment, the
Replacement Revolving Credit Note, the Replacement Term Loan Note, the
Acknowledgment and the Equity Documents and (ii) a certificate of incumbency for
the Company executed by the secretary of the Company and a certificate of
incumbency for each of its Subsidiaries setting forth the names of the officers
of the Company and the Subsidiaries, as applicable, that are authorized to
execute any of this First Amendment, the Replacement Revolving Credit Note, the
Replacement Term Loan Note, the Acknowledgment or the Equity Documents, together
with a specimen signature for each such officer.

                  (d) The Company and each of the Company's Subsidiaries shall
have executed and delivered to the Bank the Acknowledgment.

                  (e) The Bank shall have received favorable opinions of counsel
to the Company and the Subsidiaries addressed to the Bank, dated as of the date
hereof and satisfactory in form and substance to the Bank, as to the good
standing of each of the Company and its Subsidiaries in its state of
incorporation, the authority of each of the Company and its Subsidiaries to
transact business in the State of Florida, the due authorization, execution,
delivery and enforceability of this First Amendment, the Replacement Revolving
Credit Note, the Replacement Term Loan Note, the Acknowledgment, the Equity
Documents, certain matters associated with the Equity Documents, and such other
matters as the Bank shall request.

                  (f) The Bank shall have received payment in immediately
available funds of (i) an amount equal to all accrued but unpaid interest on the
Revolving Credit Note as of March 6, 2002, (ii) an amount equal to all accrued
but unpaid interest on the Term Loan Note as of March 6, 2002, (iii) the $50,000
portion of the Restructuring Fee that is due and payable on the date of this
First Amendment and (vi) the $50,000 L/C Fee that is due and payable on March 6,
2002.

                  (g) The Company shall have executed and delivered, and shall
have caused to be executed and delivered, all of the Equity Documents and all
other documents, instruments, opinions and other papers that the Bank deems
necessary or advisable be delivered to it or filed in connection with the
consummation of the transactions contemplated by the Equity Documents, the
Certificate of Designation shall have been adopted and become effective under
the laws of the State of Delaware, and all other conditions and matters set
forth as conditions precedent in the Equity Documents shall have occurred and be
acceptable to the Bank.

                  (h) The Company shall have paid all out-of-pocket expenses
incurred by the Bank in connection with the structuring, negotiating and
preparing of this First Amendment, the Replacement Revolving Credit Note, the
Replacement Term Loan Note, the Acknowledgment, the Equity Documents, and all
documents, instruments, agreements, opinions

                                      -18-
<PAGE>

and other papers associated with the Equity Documents, including but not limited
to the fees and disbursements of counsel to the Bank.

                  (i) The Company and the Material Subsidiaries shall have
executed and delivered a closing statement, an aviation/international waters
closing affidavit and a tax indemnity agreement, each in form and substance
acceptable to the Bank.

                  (j) The Company shall have executed and delivered a pledge
agreement substantially in the form of the Pledge Agreement, a blank stock power
and the original share certificate or certificates for the capital stock of
Comdial Business Communications Corporation, all of which documents shall be in
form and substance acceptable to the Bank.

            34. The Company and the Bank hereby agree that this First Amendment
supercedes and replaces the April 10 Letter, and that the April 10 Letter is of
no further force or effect.

            35. Except as expressly amended hereby, the terms of the Credit
Agreement shall remain in full force and effect in all respects, and the Company
hereby reaffirms its obligations under the Credit Agreement, as amended by this
First Amendment, and each of the other Loan Documents. The Company hereby waives
any claim, cause of action, defense, counterclaim, setoff or recoupment of any
kind or nature that it may have or assert against the Bank arising from or in
connection with the Credit Agreement, as amended by this First Amendment, the
Revolving Credit Note, the Term Loan Note, the Acknowledgment, any of the other
Loan Documents, the Equity Documents or the transactions contemplated thereby or
hereby that exist on the date hereof or arise from facts or actions occurring
prior to or on the date of this First Amendment. Nothing contained in this First
Amendment shall be construed to constitute a novation with respect to any of the
obligations of the Company or any of its Subsidiaries described in the Credit
Agreement or the other Loan Documents.

            36. All references to the Credit Agreement in any of the Loan
Documents, or any other documents or instruments that refer to the Credit
Agreement, shall be deemed to be references to the Credit Agreement as amended
by this First Amendment.

            37. This First Amendment, the Replacement Revolving Credit Note, the
Replacement Term Loan Note and the Acknowledgment shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Virginia, without reference to the conflicts or choice of law principles
thereof.

            38. This First Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same instrument.

            39. This First Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. The
Company shall not have the right to assign any of its rights or obligations
under or delegate any of its duties under the Credit

                                      -19-
<PAGE>

Agreement, as amended by this First Amendment, the Replacement Revolving Credit
Note, the Replacement Term Loan Note, the Acknowledgment or any of the other
Loan Documents.

