exv10w4



 



Exhibit 10.4


HCX5OO0/HCX5OOOi®



AUTHORIZED DISTRIBUTOR



AGREEMENT for 2003



by and between



HITACHI TELECOM (USA), INC.



and



XETA CORPORATION



 






 





AUTHORIZED DISTRIBUTOR AGREEMENT

TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	Master Agreement/Communication
	 	 	2	 
	Appointment
	 	 	2	 
	Product Definition
	 	 	3	 
	Term
	 	 	3	 
	Sales Promotion and Services
	 	 	3	 
	Forecast and Reports
	 	 	4	 
	Orders, Delivery
	 	 	4	 
	Prices
	 	 	5	 
	Payment and Additional Delivery Terms
	 	 	6	 
	Maintenance and Service
	 	 	6	 
	Training
	 	 	7	 
	Claims
	 	 	8	 
	Toll Fraud/Disclaimer
	 	 	8	 
	Limited Warranty
	 	 	9	 
	Repair Out of Warranty
	 	 	10	 
	Repair and Return Procedure
	 	 	10	 
	Inspection and Testing
	 	 	10	 
	Product Marking
	 	 	10	 
	Force Majeure
	 	 	10	 
	Advertising and Media Relations
	 	 	11	 
	Trademarks
	 	 	11	 
	Patents
	 	 	11	 
	Confidentiality
	 	 	12	 
	Indemnification by DISTRIBUTOR
	 	 	13	 
	Limitations
	 	 	14	 
	Termination
	 	 	14	.
	Export Control Provisions
	 	 	15	 
	Relationship of Parties
	 	 	16	 
	Notices
	 	 	16	 
	Nonassignment
	 	 	16	 
	Arbitration Clause
	 	 	16	 
	Waiver
	 	 	17	 
	Miscellaneous
	 	 	17	 
	Applicable Law
	 	 	18	 
	Execution
	 	 	18	 
	Exhibit A - Product Definition
	 	 	 	 
	Exhibit B - Distributor Requirements
	 	 	 	 
	Exhibit C - System Quantities and Discounts
	 	 	 	 
	Exhibit D - Forecast Form
	 	 	 	 
	Exhibit E - Payment and Delivery Terms
	 	 	 	 
	Exhibit F - Notices
	 	 	 	 
	Exhibit G - Return Material Authorization
	 	 	 	 



 






 



AUTHORIZED DISTRIBUTOR AGREEMENT



AGREEMENT made this 1st day of January 2003, by and between HITACHI TELECOM
(USA), INC., a Delaware corporation having an office at 3617 Parkway Lane,
Norcross, GA, 30092 (hereinafter referred to as “HITEL’) and XETA CORPORATION,
a corporation having an office at 1814 West Tacoma, Broken Arrow, OK 74012
(hereinafter referred to as “DISTRIBUTOR”).


WITNESSETH



WHEREAS, HITEL is engaged in the business, among other things, of selling
communication systems, materials and parts and licensing related application
and other software, all as described in Exhibit A attached hereto (hereinafter
referred to as “PRODUCTS”); and


WHEREAS, DISTRIBUTOR desires to engage in the sale, installation and
maintenance of PRODUCTS, subject to the terms and conditions hereinafter set
forth;


NOW, THEREFORE, in consideration of the mutual obligations set forth herein,
the parties hereto agree as follows:


1.     MASTER AGREEMENT/COMMUNICATION


This Agreement shall constitute an overriding master agreement fully setting
forth the rights and responsibilities of the parties with respect to the
subject matter hereof, and all sales and shipments of PRODUCTS shall be made on
the terms and conditions set forth herein. The terms and conditions of this
Agreement shall supersede the terms and conditions of any purchase order or
other document submitted by DISTRIBUTOR, and HITEL shall not in any event be
bound by the terms and conditions of DISTRIBUTOR’s purchase order forms or any
other documents submitted by DISTRIBUTOR. Any conflicting or additional
provisions on purchase orders issued by DISTRIBUTOR to HITEL (specifically
including, without limitation, all terms and conditions printed on back of such
documents), or on any acceptance, confirmation, acknowledgment or similar forms
issued by HITEL shall be inapplicable to such agreements to purchase and sell,
unless specifically and expressly agreed to in a single writing signed by both
parties. DISTRIBUTOR will issue an individual Purchase Order for each system
ordered.


2.     APPOINTMENT


Subject to the terms and conditions hereinafter provided, HITEL hereby appoints
DISTRIBUTOR and DISTRIBUTOR hereby accepts appointment by HITEL as a
non-exclusive distributor of PRODUCTS for resale to end users as specified in
this Agreement including its Exhibits.


3.     PRODUCT DEFINITION


The term PRODUCTS, as used herein, shall refer only to PRODUCTS as identified
in Exhibit A, and shall include and refers collectively to the specified HITEL
PRODUCTS and Supplier PRODUCTS as defined in Exhibit A.


 






 


4.     TERM


The term of the Agreement shall commence on January 1, 2003 and shall continue
until December 31, 2003. At the written request of either party given at least
ninety (90) days prior to the expiration of the Agreement, both parties may
negotiate in good faith and for a reasonable period for an extension of the
term of this Agreement. Expiration shall not affect any liabilities occurring
prior thereto, including, but not limited to, obligations with respect to
payment and delivery in connection with orders accepted prior to expiration.


5.     SALES PROMOTION AND SERVICES


DISTRIBUTOR shall use its best efforts to maintain a sales and service staff
adequate to support effectively the sale, service and reputation of PRODUCTS in
the geographic area(s) specified in Exhibit B. It is the expectation of HITEL
and DISTRIBUTOR that DISTRIBUTOR will purchase and take delivery of new
systems, upgrade orders, parts and subcomponents to meet the minimum purchase
volume(s) for the contract year, as specified in Exhibit C. DISTRIBUTOR’s
failure to meet the specified minimum purchase volume(s) shall entitle HITEL to
adjustments as described in Exhibit C in addition to all other remedies
available to HITEL at law.


