OEM AGREEMENT
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                  THIS OEM AGREEMENT (this "Agreement") is made and entered into
as of the 15th day of September, 1997, effective  as of  September 1, 1997  (the
"Effective Date") by and between VODAVI COMMUNICATIONS SYSTEMS, INC., an Arizona
corporation  located at 8300 East  Raintree  Drive,  Scottsdale,  Arizona  85260
("Vodavi"),  and FUJITSU  BUSINESS  COMMUNICATION  SYSTEMS,  INC.,  a California
corporation  located  at  3190  Miraloma  Avenue,   Anaheim,   California  92806
("Fujitsu").

                                    RECITALS:

                  A.   Vodavi  is  engaged  in  the   business   of   designing,
manufacturing  and supplying  telecommunications  products,  including,  without
limitation,  V-192 and V-26 hybrid key telephone  systems  (HKT),  comprised of,
among other things, key service unit (KSU) cabinets,  keysets,  D.S.S.,  phones,
specialized  software  developed by Vodavi (such  software  may  hereinafter  be
referred to as the  "Software") and other  accessories,  all as are described in
Exhibit A as such  exhibit may be amended from time to time  (collectively,  the
"Products")  (the V-192 and V-26 hybrid key  telephone  systems  constituting  a
portion of the Products and described  herein may  hereinafter be referred to as
the "V-192  Systems" and the "V-26 Systems,"  respectively,  and together as the
"HKT Systems").

                  B. Upon the terms and conditions set forth in this  Agreement:
(i) Fujitsu desires to purchase and distribute the Products in the United States
of  America  using  Fujitsu's  trademarks  and name,  (ii)  Fujitsu  desires  to
exclusively   engage  Vodavi  to   manufacture   and  supply  Fujitsu  with  its
requirements  of the HKT Systems;  and (iii) Vodavi desires to  manufacture  and
sell the Products to Fujitsu, all as provided herein.

                                   AGREEMENT:

                  NOW, THEREFORE,  for valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  Vodavi  and  Fujitsu  agree as
follows:

                  1.  Appointment of Vodavi.  Subject to and in accordance  with
the  terms  and  conditions  of this  Agreement,  Fujitsu  appoints  Vodavi as a
manufacturer of all of Fujitsu's requirements of the HKT Systems.  Vodavi hereby
accepts  such  appointment.  Fujitsu  agrees to  purchase  the HKT  Systems  for
customers  and suppliers in the  Territory  (as  hereinafter  defined) only from
Vodavi during the term of this Agreement.

                  2.  Distribution  of  Products  by  Vodavi.  Nothing  in  this
Agreement shall be construed as restricting Vodavi's rights to manufacture, sell
and  distribute  any Products not bearing the trademark  and/or name of Fujitsu,
except as specifically  set forth in this Section 2. Vodavi agrees that it shall
not sell or distribute the V-192 Systems to dealers other than Fujitsu, Vodavi's
Infinite dealers and Vodavi's Starplus Priority dealers, in the Territory during
the term
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of this Agreement so long as Fujitsu satisfies the Minimum Purchase  Obligations
(as defined in Section 15) for the  previous  year.  If Fujitsu does not satisfy
its Minimum Purchase  Obligation  during any year of the term of this Agreement,
then,  at the end of that year,  and at the option of Vodavi,  Vodavi shall have
the right to appoint  all of  Vodavi's  Starplus  dealers  and other  dealers as
distributors  of the  V-192  Systems  in the  Territory,  so long as such  V-192
Systems do not bear Fujitsu trademarks or tradenames.

                  3.  Territory.  The "Territory" for purposes of this Agreement
shall mean the United States of America and its territories.  The parties hereto
may  revise  and  update  the  Territory  at any time or from time to time by an
amendment in writing attached to this Agreement.

                  4. Term.  The term of this  Agreement  shall  commence  on the
Effective  Date and  continue in effect for three (3) years until August 1, 2000
(the  "Initial  Term").  Following  the  expiration  of the Initial  Term,  this
Agreement  shall be  automatically  renewed  for three (3)  successive  one-year
terms,  each  individually  referred to as a "Renewal Term," unless either party
notifies the other party in writing of its desire not to renew no later than one
hundred  fifty (150) days prior to the  expiration  of the  Initial  Term or any
Renewal Term, as applicable, whereupon this Agreement shall terminate at the end
of the term within which such notice is given.  Notwithstanding anything in this
Agreement  to the  contrary,  at any time after the  termination  of the Initial
Term, the parties may renegotiate the pricing of the Products.  Any renegotiated
prices will be added to Exhibit B and attached to this Agreement.

                  5. Pricing by Vodavi; Payments.

                           (a) Pricing.The purchase price for the Products shall
be as set forth on Exhibit B as may be amended from time to time pursuant to the
terms hereof.  Notwithstanding the foregoing,  all prices set forth on Exhibit B
attached hereto,  shall remain firm for the first eighteen (18) months after the
Effective Date.  Thereafter,  Vodavi may increase such prices to pass through to
Fujitsu any actual costs incurred by Vodavi as a result of increases in costs of
manufacturing,  force majeure or costs of finished  goods  delivered to Vodavi's
facility in Scottsdale,  Arizona (including freight, insurance, customs, duties,
demurage charges,  taxes and the like). Vodavi shall endeavor to provide Fujitsu
with as much advance  notice of any cost  increases as is  reasonably  possible;
however  in no event  shall any price  increases  be  effective  without  Vodavi
providing  Fujitsu with at least thirty (30) days prior written notice.  Fujitsu
shall have the ability,  on reasonable  advance notice to Vodavi,  to review and
audit Vodavi's documentation with respect to changes in prices.