            40. The Company and the Lenders hereby acknowledge and agree that
any controversy or claim between or among the parties to the Credit Agreement,
as amended by this First Amendment, the Replacement Revolving Credit Note, the
Replacement Term Loan Note, any of the other Loan Documents or the Equity
Documents, including but not limited to those arising out of or related to this
First Amendment or the Acknowledgment, shall be determined by binding
arbitration as described in Section 13.10 of the Credit Agreement. As provided
in the Credit Agreement, the Company hereby acknowledges and agrees that nothing
in Section 13.10 of the Credit Agreement shall be deemed to limit the right of
the Bank to obtain from a court provisional or ancillary remedies such as (but
not limited to) injunctive relief (including without limitation specific
performance as described in Section 14 of the Registration Rights Agreement),
writ of possession or the appointment of a trustee.

            41. The Credit Agreement, as amended by this First Amendment, the
Replacement Revolving Credit Note, the Replacement Term Loan Note, the
Acknowledgment and the other Loan Documents represent the final agreement among
the Company, its Subsidiaries and the Bank with respect to the subject matter
hereof, and may not be contradicted, modified or supplemented in any way by
evidence of any prior or contemporaneous written or oral agreements of the
Company, any of its Subsidiaries or the Bank.

                  [Remainder of page intentionally left blank]

                                      -20-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers under seal, all as of the day and
year first written above.

                                    COMDIAL CORPORATION

                                    By: /s/ Paul J. Suijk               SEAL)
                                    Name: Paul J. Suijk
                                    Title: Senior Vice President/Chief
                                    Financial Officer

Witness:

/s/ Ralph R. Dyer
Name: Ralph R. Dyer

                                    BANK OF AMERICA, N.A.

                                    By: /s/ Daniel Langelier            SEAL)
                                    Name: Daniel Langelier
                                    Title: Senior Vice President

Witness:

/s/ Ralph R. Dyer
Name: Ralph R. Dyer
#1035255v6

                                      -21-
<PAGE>

                              REVOLVING CREDIT NOTE
                              ---------------------

$8,000,000.00                                                      March 6, 2002

      FOR VALUE RECEIVED, COMDIAL CORPORATION (the "Company"), a Delaware
corporation, promises to pay to the order of BANK OF AMERICA, N.A. (the "Bank")
at its office at 100 N. Tampa Street, Tampa, Florida 33602, or at such other
place as the noteholder may from time to time designate in writing, the sum of
EIGHT MILLION DOLLARS ($8,000,000.00) or such lesser amount as may have been
advanced hereunder and remain unpaid on the Revolving Credit Termination Date
(as defined in the Credit Agreement, as hereinafter defined), and to pay
interest on the unpaid balance of such sum from the date hereof at the rate or
rates, on the dates and upon the other terms and conditions contained in the
Credit Agreement.

      This Note evidences a borrowing under, is subject to the terms and
conditions of, is entitled to the benefits of, and is the Revolving Credit Note
defined in, the Amended and Restated Credit Agreement dated as of November 22,
2000, by and between the Company and the Bank, as amended by a First Amendment
to Amended and Restated Credit Agreement dated as of March 6, 2002 (as so
amended, the "Credit Agreement"). The Credit Agreement contains, among other
things, provisions for the time, place and manner of payment of this Note, the
determination of the interest rate borne by this Note, and the mandatory
repayment of this Note under certain circumstances.

      The events of default hereunder are the same as those described in the
Credit Agreement which are incorporated herein by this reference. In the event
of the occurrence of any or all of such events, the entire unpaid principal
balance of this Note together with all accrued interest may automatically
become, or may be declared, immediately due and payable in the manner and with
the effect as provided in the Credit Agreement.

      The Company agrees to pay on demand all costs of collection, including
reasonable attorneys' fees, if after default this Note is placed in the hands of
an attorney for collection, or if after default the holder finds it necessary or
desirable to secure the services or advice of an attorney with regard to
collection.

      Presentment, demand, protest and notice of dishonor are hereby waived by
all makers and endorsers hereon.

      This Note shall be governed by and construed in accordance with the laws
of the Commonwealth of Virginia, without reference to the conflicts or choice of
law principals thereof.
<PAGE>

      IN WITNESS WHEREOF, COMDIAL CORPORATION has caused its name to be signed
to this Note by its duly authorized officer as of the date first above written.

                                COMDIAL CORPORATION

                                By: /s/ Paul K. Suijk
                                Name: Paul K. Suijk
                                Title: Chief Financial Officer

#1035630v2
200160.545

                                      -2-
<PAGE>

                                 TERM LOAN NOTE
                                 --------------

$4,903,874.69                                                      March 6, 2002

      FOR VALUE RECEIVED, COMDIAL CORPORATION (the "Company"), a Delaware
corporation, promises to pay to the order of BANK OF AMERICA, N.A. (the "Bank")
at its office at 100 N. Tampa Street, Tampa, Florida 33602, or at such other
place as the noteholder may from time to time designate in writing, at the times
and in the manner provided in the Credit Agreement (as hereinafter defined), the
sum of FOUR MILLION NINE HUNDRED THREE THOUSAND EIGHT HUNDRED SEVENTY-FOUR AND
69/100 DOLLARS ($4,903,874.69), and to pay interest on the unpaid balance of
such sum from the date hereof at the rate or rates, on the dates and upon the
other terms and conditions contained in the Credit Agreement.

