Document:

Option Agreement

 Exhibit 10.16 
  
 OPTION AGREEMENT 
  
 Optionee: Travis Reid                 
  
 This Option and any securities issued upon exercise of this Option are subject to
restrictions on voting and transfer and requirements of sale, rights of the Optionee and other provisions as set forth in the Management Stockholders Agreement, dated as of January 12, 2005, among LCE Holdings, Inc., LCE Intermediate Holdings, Inc.,
LCE Holdco LLC, Loews Cineplex Entertainment Corporation and certain optionholders and stockholders of LCE Holdings, Inc. and LCE Intermediate Holdings, Inc. from time to time party thereto (as amended from time to time, the “Management
Stockholders Agreement”) (this Option and any securities issued upon exercise of this Option constitute Management Shares as defined therein). 
  
 LCE HOLDINGS, INC. AND 
 LCE INTERMEDIATE
HOLDINGS, INC. 
  
 OPTION AGREEMENT 
  
 This option (the “Agreement”) is granted by LCE Holdings,
Inc. and LCE Intermediate Holdings, Inc. (collectively, the “Companies”, and, as applicable, the “Company”), to the Optionee, pursuant to the Companies’ 2004 Management Stock Option Plan, as amended from time
to time (the “Plan”). For the purpose of this Agreement, the “Reference Date” shall mean July 30, 2004, regardless of the date on which this Agreement is entered into. 
  
 1. Grant of Option. This Agreement evidences the grant by the Company
on January 12, 2005 to the Optionee of an option to purchase (the “Option”), in whole or in part, on the terms provided herein and in the Plan, the number of Class A Common Shares, Class L Common Shares and Preferred Shares in each
of Tranche 1, Tranche 2 and Tranche 3 as set forth on Exhibit A hereto at the following prices per share: 
  
 (a) Class A Common Shares of LCE Holdings, Inc., par value $.001 per share (the “Class A Common Shares”), at $1.00 per
share which shall vest and become exercisable in accordance with Section 2 below; 
  
 (b) Class L Common Shares of LCE Holdings, Inc., par value $.001 per share (the “Class L Common Shares”), at $81.00 per
share which shall vest and become exercisable in accordance with Section 2 below; and 
  
 (c) Cumulative Preferred Shares of LCE Intermediate Holdings, Inc., par value $.001 per share (the “Preferred Shares”),
at $100.00 per share which shall vest and become exercisable in accordance with Section 2 below. 
  
 2. Vesting.  
  
 (a) Subject to Section 10, the Tranche 1 Options will vest and become exercisable in five equal annual installments on July 30th of each of 2005, 2006, 2007, 2008 and 2009. 

 (b) Subject to Section 10, the Tranche 2 Options will vest and become exercisable upon
the earlier to occur of (i) the seventh anniversary of the Reference Date and (ii) the occurrence of a Tranche 2 Liquidity Vesting Event; provided, however, that, subject to the foregoing, in the event of the earlier occurrence of a
Tranche 2 Non-Liquidity Vesting Event the Tranche 2 Options will vest and become exercisable in five equal annual installments on July 30th of each of 2005, 2006, 2007, 2008 and 2009. 
  
 (c) Subject to Section 10, the Tranche 3 Options will vest and become exercisable upon the earlier to occur of (i) the seventh anniversary of the Reference Date and (ii) the occurrence of a Tranche 3 Liquidity Vesting
Event; provided, however, that, subject to the foregoing, in the event of the earlier occurrence of a Tranche 3 Non-Liquidity Vesting Event the Tranche 3 Options will vest and become exercisable in five equal annual installments on
July 30th of each of 2005, 2006, 2007, 2008 and 2009. 
  
 3. Exercise of Option. Each election to exercise this Option shall be subject to the terms and conditions of the Plan
and shall be in writing, signed by the Optionee or by his or her liquidator or executor or administrator or by the person or persons to whom this Option is transferred by will or the applicable laws of descent and distribution (subject to any
restrictions provided under the Plan) and made pursuant to and in accordance with the terms and conditions set forth in the Plan. The Optionee shall not exercise this Option as to any shares unless such Optionee simultaneously exercises this Option
as to a proportionate number of Class A Common Shares, Class L Common Shares and Preferred Shares. The latest date on which this Option may be exercised is July 30, 2014, subject to earlier termination in accordance with the terms and provisions of
the Plan and this Agreement. 
  
 4. Representations and
Warranties of the Parties. Each of the Companies and the Optionee represent and warrant to each other that: 
  
 (a) Authorization. Such party has full legal capacity, power, and authority to execute and deliver this Agreement and to perform
such party’s obligations hereunder. This Agreement has been duly executed and delivered by such party and is the legal, valid, and binding obligation of such party enforceable against such party in accordance with the terms hereof. 

 
 (b) No Conflicts. The execution, delivery, and
performance by such party of this Agreement and the consummation by such party of the transactions contemplated hereby will not, with or without the giving of notice or lapse of time, or both (i) violate in any material respect any provision of law,
statute, rule or regulation to which such party is subject, (ii) violate in any material respect any order, judgment or decree applicable to such party, or (iii) conflict with, or result in a breach of default under, any term or condition of any
agreement or other instrument to which such party is a party or by which such party is bound. 
  
 (c) No Other Agreements. Except as provided by this Agreement, the Management Stockholders Agreement, the Registration Rights
Agreement and the Plan, such party is not a party to or subject to any agreement or arrangement with respect to the voting or transfer of this Option or the Shares issued upon exercise hereof. 
  

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 (d) Thorough Review, etc. Optionee has thoroughly reviewed the Plan and this
Agreement in their entirety. Optionee has had an opportunity to obtain the advice of independent counsel (other than counsel to the Company or its Affiliates) prior to executing this Agreement, and fully understands all provisions of the Plan and
this Agreement. 
  
 5. Other Agreements. Optionee
acknowledges and agrees that the shares received upon exercise of this Option shall be subject to the Management Stockholders Agreement and the transfer and other restrictions, rights, and obligations set forth therein, and Optionee further
acknowledges that, as a condition to receiving this Option, Optionee must execute, join and become a party to the Management Stockholders Agreement as a Manager (as such term is defined in the Management Stockholders Agreement) and to the
Registration Rights Agreement and by executing the signature page of this Option Agreement, Optionee shall be deemed to have executed, joined and become party to the Management Stockholders Agreement as a Manager and the Registration Rights
Agreement. Notwithstanding the foregoing or any other provisions of this Option Agreement, the provisions of Section 4.1 of the Management Stockholders Agreement shall also apply to the Shares issued upon exercise hereof if a Prospective Selling
Stockholder proposes to sell any Shares to any Prospective Buyer(s) that is not a Permitted Transferee in a Transfer that is an Excepted Transfer. 
  