                           (b) Payment.  Except as otherwise expressly agreed in
writing by the parties hereto,  payment for the Products shall be made in United
States  dollars in an amount  adequate to cover the full purchase price plus all
other  charges as  specified  in Section 9, if any,  incurred  by Vodavi for the
account of Fujitsu. All payments for Products shall be due and
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payable  in full  within  thirty  (30) days from the date of  invoice.  However,
payment for only Fujitsu's Initial Stocking Order, for Products,  as hereinafter
defined, shall be due and payable in full within seventy-five (75) days from the
date of invoice. In no event shall the invoice date precede the shipping date of
the Products for which payment is due.

                           (c) Late  Payment.  If full payment of any invoice is
not  received  by  Vodavi  when  due,  then  Fujitsu's  account  will be  deemed
delinquent  and Fujitsu  shall pay Vodavi a late payment fee of one percent (1%)
of the balance due for each month, or any part thereof,  that any amount remains
(or  remained)  delinquent  following  forty-five  (45)  days  after the date of
invoice,  or, for the Initial Stocking Order only,  seventy-five (75) days after
the date of invoice.  The late payment fee permits Vodavi to be compensated  for
receiving  a late  payment and is not  intended to create a credit  arrangement.
Vodavi reserves the right to suspend  performance,  to decline to deliver except
for cash in advance  and/or to stop  delivery of  Products  in transit  whenever
Fujitsu's account is delinquent.

                  6.  Private-Label  Products.  The Products shall, at Fujitsu's
request,  be manufactured using Fujitsu's  trademarks and name. Prior to tooling
Vodavi's  equipment for the production of such private label  Products,  Fujitsu
shall  furnish to Vodavi  all  molds,  stamps,  artwork,  and other  specialized
materials and instructions  required to accurately place Fujitsu's name and logo
on the private label Products.  All molds, stamps, artwork and other specialized
materials  not  provided  by Fujitsu but  required  to label the  private  label
Products as  instructed  by Fujitsu  shall be acquired  and/or  commissioned  by
Vodavi at the sole cost and expense of Fujitsu,  and Fujitsu  agrees to promptly
pay all such costs and expenses. The Products may also bear the name and logo of
Vodavi  anywhere on the interior  components  of the  Products.  Nothing in this
Agreement shall be construed to convey to Vodavi any right, title or interest in
any symbol, trademark,  trade name, or other intellectual property of Fujitsu or
any of its affiliates.

                  7.  Technical  Support.  Commencing on the Effective  Date and
continuing  until ninety (90) days after Vodavi receives written notice to cease
providing technical support, Vodavi shall perform, for and on behalf of Fujitsu,
technical  support for the  Products as  described  on Exhibit C. Exhibit C also
sets  forth the costs of any  payment  terms for the  performance  of  technical
support. Fujitsu shall pay all such costs to Vodavi as and when due.

                  8. Ordering Procedures. All orders of the Products pursuant to
this  Agreement  shall be subject to the terms and  conditions set forth in this
Agreement,  notwithstand  ing the terms specified in any purchase order, and the
terms and conditions of this Agreement shall supersede all pre-printed terms and
conditions of any such purchase order,  unless otherwise agreed to in writing by
Vodavi.  Whenever  Fujitsu  desires to purchase any of the Products from Vodavi,
Fujitsu shall deliver to Vodavi, on or prior to the fifth (5th) day of any month
during  the term of this  Agreement  (each  such  5th day an  "Order  Date"),  a
numbered and signed written  purchase  order  specifying the quantities and part
numbers of the Products desired to be purchased and the desired  destination and
shipping date for the ordered Products, which shipping date must
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take into account an  appropriate  lead time to manufacture  such Products.  All
purchase  orders shall be made for  Products in at least the minimum  quantities
set forth in Exhibit D attached  hereto as may be amended from time to time. All
orders made in compliance with this Agreement shall be deemed accepted by Vodavi
on the tenth (10th) day after receipt unless prior to such time Vodavi  delivers
to  Fujitsu  a notice of  rejection.  The  appropriate  lead time for any of the
Products shall be one hundred twenty (120) days after the applicable Order Date.
Vodavi shall use  reasonable  best efforts to ship Products when and as required
by Fujitsu based on the shipping and lead time required by this Section.  During
the thirty (30) day period after the applicable Order Date,  Fujitsu may change,
modify or cancel  the order upon  written  notice to  Vodavi.  On the  thirtieth
(30th) day after the  applicable  Order Date,  the  purchase  order shall become
firm. If Fujitsu  desires that Vodavi delay a scheduled  delivery date of a firm
purchase  order,  Fujitsu  can  request  such a delay at any  time  prior to the
on-board  date of the order from the  factory,  at no extra cost,  request  that
Vodavi delay the delivery for up to sixty (60) days after the scheduled delivery
date.  Once the purchase order has gone on-board,  Fujitsu must take delivery of
the order as  scheduled.  In no event shall  Fujitsu  extend  delivery of a firm
purchase order beyond sixty (60) days.