      This Note evidences a borrowing under, is subject to the terms and
conditions of, is entitled to the benefits of, and is the Term Loan Note defined
in, the Amended and Restated Credit Agreement dated as of November 22, 2000, by
and between the Company and the Bank, as amended by a First Amendment to Amended
and Restated Credit Agreement dated as of March 6, 2002 (as so amended, the
"Credit Agreement"). The Credit Agreement contains, among other things,
provisions for the time, place and manner of payment of this Note, the
determination of the interest rate borne by this Note, and the mandatory
repayment of this Note under certain circumstances.

      The events of default hereunder are the same as those described in the
Credit Agreement which are incorporated herein by this reference. In the event
of the occurrence of any or all of such events, the entire unpaid principal
balance of this Note together with all accrued interest may automatically
become, or may be declared, immediately due and payable in the manner and with
the effect as provided in the Credit Agreement.

      The Company agrees to pay on demand all costs of collection, including
reasonable attorneys' fees, if after default this Note is placed in the hands of
an attorney for collection, or if after default the holder finds it necessary or
desirable to secure the services or advice of an attorney with regard to
collection.

      Presentment, demand, protest and notice of dishonor are hereby waived by
all makers and endorsers hereon.

      This Note shall be governed by and construed in accordance with the laws
of the Commonwealth of Virginia, without reference to the conflicts or choice of
law principals thereof.
<PAGE>

      IN WITNESS WHEREOF, COMDIAL CORPORATION has caused its name to be signed
to this Note by its duly authorized officer as of the date first above written.

                                            COMDIAL CORPORATION

                                            By: /s/ Paul K. Suijk
                                            Name: Paul K. Suijk
                                            Title: Chief Financial Officer

#1035637v2
200160.545

                                      -2-<PAGE>

                                                                   EXHIBIT 10.28

                               COMDIAL CORPORATION

                           CERTIFICATE OF DESIGNATION

                                       OF

            SERIES B ALTERNATE RATE CUMULATIVE CONVERTIBLE REDEEMABLE

                                 PREFERRED STOCK

      Comdial Corporation, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the "Company"),
certifies that pursuant to the authority contained in Article THIRD of its
Certificate of Incorporation, as amended, and in accordance with the provisions
of Section 151 of the General Corporation Law of the State of Delaware, its
Board of Directors, at a meeting duly convened and held on March 6, 2002,
adopted the following resolution creating a series of its Preferred Stock, par
value $10.00, designated as Series B Alternate Rate Cumulative Convertible
Redeemable Preferred Stock:

      RESOLVED, that a series of the class of authorized Preferred Stock, par
value $10.00, of the Company be hereby created, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations and restrictions thereof are as follows:

      Section 1. Designation and Amount. The shares of such series shall be
designated as the "Series B Alternate Rate Cumulative Convertible Redeemable
Preferred Stock" (hereinafter "Series B Preferred Stock") and the number of
shares constituting such series shall be 1,000,000 and no more.

      Section 2. Dividends and Distributions.

            (a) Subject to paragraph (b) of this Section 2, the holders of
shares of Series B Preferred Stock, in preference to the holders of shares of
the Company's Common Stock, par value $0.01 per share ("Common Stock"), shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
funds of the Company legally available for the payment of dividends, quarterly
dividends per share payable in cash in the following amounts: $0.125 on the last
day of March, $0.125 on the last day of June, $0.125 on the last day of
September, and $0.125 on the last day of December in each year (each such date
being referred to as a "Quarterly Dividend Payment Date") commencing on the
first Quarterly Dividend Payment Date which is after the date of issue of such
shares of Series B Preferred Stock; provided, however, that with respect to such
                                    -----------------
first Quarterly Dividend Payment Date, the holders of shares of Series B
Preferred Stock shall be entitled pursuant to this paragraph (a) to receive the
pro rata portion of such quarterly dividend on the basis of the number of days
elapsed between the date of issue and the first Quarterly Dividend Payment Date.
Such dividends shall be cumulative and shall accrue from the date of issue until
paid in cash.