 6. Confidential Information. 
  
 (a) The Optionee acknowledges that the Company and its Affiliates continually develop Confidential Information, that the Optionee may
develop Confidential Information for the Company or its Affiliates and that the Optionee may learn of Confidential Information during the course of employment. The Optionee will comply with the policies and procedures of the Company and its
Affiliates for protecting Confidential Information and shall not disclose to any Person or use, other than as required by applicable law or for the proper performance of his duties and responsibilities to the Company and its Affiliates, any
Confidential Information obtained by the Optionee incident to his employment or other association with the Company or any of its Affiliates. The Optionee understands that this restriction shall continue to apply after his employment terminates,
regardless of the reason for such termination. 
  
 (b) All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its Affiliates and any copies, in whole or in part, thereof (the
“Documents”), whether or not prepared by the Optionee, shall be the sole and exclusive property of the Company and its Affiliates. The Optionee shall safeguard all Documents and shall surrender to the Company at the time his
employment terminates, or at such earlier time or times as the Board or its designee may specify, all Documents then in the Optionee’s possession or control. 
  
 7. Non-Solicitation. The Optionee agrees that some restrictions on his activities during and after his employment are
necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its Affiliates. That being the case, the Optionee agrees that while he is employed by the Company and for eighteen months thereafter,

  

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the Optionee will not hire or attempt to hire any employee of the Company or any of its Affiliates at the time of termination of his employment or at any
time during the 90 days preceding such termination, directly or indirectly solicit for hire any such employee on behalf of any Person, encourage any such employee to terminate his or her relationship with the Company or any of its Affiliates, or
solicit or encourage any vendor of the Company or any of its Affiliates to terminate or diminish its relationship with them. 
  
 8. Assignment of Rights to Intellectual Property. The Optionee shall promptly and fully disclose all Intellectual Property to the Company. The
Optionee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) the Optionee’s full right, title and interest in and to all Intellectual Property. The Optionee agrees to execute any and all applications for
domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the
Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. The Optionee will not charge the Company for time spent in complying with these obligations.
All copyrightable works that the Optionee creates shall be considered “work made for hire.” 
  
 9. Enforcement of Covenants. The Optionee acknowledges that he has carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 6, 7 and 8 hereof. The Optionee agrees that said restraints are necessary for the reasonable and proper protection of the Company and its Affiliates and that each and every one of the
restraints is reasonable in respect to subject matter, length of time and geographic area. The Optionee further acknowledges that, were he to breach any of the covenants contained in Sections 6, 7 and 8 hereof, the damage to the Company would be
irreparable. The Optionee therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Optionee of any of said
covenants, without having to post bond. The parties further agree that, in the event that any provision of Sections 6, 7 and 8 hereof shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over
too great a time, too large a geographic area or too great a range of activities, such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law. 
  
 10. Change of Control. Immediately following a Change of Control, all
unvested Options shall terminate; provided, however, that (i) all unvested Tranche 1 Options, (ii) if there shall have occurred a Tranche 2 Non-Liquidity Vesting Event, all unvested Tranche 2 Options and (iii) if there shall have
occurred a Tranche 3 Non-Liquidity Vesting Event, all unvested Tranche 3 Options, at the option of the Board, shall either (a) be replaced by a package of equivalent economic value, as determined by the Board, or (b) immediately vest and become
fully exercisable prior to such Change of Control on a basis that gives the holder of the Option a reasonable opportunity, as determined by the Board, to participate as a stockholder in the Change of Control transaction following exercise, and the
Option will terminate upon consummation of the Change of Control transaction; and provided further however, that in the event of a Change of Control Transaction which is a Tranche 3 Liquidity Vesting Event all unvested Tranche 1
Options shall immediately vest and become fully exercisable prior to such Change of Control. In 

  

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the case the Board shall propose a package of equivalent economic value pursuant to the first proviso of the immediately preceding sentence, if the Optionee
delivers a written notice objecting to the value of such proposed package within five days of receiving a notice of such determination, the value of such proposed package and of the unvested Tranche 1 Options, the unvested Tranche 2 Options and
unvested Tranche 3 Options will be determined by a mutually acceptable “bulge bracket” independent investment bank. In the event the Company and the Optionee are unable to reach agreement upon a mutually acceptable “bulge
bracket” investment bank within 20 days of such notice, the Company and the Optionee shall each select a “bulge bracket” investment bank within 25 days of such notice which two investment banks shall select a third “bulge
bracket” investment bank to make such determination within 5 days of their selection. The costs and expenses of such investment banks shall be shared equally by the Company and the Optionee. 
  
 11. Limited Transferability. The Option shall be transferable by the
Optionee to the extent set forth in the Management Stockholders Agreement as in effect on the date hereof (and, with respect to any additional rights or transfer, as such agreement may be amended from time to time) or as may be permitted by the
Administrator in accordance with Section 6(b) of the Plan. 
  
 12.
Legends. Certificates evidencing any shares issued upon exercise of the Option granted hereby shall bear a legend in substantially the form required by the Management Stockholders Agreement. 
  
 13. Status Change. Upon the termination of the Optionee’s
employment with, or other service to, the Company or its Subsidiaries, this Option shall continue or terminate, as and to the extent provided in the Plan. 
  
 14. Effect on Employment. Neither the grant of this Option, nor the issuance of shares upon exercise of this Option, shall give the Optionee any
right to be retained in the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Optionee at any time, or affect any right of such Optionee to terminate his or her
employment at any time. 
  
 15. Provisions of the Plan.
This Agreement is subject in its entirety to the provisions of the Plan, which are incorporated herein by reference. A copy of the Plan as in effect on the date of the grant of this Stock Option has been furnished to the Optionee. By exercising all
or any part of this Option, the Optionee agrees to be bound by the terms of the Plan and this Option. In the event of any conflict between the terms of this Agreement and the Plan, the terms of this Agreement shall control. 
  
 16. Governing Law. This Agreement and all claims arising out of or
based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of New York without giving effect to any choice or conflict of laws provision or rule
that would cause the application of the domestic substantive laws of any other jurisdiction. 
  
 17. Definitions. The initially capitalized terms used herein shall have the meanings set forth herein in the parenthetical following such term or as set forth below. Initially 

  

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capitalized terms not otherwise defined herein shall have the meaning provided in the Plan or the Management Stockholders Agreement. 
  
 “Aggregate Sponsor Investment” means
$421,670,572.29. 
  