                  9.  Shipment of the  Products.  All  deliveries of Products by
Vodavi to Fujitsu  shall be shipped  F.O.B.  Vodavi's  facility  in  Scottsdale,
Arizona,  or F.O.B.  Vodavi's  other  domestic  facility.  Vodavi shall ship all
Products to the address specified for shipment on the applicable purchase order.
All Products  shall be packaged by Vodavi as Vodavi deems proper for  protection
against  normal  handling.  All charges  incurred  subsequent to the delivery of
Products  for  shipment,  including  without  limitation,   freight,  insurance,
demurrage charges and turnover,  sales, excise and other federal, state or local
taxes,  shall be borne by Fujitsu or, if paid or  incurred  by Vodavi,  shall be
reimbursed  by Fujitsu.  Fujitsu  will  contract  directly  with the  applicable
freight carrier to pay all shipping costs. The payment of delivery freight shall
be the sole  responsibility of Fujitsu,  and Fujitsu shall promptly pay all such
charges.  Vodavi shall use a freight  carrier of its own choice,  unless Fujitsu
designates an alternative  freight  carrier for delivery of Products,  whereupon
Vodavi shall use Fujitsu's  designated freight carrier for shipments of Products
whenever possible.  Notwithstanding the foregoing, if, at any time, or from time
to time,  Fujitsu requests that Vodavi use any of Fujitsu's  designated  freight
carriers,  Vodavi shall comply with Fujitsu's request and shall ship Products as
instructed by Fujitsu,  against Fujitsu's  accounts with such designated freight
carriers.

                  10. Risk of Loss.  Fujitsu  shall bear the entire risk of loss
of or damage to Products occurring at any time after delivery of the Products to
the  freight  carrier.  If Vodavi  delays  delivery  of  Products to the freight
carrier  due to any action or request  of  Fujitsu,  then the risk of loss shall
transfer to Fujitsu and Fujitsu shall pay all  reasonable  storage and insurance
charges  incurred  by  Vodavi  for such  Products.  If any of the  Products  are
returned by Fujitsu,  risk of loss shall remain upon Fujitsu  until the Products
are received by Vodavi.  Fujitsu  agrees to indemnify  and hold Vodavi  harmless
for,  from and against any and all loss of or damage to the  Products  sustained
while risk of loss remains upon  Fujitsu.  Vodavi  agrees to indemnify  and hold
Fujitsu  harmless  for,  from and  against  any and all loss of or damage to the
Products sustained while risk of loss remains upon Vodavi.

                  11.  Initial  Stocking  Order.  Upon  the  execution  of  this
Agreement,  Fujitsu shall provide  Vodavi with an initial order in the amount of
up to One Million Dollars
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($1,000,000.00) of Products (the "Initial Stocking Order"). Vodavi shall deliver
the Initial  Stocking  Order within  thirty (30) days after Vodavi  receives the
Initial  Stocking  Order.  The Initial  Stocking  Order is intended to cover the
first  three  (3)  months  of  projected  sales  of  Products  pursuant  to this
Agreement.  Notwithstanding  the  provisions of Paragraph 8 hereof,  the Initial
Stocking  Order shall be firm on the date it is  received by Vodavi;  thereafter
Fujitsu may not make any changes to such order.

                  12. HKT Software  License  Grant.  Fujitsu  acknowledges  that
Vodavi has  developed  the  Software  for use in the HKT  Systems  as  firmware.
Subject to Fujitsu's adherence to the terms of this Agreement,  Vodavi grants to
Fujitsu for the term of this Agreement a  non-exclusive  license to use and sell
the Software, but only as incorporated into an HKT System manufactured by Vodavi
and sold within the Territory.  This Agreement transfers no rights to Fujitsu or
any of Fujitsu's  dealers or customers with respect to all or any portion of the
Software except as specifically  provided herein.  Fujitsu is hereby  prohibited
from reverse  engineering  (by  disassembly,  decompilation  or  otherwise)  the
Software and may not copy or reproduce  all or any portion of the  Software,  or
export  outside the Territory any of the Software or any Product  containing the
Software,  for  any  purpose  whatsoever.   Notwithstanding   anything  in  this
Agreement,   Vodavi  retains  all  title  to,  and,   except  as  expressly  and
unambiguously  licensed  herein,  all  rights to the  Software,  all  copies and
derivative  works thereof (by whomever  produced) and all related  documentation
and  materials.  Fujitsu will  cooperate with Vodavi in preventing and resolving
infringement of the Software and assist Vodavi in all other reasonable  respects
to  protect  Vodavi's  rights  in  and  to  the  Software,   including,  without
limitations,  reporting  to Vodavi  any  infringement  of such  rights by any of
Fujitsu's  dealers  within ten (10) days  after  Fujitsu  becomes  aware of such
infringement.  The  foregoing  shall not be  interpreted  to require  Fujitsu to
resolve  infringement  claims on behalf of Vodavi. The reasonable costs incurred
by Fujitsu in resolving infringement claims, to the extent that such prosecution
assistance is requested by Vodavi, shall be borne by Vodavi.

                  13.   Representations   and   Warranties  by  Vodavi.   Vodavi
represents  and  warrants  to Fujitsu  that:  (a) Vodavi is a  corporation  duly
formed,  validly  existing and in good standing under the laws of Arizona,  with
the full right, power and authority, corporate and otherwise, to manufacture and
to sell the Products to Fujitsu  according to the terms of this Agreement and to
carry out the transactions  contemplated  hereunder in all  jurisdictions  where
such  authority is required;  (b) the execution and delivery of this  Agreement,
the timely consummation of the transactions contemplated hereby and the complete
and timely fulfillment of the terms hereof have been duly and validly authorized
by all necessary  action on the part of Vodavi;  (c) this Agreement  constitutes
the legal, valid and binding obligation of Vodavi, enforceable against Vodavi in
the United States of America; and (d) neither the execution and delivery of this
Agreement,  nor the consummation of the transactions  contemplated  hereby, will
conflict  with,  violate  or  result in a breach of or  default  under  (with or
without the giving of notice or the passage
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of time, or both): (i) the articles of  incorporation or bylaws of Vodavi;  (ii)
any license, instrument,  contract or agreement to which Vodavi is a party or by
which  Vodavi  is  bound;  or (iii)  any law,  order,  rule,  regulation,  writ,
injunction or decree that is applicable to Vodavi.