                                       1
<PAGE>

            (b) Alternatively, in lieu of paying a dividend on the Series B
Preferred Stock in cash, the Company shall have the option of paying any such
dividend, when paid, in shares of the Company's Common Stock at a rate equal to
two times the cash dividend rate provided in Section 2(a) above, and in any such
case the value of shares of Common Stock paid as a dividend on the Series B
Preferred Stock shall be determined as provided for in the following paragraphs:

      If the Company elects to issue the dividend in shares of Common Stock
rather than cash, the Company shall issue the holder the number of shares of
Common Stock having an aggregate Current Market Value equal to two times the
amount of the dividend payable to the holder had the Company elected that the
dividend be paid in cash, provided, however, the Company may not elect to issue
                          -----------------
dividends in shares of Common Stock if such issuance would result in the holders
of Series B Preferred Stock owning an amount of the outstanding common stock of
the Company on an as-converted basis that would require the Company to obtain
stockholder approval under NASDAQ Rule 4350(i). The "Current Market Value" for a
share of the Common Stock shall be determined as follows:

                  (i) if the Common Stock shall be listed (or admitted to
unlisted trading privileges) on any single national securities exchange, then
the Current Market Value shall be computed on the basis of the last reported
sale price of the Common Stock on such exchange on the third Business Day prior
to the Quarterly Dividend Payment Date, or if no such sale shall have occurred
on such day, then on the next Business Day prior thereto on which day a sale
occurred; or

                  (ii) if the Common Stock shall not be so listed (or admitted
to unlisted trading privileges) and bid and asked prices therefor in the
over-the-counter market shall be reported by NASDAQ, including the Nasdaq
National Market and the Nasdaq SmallCap Market, then the Current Market Value
shall be the average of the closing bid and asked prices for the five trading
days ending on the third Business Day prior to the Quarterly Dividend Payment
Date; or

                  (iii) if the Common Stock shall be listed (or admitted to
unlisted trading privileges) on more than one national securities exchange or
one or more national securities exchanges and in the over-the-counter market,
then the Current Market Value shall, if different as a result of calculation
under the applicable method(s) described above in (i) and (ii) above, be deemed
to be the higher number calculated in connection therewith; or

                  (iv) if the shares of Common Stock are traded over the
counter, but not on any national securities exchange and not in the NASDAQ
National Market System or the Nasdaq SmallCap Market System, then the Current
Market Value shall be the average of the mean bid and asked prices per share for
the five trading days ending on the third Business Day prior to the Quarterly
Dividend Payment Date, as reported by Pink Sheets LLC, or an equivalent
generally accepted reporting service; or

                                       2
<PAGE>

                  (v) if the Common Stock shall not be so listed, admitted to
unlisted trading privileges, or traded over the counter, and such bid and asked
prices shall not be so reported, then the Current Market Value shall be the
average of the mean bid and asked prices per share for the last ten trading days
on which bid and asked prices were reported prior to the third Business Day
prior to the Quarterly Dividend Payment Date.

      The Company shall not be required to issue fractional shares of Common
Stock in connection with its election to pay the dividend in shares of Common
Stock. If any fraction of a share of Common Stock would be issuable upon the
payment of the dividend (or any specified portion thereof), the Company shall
pay an amount in cash equal to the product of (a) such fraction and (b) the
Current Market Value of a share of the Common Stock, determined as set forth
above.

            (c) Dividends paid on shares of Series B Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis to
all such shares of Series B Preferred Stock at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive payments of a dividend declared
thereon, which record date shall be no more than 60 days nor less than ten days
prior to the date fixed for the payment thereof.

            (d) The holders of shares of Series B Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided in
this Certificate of Designation of Series B Alternate Rate Cumulative
Convertible Redeemable Preferred Stock.

      Section 3. Required Approval. The shares of Series B Preferred Stock shall
not have any voting powers, either general or special, except as required by
applicable law and shall have approval rights as follows:

            (a) Without the approval of the holders of at least 67% of the
shares of Series B Preferred Stock at the time outstanding, the Company shall
not amend its Certificate of Incorporation to, adopt a certificate of
designation to, or otherwise (i) create any class of stock or issue any series
of Preferred Stock or any other equity security ranking prior to or in parity
with the Series B Preferred Stock as to dividends or upon liquidation; provided,
                                                                       --------
however, that such approval shall not be required if the creation or issuance of
-------
the class or series of equity securities ranking prior to or in parity with the
Series B Preferred Stock as to dividends or upon liquidation is created or
issued in an Approved Transaction, as defined in Section 8 herein; or (ii) alter
or change any of the preferences, privileges, rights or powers of the holders of
the Series B Preferred Stock so as to affect adversely such preferences,
privileges, rights or powers.

            (b) In the event that any four consecutive quarterly dividends upon
the Series B Preferred Stock which the holders of the Series B Preferred Stock
are entitled to receive hereunder shall be in arrears and unpaid either in cash
or in-kind, the holders of Series B Preferred Stock shall have the exclusive and
special right, voting separately as a class, to elect two (2) members of the
Board of Directors or such greater number of members as is necessary to

                                       3
<PAGE>

equal at least 20% of the total number of members of the Board of Directors at
all times thereafter.

      Section 4. Certain Restrictions. Whenever quarterly dividends payable on
shares of Series B Preferred Stock pursuant to the terms of Section 2 are in
arrears, then thereafter and until all accrued and unpaid dividends on shares of
Series B Preferred Stock outstanding shall have been paid in full or declared
and set apart for payment, the Company shall not declare or pay dividends on, or
make any other distributions on any shares of any series or class other than
Series B Preferred Stock or purchase, redeem or otherwise acquire any shares of
any series or class other than Series B Preferred Stock; provided, however, that
                                                         -----------------
such restrictions shall be deemed to be waived by the holders of the outstanding
shares of the Series B Preferred Stock if the declaration or payment of
dividends or distributions, or the repurchase, redemption or other acquisition,
is with regard to a series or class of capital stock issued in an Approved
Transaction.