 “Consideration
Value” means, at any time, (i) in the case of cash or cash equivalents the actual amount of such cash or cash equivalents and (ii) in the case of Marketable Securities, the weighted average trading price (by dollar volume) of such
Marketable Securities for the most recent 30 trading days for such securities prior to the date of the delivery thereof as consideration and (iii) in the case of all other consideration the fair value of said consideration as of the date of the
delivery thereof as determined in good faith by the Board. In the event that the Optionee delivers a written notice to the Company disputing the Company’s Consideration Value determination within five days of receiving such determination, the
Consideration Value will be determined by a mutually acceptable “bulge bracket” independent investment bank, and such value will be based on the standards set forth in this Agreement. In the event the Company and the Optionee are unable to
reach agreement upon a mutually acceptable “bulge bracket” investment bank within 20 days of such notice, the Company and the Optionee shall each select a “bulge bracket” investment bank within 25 days of such notice which two
investment banks shall select a third “bulge bracket” investment bank to make such determination within 5 days of their selection. The costs and expenses of such investment banks shall be shared equally by the Company and the Optionee.

  
 “Change of Control” has the
meaning set forth in the Management Stockholders Agreement. 
  
 “Confidential Information” means any and all information of the Company and its Affiliates that is not generally known by others with whom they compete or do business, or with whom any of them plans
to compete or do business and any and all information, publicly known in whole or in part or not, which, if disclosed by the Company or its Affiliates would assist in competition against them. Confidential Information includes without limitation
such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its Affiliates, (ii) the Products, (iii) the costs, sources of supply, financial performance and strategic
plans of the Company and its Affiliates, (iv) the identity and characteristics of the customers of the Company and its Affiliates and (v) the people and organizations with whom the Company and its Affiliates have business relationships and those
relationships. Confidential Information also includes any information that the Company or any of its Affiliates have received, or may receive hereafter, belonging to customers or others with any understanding, express or implied, that the
information would not be disclosed. 
  
 “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made,
created, developed or reduced to practice by the Executive (whether alone or with others, whether or not during normal business hours or on or off Company premises) during the Executive’s 

  

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employment and during the period of three (3) months immediately following termination of his/her employment that relate to either the business or any
prospective activity of the Company or any of its Affiliates or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its Affiliates. 
  
 “Marketable Securities” means any securities that are (i) listed or traded on a any
established trading market or quotation system for the trading of securities, including any established electronic securities market and have an average daily trading volume of over $20 million (calculated on 30-day weighted average (by dollar
volume) basis) and (ii) tradable in the United States without any further registration under applicable securities laws. 
  
 “Original Sponsor Shares” means the Shares originally issued to the Sponsors pursuant to the Sponsor Subscription
Agreement. 
  
 “Person” means an
individual, a corporation, a limited liability company, an association, a partnership, an estate, a trust and any other entity or organization of any kind, other than the Company or any of its Affiliates. 
  
 “Registration Rights Agreement” means the
Registration Rights Agreement dated as of July 30, 2004 among LCE Holdings, Inc., LCE Intermediate Holdings, Inc., LCE Holdco LLC, LCE Acquisition Corporation and the investors listed on Schedule 1 thereto. 
  
 “Shares” means Class A Common Shares, Class
L Common Shares, Preferred Shares and any security received in consideration therefor. 
  
 “Sponsor Subscription Agreement” means the Stock Subscription Agreement, dated as of July 30, 2004, among LCE Holdings,
Inc., LCE Intermediate Holdings, Inc., LCE Holdco LLC, LCE Acquisition Corporation and the investors listed on Schedule 1 thereto. 
  
 “Sponsors” means, collectively, the Bain Investors, the Carlyle Investors and the Spectrum Investors. 
  
 “Tranche 2 Liquidity Vesting Event” means
(i) a Change of Control transaction in which the Consideration Value of the cash, cash equivalents or Marketable Securities represent at least 60% of the Consideration Value of the consideration that the Sponsors receive for their Shares sold in
such transaction or (ii) a transaction which includes the first Transfer by one or more Sponsors at or after the IPO (other than to an affiliated fund) in connection with which Sponsor(s) receive cash, cash equivalents or Marketable Securities in
consideration for Shares representing at least 25% of the Original Sponsor Shares, in either case, in connection with which the sum of (A) the Consideration Value of the net consideration received by the Sponsors in respect of the Original Sponsor
Shares (assuming (x) conversion or exercise of (i) all options and convertible securities that are then exercisable, convertible or exchangeable or which will become exercisable, convertible or exchangeable on or prior to, or by reason of, the
Tranche 2 Liquidity Vesting Event, (ii) without regard to the foregoing, all Tranche 2 Options issued by the 

  

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Company to any Participant, in each case, taking into account the conversion or exercise price thereof and (y) all Original Sponsor Shares that continue to
be held by the Sponsors were Transferred in such transaction for the same net per share consideration) plus (B) the aggregate amount of the Consideration Value of any net consideration paid with respect to the Original Sponsor Shares pursuant to any
previous transaction(s), equals or exceeds two times (2x) the Aggregate Sponsor Investment. 
  
 “Tranche 2 Non-Liquidity Vesting Event” means (i) a Change of Control transaction in which the Consideration Value of the
cash, cash equivalents or Marketable Securities represent less than 60% of the Consideration Value of the consideration that the Sponsors receive for their Shares sold in such transaction (such actual percentage, the “Cash Percentage”), in
connection with which the sum of (A) the Consideration Value of the net consideration received by the Sponsors in respect of the Original Sponsor Shares (assuming (x) conversion or exercise of (i) all options and convertible securities that are then
exercisable, convertible or exchangeable or which will become exercisable, convertible or exchangeable on or prior to, or by reason of, the Tranche 2 Non-Liquidity Vesting Event, (ii) without regard to the foregoing, all Tranche 2 Options issued by
the Company to any Participant, in each case, taking into account the conversion or exercise price thereof and (y) all Original Sponsor Shares that continue to be held by the Sponsors were Transferred in such transaction for the same net per share
consideration) plus (B) the aggregate amount of the Consideration Value of any net consideration paid with respect to the Original Sponsor Shares pursuant to any previous transaction(s), equals or exceeds two times (2x) the Aggregate Sponsor
Investment or (ii) a resignation by the Optionee in the case where, at the time such resignation is effective, a 100% cash Change of Control transaction for the then fair market value would have resulted in a Tranche 2 Liquidity Vesting Event.

  
 “Tranche 3 Liquidity Vesting
Event” means (i) a Change of Control transaction in which the Consideration Value of the cash, cash equivalents or Marketable Securities represent at least 60% of the Consideration Value of the consideration that the Sponsors receive for
their Shares sold in such transaction or (ii) a transaction which includes the first Transfer by one or more Sponsors at or after the IPO (other than to an affiliated fund) in connection with which Sponsor(s) receive cash, cash equivalents or
Marketable Securities in consideration for Shares representing at least 25% of the Original Sponsor Shares, in either case, in connection with which the sum of (A) the Consideration Value of the net consideration received by the Sponsors in respect
of the Original Sponsor Shares (assuming (x) conversion or exercise of (i) all options and convertible securities that are then exercisable, convertible or exchangeable or which will become exercisable, convertible or exchangeable on or prior to, or
by reason of, the Tranche 3 Liquidity Vesting Event, (ii) without regard to the foregoing, all Tranche 2 Options and Tranche 3 Options issued by the Company to any Participant, in each case, taking into account the conversion or exercise price
thereof and (y) all Original Sponsor Shares that continue to be held by the Sponsors were Transferred in such transaction for the same net per share consideration) plus (B) the aggregate amount of the Consideration Value of any net consideration
paid with respect to the Original Sponsor Shares pursuant to any previous transaction(s), equals or exceeds three times (3x) the Aggregate Sponsor Investment. 
  