                  14.   Representations  and  Warranties  by  Fujitsu.   Fujitsu
represents  and  warrants  to Vodavi  that:  (a) Fujitsu is a  corporation  duly
formed,  validly  existing and in good  standing  under the laws of the State of
California,  with the full right, power and authority,  corporate and otherwise,
to purchase,  market and sell the Products and perform all other duties  arising
under the terms of this Agreement and to carry out the transactions contemplated
hereunder  in all  jurisdictions  where  such  authority  is  required;  (b) the
execution  and  delivery  of this  Agreement,  the  timely  consummation  of the
transactions contemplated hereby, and the complete and timely fulfillment of the
terms hereof have been duly and validly  authorized by all  necessary  action on
the part of Fujitsu; (c) this Agreement constitutes the legal, valid and binding
obligation of Fujitsu,  fully enforceable against Fujitsu in accordance with its
terms;  and (d) neither the  execution and delivery of this  Agreement,  nor the
consummation  of the  transactions  contemplated  hereby,  will  conflict  with,
violate or result in a breach of or default under (with or without the giving of
notice or the passage of time,  or both):  (i) the  incorporation  documents  or
corporate bylaws of Fujitsu; (ii) any license, instrument, contract or agreement
to which  Fujitsu  is a party or by which  Fujitsu  is bound;  or (iii) any law,
order,  rule,  regulation,  writ,  injunction  or decree that is  applicable  to
Fujitsu.

                  15. Forecasts;  Minimum Purchase Obligation.  On or before the
fifth (5th) business day of each calendar month,  Fujitsu will provide to Vodavi
a written report containing sales and customer data for the previous month and a
nonbinding   forecast  of  its  Product  delivery   requirements  for  the  next
consecutive eleven (11) calendar month period (a "Forecast"). Fujitsu's delivery
requirements  for the  first  one  hundred  twenty  (120)  days of each  rolling
Forecast  will  include the  purchase  orders  that have  become  firm  purchase
commitments  pursuant to Section 8, and Fujitsu shall submit  purchase orders to
Vodavi for such purchase commitments.  The rolling Forecast submitted each month
shall take into account the firm purchase commitments from the preceding month's
rolling Forecast.  On an annual basis, the purchases of Products by Fujitsu from
Vodavi,  shall be at  least in those  minimum  dollar  amounts  as set  forth on
Exhibit E attached hereto ("Minimum Purchase Obligations"). During the course of
the Initial Term, Fujitsu shall order at least the minimum quantities of certain
of the  Products  as is set forth in Exhibit E attached  hereto  ("Minimum  Unit
Obligation").  The parties  hereto shall update and amend Exhibit E from time to
time as new  Products  are added to  Exhibit  A  attached  hereto,  new areas of
Territory  are added and  within  one  hundred  eighty  (180)  days prior to any
Renewal Term.  The only effect of Fujitsu  failing to meet the Minimum  Purchase
Obligations  shall be as set forth in  Section 2 of this  Agreement,  and Vodavi
shall not be  entitled to any  damages as a result  thereof.  The only effect of
Fujitsu failing to meet the Minimum Purchase  Obligations  shall be as set forth
in Section 2 of this Agreement.  This Agreement shall not be construed as a take
or pay  agreement and Vodavi shall not be entitled to any damages as a result of
Fujitsu failing to meet the Minimum Purchase Obligations.
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                  16.  Other   Obligations   of  Fujitsu.   Fujitsu   agrees  to
immediately  conduct an  introductory  public  promotion of the Products for the
purpose of  developing  customer  interest  and initial  sales.  Thereafter  and
throughout  the term of this  Agreement  Fujitsu agrees to encourage and develop
the full sales potential for the Products in the Territory, and to promptly meet
all demands and needs for marketing and after-sale  support of the Products sold
by Fujitsu.  Fujitsu  shall  endeavor to maintain  adequate  inventories  of the
Products at all times, and shall encourage purchase of the Products by Fujitsu's
existing  dealer  and  customer  base.  Except as set forth in Section 7 hereof,
Fujitsu  shall be  responsible  for all costs and expenses  associated  with the
installation of the Products,  after-sale service, customer support and training
of the end-users of the Products.

                  17.  Other  Obligations  of Vodavi.  Vodavi  agrees to use its
reasonable best efforts throughout the term of this Agreement to support Fujitsu
in its  efforts to promote  the sale of the  Products  by  providing  reasonable
technical  and sales  training  assistance  for  Fujitsu's  employees  and sales
representatives in the Fujitsu sales organization, as set forth in Attachments C
and D to Exhibit F attached  hereto.  Vodavi's  obligations  shall  include  the
following:

                           a.  Provide  Fujitsu  with timely  reports  detailing
marketing or technical information on Products, competitive comparisons, special
sales or service  suggestions,  competitive  announcements  and the like, and to
respond reasonably  promptly to reasonable  inquiries and requests for help from
Fujitsu.