(b)  DISTRIBUTOR may, from time to time, request HITEL to provide on-site sales
support assistance to DISTRIBUTOR for pre-sale activities. Subject to available
manpower and at HITEL’s sole discretion, HITEL may provide such services. This
sales support assistance may be provided by HITEL or its assignee, designee,
subcontractor or the like from a HITEL location, DISTRIBUTOR location or
on-site at the customer location and shall be referred to as sales support.
Whenever possible, DISTRIBUTOR shall request sales support from HITEL no less
than fifteen (15) days prior to the date upon which DISTRIBUTOR would like such
service to be performed. Shorter notice may result in increased travel costs,
which HITEL, in its sole discretion, may require DISTRIBUTOR to pay in exchange
for the support. Such charge must be negotiated and agreed between both parties
before the date of the Sales Support.


(c)  DISTRIBUTOR shall be responsible for the application, installation, repair
and maintenance of PRODUCTS in such a manner as to further effectively promote
the sale and use of PRODUCTS. DISTRIBUTOR shall comply with all applicable
laws, ordinances and regulations of all applicable federal, state and local
jurisdictions.


(d)  DISTRIBUTOR agrees that sales of PRODUCTS will be to end users of PRODUCTS
and DISTRIBUTOR will not sell PRODUCTS to distributors, dealers, sub-dealers or
the like for the purpose of resale by such party(-ies) to end users unless
agreed to in writing by HITEL, prior to any such sale to such distributor,
dealer, sub-dealer or the like.


6.     FORECAST AND REPORTS


Within thirty (30) days from the signing of this Agreement, DISTRIBUTOR shall
inform HITEL of DISTRIBUTOR’S public business plan for PRODUCT. DISTRIBUTOR
shall also, (i) provide quarterly updates to said annual business plan no later
than two (2) weeks before the beginning of each calendar quarter, (ii) keep
HITEL informed of its activities relating to PRODUCTS, (iii) furnish HITEL with
information relative to the number of proposals offered, the progress of
potential sales orders and the reason for lost sale(s) and (iv) on a quarterly
basis, furnish HITEL with information summarizing significant marketing
activities, trends and conditions in DISTRIBUTOR’s Territory.


 






 


From time to time, HITEL may advise DISTRIBUTOR of its public business plan for
PRODUCT.


(b)  DISTRIBUTOR shall provide to HITEL a rolling forecast of PRODUCT to be
delivered. The forecast shall be provided by the 25th day of each month and
cover the DISTRIBUTOR’S expected PRODUCT order activity for the three (3)
months immediately following the date of the forecast. The monthly forecast
shall be in the format as provided in Exhibit D. DISTRIBUTOR understands that
the completion and accuracy of such forecasts may affect its ability and
priority to obtain PRODUCT within the otherwise agreed delivery intervals.


7.     ORDERS, DELIVERY


(a)  DISTRIBUTOR shall obtain PRODUCTS by placing firm orders on HITEL, which
orders shall include a description and specification of PRODUCTS, quantities,
prices, a “requested” delivery schedule, and the name and location of the end
user (in the case of system orders).


(b)  No order shall be binding upon HITEL unless and until it has been accepted
by HITEL in writing. HITEL shall have the right to accept or reject any
purchase order, and if HITEL rejects any purchase order, DISTRIBUTOR hereby
agrees to indemnify HITEL and hold HITEL harmless from any claim resulting from
HITEL’s refusal to accept purchase orders from DISTRIBUTOR. HITEL’s acceptance
of purchase orders shall not be unreasonably withheld.


(c)  HITEL may delay or stop any shipment to DISTRIBUTOR if DISTRIBUTOR fails to
pay when due amounts owed to HITEL after demand for payment has been made by
HITEL (in which case DISTRIBUTOR shall be charged for storage and cancellation
at normal rates and at HITEL’s discretion) or if HITEL, in its reasonable
discretion, shall have reservations concerning DISTRIBUTOR’S financial
condition and DISTRIBUTOR fails to provide HITEL with adequate assurances of
performance after demand by HITEL.


(d)  Except for PRODUCTS covered by accepted purchase orders, HITEL may, at any
time and from time to time, upon ninety (90) days notice to DISTRIBUTOR in case
of HITEL PRODUCTS and thirty (30) days notice in case of Supplier PRODUCTS, or
sooner if accepted by DISTRIBUTOR, suspend or discontinue the sale of any
PRODUCTS of any type or model and substitute a new type or model, change the
design or make improvements to PRODUCTS, eliminate any type or model, or
completely discontinue the importation or sale of PRODUCTS, without any
liability on its part to DISTRIBUTOR. HITEL shall not have any obligation to
furnish or install any change, substitution or improvement on any PRODUCTS
previously sold to DISTRIBUTOR whether previously delivered or undelivered and
covered by an accepted purchase order. HITEL will provide to DISTRIBUTOR, on a
timely basis, all engineering change notices issued. Upgrades, Spare Parts,
sub-components and RMA orders will be provided at the current list prices minus
applicable hardware discounts as set forth in Exhibit C.


(e)  A delivery schedule shall be established by HITEL for each order submitted
by DISTRIBUTOR and accepted by HITEL within ten (10) business days of
acceptance by HITEL. Delivery may be made in installments. Supplier PRODUCTS
may be drop-shipped from third party supplier locations. Default or delay by
HITEL in delivering or shipping the whole or any part or installment of any
order shall not affect any other portion thereof, nor shall it affect any other
order between the parties. DISTRIBUTOR may cancel the order without penalty if
HITEL


 






 


is unable to ship the complete order (or a sufficient part or installment of
the order so that PRODUCTS may be resold) within sixty (60) days of the
delivery schedule established by HITEL at the time of acceptance of such order.