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 “Tranche 3 Non-Liquidity Vesting Event” means (i) a Change of Control
transaction in which the Consideration Value of the cash, cash equivalents or Marketable Securities represent less than 60% of the Consideration Value of the consideration that the Sponsors receive for their Shares sold in such transaction (such
actual percentage, the “Cash Percentage”) in connection with which the sum of (A) the Consideration Value of the net consideration received by the Sponsors in respect of the Original Sponsor Shares (assuming (x) conversion or exercise of
(i) all options and convertible securities that are then exercisable, convertible or exchangeable or which will become exercisable, convertible or exchangeable on or prior to, or by reason of, the Tranche 3 Non-Liquidity Vesting Event, (ii) without
regard to the foregoing, all Tranche 2 Options and Tranche 3 Options issued by the Company to any Participant, in each case, taking into account the conversion or exercise price thereof and (y) all Original Sponsor Shares that continue to be held by
the Sponsors were Transferred in such transaction for the same net per share consideration) plus (B) the aggregate amount of the Consideration Value of any net consideration paid with respect to the Original Sponsor Shares pursuant to any previous
transaction(s), equals or exceeds three times (3x) the Aggregate Sponsor Investment or (ii) a resignation by the Optionee in the case where, at the time such resignation is effective, a 100% cash Change of Control transaction for the then fair
market value would have resulted in a Tranche 3 Liquidity Vesting Event. 
  
  

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 IN WITNESS WHEREOF, each Company has caused this Option to be executed under its corporate seal by its
duly authorized officer. This Option shall take effect as a sealed instrument. 
  

			
	LCE HOLDINGS, INC.
		
	By:	 	 
	 	 	 Name:
 Title:

  
  
  

			
	LCE INTERMEDIATE HOLDINGS, INC.
		
	By:	 	 
	 	 	 Name:
 Title:

  
  
 Dated: 
  
  
 Acknowledged and Agreed 
  
  
 _________________________ 
 Name: Travis Reid 
  
  

 Exhibit A 
  

									
	 	  	Tranche 1

	  	Tranche 2

	  	Tranche 3

	  	Total

					
	 Class A Common Stock
	  	127,103.67	  	127,103.67	  	127,103.66	  	381,311
					
	 Class L Common Stock
	  	14,122.67	  	14,122.67	  	14,122.66	  	42,368
					
	 Cumulative Preferred Stock
	  	2,530	  	2,530	  	2,530	  	7,590Form of Business Loan and Security Agreement

 Exhibit 10.31 
  
 BUSINESS LOAN AND SECURITY AGREEMENT 
  
 BY AND BETWEEN 
  
 COMDIAL CORPORATION 
  
 AND 
  
 [REDACTED] CORPORATION 
  
 DATED: October 1, 2004 
  

  
 BUSINESS LOAN AND
SECURITY AGREEMENT BETWEEN 
 COMDIAL CORPORATION (“Lender”) and 
 [REDACTED] (“Borrower”) 
  
 THIS BUSINESS LOAN AND SECURITY AGREEMENT (“Agreement”) is made this 1st day of October, 2004 between COMDIAL CORPORATION, a Delaware
corporation, maintaining an office at 106 Cattlemen Road, Sarasota, Florida 34232 (“Lender”) and [REDACTED], a [REDACTED] corporation, maintaining an office at [REDACTED] (“Borrower”), [REDACTED] and [REDACTED]
(“[REDACTED]”), and [REDACTED] and [REDACTED] (“[REDACTED]”) (individually, and jointly, the “Sureties”). 
  
 Background 
  
 A. Borrower desires to obtain certain secured credit facilities from Lender pursuant to the terms and provisions of this Agreement for the purposes described in this
Agreement. 
  
 B. Lender will extend such secured credit facilities to Borrower on
the terms and provisions set forth in this Agreement. 
  
 C. Lender shall extend
to Borrower a term loan in the original principal amount of Eight Hundred Thousand Dollars ($800,000.00) (the “Loan”). 
  
 D. Lender and Borrower desire to set forth in writing their present understandings and agreements pertaining to the Loan. 
  
 NOW THEREFORE, in consideration of the premises and the covenants contained
in this Agreement and intending to be legally bound hereby, Lender and Borrower agree as follows: 
  
 ARTICLE I. TERM LOAN 
  
 1.1 Term Loan. Lender shall loan to Borrower the Loan in the original principal amount of Eight Hundred Thousand Dollars ($800,000.00). 
  
 1.2 Purpose of the Loan. Borrower shall use the proceeds of the Loan solely to assist in refinancing existing debt to
Sovereign Lender. 
  
 1.3 Interest Rate on the Loan. Lender
shall charge Borrower interest on the outstanding and unpaid principal balance of the Loan at a fixed interest rate equivalent to eight percent (8%) per annum. 
  

1.4 Maturity Date of the Loan. The Loan shall mature September 30, 2005 at which time the entire outstanding and unpaid principal balance of the
Loan plus all unpaid and accrued interest thereon and all other sums due thereunder shall be paid by Borrower to Lender. 
  
 1.5 Repayment of Principal and Payment of Interest on the Term Loan. Borrower shall repay principal and pay interest on the Loan as follows:

  
 (a) Commencing on November 1, 2004 and on the
first day of each consecutive month thereafter, eleven (11) consecutive monthly interest only payments, each in the amount of Eight Thousand Dollars ($5,333.33). 
  

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 (b) The entire outstanding and unpaid principal balance of the Term Loan together with
all unpaid and accrued interest thereon and all other sums due thereunder shall be paid on or before September 30, 2005. 
  