      Section 5. Redemption.

            (a) The outstanding shares of Series B Preferred Stock may be
redeemed at the option of the Company, in whole or in part, at any time upon not
less than 30 days nor more than 90 days prior written notice to all holders of
record of shares of Series B Preferred Stock to be so redeemed, at a redemption
price equal to all accumulated but unpaid dividends to and including the date
fixed for redemption of such shares (the "Redemption Date") plus an amount (the
"Applicable Amount") equal to (i) during the four calendar years after the year
of issuance of the Series B Preferred Stock, $10.00 per share or (ii) during
each calendar year after the fourth year, an amount equal to the Applicable
Amount in the preceding year plus $0.50 per share; provided that the redemption
price per share for any transaction which results in the total number of shares
of Series B Preferred Stock that have been redeemed (including the shares
redeemed in such transaction) equaling at least ten percent (10%) of the total
number of shares of Series B Preferred Stock which were originally issued, and
for all subsequent transactions, shall be the same price as was in effect during
the year preceding the transaction which results in the redemption of at least
ten percent (10%) of the originally issued Series B Preferred Stock. Subject to
delivery of certificates for the shares to be redeemed, the Company shall pay
the Applicable Amount plus all accumulated but unpaid dividends on the
Redemption Date.

            (b) Unless default shall be made in the payment in full of the
redemption price and any accumulated and unpaid dividends, dividends on the
shares of Series B Preferred Stock called for redemption shall cease to
accumulate on the Redemption Date, and al1 rights of the holders of such shares
as stockholders of the Company by reason of the ownership of such shares shall
cease on the Redemption Date, except the right to receive the amount payable
upon redemption of such shares on presentation and surrender of the respective
certificates representing such shares. After the Redemption Date, such shares
shall not be deemed to be outstanding and shall not be transferable on the books
of the Company except to the Company.

            (c) At any time on or after the Redemption Date, the respective
holders of record of shares of Series B Preferred Stock to be redeemed shall be
entitled to receive the redemption price upon actual delivery to the Company of
certificates for the shares to be redeemed, such certificates, if required by
the Company, to be properly stamped for transfer and

                                       4
<PAGE>

duly endorsed in blank or accompanied by proper instruments of transfer thereof
duly executed in blank.

      Section 6. Liquidation, Dissolution or Winding-Up. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
the holders of shares of the Series B Preferred Stock then outstanding shall be
entitled to be paid out of the assets of the Company available for distribution
to its stockholders, before any payment shall be made to the holders of any
other class or series of capital stock of the Company, an amount equal to $10.00
per share plus an amount equal to all dividends accrued thereon to and including
the date of payment; provided, however, the holders of the Series B Preferred
Stock shall be deemed to have waived such priority of payment with regard to
another class or series of capital stock issued in an Approved Transaction.

      Section 7. Conversion.

            (a) Conversion Ratio. Each share of Series B Preferred Stock shall
be convertible at any time at the option of the holder thereof, into shares of
Common Stock. Subject to the other terms of this Section 7, the number of shares
of Common Stock deliverable upon conversion of one share of Series B Preferred
Stock shall be one and one-half (1.5) shares of Common Stock, provided, however,
in the event that while shares of Series B Preferred Stock are held by Bank of
America, N.A. or a nominee thereof the Company issues new shares of equity
securities to investors for new funding and a portion of the proceeds is used to
make a reduction in the outstanding principal amount of the Company's Term Loan,
the conversion ratio shall be adjusted as follows:

 Term Loan             Conversion            Pre Conversion           No. Shares
  Paydown                 Ratio                  Equity                Of Common
  -------                 -----                  ------                ---------
     $0                   1.5:1                  16.30%                1,500,000

$1.0 million              1.4:1                  15.22%                1,400,000

$1.5 million              1.3:1                  14.13%                1,300,000

$2.0 million              1.2:1                  13.04%                1,200,000

$2.5 million              1.0:1                  10.87%                1,000,000

$3.0 million              0.5:1                   5.43%                  500,000

For the purposes of this Section 7(a), the "Term Loan" shall mean the term loan
payable to Bank of America, N.A. in the original principal amount of
$4,903,874.69, due March 31, 2003, evidenced by a Term Loan Note dated March 6,
2002, as such term loan note may be amended, modified, renewed or replaced.