(f)  Invoices for partial or installment deliveries shall be issued at the time
of shipment of such partial order or installment, except where the systems
delivered are incomplete to the point of being unsuitable for resale.


(g)  Except as provided in Subsection (e) hereof, DISTRIBUTOR shall not have the
right to cancel, reschedule, change or modify all or any portion or installment
of any order for PRODUCT covered by this Agreement without HITEL’s prior
written consent.


(h)  DISTRIBUTOR may, pursuant to the terms and conditions of this Agreement,
order and HITEL shall provide spare parts, software and third level technical
support as required for the maintenance of HITEL PRODUCT for a period of ten
(10) years from the ship date of HITEL PRODUCT, provided that DISTRIBUTOR is,
at all times, in full compliance with this Agreement and HITEL has not
terminated this Agreement due to DISTRIBUTOR’s material breach. HITEL shall not
have any such corresponding obligations with respect to Supplier PRODUCT.


(i)  The acceptance by HITEL of any purchase order from DISTRIBUTOR or the sale
of any PRODUCTS by HITEL to DISTRIBUTOR after the termination of this Agreement
shall not be construed as a renewal or an extension, or as a waiver of
termination of this Agreement, but in the absence of a new written Agreement,
all such transactions shall be governed by the provisions of this Agreement.


8.     PRICES


The prices charged to DISTRIBUTOR shall be according to a written or
“Configurator” quote provided to DISTRIBUTOR for each system, discounted
according to the schedule shown in Exhibit C. Each quote shall be valid for
ninety (90) days from the date of such quotation. No verbal quotation or verbal
confirmation given to DISTRIBUTOR shall be binding upon HITEL unless it is
confirmed in writing by HITEL.


9.     PAYMENT AND ADDITIONAL DELIVERY TERMS


Payment and additional delivery terms are as specified in Exhibit E.


10.     MAINTENANCE AND SERVICE


(a)  DISTRIBUTOR shall be responsible for the installation, timely maintenance
and service to users of PRODUCTS; and shall perform such responsibilities in a
satisfactory manner to maintain and enhance HITEL’s and the PRODUCTS’
respective good name and reputations. Maintenance, services and consultation as
provided by DISTRIBUTOR technicians at customer locations are referred to as
first level support. Maintenance, services and consultation as provided by
DISTRIBUTOR technical experts at a centralized location providing support to
the first level support technicians are referred to as second level support.
Both first and second level support is the responsibility of DISTRIBUTOR. For
this purpose, DISTRIBUTOR shall maintain or have contracted with a number of
competent Hitachi Certified service technicians, as defined in Exhibit B, who
are readily accessible to end users. DISTRIBUTOR shall, at its own


 






 


expense, maintain the technical level of its staff to provide PRODUCT technical
support in performing all of its activities under the Agreement. DISTRIBUTOR
shall also maintain an adequate inventory of parts and equipment, in accordance
with Exhibit G hereof, to maintain satisfactory operation of PRODUCTS being
used by its customers, without relying upon urgent supplies from HITEL.


(b)  DISTRIBUTOR acknowledges that failure to fulfill its obligations under
subparagraph (a) could irreparably damage the business reputation of PRODUCTS,
and that HITEL, upon fifteen (15) days notice (one (1) day notice if system is
not processing calls), may take corrective measures as may in HITEL’s
discretion be required, holding DISTRIBUTOR fully responsible for cost and
expenses thereof, if DISTRIBUTOR has not initiated appropriate corrective
measures within the fifteen (15) days (one (1) day if system is not processing
calls), following notice by HITEL.


(c)  HITEL shall have access to customers at any time to review DISTRIBUTOR’S
installation and maintenance performance and degree of customer satisfaction,
and DISTRIBUTOR shall take such remedial action and/or make such improvements
in service as may be reasonably requested by HITEL in writing. HITEL may
request references from customers in connection with the promotion of HITEL
sales. HITEL, in its sole discretion: may provide customers with PRODUCT or
system passwords; or, upon the written request of customer(s), may change
PRODUCT or system password(s) without notice to DISTRIBUTOR of the new
password(s).


(d)  Within one hundred twenty (120) days of cutover, HITEL or its assignee may
perform a technical audit to determine if the PRODUCT installation meets
HITEL’s published standards as defined in current system documentation. If
installation of the PRODUCT does not meet such standards, HITEL may require the
DISTRIBUTOR to take corrective action to meet HITEL’s standards. If DISTRIBUTOR
fails to take such action within thirty (30) days, HITEL may take such action
and invoice DISTRIBUTOR at published technical support rates. Failure of
DISTRIBUTOR to take such actions is cause for HITEL to terminate this
Agreement.


(e)  DISTRIBUTOR may request on-site Technical Support from HITEL by submitting
written purchase orders therefore to HITEL. Subject to its available manpower
and in HITEL’s reasonable discretion, HITEL may agree to provide such on-site
Technical Support assistance to DISTRIBUTOR for installation and/or
troubleshooting of systems. Any and all such on-site Technical Support shall be
provided by HITEL at the rates set forth in HITEL Price Guides at the time
HITEL accepts the purchase order(s) for such Technical Support, and shall
include separate charges for the use of test equipment and all travel and
living expenses related to HITEL’s provision of such Technical Support. This
activity, as provided by HITEL or its assignee either from a HITEL location or
at a DISTRIBUTOR or customer location (on-site), is referred to as third level
support. The rate shall be subject to change upon ninety (90) days prior
written notice. This charge will be waived if: (i) the system is in-warranty
and on-site third level support is initiated by HITEL; or (ii) the system is
out of warranty, the on-site third level support is initiated by DISTRIBUTOR
and the problem was found to be caused by in-warranty PRODUCT. Case (i) does
not require a purchase order. DISTRIBUTOR shall make every reasonable effort to
inform HITEL two (2) weeks in advance when on-site third level support is
requested, and such support may be limited by HITEL as it may deem necessary in
view of its available manpower.