                           b. Provide training for Fujitsu's  technical training
staff,  support  engineers  and sales force and other  necessary  materials  for
Fujitsu's  product service  organization,  which training shall consist of up to
five (5) training  sessions,  each consisting of up to five (5) days, at no cost
to Fujitsu if such training sessions are held at either party's Maricopa County,
Arizona training facilities.

                           c.  Provide   reasonable  amounts  of  equipment  and
manuals for  evaluation  and  equipment  trials,  integration  testing,  or beta
testing by Fujitsu.

                           d. Participate jointly in trade shows with Fujitsu as
mutually agreed upon.

                           e. Participate in meetings with Fujitsu,  as mutually
scheduled, to discuss product planning and marketing coordination.

                           f. For equipment under warranty, provide Fujitsu with
upgrades   relating  to  correct   product   performance   that  does  not  meet
specifications at no cost.  Additional  features shall be provided to Fujitsu at
the then current price.
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                           g. Provide Fujitsu information on all Product changes
and  planned  Product  introductions  three (3) months in advance of the Product
change or introduction.

                           h.  Provide  Fujitsu  notice of  Product  and of life
plans six (6) months prior to initiating  the Product's end of life process.  If
another  product of equivalent or  compatible  functionality  and price is being
released to replace a  discontinued  Product,  then Vodavi shall provide six (6)
months notice of the discontinuance of the Product.

                           i. Keep  records  of all  Products  shipped  to or on
behalf of Fujitsu.  Such records shall include  serial  numbers and revisions of
all separate  assemblies  shipped as integrated  product or  individual  pieces.
Fujitsu may, if pertinent  issues arise,  request  copies of such  records,  and
Vodavi shall provide them to Fujitsu  within seven (7) days after any reasonable
request.

                           j. Compile the following information and provide such
information  to Fujitsu as  encountered:  (i) pertinent  information  related to
hardware  and  software   configuration  control  (i.e.,  forward  and  backward
compatibility); (ii) engineering change orders affecting form, fit and function;
(iii) manufacturing  process changes affecting previously agreed to availability
plan;  and (iv) problem  resolution  plans to include task,  responsibility  and
committed resolution date.

                           k.  Provide   Fujitsu,   once  per   calendar   year,
information on field returns for repair and data on the failed components.

                  18.   Nondisclosure   and  Limited  Use  of  Confidential  and
Proprietary Information.  Each party hereto shall refrain from disclosing to any
third  parties,  or using  for any  purpose  unrelated  to this  Agreement,  the
existence of, or any of the terms of, this Agreement, all information concerning
the  pricing  of  the  Products,  any  customer  lists,  operating,   financial,
marketing,  sales or technical  information or other confidential or proprietary
information of the other, including, without limitation, information as to their
respective customers or the relationship  established hereunder;  and each party
hereto shall cause its  employees  and agents to refrain from  disclosing to any
third parties,  or using,  for any purpose  unrelated to the performance of this
Agreement,  any such confidential or proprietary  information of the other. Each
party hereto shall limit its use of any confidential or proprietary  information
received from the other to the purposes of this Agreement. In addition,  Fujitsu
and Vodavi  agree to keep  confidential  and not disclose to any other person or
entity, any writings between Fujitsu and Vodavi that are conspicuously marked or
designated as "Confidential."  These obligations shall not apply to identifiable
information  that was  previously  known to the receiving  party,  or that is or
becomes in the public domain without violating this Agreement,  or that is later
acquired by the receiving party from a third party without  similar  obligations
of confidentiality.
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                  19.  Advertising  and Promotion;  Use of Vodavi Name.  Fujitsu
shall have the right, privilege and license during the term of this Agreement to
advertise and to promote the Products by telephone,  mail, newspaper,  magazine,
radio,  television  and any other lawful  means using the name  "Vodavi" and any
other tradename, symbol, trademark or corporate name used by Vodavi with respect
to HKT Systems,  provided such use conforms to standards and guidelines relating
thereto that Vodavi may furnish from time to time. Use of  tradenames,  symbols,
trademarks, corporate names and other intellectual property of Vodavi by Fujitsu
is subject to prepublication or prior review and approval by Vodavi.  The use of
any  tradenames,  symbols,  trademarks,  corporate  names or other  intellectual
property  rights of Vodavi by Fujitsu  shall not give  Fujitsu  any  proprietary
rights therein.

                  20. Warranty of Products.  Vodavi expressly  warrants that the
Products  sold to Fujitsu will be free of defects in materials  and  workmanship
under  normal use and service for the  warranty  period in  accordance  with the
terms and  conditions  set forth in Exhibit F  attached  hereto.  Repair  and/or
replacement  of  Products  by Vodavi  shall be as provided in Exhibit F attached
hereto.  Any  delivery  of  Products  under this  Agreement  shall meet  Federal
Millennium  Certification  Standards,  which require that the Products delivered
under this Agreement  shall operate  accurately in the manner in which they were
intended  as it  relates  to date  related  operations  when  given a valid date
containing century, year, month and day. VODAVI MAKES NO WARRANTY OTHER THAN THE
ONE SET FORTH IN EXHIBIT F ATTACHED HERETO. THE WARRANTY SET FORTH THEREIN IS IN
LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO
ANY  EXPRESSED  OR  IMPLIED  WARRANTY  OF  MERCHANTABILITY,  OF  FITNESS  FOR  A
PARTICULAR  PURPOSE,  OR  AGAINST  INFRINGEMENT,  AND IT  CONSTITUTES  THE  ONLY
WARRANTY  MADE  WITH  RESPECT  TO  THE  PRODUCTS  COVERED  BY  THESE  TERMS  AND
CONDITIONS.  IN NO EVENT SHALL VODAVI BE LIABLE FOR LOSS OF ANTICIPATED PROFITS,
INCIDENTAL OR  CONSEQUENTIAL  DAMAGE,  LOSS OF TIME, OR OTHER LOSSES INCURRED BY
FUJITSU IN CONNECTION WITH THE PURCHASE,  POSSESSION,  OPERATION,  OR USE OF THE
PRODUCTS, SUCH CLAIMS BEING HEREBY EXPRESSLY WAIVED BY FUJITSU.