 ARTICLE II. SECURITY FOR THE LOANS 
  
 2.1 Security for the Loan. As security for the Loan, the repayment of principal, all interest due thereon and to become due thereon and for any
other past, present or future indebtedness due Lender by Borrower and/or Sureties plus interest due or to become due thereon, and for the reimbursement of all expenses incurred by Lender in the enforcement of its rights under this Agreement or under
any documentation given at any time by Borrower and/or Sureties to Lender for other obligations due Lender by Borrower and/or Sureties: 
  
 (a) Borrower grants and conveys to Lender a continuing lien security interest, subordinated to the liens of Affinity Bank of [REDACTED],
in all accounts, accounts receivable, chattel paper, instruments, documents and general intangibles now owned or hereafter acquired by Borrower or in which Borrower now has or may hereafter acquire an interest of any kind; all now owned or hereafter
acquired inventory and goods held by Borrower for sale or lease or furnished, or to be furnished, to or for the account of Borrower’s customers as part of services performed or consumed in Borrower’s business, including, but not limited
to, all presently owned or hereafter acquired raw materials, component parts, work in process, finished goods, wrapping, packing, containing and shipping materials, all additions and accessions and the resulting product of the foregoing and any
documents or instruments related to or representing all or any part of such inventory or goods; all machinery, equipment, furnishings, furniture, fixtures, new or used motorized or non-motorized vehicles which are titled and untitled, and all other
tangible personal property, all of which are now owned or hereafter acquired or in which Borrower now has or hereafter may acquire an interest, wherever located, all subordinations, intellectual property, including but not limited to, trademarks,
patents, copyrights, trade names, trade secrets, licenses, franchises, tax refunds, and all deposit accounts and other funds and property of Borrower now or at any time hereafter on deposit with or in possession of Lender or its agent or now or
hereafter owing by Lender to Borrower now or hereafter mortgaged, liened, pledged, or secured in favor of Lender for any reason, together with all cash and non-cash proceeds of the foregoing property, including the proceeds of any insurance
policies, (excluding life insurance proceeds), all products thereof, all goods or documents evidenced by any replacements and increases thereof, all parts, fittings, accessories, special tools, dies and supplies held in connection therewith, all
books and records, including computer records of any nature whatsoever relating to such property, and all rights to payment and other rights accruing to Borrower by reason of its interest in the foregoing property (collectively the
“Collateral”). 
  
 (b) Financing
statements covering the Collateral shall be filed of record for the benefit of Lender (the “Financing Statements”). 
  
 (c) Borrower shall execute and deliver to Lender a promissory note for the original principal amount of Eight Hundred Thousand Dollars
($800,000.00) (the “Note”). 
  

 2 

 The suretyships referred to in Section 2.1 of the Agreement are collectively called the
“Suretyships.” Each of the Note and Suretyships contains a provision for the confession of judgment against Borrower and/or the Sureties upon the occurrence of an Uncured Event of Default as defined in this Agreement. 
  
 (d) The Sureties shall execute and deliver unlimited
Suretyship Agreements and disclosures for confession of judgment. 
  
 (e) The [REDACTED] shall execute and deliver to Lender a fourth lien mortgage on their real property, with improvements, located at [REDACTED]. 
  
 (f) The [REDACTED] shall execute and deliver to Lender a fourth lien mortgage on their real property, with
improvements, located at [REDACTED]. 
  
 2.2 Additional Loan
Documentation. Lender may require additional loan documentation, in its reasonable discretion, in order to obtain and perfect the liens and security interests in favor of the Lender provided for in this Agreement. All loan documentation referred
to in this Article 2 of the Agreement shall be in a form satisfactory to Lender in its sole discretion. 
  
 ARTICLE III. SALE OF ASSETS TO [REDACTED] 
  
 3.1 [REDACTED] Sale. Borrower shall, within five (5) business days after the date of this Agreement, enter into and consummate a transaction with
[REDACTED] (“[REDACTED]”), pursuant to which (i) Borrower shall sell the [REDACTED] operations of the Borrower’s business (the “[REDACTED]”) to [REDACTED] in exchange for the redemption of [REDACTED] equity ownership
interest in the Borrower and the cancellation of certain debt pursuant to the terms of an Asset Purchase Agreement between the parties, or (ii) [REDACTED] redeems its equity ownership interest in the Borrower and cancels its debt pursuant to the
terms of a separate Agreement signed on October 1, 2004 between the Borrower and [REDACTED]. 
  
 3.2 Default of Interest Rate. If the Borrower fails to comply with Section 3.1, Lender shall increase the interest rate charged on the Loan to 24% (the “Default Interest Rate”), for the remaining term
of the Loan. 
  
 ARTICLE IV. EQUITY INTEREST 
  
 4.1 Lender’s Equity Interest in Borrower. Borrower shall issue to
Lender at the closing of the Loan, an equity interest in the Borrower equal to 3% of the ownership of Borrower of a fully diluted basis, in the form of Common Stock of the Borrower or warrants to purchase Common Stock of the Borrower. 
  
 4.2 Adjustment And Antidilution Provisions. In case the Borrower shall
hereafter (i) declare a dividend or make a distribution on its outstanding Common Stock or on its Series B Preferred Stock, either in shares of Common Stock or in shares of Series B Preferred Stock, (ii) subdivide or reclassify its outstanding
Common Stock or its Series B Preferred Stock into a greater number of shares, or (iii) combine or reclassify its outstanding Common Stock or Series 

  

 3 

 
B Preferred Stock into a smaller number of shares, (iv) make any other issuance of shares of Common Stock of Series B Preferred Stock, the Borrower shall
issue additional shares of Common Stock so that the number of shares held by Lender shall remain equal to 3% on a fully diluted basis. Such adjustment shall be made successively whenever any event listed above shall occur. 
  
 4.3 Right of First Refusal. In the event that Lender shall receive in
writing a bona fide offer from an unaffiliated third party (a “Bona Fide Purchaser”) that it desires to accept for the purchase of Lender’s Common Stock (or a portion thereof) (the “Offered Shares”) Lender shall give written
notice (the “Offer Notice”) thereof to Borrower setting forth, with specificity, the terms and conditions of the proposed transaction, and the identity, background, address, telephone number and principal business affiliation of the Bona
Fide Purchaser(s) and attaching a copy of the Bona Fide Purchaser’s written third party offer. Borrower shall have the exclusive option, for a period of 10 business days after receipt of the Offer Notice, to deliver to Lender written notice
(the “Election Notice”) electing to purchase such Offered Shares (or portion thereof) at the same price and other terms as set forth in the Offer Notice. In event that Borrower shall fail collectively to elect to purchase the entire
Offered Interest, then the Lender shall be under no obligation to sell any portion of the Offered Interest to the Borrower and the Lender shall have the right to consummate the proposed sale on the same terms and conditions, and to the same Bona
Fide Purchaser(s), as set forth in the Offer Notice hereunder. 
  
 ARTICLE V. FINANCIAL COVENANTS AND FINANCIAL STATEMENTS OF BORROWER 
  
 5.1 Financial Covenants of Borrower. Borrower covenants with Lender, which covenants shall survive the execution and delivery of this Agreement, that: 
  
 (a) Intentionally Omitted. 
  
