EXHIBIT 10.1
Form of Lock-Up Agreement by and between
officers and directors of Comdial Corporation
Officer, Director and Securityholder Lock-Up Agreement
June ___, 2002
Comdial Corporation
000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
The undersigned (the "Securityholder") understands that Comdial Corporation (the
"Corporation") has entered into certain Bridge Subscription Agreements of even
date hereof (the "Subscription Agreements") with certain investors providing for
the sale (the "Bridge Offering") by the Company of units consisting of 7% senior
subordinated secured convertible promissory notes (the "Notes"). 13.33% of the
principal amount of the Notes are convertible into shares of the Company's
common stock, par value $0.01 per share ("Common Stock").
1. For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Securityholder agrees that the Securityholder
will not, without the prior written consent of the Company, directly or
indirectly offer, sell, pledge, contract to sell (including any short
sale), grant any option to purchase, enter into any contract to sell or
otherwise dispose of or transfer any shares of Common Stock or other equity
securities of the Company (including without limitation, any shares of
Common Stock which may be deemed to be beneficially owned by the
Securityholder in accordance with the rules and regulations of the
Securities and Exchange Commission (the "SEC"), and any shares of Common
Stock which may be issued upon exercise of any stock options or warrants or
upon conversion or exchange of any convertible or exchangeable securities)
or any rights, warrants, options or other securities that are convertible
into, or exercisable or exchangeable for, Common Stock (collectively,
"Rights", which term includes, without limitation, any shares of preferred
stock which are convertible into Common Stock) or enter into any Hedging
Transaction (as defined below) (each of the foregoing referred to as a
"Disposition") for a period beginning on the date of the Initial Closing
(as defined in the Subscription Agreements) and continuing through the
earlier of (i) the date on which a registration statement covering the
resale of the shares of Common Stock issuable upon conversion of a portion
of the principal balance of the Notes (the "Note Conversion Stock"), is
declared effective by the SEC, (ii) the date on which the Note Conversion
Stock may be sold in the public market without an effective registration
statement under the Securities Act of 1933, as amended; and (iii) the
second anniversary of the Initial Closing (the "Lock-Up Period"). The
foregoing restriction is expressly intended to preclude the Securityholder
from engaging in any Hedging Transaction or other transaction which is
designed to or is reasonably expected to lead to or result in a Disposition
during the Lock-Up Period even if the securities would be disposed of by
someone other than the Securityholder. "Hedging Transaction" means any
short sale (whether or not against the box) or any purchase, sale or grant
of any right (including, without limitation, any put or call option) with
respect to any security (other than a broad-based market basket or index)
that includes, relates to or derives any significant part of its value from
the Common Stock or any Rights. The foregoing restrictions set forth in
this paragraph shall apply to all shares of Common Stock and all Rights now
owned or hereafter acquired by the Securityholder, except that such
restrictions shall not apply to shares of Common Stock and Rights acquired
in open market transactions after the completion of the Bridge Offering.
2. Notwithstanding the foregoing, the Securityholder may transfer any or all
of the Securityholder's Common Stock or Rights (i) if the Securityholder is
a natural person, by gift, will or intestacy so long as the transfer is not
for value; (ii) if the Securityholder is a natural person, to any trust for
the direct or indirect benefit of the Securityholder or the immediate
family of the Securityholder so long as the transfer is not for value;
(iii) if the Securityholder is a partnership, to a partner of such
partnership or a retired partner of such partnership who retires after the
date hereof so long as the transfer is not for value; and (iv) if the
Securityholder is a corporation, limited liability company or limited
partnership to any of its wholly-owned subsidiaries; provided, however,
that in any such case it shall be a condition to the transfer that, prior
to or concurrently with such transfer, the transferee executes and delivers
to the Company an agreement, in form and substance satisfactory to the
Company, stating that the transferee is receiving and agrees to hold the
Common Stock or Rights, as the case may be, subject to the provisions of
this letter agreement, and there shall be no further transfer of such
Common Stock or Rights, as the case may be, except in accordance with this
letter agreement. For purposes of this Lock-Up Agreement, "immediate
family" shall mean any relationship by blood, marriage, or adoption, not
more remote than first cousin. Furthermore, in the event ComVest Venture
Partners, L.P. ("ComVest") privately sells or transfers any of the
securities it acquires in the Bridge Offering other than to its limited
partners and other affiliated persons (except that a sale or transfer by
such transferee shall be treated as if by ComVest), Securityholder may
privately sell or transfer an equal percentage of its Common Stock or
Rights.
3. Without limiting the restrictions herein, any Disposition by the
Securityholder shall remain at all times subject to applicable securities
laws, including without limitation the resale restrictions imposed by Rule
144 promulgated under the Securities Act of 1933, as amended.
4. The Securityholder hereby agrees that, to the extent that the terms of this
letter agreement conflict with or are in any way inconsistent with any
registration rights agreement or similar agreement to which the
Securityholder is a party or under which the Securityholder is entitled to
any right or benefit, this letter agreement supersedes such registration
rights agreement or similar agreements.
5. The Securityholder understands that the Company will proceed with the
Bridge Offering in reliance on this letter agreement.
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6. This letter agreement shall be governed by the laws of the State of New
York, without regard to any applicable choice of law provisions.
7. This letter agreement shall terminate and have no force or effect if the
Initial Closing (as defined in the Subscription Agreements) does not occur
by 11:59 p.m. (New York time) on July 1, 2002.
8. The Securityholder hereby represents and warrants that the Securityholder
has full power and authority to enter into this letter agreement and that
this letter agreement has been duly authorized (if applicable), executed
and delivered by the Securityholder and is a valid and binding agreement of
the Securityholder. All authority herein conferred or agreed to be
conferred shall survive the death or incapacity of the Securityholder and
any obligations of the Securityholder shall be binding upon the heirs,
personal representatives, successors and assigns of the Securityholder.
Very truly yours
_________________________________________
(Signature)
_________________________________________
(Print Name)
_________________________________________
(Print Name of Securityholder, if
Securityholder is an entity)
Consent of Spouse
I, the spouse of the above-named Securityholder, acknowledge
and agree that I am bound by the terms of this letter agreement as to any and
all interests I may have in securities or options issued by the Company
acquired, held or beneficially owned by my spouse.
___________________________
___________________________
Print Name
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