            (b) Exercise of Conversion Privilege. Each holder of outstanding
shares of Series B Preferred Stock may exercise the conversion right provided in
paragraph (a) above as to all or any portion of the shares he holds by
delivering to the Company during regular business hours, at the principal office
of the Company or at such other place as may be designated in

                                       5
<PAGE>

writing by the Company, the certificate or certificates for the shares to be
converted, duly endorsed or assigned in blank or endorsed or assigned to the
Company (if required by it), accompanied by written notice stating that the
holder elects to convert such shares and stating the name or names (with address
and applicable social security or other tax identification number) in which the
certificate or certificates for shares of Common Stock are to be issued.
Conversion shall be deemed to have been effected on the date (the "Conversion
Date") when such delivery is made. As promptly as practicable thereafter the
Company shall issue and deliver to or upon the written order of such holder, at
such office or other place designated by the Company, a certificate or
certificates for the number of shares of Common Stock to which he is entitled
and a check or other order for the payment of cash due with respect to any
fraction of a share, as provided in paragraph (c) below. The person in whose
name the certificate or certificates for shares of Common Stock are to be issued
shall be deemed to have become a shareholder of record on the Conversion Date,
unless the transfer books of the Company are closed on that date, in which event
he shall be deemed to have become a shareholder of record on the next succeeding
date on which the transfer books are open; but the Conversion Price shall be
that in effect on the Conversion Date.

            (c) No Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock upon conversion of shares of Series B
Preferred Stock. If more than one share of Series B Preferred Stock shall be
surrendered for conversion at any time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on the
basis of the total number of shares of Series B Preferred Stock so surrendered.
If any fractional interest in a share of Common Stock would be deliverable upon
conversion, the Company shall make an adjustment therefor in cash based on the
Current Market Value of one share of Common Stock on the Conversion Date. The
"Current Market Value" for purposes of this paragraph shall be determined as set
forth in Section 2(b), except that each reference to "Quarterly Dividend Payment
Date" in Section 2(b) shall mean "Conversion Date" for purposes of this
paragraph.

            (d) Taxes Payable on Conversion. The issuance of shares of Common
Stock on conversion of outstanding shares of Series B Preferred Stock shall be
made by the Company without charge for expenses or for any tax in respect of the
issuance of such shares of Common Stock, but the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of shares of Common Stock in any name other than that of
the holder of record on the books of the Company of the outstanding shares of
Series B Preferred Stock converted, and the Company shall not be required to
issue or deliver any certificate for shares of Common Stock unless and until the
person requesting the issuance thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.

            (e) Conversion Price Adjustments. The Conversion Price of the Series
B Preferred Stock shall be subject to adjustment from time to time as follows:

                  (i) (A) If the Company shall issue any Additional Stock (as
defined below) without consideration or for a consideration per share that is
less than the Market Price in effect immediately prior to the issuance of such
Additional Stock, the Conversion Price

                                       6
<PAGE>

shall forthwith (except as otherwise provided in this clause (i)) be adjusted as
to equal the price determined by the following formula:

      NP =  OP x  (P x N) + C
                 -------------
                 (P x (N + n))
where

      NP =  new Conversion Price,

      OP =  old Conversion Price,

      P  =  Market Price in effect immediately prior to the issuance of
            Additional Stock,

      N =   the number of shares of Common Stock outstanding immediately prior
            to the issuance of Additional Stock (including for this purpose the
            number of shares of Common Stock issuable upon conversion of the
            Series B Preferred Stock at the Conversion Price in effect
            immediately prior to such issuance),

      C =   the aggregate consideration to be received by the Company for the
            Additional Stock, and

      n =   the number of shares of Additional Stock to be issued.

      The "Market Price" shall mean the Current Market Value as defined in
Section 2(b) hereof, with the date of measurement under sub-clauses (i) to and
including (v) of Section 2(b) being, for the purposes of this Section 7(e), the
third Business Day prior to the Issuance Date of such Additional Stock rather
than the third Business Day prior to the Quarterly Dividend Payment Date.

                        (B) No adjustment of the Conversion Price for the Series
B Preferred Stock shall be made in an amount less than one cent per share,
provided that any adjustments that are thereby not required to be made shall be
carried forward and shall be taken into account in any subsequent adjustment.
Except to the limited extent provided for in Subsection 7(e)(i)(E)(3), no
adjustment of the Conversion Price pursuant to this Subsection 7(e)(i) shall
have the effect of increasing the Conversion Price above the Conversion Price in
effect immediately prior to such adjustment.

                        (C) In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the amount of cash paid therefor
before deducting any reasonable discounts , commissions or other expenses
allowed, paid or incurred by the Company for any underwriting or otherwise in
connection with the issuance and sale thereof.

                        (D) In the case of the issuance of the Common Stock for
a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair value thereof as determined by the
Board of Directors irrespective of any accounting treatment.