 






 


(f)  Subject to its available manpower, HITEL Technical Support engineers shall
give telephone assistance for PRODUCTS. Telephone assistance for out of
warranty PRODUCTS will be billed at the rates set forth in HITEL Price Guides
with time charged to the nearest one-half (1/2) hour. If HITEL determines that
DISTRIBUTOR’s request for third level support should not be included in third
level support, including, but not limited to, problems that are related to
installation, configuration, integration, third party repair or unintended
usage, DISTRIBUTOR will be billed as described above regardless of warranty
status. Rates are subject to change upon ninety (90) days prior written notice.


(g)  HITEL will only accept calls for assistance from HITEL Certified
Technicians currently registered with HITEL by an Authorized DISTRIBUTOR and
only if the system in question is equipped with Remote Maintenance (or the
Technician has a portable Remote Maintenance unit available on site) and the
technician has ready access to spare parts.


(h)  Nothing contained in this Section 10, or otherwise in this Agreement, shall
be construed as obligating HITEL, in any way, to take any action with respect
to any customer of DISTRIBUTOR.


11.     TRAINING


Technical courses will be conducted for DISTRIBUTOR’s technicians at HITEL
facilities in Norcross, Georgia. Training shall be approximately two weeks for
Technicians. All pertinent, required documentation will be furnished by HITEL
to attendees.


The training will be conducted by HITEL employee(s) who will be dedicated to
this function whenever a class is in progress. The training will be conducted
in a suitable area reserved for this purpose.


DISTRIBUTOR shall bear all salary, transportation and other expenses for its
personnel in addition to tuition and material charges set forth in HITEL Price
Guides. HITEL will not release a system for shipment until DISTRIBUTOR has had
a minimum number (as defined in Exhibit B) of Technicians complete the initial
training required to receive HITEL certification and DISTRIBUTOR provides
written authorization for technician’s call privilege level to HITEL. A
purchase order for a training class shall be issued by DISTRIBUTOR listing the
Technician’s name, the geographical area to be served by the technician and
charges for the class.


12.     CLAIMS


Risk of loss and/or damage shall pass to DISTRIBUTOR upon delivery by HITEL, at
HITEL’s plant F.C.A. Norcross, Georgia (Incoterms 2000) for HITEL PRODUCTS and
Supplier PRODUCTS shipped from HITEL’s Norcross facilities, and F.C.A. HITEL’s
supplier’s shipping location (Incoterms 2000) for Supplier PRODUCT that is
drop-shipped or otherwise not shipped from HITEL’s Norcross location. The
issuance of a clean bill of lading by the railroad or trucker or the issuance
of a clean receipt by the freight agent designated by DISTRIBUTOR, upon such
delivery, shall constitute conclusive proof that the package(s) containing
PRODUCTS were not damaged at the time of delivery to DISTRIBUTOR and that the
number of packages delivered were those set forth on such bill of lading or
receipt. Any claim for shortages or damage to PRODUCTS shall be made by
DISTRIBUTOR to HITEL (2002 says and, except for those claims covered by the
warranty hereinafter set forth, shall be made by DISTRIBUTOR to HITEL) within
thirty (30) days after delivery by the railroad, trucker or freight agent, as
the case


 






 


may be. Such claims shall be in writing, shall specify the items under claim
and the nature of the damages, and all other details as may be reasonably
required by HITEL to consider such claim. HITEL or its representatives shall
have the right to inspect and/or test the PRODUCTS covered by such claim. If,
in the reasonable opinion of HITEL, such claim is justified, HITEL shall have
the right, at its option, to promptly repair or replace the PRODUCTS or part,
or issue a credit for the invoice value thereof.


HITEL shall not under any circumstances or for any cause, be liable for any
actual, consequential, special or other damages or loss of use of PRODUCTS. If
DISTRIBUTOR does not make its claim within the time above provided, it shall be
deemed to have unconditionally accepted delivery of the PRODUCTS.


13.     TOLL FRAUD/DISCLAIMER


DISTRIBUTOR understands that the PRODUCTS are not immune from unauthorized use
or fraudulent intrusions and that third parties may commit various forms of
toll fraud using the PRODUCTS as conduits. HITEL hereby expressly disclaims
that the PRODUCTS have been designed to completely prevent or are otherwise
immune from such unauthorized uses and toll fraud. DISTRIBUTOR shall notify and
warn each of its customers, verbally and in writing, of the possibility that
the PRODUCTS may be fraudulently used including, but not limited to,
unauthorized or fraudulent use of the PRODUCT’s interconnection to long
distance services, 1OXXX and 101XXXX calling, external call forwarding, trunk
to trunk calling, voice mail and DISA. In no event shall HITEL be liable to
DISTRIBUTOR, DISTRIBUTOR’s customers or subsequent purchasers or users of
PRODUCTS for any claim relating in any way to unauthorized use of the PRODUCT
or toll fraud.


14.     LIMITED WARRANTY


HITEL warrants to DISTRIBUTOR alone, that PRODUCTS sold to DISTRIBUTOR pursuant
to this Agreement will be delivered free from defects in material and
workmanship under normal and proper use and will materially conform to HlTEl’s
specifications at the time of delivery to DISTRIBUTOR, with the term of said
warranty being fifteen (15) months for all PRODUCTS, except MAXimilian
Software, from the date of delivery to DISTRIBUTOR provided that:


(a)  HITEL is promptly notified in writing of any warranty claim: and


(b)  DISTRIBUTOR provides HITEL with the means and access to examine and test
the PRODUCTS within a reasonable period of time, and at DISTRIBUTOR’s cost; and


(c)  HITEL’s examination of such items shall disclose to its reasonable
satisfaction that the claimed defect in the PRODUCTS constitutes a breach of
the above warranty and was not caused by such occurrences as misuse, abuse,
neglect, improper handling, installation, operation, maintenance, unauthorized
repair, alteration or accident. Modification of PRODUCTS by DISTRIBUTOR or at
DISTRIBUTOR’s direction, unless specifically authorized in writing by HITEL,
shall invalidate the above warranty; and


(d)  DISTRIBUTOR complies in all respects with the procedures for implementing
HITEL’s warranty protections set forth in HITEL’s Return Material Authorization
(RMA) Policy for HITEL Products in Exhibit G hereof.