 (b) Borrower will maintain a minimum cash flow (defined as
“EBITDA” less distributions) to debt service ratio of 1.25 to 1.0 for the term of the Loan. This financial covenant shall be measured annually as of December 31 of each year. 
  
 (c) Borrower will maintain a capital base requirement of not less than $800,000.00. This financial covenant
shall be measured quarterly, beginning December 31, 2004. 
  
 (d) Borrower may expend capital expenditures of no more than $200,000.00 annually. This financial covenant shall be measured annually, beginning December 31, 2004, in accordance with generally accepted accounting
principles consistently applied. 
  
 5.2 Financial Statements
of Borrower. Borrower shall deliver to Lender the following financial statements, in form and substance satisfactory to the Lender, during the term of the Loan: 
  
 (a) Within one hundred twenty (120) days after the end of its fiscal year, its annual financial statements
audited by a certified public accountant satisfactory to Lender, in a form satisfactory to Lender, for its preceding fiscal year. 
  

 4 

 (b) Within thirty (30) days after the end of each calendar quarter, internally prepared
interim financial statements of Borrower for the preceding calendar quarter, certified by its chief financial officer. 
  
 All financial statements of Borrower to be delivered to Lender shall be prepared in accordance with generally accepted accounting principles consistently
applied. 
  
 ARTICLE VI. INSURANCE 
  
 6.1 Insurance Coverage. Borrower, at its expense, shall maintain the
following insurance coverages: 
  
 (a) Physical
damage insurance, fire and extended coverage, vandalism and theft insurance in an amount satisfactory to Lender covering the property being the Collateral for the security interest granted to Lender in this Agreement. 
  
 (b) Public liability insurance coverage in an amount
satisfactory to Lender pertaining to any premises leased by Borrower at which Borrower operates its business and Borrower’s vehicles. 
  
 (c) Business interruption insurance for Borrower’s places of business and operations in such amounts satisfactory to Lender.

  
 (d) Extended coverage insurance on all real
estate and improvements on which the Lender has or will have a mortgage lien under the terms of this Agreement, naming the Lender as Loss Payee and Fourth Mortgagee. 
  
 The insurance coverages and policies referred to in this paragraph are collectively referred to as the “Insurance
Coverage”. 
  
 6.2 Additional Insurance Provisions.
Any policy of insurance referred to in Section 5.1 shall be with a company satisfactory to Lender. Lender shall be named as a loss payee under the policy referred to in subparagraph (a) of the preceding paragraph. Copies of the policies of insurance
coverage referred to in the preceding paragraph shall be delivered to Lender. Any insurance policy to be delivered to Lender shall provide that the insurer shall not amend or cancel such policy prior to it giving Lender thirty (30) days written
notice of such cancellation. 
  
 ARTICLE VII. REPRESENTATIONS,
COVENANTS AND NEGATIVE COVENANTS OF BORROWER 
  
 7.1
Representations of Borrower. Borrower represents to Lender, which representations shall survive the execution and delivery of this Agreement, that: 
  
 (a) Borrower is a duly incorporated corporation in good standing under the laws of the Commonwealth of [REDACTED]. 
  
 (b) Borrower has all requisite power to own its property and
to carry out its business as now conducted. 
  

 5 

 (c) Borrower has the power to execute, deliver and perform this Agreement and all loan
documentation referred to in this Agreement to which it is a party. 
  
 (d) Borrower has the power to borrow under this Agreement and all loan documentation referred to in this Agreement. 
  
 (e) Borrower has the full power and authority to perform and observe the terms and provisions of this Agreement and all loan documentation
referred to in this Agreement. 
  
 (f) All action
on Borrower’s part and on the part of its officers, directors and shareholders necessary for the authorization, execution, delivery and performance of this Agreement and the loan documentation referred to herein has been taken. 
  
 (g) No consent, permission, authorization, order or license
of any governmental authority is necessary in connection with the execution, delivery and/or performance of this Agreement and the loan documentation referred to herein or any transaction contemplated in this Agreement. 
  
 (h) All financial statements and other statements previously
or hereafter given by or on behalf of Borrower to Lender are or will be (when furnished) true, correct and substantially complete as of the date of their preparation and do or will (when furnished) present fairly, accurately and completely the
financial position of Borrower and the results of their operations as of the dates and for the periods for which the same are furnished. All potential or contingent losses are accrued, reflected or reserved against or otherwise disclosed in such
financial statements and/or footnotes thereto. 
  
 (i) There are no suits, investigations, tax claims or other legal proceedings now pending or threatened, and there are no unasserted claims that are known to Borrower which would materially and adversely affect the financial condition of
the Borrower. 
  
 (j) All statements as to
ownership and other statements given to Lender by or on behalf of Borrower are true and correct and substantially complete, and Borrower has good and marketable title, in fee simple, to the Collateral. 
  
 (k) As of the date of this Agreement, Borrower has filed all
federal and state tax returns which it is required to file, and has paid or made adequate provision for the payment of all taxes which have been or may become due pursuant to said returns, or pursuant to any assessment received by Borrower in
relation thereto. 
  
 (l) There is no charter,
bylaw or capital stock provision of Borrower and no provision of any indenture or agreement to which Borrower is a party or under which the Borrower and/or any of its property are bound, nor is there any statute, rule or regulation or any judgment,
decree of any court or agency binding upon Borrower and/or any of Borrower’s property which would be contravened by the execution and/or delivery of this Agreement, any loan documentation referred to in this Agreement or by the performance of
any provision, condition, covenant or other term of this Agreement. 
  

 6 

 (m) Upon the execution and delivery to Lender of this Agreement and the loan
documentation referred to herein and the subsequent filing and recording of security documents, Lender shall have, in regard to the Collateral, the liens, security interests and lien priorities described herein. 
  
 (n) No representation or warranty made by Borrower under
this Agreement and no statement made by it in any financial statement, certificate, report or document furnished by it to Lender pursuant to this Agreement is false or misleading in any material respect (including by omission of material information
necessary to make such representation, warranty or statement not misleading). 
  
 (o) Borrower has disclosed to Lender in writing, every fact which materially and adversely affects or which so far as it can now foresee, might in the future materially and adversely affect Borrower’s business
operations or Borrower’s ability to perform its obligations under this Agreement and the loan documentation referred to herein. 
  
 7.2 Covenants of Borrower. Borrower covenants to Lender, which covenants shall survive the execution and delivery of this Agreement, that:

  
 (a) Borrower will remain a corporation in
good standing under the laws of the Commonwealth of [REDACTED]. 
  
 (b) Borrower will adhere to all laws, ordinances, regulations and rules governing the operation of its business and the ownership and usage of the Collateral. 
  
 (c) Borrower will make full and timely performance of all
its duties and obligations including, but not limited to, the prompt payment when due of any amounts for the Loan arising under any other agreements, contracts, documents, instruments and/or loans between Lender and Borrower, whether executed prior
to or concurrent with or subsequent to the execution of this Agreement. 
  