                                       7
<PAGE>

                        (E) In the case of the issuance of options to purchase
or rights to subscribe for Common Stock, securities by their terms convertible
into or exchangeable for Common Stock or options to purchase or rights to
subscribe for such convertible or exchangeable securities (which are not
excluded from the definition of Additional Stock), the following provisions
shall apply:

                              (1) subject to subparagraph (4) below, the
aggregate maximum number of shares of Common Stock deliverable upon exercise of
such options to purchase or rights to subscribe for Common Stock shall be deemed
to have been issued at the time such options or rights were issued and for a
consideration equal to the consideration (determined in the manner provided in
Subsections 7(e)(i)(C) and 7(e)(i)(D)), if any, received by the Company upon the
issuance of such options or rights plus the additional consideration, if any, to
be received by the Company upon the exercise of such options or rights for the
Common Stock covered thereby;

                              (2) subject to subparagraph (4) below, the
aggregate maximum number of shares of Common Stock deliverable upon conversion
of or in exchange for any such convertible or exchangeable securities or upon
the exercise of options to purchase or rights to subscribe for such convertible
or exchangeable securities and the subsequent conversion or exchange thereof
shall be deemed to have been issued at the time such convertible or exchangeable
securities were issued or such options or rights were issued and for a
consideration equal to the consideration, if any, received by the Company for
any such convertible or exchangeable securities and related options or rights
(excluding any cash received on account of accrued interest or accrued
dividends), plus the additional consideration, if any, to be received by the
Company upon the conversion or exchange of such securities or the exercise of
any related options or rights (the consideration in each case to be determined
in the manner provided in Subsections 7(e)(i)(C) and 7(e)(i)(D));

                              (3) in the event of any increase in the number
shares of Common Stock deliverable upon exercise of such options or rights or
upon conversion of or in exchange for such convertible or exchangeable
securities, including, but not limited to, a change resulting from the
antidilution provisions thereof, the Conversion Price then in effect shall
forthwith be readjusted to such Conversion Price as would have been obtained had
the adjustment that was made upon the issuance of such options, rights or
securities not converted prior to such change or the options or rights related
to such securities not converted prior to such change been made upon the basis
of such change, but no further adjustment shall be made for the actual issuance
of Common Stock upon the exercise of any such options or rights or the
conversion or exchange of such securities; and

                              (4) upon the expiration of any such options or
rights, the termination of any such right s to convert or exchange or the
expiration of any options or rights related to such convertible or exchangeable
securities, the Conversion Price shall forthwith be readjusted to such
Conversion Price as would have been obtained had the adjustment that was made
upon the issuance of such options, rights or securities or options or rights
related to such securities been made upon the basis of the issuance of only the
number of shares of Common

                                       8
<PAGE>

Stock actually issued upon the exercise of such options or rights, upon the
conversion or exchange of such securities or upon the exercise of the options or
rights related to such securities.

                  (ii) "Additional Stock" shall mean any shares of Common Stock
issued (or deemed to have been issued pursuant to Subsection 7(e)(i)(E)) on any
date ("Issuance Date"), other than:

                        (A) Common Stock issued pursuant to a transaction
described in Subsection 7(e)(iii) hereof,

                        (B) Common Stock issuable or issued to directors,
employees or consultants of the Company directly or pursuant to a stock option
or other plan,

                        (C) Common Stock issued or issuable upon conversion of
any outstanding Series B Preferred Stock, and

                        (D) Common Stock issued in an Approved Transaction.

                  (iii) If the Company should at any time or from time to time
after the Issuance Date fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof), then, as of such record date (or the date of such dividend,
distribution, split or subdivision if no record date is fixed), the applicable
Conversion Price of the Series B Preferred Stock shall be appropriately
decreased so that the number of shares of Common Stock issuable on conversion of
each share of Series B Preferred Stock shall be increased in proportion to such
increase of outstanding shares.

                  (iv) If the number of shares of Common Stock outstanding at
any time after the Issuance Date is decreased by a combination or reverse stock
split of the outstanding shares of Common Stock, then, following the record date
of such combination or reverse stock split, the applicable Conversion Price of
the Series B Preferred Stock shall be appropriately increased so that the number
of shares of Common Stock issuable on conversion of each share of Series B
Preferred Stock shall be decreased in proportion to such decrease in outstanding
shares.

                  (v) In case of any consolidation or merger of the Company with
or into another corporation or the conveyance of all or substantially all of the
assets of the Company to another corporation, adequate provision shall be made
by the Company or by the successor or purchasing business entity so that each
share of Series B Preferred Stock shall thereafter be convertible into the
number of shares of stock or other securities or property to which a holder of
the number of shares of Common Stock deliverable upon conversion of such Series
B Preferred Stock immediately before the effectiveness of such consolidation,
merger or conveyance, would

                                       9
<PAGE>

have been entitled upon such consolidation, merger or conveyance; and, in any
such case, appropriate adjustment (as determined by the Board of Directors of
the Company) shall be made in the application of the provisions herein set forth
with respect to changes in and other adjustment of the Conversion Price of the
Series B Preferred Stock) shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the conversion of the Series B Preferred Stock.

            (f) Other Distributions. If the Company shall declare a distribution
payable to holders of Common Stock in securities of other persons, evidences of
indebtedness issued by the Company or other persons, assets (excluding cash
dividends) or options or rights not referred to in Subsection 7(e) (iii), then,
in each such case for the purpose of this Subsection 7(f), the holders of the
Series B Preferred Stock shall be entitled to a proportionate share of any such
distribution as though they were the holders of the number of shares of Common
Stock of the Company into which their shares of Series B Preferred Stock are
convertible as of the record date fixed for the determination of the holders of
Common Stock of the Company entitled to receive such distribution.