 






 


This Limited Warranty does not cover any items normally consumed in operation
of Products (such as lamps and fuses) or cosmetic damage, and does not cover
the MAXimilian Software PRODUCT.


HITEL’s liability under this warranty is limited to repairing, replacing or
issuing a credit in the amount of the unit Agreement price, at its election,
for any such claim, Any repair or replacement shall not extend the warranty
period, except as provided in Exhibit G, hereof. If HITEL elects to replace a
defective PRODUCT, HITEL’s obligation is limited to making a replacement
PRODUCT available to DISTRIBUTOR F.C.A. HITEL’s warehouse, Norcross, Georgia,
and does not include such items as the provision of any labor involved or
connected therewith, such as that which is required to diagnose trouble,
service faults, etc., or removing or installing any PRODUCT, responsibility for
any transportation expense other than delivery to the F.C.A. point, and any
taxes, duties or the like in connection therewith. HITEL may replace PRODUCT
hereunder with new or refurbished parts or PRODUCTS, in HITEL’s discretion.


DISCLAIMER OF WARRANTY. THIS WARRANTY IS EXTENDED TO DISTRIBUTOR ONLY AND IS
NOT TRANSFERABLE TO SUBSEQUENT PURCHASERS OR USERS OF PRODUCTS. THIS WARRANTY
IS GIVEN IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT
SHALL HITEL BE LIABLE FOR DAMAGES IN EXCESS OF THE VALUE OF THE DEFECTIVE
PRODUCT(S) OR PART, NOR SHALL HITEL BE LIABLE FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES, LOSS OF PROFITS OF ANY KIND OR FOR LOSS OF USE OF THE
PRODUCTS.


15.     REPAIR OUT OF WARRANTY


HITEL agrees to perform repair service on HITEL PRODUCTS returned by
DISTRIBUTOR to HITEL’s designated repair facility during the term of this
Agreement and for a period of three (3) years after the last delivery of HITEL
PRODUCT under this Agreement. All HITEL PRODUCT returned by DISTRIBUTOR to
HITEL for repair will be repaired only if deemed repairable in HITELs sole
discretion. DISTRIBUTOR will follow the procedure in Exhibit G (RMA) Policy,
which may be changed at HITEL’s sole discretion) for the return of HITEL
PRODUCT for repair. Repaired HITEL PRODUCT will be shipped to DISTRIBUTOR
within thirty (30) days (unless specified differently in said Exhibit G) after
receipt of HITEL PRODUCT at HITEL’s designated repair facility. DISTRIBUTOR
will be billed for such repair at HITEL’s current prices in effect at the time
DISTRIBUTOR presents HITEL PRODUCT for repair. A copy of HITEL’s current repair
price list is attached to Exhibit G. In no event will HITEL be liable for data
stored on HITEL PRODUCTS presented for repair.


16.     REPAIR AND RETURN PROCEDURE


The repair and return procedure for handling repairs of HITEL PRODUCTS both in
and out of warranty (Sections—14 and 15) is set forth in HITEL’s Return
Material Authorization (RMA) Policy for HITEL PRODUCTS set forth in Exhibit G.
The RMA Policy is available to DISTRIBUTOR upon request and may be changed by
HITEL upon thirty (30) days written notice by HITEL. Repair and return of
Supplier PRODUCTS is handled directly between DISTRIBUTOR and Supplier.


 






 


17.     INSPECTION AND TESTING


(a)  Unless otherwise agreed in writing, HITEL’s or its suppliers’ respective
factory inspection shall be final.


(b)  Should any specific inspection or test be requested by DISTRIBUTOR, all
expenses therefor shall be at DISTRIBUTOR’S expense and the delivery period and
validity period (if any) shall be adjusted accordingly.


18.     PRODUCT MARKING


All PRODUCTS sold to DISTRIBUTOR under this Agreement which bear the HITEL or
Hitachi name and/or logo or the name and/or logo of a HITEL supplier, shall not
have such name or logo removed nor defaced by DISTRIBUTOR. The placing of the
DISTRIBUTOR logo on PRODUCTS sold under this Agreement is permitted only upon
the prior written consent of HITEL.


19.     FORCE MAJEURE


Any cause beyond the reasonable control of HITEL or HITEL’s suppliers,
including but not limited to sabotage, fires, floods, strikes, riots, labor
difficulties, insurrection, war, priorities created at the request or for the
benefit of, directly or indirectly, any government authority, agency or
agencies thereof, act of God, breakdown of machinery or equipment, or inability
to obtain material, labor, equipment or transportation, or any failure by any
of HITEL’s suppliers to deliver or supply PRODUCT, parts or components which
results in HITEL’s failure to perform in accordance with the terms hereof,
shall not give rise to any liability or damages on account of such delay or
nonperformance, but shall be deemed an excuse for HITEL’s performance. In any
such event, HITEL shall have the right, at its election and without any
liability on it to DISTRIBUTOR to (a) cancel all or any portion of this
Agreement, or (b) perform the Agreement as so restricted or modified to the
extent determined by HITEL in its sole and absolute discretion or (c) perform
the Agreement within a reasonable time after the causes for nonperformance or
delay have terminated.


20.     ADVERTISING AND MEDIA RELATIONS


HITEL may, as it deems necessary and desirable, advertise PRODUCTS on a
national or local basis. HITEL may list DISTRIBUTOR’s name, address and
telephone numbers in its advertising and promotional materials, at its
discretion, for as long as this Agreement is in force.