                  21. No Exclusive  Rights in Vodavi  Products  Generally.  This
Agreement is not to be construed  as granting  any  exclusive  rights to Fujitsu
with respect to the sale and  marketing of any products  manufactured  by Vodavi
not bearing  Fujitsu's  trademarks or name.  Vodavi shall have the right to sell
any of its own products to any and all potential purchasers,  including, without
limitation, competitors of Fujitsu, except as expressly set forth herein.
                                        9
<PAGE>
                  22.      Termination.

                           (a)  Generally.  Except as otherwise  provided for in
this Agreement, if either party materially defaults in the performance of any of
its obligations under this Agreement,  the other party may defer its performance
hereunder  until the  default  is cured.  If the  material  default is not cured
within  forty-five  (45) days after the giving of written  notice thereof to the
defaulting party, at the option of the non-defaulting party exercised in writing
to the  defaulting  party,  this  Agreement  shall  terminate  at the end of the
forty-five (45) day period.  The  nondefaulting  party may also pursue all other
available legal and equitable remedies. A material default within the meaning of
this Section shall include,  without limitation,  a failure of Fujitsu to timely
pay any amounts owing to Vodavi, as provided in this Agreement.

                           (b)  Exclusion  of Certain  Liability.  EXCEPT TO THE
EXTENT  OF ANY  LIABILITY  ARISING  PURSUANT  TO  SECTION  23  HEREOF,  UNDER NO
CIRCUMSTANCES  SHALL  VODAVI OR FUJITSU BE LIABLE TO THE OTHER FOR ANY  SPECIAL,
INCIDENTAL, CONSEQUENTIAL, INDIRECT OR EXEMPLARY LOSSES OR DAMAGES PERTAINING IN
ANY WAY TO THE  PRODUCTS  UNDER THIS  AGREEMENT,  AND THE AMOUNT OF ANY CLAIM BY
EITHER PARTY AGAINST THE OTHER,  WHETHER BASED ON BREACH OF CONTRACT,  BREACH OF
WARRANTY,  NEGLIGENCE OR ANY OTHER LEGAL OR EQUITABLE  GROUND FOR RELIEF,  SHALL
NOT EXCEED THE PURCHASE  PRICE OF THE PRODUCT OR PRODUCTS  CONCERNING  WHICH THE
CLAIM WAS MADE.

                           (c)  Performance at  Termination or Expiration.  Upon
the termination or the expiration of this Agreement, Fujitsu shall pay to Vodavi
a sum equal to the total then outstanding  balance of all of Fujitsu's  accounts
with Vodavi,  including,  without limitation,  all sums due for Products ordered
prior to the effective date of termination or expiration;  except,  however,  if
orders are outstanding on the effective date of  termination,  Fujitsu shall not
be required to pay for any Products that do not bear Fujitsu's name and that can
be converted  for sale to other  Vodavi  customers  pursuant to purchase  orders
received by Vodavi, in which case,  Fujitsu shall pay to Vodavi the lower of the
purchase  price  of the  Products  as set  forth  on  Exhibit  B, or the  actual
conversion  costs to be incurred by Vodavi.  Upon  termination  or expiration of
this  Agreement,  Vodavi shall deliver all Products  ordered by Fujitsu prior to
the effective date of such termination or expiration,  consistent with the terms
of this Agreement.

                           (d) Survival of Certain Obligations.  Notwithstanding
any termination or expiration of this  Agreement,  Fujitsu shall not be relieved
of its  obligation  to pay for all  Products  ordered  prior to  termination  or
expiration,   and  neither   party  shall  be  relieved  of  its   warranty  and
indemnification obligations set forth herein.
                                       10
<PAGE>
                           (e) Events of Default.  Notwithstanding  anything set
forth in this Agreement to the contrary,  the occurrence of any of the following
events  shall  be  considered  an event  of  default  hereunder  for  which  the
nondefaulting  party may  terminate  this  Agreement  upon  five (5) days  prior
written  notice to the  defaulting  party:  (a) the filing of any  voluntary  or
involuntary  petition for bankruptcy or upon any agreement  (oral or written) in
respect of any arrangement for the benefit of creditors; (b) the sale, transfer,
conveyance  or other  disposition  of either  the  capital  stock or  beneficial
interest in the party  resulting  in a "change of control" of such party,  or of
substantially  all of the  assets of such  party in any case  without  the prior
written consent of the other party, which shall not be unreasonably withheld; or
(c) with respect to Vodavi,  Vodavi's  decision to discontinue the  manufacture,
sale or distribution  of the Products or a component  necessary for the assembly
of the Products.

                           (f) Termination after Initial Term. After the Initial
Term,  either party may terminate this  Agreement,  without cause,  upon six (6)
months prior written notice to the other party hereto.