 (d) Borrower will duly pay and discharge all taxes, assessments and governmental charges upon it or against any property owned by it, whether real or personal, tangible or intangible, prior to the date upon which
penalties are imposed thereon, and unless to the extent only that such taxes shall be contested in good faith and by the appropriate legal proceedings, and it shall maintain a reserve account therefor in accordance with generally accepted accounting
principles consistently applied. 
  
 (e) Borrower
will promptly deliver written notice to Lender of the occurrence of (i) any Event of Default as defined in this Agreement; (ii) the initiation of any litigation, administrative proceeding and/or substantial dispute materially affecting it or its
assets and/or its financial condition except worker’s compensation claims for which there is adequate worker’s compensation insurance coverage; and/or (iii) any other event or matter which has resulted or may result in a material adverse
change in its financial condition and/or its assets. 
  
 (f) Borrower will maintain the Collateral in good repair. 
  

 7 

 7.3 Negative Covenants of Borrower. Borrower covenants with Lender, which covenants shall survive
the execution and delivery of this Agreement, that it will not without the prior written consent of Lender: 
  
 (a) Voluntarily or involuntarily cause or permit the placing of any lien, encumbrance, attachment, levy or other legal process against the
Collateral other than in favor of [REDACTED]. 
  
 (b) Sell, pledge, assign or otherwise dispose of any of its assets other than in the normal course of its business, or to [REDACTED]. 
  
 (c) Create, incur, assume, suffer or permit to exist any indebtedness for borrowed money from any source other than Lender and [REDACTED].

  
 (d) Permit or suffer to occur any change in
the present ownership or control of Borrower from that which was disclosed to Lender on the date of this Agreement, except for any sale of certain assets of the [REDACTED]. 
  
 (e) Make any loans or advances of money, credit or property to any other person or persons, entity or
entities or invest in by capital contribution, loan, purchase or otherwise, any firm, corporation or person. 
  
 (f) Borrower will not make capital expenditures in excess of Two Hundred Thousand Dollars ($200,000.00), annually. 
  
 (g) Borrower will not make shareholder advances, loans,
dividends or distributions or permit any withdrawals of any nature to its shareholders. 
  
 (h) Become or remain liable directly or indirectly in connection with the obligations, liabilities or duties of any person, firm,
corporation or other entity, whether by guaranty, endorsement, agreement to supply or advance funds, agreement to maintain working capital or net worth, agreement to purchase or repurchase goods or services, whether or not such goods or services are
actually acquired or otherwise, except that Borrower may endorse negotiable instruments for collection in the ordinary course of its business. 
  
 (i) Materially violate or fail to comply with any law, ordinance regulation, or legal requirement which would materially impair
Borrower’s ability to comply with the terms and provisions of this Agreement, applicable to the Borrower, the Collateral and/or the operation of Borrower’s business. 
  
 (j) Enter into any merger, acquisition, consolidation or other corporate reorganization or other change in
corporate structure. 
  
 (k) Make or permit to be
made any material change in the nature, character or conduct of its business or discontinue or permit the discontinuance of its business as conducted on the date of this Agreement, except for the sale of the [REDACTED]. 
  

 8 

 ARTICLE VIII. OTHER CONDITIONS PRECEDENT TO CLOSING ON THE LOAN 
  
 8.1 Landlord’s Waiver. Borrower, at its expense, shall cause to
be delivered to Lender landlord’s waivers executed by the landlord or landlords of every premises occupied by Borrower as a tenant for the operation of its business (the “Landlord’s Waivers”). 
  
 8.2 Lien Searches. Lender, at Borrower’s expense, shall procure
lien searches for the purpose of determining that the Collateral is free and clear of all liens and encumbrances as represented by Borrower to Lender in this Agreement and the loan documentation. 
  
 8.3 Payment of Commitment Fee, Expenses and Legal Fees Related to the
Transaction Evidenced by this Agreement. Borrower shall pay to Lender, at the closing on the Loan, a commitment fee in the amount of Five Thousand Dollars ($5,000.00). Borrower shall pay all premiums for the insurance policies, all filing and
recording fees for loan documentation referred to in this Agreement, and Lender’s counsel fees. 
  
 ARTICLE IX. DOCUMENTATION 
  
 9.1 Delivery of Documentation. Prior to the date of this Agreement, Borrower shall deliver or cause to be delivered to Lender, the following: 
  
 (a) Financial statements of Borrower. 
  
 (b) Certified copies of Borrower’s Articles of Incorporation and Bylaws. 
  
 (c) Evidence that all corporate action required to be taken
by Borrower including, but not limited to, resolutions and unanimous consents has occurred as of the date of this Agreement. 
  
 (d) Subsistence Certificate for Borrower. 
  
 (e) Incumbency and signature certificate for Borrower dated within ten (10) days of the date of this Agreement. 
  
 (f) Evidence of Insurance Coverage. 
  
 (g) Landlord’s Waivers. 
  
 (h) Lien Searches. 
  
 9.2 Delivery of Loan Documentation. On the date of this Agreement,
Borrower shall deliver or cause to be delivered to Lender the following loan documents: 
  
 (a) This Agreement. 
  
 (b) The Notes. 
  
 (c) Financing Statements. 
  

 9 

 (d) The Suretyships. 
  
 (e) The Mortgages. 
  

(f) The Subordination Agreement. 
  
 ARTICLE X. DEFAULTS, UNCURED DEFAULTS AND REMEDIES. 
  
 10.1 Events of Default. An Event of Default is defined in this Agreement as: 
  
 (a) Failure of Borrower to pay any principal or interest on the Loan when due. 
  
 (b) Failure of Borrower to perform, keep and observe any
covenant, condition, term or provision contained in this Agreement, the loan documentation referred to herein or in any other agreement, contract, instrument and/or loan documentation between Lender and Borrower. 
  
 (c) Any act of voluntary or involuntary bankruptcy,
receivership, or reorganization of the affairs of Borrower which is not withdrawn or caused to be withdrawn within sixty (60) days of the date of such filing or occurrence. 
  
 (d) Failure by Borrower to fully perform, keep and observe any other material covenant, condition, term or
provision under any agreement to which Borrower is a party with any other person or entity which, in the sole opinion of Lender, would have a material adverse effect on the financial condition of Borrower. 
  
 (e) Any misrepresentation on the part of Borrower under this
Agreement or any loan documentation referred to in this Agreement or any materially incorrect or false written report or certification given or to be given by Borrower to Lender. 
  
 (f) Any materially erroneous or false financial statement made, given previously or to be given in the
future by the Borrower to Lender. 
  