21.     TRADEMARKS


DISTRIBUTOR does not have and is not granted any right or interest in or to the
name “HITACHI”, “HITACHI TELECOM (USA), INC.”, “HITEL’ or any trademark or
trade names owned, used or to be owned or used by HITEL or HITACHI, LTD. or any
of HITEL’s suppliers. Any use of such names, trade names or trademarks by
DISTRIBUTOR shall be only upon the prior written consent of HITEL and for
HITEL’s exclusive benefit. Under no circumstances shall DISTRIBUTOR register
any such name, trademarks or trade name. DISTRIBUTOR further agrees not to
contest or dispute, directly or indirectly, HITEL’s or HITACHI, LTD.’s
proprietary interest in or ownership of the name “HITACHI”, or any trade names
owned or used by HITACHI, LTD. or HITEL or any of HITEL’s suppliers.
DISTRIBUTOR shall not remove,


 






 


obliterate, alter or cover the trademark or name “HITACHI” on any PRODUCT.
However, DISTRIBUTOR may place on HITEL PRODUCTS its own name or trademark.


22.     PATENTS


(a)  HITEL agrees to defend, at its expense, any suit or proceeding brought
against DISTRIBUTOR based upon a third party claim of direct infringement of a
U.S. patent by HITEL PRODUCTS furnished hereunder, HITEL also agrees to hold
DISTRIBUTOR harmless against actual damages for such direct infringement.


(b)  HITEL’s agreement to defend and its obligation to indemnify DISTRIBUTOR
herein, which extends only to actual damages for direct infringement of a U. S.
patent which are awarded against DISTRIBUTOR in such suit or proceeding, are
subject to the following terms and conditions:


(1)  The agreement and obligation shall arise only if DISTRIBUTOR gives HITEL
prompt notice of the infringement claim; grants HITEL, in writing, exclusive
control over its defense and settlement; and provides reasonable information
and assistance to HITEL at HITEL’s expense, in the defense of such claim;


(2)  The agreement and obligation will cover only the HITEL PRODUCT as delivered
by HITEL to DISTRIBUTOR and not to any modification or addition made by
DISTRIBUTOR or third parties;


(3)  The agreement and obligation shall not cover: (i) any claim based on the
furnishing of any information, service or technical support to DISTRIBUTOR; or
(ii) any claim of infringement of any third party’s rights arising from use of
any HITEL PRODUCT furnished hereunder in combination with any other products or
articles if such infringement would be avoided by the use of the HITEL PRODUCT
alone, nor does it extend to any HITEL PRODUCT furnished hereunder of
DISTRIBUTOR’S design or formula; or (iii) any claim that the use of the HITEL
PRODUCTS furnished hereunder infringes any third party’s process patent rights;
or (iv) any claim of infringement of any third party’s rights in respect to
patents, where it is the policy of such third party to offer patent license
agreements separately to end users;


(4)  If an infringement claim is asserted, or if HITEL believes one likely,
HITEL will have the right, but not the obligation: (i) to procure for
DISTRIBUTOR the right to use the HITEL PRODUCTS furnished hereunder for the use
contemplated by HITEL and DISTRIBUTOR in making this Agreement; (ii) to modify
the HITEL PRODUCTS furnished hereunder as appropriate to avoid such rightful
claim of infringement, as long as modification for this purpose does not
materially impair the operation thereof; or (iii) to accept the HITEL PRODUCT
returned and reimburse DISTRIBUTOR for the purchase price thereof less a
reasonable charge for wear and tear; and


(5)  The sale of any PRODUCT hereunder does not convey any license by
implication, estoppel, or otherwise covering combinations of any PRODUCT
furnished hereunder with other devices, articles or elements.


(c)  DISTRIBUTOR shall indemnify and hold HITEL and its supplier(s) harmless
against any expense or liability from claims of patent infringement of any
patents related to PRODUCTS sold hereunder arising from: (i) HITEL’s compliance
with specifications or instructions


 






 


furnished by DISTRIBUTOR; (ii) use of any PRODUCT hereunder in connection with
a manufacturing or other process; or (iii) use of any PRODUCT in combination
with products not supplied by HITEL.


THE FOREGOING STATES HITEL’S EXCLUSIVE OBLIGATION WITH RESPECT TO CLAIMS OF
INFRINGEMENT OF PROPRIETARY RIGHTS OF ANY KIND, AND IS IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED. IN NO EVENT SHALL HITEL’S TOTAL LIABILITY TO
DISTRIBUTOR EXCEED THE PURCHASE PRICE RECEIVED BY HITEL FROM DISTRIBUTOR OF THE
ALLEGED INFRINGING HITEL PRODUCT(S).


23.     CONFIDENTIALITY


HITEL may, from time to time during the term of this Agreement, furnish
DISTRIBUTOR Confidential Information relating to PRODUCTS. “Confidential
Information” includes without limitation:


(i)  any source code and internal (programmers’) documentation for any software
disclosed to DISTRIBUTOR;


(ii) non-public financial information concerning HITEL;


(iii) HITEL’s or its respective suppliers’ research and development;


(iv) HITEL’s or its respective suppliers’ pricing or marketing plans;


(v) technical support information, materials and documentation concerning the
operation, design and functionality of PRODUCTS;


(vi) HITEL’s customer lists; and


(vii) any information designated as confidential in writing.


Confidential Information may be furnished orally, in written form, including
descriptive material, diagrams, specifications and other documents, or by way
of consignment. Written Confidential Information shall be marked
“Confidential”. DISTRIBUTOR agrees that all Confidential Information made
available to it by HITEL shall be kept strictly confidential by it, and
DISTRIBUTOR shall not divulge any such Confidential Information to any other
person, firm, corporation, association or entity without the express prior
written consent of HITEL. Confidential Information may be disclosed only to
such of DISTRIBUTOR’s employees who reasonably require access to such
Confidential Information for the purpose for which it was disclosed.
DISTRIBUTOR shall not make use of such Confidential Information without HITEL’s
prior written consent and agrees that in no event shall it use any such
Confidential Information in connection with the manufacture by it or by others
of any product or equipment similar to the PRODUCTS. The obligations of
DISTRIBUTOR under this paragraph shall survive any termination of this
Agreement for a period of seven (7) years.