                  23. Indemnification.

                           (a)  Indemnification  by Fujitsu;  Product Liability;
Distribution  Activities.  Fujitsu shall indemnify,  defend and hold Vodavi, its
officers,  directors,   shareholders,   employees,  agents  and  representatives
harmless for, from and against any claims,  losses, costs, damages,  expenses or
liabilities to third parties,  including,  without limitation,  any governmental
agencies (including, without limitation, reasonable attorneys' fees) arising out
of or resulting  from (i) the  performance or  nonperformance  by Fujitsu of any
obligation of, or agreement made by, Fujitsu relating to its distribution of the
Products,  or in connection with the performance of its duties as a distributor;
and/or  (ii) any  products  liability  resulting  from (1)  modification  of the
Products by Fujitsu,  its  employees or agents;  or (2) a product  specification
relating to product design  provided by Fujitsu to Vodavi and implemented in the
Products.

                           (b)  Indemnification  by Vodavi;  Product  Liability;
Intellectual  Property.  Vodavi shall  indemnify,  defend and hold Fujitsu,  its
officers,  directors,   shareholders,   employees,  agents  and  representatives
harmless for, from and against any claims,  losses, costs, damages,  expenses or
liabilities to third parties,  including,  without limitation,  any governmental
agencies (including, without limitation, reasonable attorneys' fees) arising out
of or resulting  from (i) any products  liability  resulting  from any action or
omission of Vodavi, its employees, agents or representatives or strict liability
theory;  and/or  (ii) any suit or  proceedings  brought  against  Fujitsu to the
extent it is based on a claim that any of the Products manufactured and supplied
by Vodavi to Fujitsu constitute a direct infringement of a patent,  copyright or
other intellectual  property of a third person in the United States,  except, in
all cases,  where the alleged  infringement is based on (a) Vodavi's  compliance
with any Product  specification  of Fujitsu;  (b)  Fujitsu's use of a Product in
combination   with  any  other   product   (whether   direct   or   contributory
infringement);  or (c)  modification  of a Product by Fujitsu,  or its employee,
agent or  representative  after the 
                                       11
<PAGE>
Product  has been  delivered  to  Fujitsu.  If a suit or  proceeding  is brought
against Vodavi based on a claim that the  applicable  Product  manufactured  and
supplied by Vodavi to Fujitsu  constitutes  a direct  infringement  of a patent,
copyright  or other  intellectual  property of a third  person,  based on any of
events  recited in (a), (b) or (c) above in this Section  23(b),  Fujitsu  shall
defend such claim and indemnify Vodavi for, from and against any and all damages
and costs  awarded  against  Vodavi on the same basis as  applicable  to Fujitsu
above.  Fujitsu  acknowledges  and  agrees  that  Vodavi  is  the  owner  of all
confidential  and  proprietary  information,  software,  firmware and  protocols
embodied in the Products (with the exception of the Fujitsu trademarks and name)
and Fujitsu shall not take any action or make any claims contrary thereto.

                  24.  Force  Majeure.  Neither  Fujitsu  nor  Vodavi  shall  be
responsible  for any loss or  damage  resulting  from any  delay or  failure  in
performing  any  provision of this  Agreement,  other than a delay or failure to
make payments  hereunder  when due, if the delay or failure  results  from:  (a)
transportation  shortages,  inadequate supply of labor,  materials or energy, or
the  voluntary  foregoing of the right to acquire or use any of the foregoing in
order  to  accommodate  or  comply  with  the  orders,  requests,   regulations,
recommendations  or  instructions  of any government or any department or agency
thereof; (b) compliance with any law, ruling, order, regulation,  requirement or
instruction of any government or any department or agency  thereof;  (c) acts of
God; or (d) fires, strikes, labor slowdowns,  embargoes,  war or riot. Any delay
or failure to perform resulting from any of such causes shall extend performance
accordingly or excuse performance in whole or in part, as may be necessary.

                  25. Independent Contractor. Fujitsu and Vodavi acknowledge and
agree that Vodavi is an  independent  contractor  and that under this  Agreement
neither  Fujitsu nor Vodavi shall be considered for any purpose to be the agent,
partner, franchisor, franchisee or joint venturer of the other. Nor shall Vodavi
or Fujitsu have any obligation or  responsibility  to act on behalf of or in the
name of the  other,  or the power or  authority  to bind the other in any manner
whatsoever.  Any  representation to the contrary by Fujitsu or by Vodavi, or the
employees or agents of either, shall be a material breach of this Agreement.

                  26.      General Provisions.

                           (a) Further  Assurances.  Each of the parties  hereto
shall execute and deliver all such other  instruments  and take all such actions
as either party may  reasonably  request from time to time of the other in order
to effectuate the purposes of this Agreement and the  transactions  provided for
herein.
                                       12
<PAGE>
                           (b) Notices. All notices, requests, demands and other
communications  required or permitted  under this Agreement  shall be in writing
and shall be deemed to have been duly given,  made and received  when  delivered
against receipt,  twelve (12) hours after being sent by facsimile,  or three (3)
days after being sent by registered or certified mail,  postage prepaid,  return
receipt requested, addressed to the recipient's address as set forth below:

                  Vodavi Communications Systems, Inc.
                  8300 East Raintree Drive
                  Scottsdale, Arizona 85260
                  Phone:   (602) 443-6056
                  Fax:     (602) 483-0144
                  Attn: Vice President - New Business Development

                  Fujitsu Business Communication Systems, Inc.

