Exhibit 10.13

PROMISSORY NOTE

$7,500,000

September 28, 2006

 

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”), at its offices in Tulsa, Oklahoma, the principal sum of Seven
Million Five Hundred Thousand and No/100 Dollars ($7,500,000), or, if less, the
aggregate sum of advances made by Lender to Maker under the Revolving Credit and
Term Loan Agreement dated October 1, 2003 (as amended, the “Credit Agreement”)
between Maker and Lender, payable as follows (all capitalized terms used but not
defined herein shall have the meanings given in the Credit Agreement):

a.                  Principal. Principal shall be payable on September 28, 2007.

b.                 Interest. Interest shall be payable on the first day of each
month, commencing the 1st day of October, 2006, and at maturity. Interest shall
accrue on the principal balance outstanding hereunder and on any past due
interest hereunder at a rate at all times equal to the Note Rate (defined
below).

“Note Rate” shall mean a rate at all times equal to the Adjusted Prime Rate or
the Adjusted LIBOR Rate, as elected by Maker pursuant to a properly made
Interest Rate Election (defined below); provided, that at the end of any
applicable Interest Period (defined below), the Note Rate shall revert to the
Adjusted Prime Rate unless a new Interest Rate Election has been properly made
by Maker. The Adjusted Prime Rate and the Adjusted LIBOR Rate shall be
calculated, on any date of determination thereof, as follows:

Funded Debt to Cash Flow

 

Adjusted
LIBOR Rate

 

Adjusted
Prime Rate

Greater than or equal to 2.50 to 1

 

LIBOR Rate plus 2.50%

 

Prime Rate minus .375%

Greater than or equal to 2.0 to 1 but less than 2.5 to 1

 

LIBOR Rate plus 2.00%

 

Prime Rate minus .375%

Greater than or equal to 1.50 to 1 but less than 2.0 to 1

 

LIBOR Rate plus 1.75%

 

Prime Rate minus .875%

Greater than or equal to 1.0 to 1but less than 1.5 to 1

 

LIBOR Rate plus 1.50%

 

Prime Rate minus 1.125%

Less than 1.0 to 1

 

LIBOR Rate plus 1.25%

 

Prime Rate minus 1.125%

 

The Adjusted LIBOR Rate and Adjusted Prime Rate shall be recalculated on not
less than a quarterly basis, on the date on which the Lender is in receipt of
Maker’s most recent financial statements (and, in the case of the year-end
financial statements, audit report) for the fiscal quarter then ended (“Pricing
Date”). From the date of this Agreement to the first recalculation, the Adjusted
LIBOR Rate shall be set at the LIBOR Rate plus 2.50 percent (2.50%), and the
Adjusted Prime Rate shall be set at the Prime Rate minus .375 percent (-.375%).
The Note Rate shall be established based on the ratio of Funded Debt to Cash
Flow for the most recently completed fiscal quarter and the Note Rate
established on a Pricing Date shall remain in effect until the next Pricing
Date.  If the Maker has not delivered its financial statements by the date such
financial statements (and, in the case of

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the year-end financial statements, audit report) are required to be delivered
under the Credit Agreement, until such financial statements and audit report are
delivered, the Note Rate shall be the Prime Rate minus three hundred
seventy-five thousandths of one percent (0.375%). If the Maker subsequently
delivers such financial statements before the next Pricing Date, the Note Rate
established by such late delivered financial statements shall take effect from
the date of delivery until the next Pricing Date, In all other circumstances,
the Note Rate established by such financial statements shall be in effect from
the Pricing Date that occurs immediately after the end of the fiscal quarter
covered by such financial statements until the next Pricing Date. Each
determination of the Note Rate made by the Lender in accordance with the
foregoing shall be conclusive and binding on the Maker and the Lender if
reasonably determined. Any change in the Note Rate resulting from a change in
the Prime Rate shall be effective as of the opening of business on the day on
which such change in the Prime Rate becomes effective.

“Funded Debt” (for purposes of this Note) shall mean all interest bearing debt.

“EBITDA” shall have the meaning given in the Credit Agreement.

“Interest Rate Election” means written notice from Maker to Lender no earlier
than twenty (20) days and no later than five (5) days prior to the contemplated
effective date, substantially in form and content as set forth on Exhibit “A”
hereto, whereby Maker may elect from time to time that interest shall accrue
hereunder at the Adjusted Prime Rate or the Adjusted LIBOR Rate.

“LIBOR Rate” means the London Interbank Offered Rate composite rate per annum
for U.S. Dollars for the applicable Interest Period which appears on the LIBOR
01 page of the Reuters information service on the day the Interest Rate Election
is received by Lender.  The LIBOR Rate shall remain fixed during the applicable
Interest Period.

“Interest Period” shall mean a period of time equal to the lesser of: (i) at the
election of the Maker, thirty (30), sixty (60), or ninety (90) days; or (ii) the
number of days between the contemplated effective date specified by the Maker in
the applicable Interest Rate Election and the maturity date hereunder.

“Prime Rate” means a rate which is subject to change from time to time based on
changes in an index which is the BOKF National Prime Rate, described as the rate
of interest set by BOK Financial Corporation, in its sole discretion, on a daily
basis as published by BOK Financial Corporation (“BOKF”) from time to time (the
“Index”).  The Index is not necessarily the lowest rate charged by Lender on its
loans and is set by Lender at its sole discretion.  If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute
index after notifying Borrower. Lender will tell Borrower the current index rate
upon Borrower’s request.  The interest rate change will not occur more often
that each day.  Borrower understands that Lender may make loans based on other
rates as well.  NOTICE: Under no circumstances will the interest rate on this
Note be more than the maximum rate allowable by applicable law.  Whenever
increases occur in the interest rate, Lender, at its option, may do one or more
of the following: (A) increase Borrower’s payments to ensure Borrower’s loan
will pay off by its original final maturity date, (B) increase Borrower’s
payments to cover accruing interest, (C) increase the number of Borrower’s
payments, and (D) continue Borrower’s payments at the same amount and increase
Borrower’s final payment.

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.

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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.

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

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or residential purposes, and is executed and delivered in the State of Oklahoma
and shall be governed by and construed in accordance with the laws of the State
of Oklahoma.

This Note constitutes an extension and renewal of the $7,500,000 Revolving Line
Note dated September 30, 2005, from Maker to Lender.

XETA TECHNOLOGIES, INC.

 

 

 

 

 

By

/s/ Robert B. Wagner

 

 

Robert B. Wagner, Chief Financial Officer

 

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