Information shall not be deemed confidential information or know-how if it is:


(a)  publicly available prior to this Agreement or is made publicly available by
HITEL without restrictions;


(b)  rightfully received by DISTRIBUTOR from third parties without accompanying
secrecy obligations;


 






 


(c)  already in DISTRIBUTOR’s possession and was lawfully received from sources
other than HITEL;


(d)  independently developed by DISTRIBUTOR and can be so shown by written
evidence; or


(e)  approved in writing by HITEL for release.


The secrecy of the Confidential Information and know-how shall be maintained
for a period of seven (7) years from the day of disclosure thereof. Upon
request of HITEL, any written information subject to these provisions shall be
returned to HITEL.


24.     INDEMNIFICATION BY DISTRIBUTOR


DISTRIBUTOR agrees to indemnify, defend and save harmless HITEL and its
officers, directors, agents, employees, shareholders, legal representatives,
successors and assigns, suppliers, and each of them, from any and all claims,
actions and suits, whether groundless or otherwise, and from and against any
and all liabilities, judgments, losses, damages, costs, charges, attorneys’
fees, and other expenses of every nature and character by reason of
DISTRIBUTOR’S business and/or actions with respect to the PRODUCTS including
any claims, actions or suits not covered under HITEL’s warranty as set forth in
Section 14 hereof. DISTRIBUTOR further agrees that the provisions contained in
this Section 24 shall survive the termination or expiration of this Agreement.


25.     LIMITATIONS


NEITHER HITEL NOR ITS SUPPLIERS WILL BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY THEREOF IN ADVANCE.
THESE LIMITATIONS APPLY TO ALL CAUSES OF ACTION IN THE AGGREGATE, INCLUDING
WITHOUT LIMITATION CAUSES OF ACTION ARISING OUT OF TERMINATION OF THIS
AGREEMENT, BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT
LIABILITY, MISREPRESENTATION AND OTHER TORTS. NO ACTION MAY BE BROUGHT BY
DISTRIBUTOR AT ANY TIME MORE THAN TWELVE (12) MONTHS AFTER THE CAUSE OF ACTION
ARISES. IN NO EVENT SHALL HITEL’S OR ITS SUPPLIERS’ LIABILITY IN CONNECTION
WITH PRODUCTS OR THIS AGREEMENT EXCEED AMOUNTS PAID TO HITEL BY DISTRIBUTOR
HEREUNDER.


26.     TERMINATION


26.1 This Agreement will terminate:


(a)  On the thirtieth (30th) day after either party gives the other notice of a
material breach by the other of any term or condition of this Agreement, or of
any agreement between HITEL and DISTRIBUTOR relating to the PRODUCTS, unless
the breach is cured before that day; or


(b)  When DISTRIBUTOR experiences any significant change in the ownership,
control, organization, legal form of doing business, key personnel, merger or
consolidation which HITEL, in its discretion, believes will have an adverse
effect on future sales or service.


 






 


(c)  Either party may terminate this Agreement on ten (10) days written notice
if the other party is insolvent, files a petition of bankruptcy, or has made
any assignment by operation of law or otherwise of this Agreement or of any of
its rights hereunder for the benefit of creditors.


(d)  As provided elsewhere in this Agreement.


26.2 After termination:


(a)  DISTRIBUTOR may continue to sell the PRODUCTS in its possession for which
it has fully paid HITEL, and to market those PRODUCTS in its customary manner
in the ordinary course of business.


(b)  DISTRIBUTOR’s payment and indemnification obligations arising prior to
termination and the obligations of each party to keep the other’s Confidential
Information confidential, will remain in force.


(c)  The due date for all invoices for PRODUCTS or Spare Parts shall
automatically be accelerated so that they shall immediately become due and
payable on the effective date of termination, even if longer terms had been
provided previously. This Subsection (c) does not apply to termination due to
expiration of the term of the Agreement as provided for in Section 4.


(d)  In the event of termination of this Agreement due to DISTRIBUTOR’s material
breach, HITEL’s obligation to provide Spare Parts and repair support under this
Agreement will terminate at that same time.


(e)  DISTRIBUTOR shall immediately cease to hold itself out as an Authorized
DISTRIBUTOR of PRODUCTS and shall cease to exercise any rights granted in
accordance with this Agreement, and remove all signs, telephone directory
listings, advertisements, logotypes, names, insignia and/or all other
promotional materials identifying it in any way as an authorized HITEL
DISTRIBUTOR. DISTRIBUTOR shall return to HITEL all copies of HITEL furnished
proprietary information except information specifically required to operate and
maintain installed PRODUCTS.


26.3 Liability and Other Remedies. Neither party will be liable for damages of
any kind as a result of exercising its right to terminate this Agreement, and
termination will not affect any other right or remedy available in law or in
equity of either party.


27.     EXPORT CONTROL PROVISIONS


Neither party shall commit any act or request the other party to commit any act
which would violate either the letter or spirit of the export control laws or
regulations of the United States, or other export control laws, rules or
regulations, and neither party shall fail to take any action reasonably within
its capacity to assure compliance with such laws, rules or regulations.


DISTRIBUTOR represents and warrants that it shall not, directly or indirectly,
export, re-export or transship PRODUCTS and/or technical data (“the
Commodities”) in violation of any applicable export control laws promulgated
and administered by the government of any country having jurisdiction over the
parties or the transaction(s) contemplated herein.



 










 



HITEL shall have the right to refuse to accept DISTRIBUTOR orders for PRODUCTS,
or to deliver PRODUCTS to fulfill any previously accepted DISTRIBUTOR order if
HITEL determines, in good faith, that such proposed sale or other disposition
of the PRODUCTS poses an unreasonable risk of a violation of any applicable
export control law or regulation.