            (g) Recapitalizations. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision,
combination, merger, sale of assets or other transaction provided for elsewhere
in this Section 7), provision shall be made so that the holders of the Series B
Preferred Stock shall thereafter be entitled to receive upon conversion of the
Series B Preferred Stock the number of shares of stock or other securities or
property of the Company or otherwise, to which a holder of Common Stock
deliverable upon conversion immediately before the effectiveness of such
recapitalization would have been entitled on such recapitalization. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Section 7 with respect to the rights of the holders of the Series B
Preferred Stock after the recapitalization to the end that the provisions of
this Section 7 (including adjustment of the Conversion Price then in effect and
the number of shares purchasable upon conversion of the Series B Preferred
Stock) shall be applicable after that event as nearly equivalent as may be
practicable.

            (h) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Section 7 and in the taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of the
holders of the Series B Preferred Stock against impairment.

            (i) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price of the Series B Preferred
Stock pursuant to this Section 7, the Company, at its expense, shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and
prepare and furnish to each holder of Series B Preferred Stock, by first class
mail, postage prepaid, a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is

                                       10
<PAGE>

based, including a statement setting forth (A) the consideration received or to
be received by the Company for any Additional Stock, (B) the Conversion Price
then in effect, and (C) the number of shares of Common Stock and the amount, if
any, of other property which at the time would be received upon the conversion
of a share of the Series B Preferred Stock.

            (j) Notices of Record Date. In the event of any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the Company shall mail to
each holder of Series B Preferred Stock, at least 20 days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right.

            (k) Notices. Any notice required by the provisions of this Section 7
to be given to the holder of shares of Series B Preferred Stock shall be deemed
given when personally delivered to such holder or five business days after the
same has been deposited in the United States mail, certified or registered mail,
return receipt requested, postage prepaid, and addressed to each holder of
record at his address appearing on the books of the Company.

            (l) Effect of Conversion After Certain Record Dates. If any shares
of Series B Preferred Stock are converted into shares of Common Stock after the
record date for the happening of any of the events described in subparagraphs
(i), (ii) or (iii) of Section 7(e) but before the happening of such event the
Company may defer, until the happening of such event, (i) issuing to the holder
of shares of Series B Preferred Stock so converted the shares of Common Stock
which he is entitled to receive because of the adjustments required pursuant to
any such subparagraph and (ii) paying to such holder any cash in lieu of a
fractional share pursuant to this Section 7.

            (m) Reservation of Stock Issuable on Conversion. Shares of Common
Stock issued on conversion of shares of Series B Preferred Stock shall be issued
as fully paid shares and shall be nonassessable by the Company. The Company
shall, at all times, reserve and keep available for the purpose of effecting the
conversion of the outstanding shares of Series B Preferred Stock such number of
its duly authorized shares of Common Stock as shall be sufficient to effect the
conversion of all of the outstanding shares of Series B Preferred Stock.

      Section 8. Approved Transactions. As used in Sections 3, 4, 6 and 7 of
this Certificate, the term "Approved Transaction" shall mean any transaction
entered into by the Company which results in the issuance of shares of the
Company's capital stock (or securities convertible into or exchangeable or
exercisable for shares of capital stock) to a third party so long as such
transaction shall have been approved or consented to, in either case in writing,
by a majority of the holders of the outstanding shares of Series B Preferred
Stock. The approval of or consent to such transaction shall be deemed to have
been given by such holders of a majority of the Series B Preferred Stock if such
holders shall have received a Third Party Opinion customary in form and
substance that the transaction is fair to the Company from a financial point of
view not less

                                       11
<PAGE>

than five business days prior to the closing of such transaction. The term
"Third Party Opinion" shall mean a fairness opinion addressed to the Company's
Board of Directors and the holders of a majority of the Series B Preferred Stock
from a nationally recognized investment banking firm selected by the Company
which selection shall be subject to the approval of the holders of a majority of
the Series B Preferred Stock.

      Section 9. Transfer Restrictions. The holder of any shares of Series B
Preferred Stock shall not transfer or purport to transfer any such shares unless
he shall have given to the Company, through its Secretary, at least fifteen (15)
business days' written notice of the proposed transfer, the number of shares
proposed to be transferred, the price at which the proposed transfer is to be
made, and the name of the prospective transferee. During such fifteen (15)
business days, the Company shall have the sole option to exercise its right of
redemption consistent with the terms of Section 5 of this Certificate.

      IN WITNESS WHEREOF, Comdial Corporation has caused this Certificate of
Designation to be duly executed by Nickolas A. Branica, its President, and
attested to by Paul K. Suijk, its Secretary, and has caused the corporate seal
to be affixed hereto, this 6th day of March, 2002.

                               COMDIAL CORPORATION

                               By: /s/ Nickolas A. Branica
                                   ------------------------------------
                                   President

ATTEST:

/s/ Paul K. Suijk
------------------------------------
Secretary

(Corporate Seal)

1037123v4

                                       12

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