 10.2 Uncured Event of
Default. An Uncured Event of Default is defined in this Agreement as: 
  
 (a) An Event of Default as set forth in subparagraphs (a), (b), and (d) of the preceding paragraph which Borrower has not cured or caused to be cured within fifteen (15) days after written notice is given by Lender to
Borrower to cure or cause to be cured such Event of Default. 
  
 (b) An Event of Default as set forth in subparagraphs (e) and (f) of the preceding paragraph for which there is no cure period given. 
  
 10.3 Rights and Remedies Upon the Happening of an Uncured Event of Default. Upon the happening of an Uncured Event of
Default, Lender shall have the following rights and remedies which may be exercised consecutively, concurrently, cumulatively and as many times as necessary for the payment to Lender of the unpaid principal balance and interest under the 

  

 10 

 
Loan and payment of all principal and interest under any other obligation then owing, whether matured or unmatured, by Borrower to Lender: 
  
 (a) The right to accelerate the entire unpaid principal
balance of all of the Loan and any other indebtedness, whether matured or unmatured, owing by Borrower to Lender and demand immediate payment thereof plus interest thereon. 
  
 (b) Exercise any right it maintains in this Agreement or any loan documentation referred to herein given to
Lender including the right to increase the interest rate charged on any of the Loan to Lender’s Prime Rate above the highest interest rate then applicable under the Notes (the “Default Interest Rate”). 
  
 (c) The right, through its agents, employees or
representatives and without obtaining the consent of Borrower, to go upon any premises owned by Borrower or leased by Borrower in which assets of Borrower are located and in which assets Lender maintains a security interest, to assemble such assets
and repossess and remove the same from any such premises. 
  
 (d) Any right which it may have under any statute, in law or in equity. 
  
 ARTICLE XI. MISCELLANEOUS 
  
 11.1 Inspection and Field Audits by Lender. Borrower shall, at all times, without hindrance or delay, and during business hours and absent an Event of Default, with twenty-four (24) hours prior notice, permit
any agent of Lender to inspect, audit or check or make abstracts from the books, records, receipts, correspondence, memoranda, or other papers and data, including computer data, relating to Borrower’s business and to generally audit all books
and records of Borrower. The expense of such inspections or field audits shall be paid by Borrower. No notice is required from Lender when there has occurred an Event of Default as defined in this Agreement in which case, Lender shall immediately
have the rights granted to Lender by Borrower in this Section 10.1 of the Agreement. 
  
 11.2 Late charges. If Borrower fails to pay any principal or interest payment on any of the Loan within fifteen (15) days of the due date of such payment, Lender may impose a late charge equal to five percent
(5%) of the late payment. 
  
 11.3 Calculation of interest.
The interest to be charged by Lender to Borrower under this Agreement shall be calculated for the actual number of days the unpaid principal balance of the Loan was outstanding based upon a three hundred sixty (360) day year. 
  
 11.4 Continuation of interest. The interest rate to be charged on the
Loan shall continue as stated herein notwithstanding the maturity or acceleration of the repayment of the principal of the Loan or the entry of any judgment against Borrower under any instrument given by Borrower to Lender for the Loan or arising
out of any action brought by Lender for collection of the Loan subject to Section 9.3 (b) of this Agreement. 
  
 11.5 Set-off. Upon the occurrence of an Uncured Event of Default, Lender shall have the right to set-off any monies or property of Borrower in
Lender’s possession immediately 

  

 11 

 
without prior written notice to Borrower. However, Lender shall provide Borrower with prompt notice (either verbally or written) of the exercise of its right
of set-off pursuant to this Agreement. 
  
 11.6 Payment of Fees
and Costs. On the date of this Agreement, Borrower shall pay fees and costs related to the transactions evidenced by this Agreement including, but not limited to, attorney’s fees of Lender’s counsel. 
  
 11.7 Lender’s Waiver. Any waiver by Lender in the enforcement of
any condition, covenant, provision or term contained in this Agreement or under any loan documentation referred to in this Agreement upon an Event of Default or Uncured Event of Default shall not waive Lender’s future rights to enforce any
condition, covenant, provision or term hereunder or under said loan documentation upon the subsequent Event of Default or Uncured Event of Default. 
  
 11.8 Understandings of the Parties. This Agreement and the loan documentation referred to in this Agreement are the complete understandings between
Lender and Borrower relating to the transactions referred to in this Agreement. Any amendment to this Agreement or any loan documentation referred to in this Agreement must be executed in writing by Lender and Borrower. 
  
 11.9 Notices. Any notice required hereunder shall be deemed made when
sent postpaid, certified mail, return receipt requested to the following: 
  
 Lender: 
  
 Comdial Corporation

 106 Cattlemen Road 
 Sarasota,
FL 34232 
 Attention: Kenneth Clinebell, Chief Financial Officer 
  
 Borrower: 
  
 [REDACTED] 
 [REDACTED] 
 [REDACTED] 
 [REDACTED] 
 [REDACTED] 
  
 11.10 Background Section. The Background section of this Agreement is incorporated into the body of this Agreement by reference. 
  

 12 

 11.11 Headings. Any paragraph heading in this Agreement is for reference purposes only and shall
not connote any meaning to this Agreement. 
  
 11.12
Incorporation of Documentation. All documentation referred to in this Agreement is incorporated herein by reference and this Agreement is incorporated by reference into all documentation referred to herein. 
  
 11.13 Nonassignability of this Agreement. Borrower shall not assign
this Agreement or any portion thereof to any person or entity. 
  
 11.14 Severance. If any provision of this Agreement or any loan documentation referred to in this Agreement would be declared invalid, unenforceable or unconstitutional by any court of competent jurisdiction, then such provision
shall be deleted herefrom or therefrom and all other provisions of this Agreement or any loan documentation referred to in this Agreement shall remain in effect. 
  
 11.15 Waiver of Jury Trial. Borrower hereby waives any and all right it may have to a trial by jury in any action,
proceeding, counterclaim or other litigation whatsoever arising directly or indirectly out of or in any way connected with this Agreement or any loan documentation referred to herein or the relationship created thereby. 
  
 11.16 Governing law. This Agreement and all loan documentation
referred to in this Agreement shall be governed by and interpreted under the laws, but not the conflict of laws, of the State of New York. 
  
 11.17 Forum. Any litigation arising from this Agreement or any documentation referred to in this Agreement shall be commenced only in the State of
New York. 
  
 IN WITNESS WHEREOF and intending to legally bind
themselves, their successors and assigns, Lender and Borrower have executed this Agreement the day and year first above written. 
  

			
	 COMDIAL CORPORATION

		
	By:	 	 
	 Name: Kenneth Clinebell

	 Title: Chief Financial Officer

  

			
	[REDACTED] CORPORATION
		
	By:	 	 
	 Name: [REDACTED]

	 Title: President

		
	 Attest:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 13

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