                  3190 Miraloma, Anaheim, California 92806
                  Phone:    (714) 764-2523
                  Fax:      (714) 764-2527
                  Attn: Corporate Counsel
                  cc:   FBCS Sales, Mfgr Operations

Either  party may alter the  address to which  communications  are to be sent by
giving notice of the change of address in conformity with the provisions of this
paragraph for the giving of notice.

                           (c) Binding  Nature of  Agreement;  Assignment.  This
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their  respective  successors and assigns,  except that neither party hereto
may assign or transfer its rights or obligations  under this  Agreement  without
prior written consent of the other,  and any such assignment or transfer without
such approval shall constitute a breach hereof and shall be null and void and of
no force or  effect,  and shall not convey  any  rights to or  interest  in this
Agreement.

                           (d) Entire  Agreement.  This  Agreement  contains the
entire  agreement and  understanding  between the parties hereto with respect to
the  subject  matter  hereof,  and  supersedes  and is in lieu of all  prior and
contemporaneous agreements, understandings,  inducements and conditions, express
or  implied,  oral or  written,  of any nature  whatsoever  with  respect to the
subject matter hereof. The express terms hereof control and supersede any course
of performance or usage of the trade inconsistent with any of the terms hereof.

                           (e) Governing  Law;  Arbitration.  This Agreement and
all  questions  relating  to  its  validity,  interpretation,   performance  and
enforcement,  shall be governed by and
                                       13
<PAGE>
construed,  interpreted and enforced in accordance with the laws of the State of
Arizona without regard to the conflict of laws provisions of such state.  Except
for claims for  injunctive  relief,  any  controversy or claim arising out of or
relating  to  this  Agreement  or  the  breach  thereof,  shall  be  settled  by
arbitration   in  accordance   with  the  Rules  of  the  American   Arbitration
Association,  as agreed to by the parties,  and judgment upon the award rendered
by the  arbitrator(s)  thereof may be entered and executed  upon if necessary in
any court having jurisdiction thereof. The arbitration is to be held in Phoenix,
Arizona, if initiated by Fujitsu,  and in Anaheim,  California,  if initiated by
Vodavi.  The prevailing party in any arbitration shall be entitled,  in addition
to such other rights or remedies it may have, to reimbursement  for its expenses
incurred thereby,  including  arbitration costs,  reasonable attorneys' fees and
arbitrator fees.

                           (f) Remedies  Cumulative.  Except as specifically set
forth  herein to the  contrary,  the  remedies of the parties  hereto under this
Agreement are cumulative  and will not preclude the recovery,  award or grant of
any other remedies to which any party may be lawfully entitled.

                           (g) Indulgences Not Waivers.  Neither the failure nor
any  delay  on the part of a party  to  exercise  any  right,  remedy,  power or
privilege under this Agreement shall operate as a waiver thereof,  nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further  exercise of the same or of any other right,  remedy,  power or
privilege,  nor shall any waiver of any right,  remedy,  power or privilege with
respect to any occurrence be construed as a waiver of such right,  remedy, power
or privilege with respect to any other occurrence.  No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.

                           (h)  Provisions  Severable.  The  provisions  of this
Agreement are  independent  of and severable  from each other,  and no provision
shall be  affected or rendered  invalid or  unenforceable  by virtue of the fact
that for any reason any other or others of them may be invalid or  unenforceable
in whole or in part.

                           (i) Numbers of Days.  In computing the number of days
for  purposes of this  Agreement,  all days shall be counted  (unless  otherwise
specified  herein),  including  Saturdays,  Sundays and holidays in the State of
Arizona; provided,  however, that if the final day of any time period falls on a
Saturday, Sunday or holiday in the State of Arizona, then the final day shall be
deemed to be the next day that is not a Saturday, Sunday or holiday in the State
of Arizona.

                           (j) Construction.  The parties hereto acknowledge and
agree that each party has  participated  in the drafting of this  Agreement  and
that this  document has been  reviewed by the  respective  legal counsel for the
parties  hereto  and  that  the  rule of  construction  to the  effect  that any
ambiguities are to be resolved against the drafting party will not be applied to
the interpretation of this Agreement.  No inference in favor of, or against, any
party  shall be drawn
                                       14

<PAGE>
from the fact that one party has  drafted any portion  hereof.  The  headings in
this Agreement are inserted for convenience  only, and do not define,  limit, or
expand the intent, scope or meaning of this Agreement.

                           (k) Amendment.  This Agreement may only be amended or
modified by written agreement signed by each of the parties hereto.

                  IN WITNESS WHEREOF,  the parties have caused this Agreement to
be executed and delivered by their proper and duly authorized representatives as
of the date first above written.

                                   VODAVI COMMUNICATIONS SYSTEMS, INC.


                                   By:   /s/ Larry Steimetz
                                         -------------------------------
                                   Name: Larry Steinmetz
                                         -------------------------------
                                   Its:  President
                                         -------------------------------

                                   FUJITSU BUSINESS COMMUNICATION SYSTEMS,
                                   INC.


                                   By:   /s/ John T. Caulfield
                                         -------------------------------
                                   Name: John T. Caulfield
                                         -------------------------------
                                   Its:  Sr. V.P. Sales & Mktg.
                                         -------------------------------


                                   By:   /s/ Raymond W. Callahan
                                         -------------------------------
                                   Name: Raymond W. Callahan
                                         -------------------------------
                                   Its:  V.P Mfgr Operations
                                         -------------------------------
                                       15