Exhibit 10.3

 

PROMISSORY NOTE

 

$7,500,000.00

 

September 30, 2009

 

 

Tulsa, Oklahoma

 

FOR VALUE RECEIVED, the undersigned, XETA TECHNOLOGIES, INC., an Oklahoma
corporation (“Maker”), promises to pay to the order of BANK OF OKLAHOMA, N.A.
(“Lender”), on or before November 30, 2009 (the “Maturity Date”), at Lender’s
offices in Tulsa, Oklahoma, the principal sum of Seven Million Five Hundred
Thousand and No/100 Dollars ($7,500,000.00) or such thereof as shall be advanced
hereunder from time to time and remain outstanding, together with interest
accrued from the date hereof on the principal balance outstanding hereunder and
on any past due interest hereunder at a floating rate equal to the LIBOR Rate
(defined below), adjusted as of each change therein, plus six percent (6.0%),
adjusted payable as follows.

 

a.             Principal.  Principal shall be due and payable in full on the
Maturity Date.

 

b.             Interest.  Interest shall be payable on November 1, 2009, and on
the Maturity Date.

 

This Note is issued under the terms of the Revolving Credit and Term Loan
Agreement dated October 1, 2003, as amended (the “Credit Agreement”), between
Maker and Lender and is the “Revolving Line Note” referred to in the Credit
Agreement.  All capitalized terms used but not defined herein shall have the
meanings given in the Credit Agreement.

 

As used herein, “LIBOR Rate” on any day means an interest rate per annum equal
to the “London Interbank Offered Rate” for U.S. dollars on such day applicable
to a one-month interest period (or, if such day is not a Business Day, the
immediately preceding Business Day) appearing on the Reuters Screen LIBOR01
Page (or on any successor or substitute page) at approximately 11:00 a.m.
Central time on such day, rounded to the nearest 1/16th of 1%.  Each change in
the LIBOR Rate shall become effective hereunder without notice to Maker (which
notice is hereby expressly waived by Maker) on the effective date of each such
change.

 

Notwithstanding any other provision of this Note or the Credit Agreement, the
rate of interest payable upon the indebtedness evidenced by this Note shall not
at any time exceed the maximum rate of interest permitted under the laws of the
State of Oklahoma for loans of the type and character evidenced by this Note.

 

If any payment shall be due on a Saturday or Sunday or upon any other day on
which state or national banks in the State of Oklahoma are closed for business
by virtue of a legal holiday for such banks, such payment shall be due and
payable on the next succeeding banking day and interest shall accrue to such
day.  All interest due hereon shall be computed on the actual number of days
elapsed (365 or 366) based upon a 360-day year.

 

All payments under this Note shall be made in legal tender of the United States
of America or in other immediately available funds at Lender’s office described
above, and no credit shall be given for any payment received by check, draft or
other instrument or item until such time as the holder hereof shall have
received credit therefor from the holder’s collecting agent or, in the event no
collecting agent is used, from the bank or other financial institution upon
which said check, draft or other instrument or item is drawn.

 

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From time to time the maturity date of this Note may be extended or this Note
may be renewed, in whole or in part, or a new note of different form may be
substituted for this Note and/or the rate of interest may be changed, or changes
may be made in consideration of loan extensions, and the holder, from time to
time, may waive or surrender, either in whole or in part, any rights,
guarantees, security interests or liens given for the benefit of the holder in
connection herewith; but no such occurrences shall in any manner affect, limit,
modify or otherwise impair any rights, guarantees or security of the holder not
specifically waived, released or surrendered in writing, nor shall any maker,
guarantor, endorser or any person who is or might be liable hereon, either
primarily or contingently, be released from such liability by reason of the
occurrence of any such event.  The holder hereof, from time to time, shall have
the unlimited right to release any person who might be liable hereon; and such
release shall not affect or discharge the liability of any other person who is
or might be liable hereon.

 

If any payment required by this Note to be made is not made when due, or if any
default occurs under any loan agreement or under the provisions of any mortgage,
security agreement, assignment, pledge or other document or agreement which
provides security for the indebtedness evidenced by this Note, the holder hereof
may, at its option, without notice or demand, declare this Note in default and
all indebtedness due and owing hereunder immediately due and payable.  Interest
from the date of default on such principal balance and on any past due interest
hereunder shall accrue at the rate of five percent (5%) per annum above the
nondefault interest rate accruing hereunder.  The Maker and any endorsers,
guarantors and sureties hereby severally waive protest, presentment, demand, and
notice of protest and nonpayment in case this Note or any payment due hereunder
is not paid when due; and they agree to any renewal, extension, acceleration,
postponement of the time of payment, substitution, exchange or release of
collateral and to the release of any party or person primarily or contingently
liable without prejudice to the holder and without notice to the Maker or any
endorser, guarantor or surety.  Maker and any guarantor, endorser, surety or any
other person who is or may become liable hereon will, on demand, pay all costs
of collection, including reasonable attorney fees of the holder hereof in
attempting to enforce payment of this Note and reasonable attorney fees for
defending the validity of any document securing this Note as a valid first and
prior lien.

 

Upon the occurrence of any default hereunder, Lender shall have the right,
immediately and without further action by it, to set off against this Note all
money owed by Lender in any capacity to the Maker or any guarantor, endorser or
other person who is or might be liable for payment hereof, whether or not due,
and also to set off against all other liabilities of Maker to Lender all money
owed by Lender in any capacity to Maker; and Lender shall be deemed to have
exercised such right of setoff and to have made a charge against such money
immediately upon the occurrence of such default even though such charge is made
or entered into the books of Lender subsequently thereto.

 

The holder of this Note may collect a late charge not to exceed an amount equal
to five percent (5%) of the amount of any payment which is not paid within ten
(10) days from the due date thereof, for the purposes of covering the extra
expenses involved in handling delinquent payments.  This late charge provision
shall not be applicable in the event the holder hereof, at its option, elects to
receive interest at the increased rate as provided hereunder in the event of
default.

 

This Note is given for an actual loan of money for business purposes and not for
personal, agricultural or residential purposes, and is executed and delivered in
the State of

 

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Oklahoma and shall be governed by and construed in accordance with the laws of
the State of Oklahoma.

 

This Note is made, executed and delivered by Maker and accepted by Lender in
renewal and extension of, but not in payment or satisfaction of, that certain
Promissory Note of Maker dated August 29, 2008 (the “Prior Note”), executed by
Maker payable to the order of Lender in the stated principal amount of
$7,500,000.00.  All Loan Documents securing payment of the Prior Note shall
continue in full force and effect as security for payment of this Note.

 

 

XETA TECHNOLOGIES, INC.

 

 

 

 

 

By

/s/ Robert B. Wagner

 

 

Robert B. Wagner, Chief Financial Officer

 

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