DISTRIBUTOR acknowledges that various countries’ laws and regulations regulate
the export of computer products and technology, and may prohibit use, sale, or
re-export of same. If DISTRIBUTOR knows, becomes aware of, or has reason to
know that the PRODUCTS and any technology in conjunction therewith are for use
in connection with the design, development, production, stockpiling, or use of
nuclear, chemical, or biological weapons or missiles, or if DISTRIBUTOR sells
or transfers its title and/or right to use all and/or any part of the PRODUCTS,
and/or other products or materials supplied by HITEL to a third party or itself
exports the PRODUCTS, DISTRIBUTOR shall ensure that all current export
restrictions are observed.


In the event HITEL refuses to deliver PRODUCTS to fulfill previously accepted
DISTRIBUTOR orders as set forth in the paragraph immediately preceding, or the
necessary export or re-export authorizations are not obtained within a
reasonable period of time, HITEL, at its option, may cancel the order or this
Agreement, without penalty.


28.     RELATIONSHIP OF PARTIES


The relationship created between the parties hereto is that of vendor and
vendee, and neither party nor any of its employees, customers or agents shall
be deemed to be the representative, agent or employee of the other party for
any purpose whatsoever, nor shall any of them have any right or authority to
assume or create an obligation of any kind or nature, expressed or implied, on
behalf of the other, nor to accept service of any legal process addressed to or
intended for the other.


29.     NOTICES


DISTRIBUTOR shall provide HITEL immediate written notice of any of the
following events: (i) any material change in DISTRIBUTOR’S business or
financial situation; (ii) any significant sale, bequest, or other transfer of
the ownership (or any portion thereof) of DISTRIBUTOR’S business; (iii) a
change in DISTRIBUTOR’S service management; and (iv) a change in the location
of DISTRIBUTOR’S senior sales or service facilities or personnel.


All notices to be given pursuant to this Agreement shall be in writing and sent
by registered or certified mail, return receipt requested, postage pre-paid, to
the address of the respective party first set forth above or to such other
address as such party may hereafter designate by notice in accordance with this
paragraph.


30.     NONASSIGNMENT


DISTRIBUTOR shall not voluntarily or by operation of law, assign this Agreement
or any right accruing to it hereunder or delegate any duty owed by it, without
the prior written consent of HITEL. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, their respective permitted successor
in interest and permitted assigns.


 






 


31.     ARBITRATION CLAUSE


Any dispute, controversy or claim arising out of or relating to this Agreement,
or the breach thereof (“Dispute”), shall be settled by binding arbitration,
conducted on a confidential basis, under the then current Commercial
Arbitration Rules of the American Arbitration Association (“the Association”)
strictly in accordance with the terms of this Agreement and the substantive law
of the State of New York. The arbitration shall be held at a mutually agreeable
location in New York, NY and conducted by one arbitrator chosen from a list of
attorneys who are members of the Association’s commercial arbitration panel,
from a neutral geographic location, who is knowledgeable about
telecommunications systems and private branch exchange systems and who has been
engaged in the practice of law for a period of at least ten (10) years. If the
parties cannot promptly, within 30 days, agree on the selection of the
arbitrator, the arbitrator will be chosen pursuant to Rule 13 of the Commercial
Arbitration Rules of the Association. The costs of the arbitration, including
fees to be paid to the arbitrator, shall be shared equally by the parties to
the Dispute. Each party shall bear the cost of preparing and presenting its
case to the arbitrator. The parties to the Dispute shall be limited to taking
no more than three (3) depositions each. The length of each deposition shall be
limited to one (1) day. No interrogatories shall be permitted. The scope of
document production shall be governed by the Commercial Arbitration Rules of
the Association and the decision of the arbitrator with respect thereto.


The arbitration shall be completed within six (6) months from the date of the
selection of the arbitrator. The arbitrator shall issue his/her award and a
brief description of the basis for the award in writing. The judgment upon the
award rendered by the arbitrator may be entered and enforced in any court of
competent jurisdiction. Neither party shall be precluded hereby from seeking
provisional remedies in the courts of any jurisdiction including, but not
limited to, temporary restraining orders and preliminary injunctions, to
protect its rights and interests, but such shall not be sought as a means to
avoid or stay arbitration. The parties agree that they have voluntarily agreed
to arbitrate their disputes in accordance with the foregoing.


32.     WAIVER


No claim or right arising out of a breach of this Agreement shall be discharged
in whole or in part by a waiver or renunciation of the claim or right unless
the waiver or renunciation is in writing signed by the aggrieved party. The
failure of DISTRIBUTOR or HITEL to enforce at any time or for any period of
time any of the provisions hereof shall not be construed to be a waiver of such
provisions nor the right of DISTRIBUTOR or HITEL thereafter to enforce each and
every such provision.


33.     MISCELLANEOUS


(a)  Each party hereto warrants and represents to the other that it is legally
free to enter into this Agreement, that the execution hereof has been duly
authorized, and that the terms and conditions of this Agreement, and each
party’s obligations hereunder, do not conflict with or violate any terms or
conditions of any other agreement or commitment by which such party is bound.


(b)  This Agreement, including all Exhibits hereto, is intended to be the sole
and complete statement of the obligations of the parties relating to the
subject mailer hereof, and supersedes all previous understandings, agreements,
negotiations and proposals as to this Agreement. Any pre-printed or other terms
and conditions on DISTRIBUTOR’s order form or HITEL’s confirmation or
acknowledgement form shall be of no force or effect. Except as otherwise
provided herein, no


 






 



provisions of this Agreement shall be deemed waived, amended or modified by any
party unless such waiver, amendment or modification shall be in writing and
duly signed by both parties hereto. The paragraph headings are for purposes of
convenience only.


(c)  This Agreement may be executed in several counterparts, each of which shall
be deemed the original, but all of which shall constitute one and the same
instrument.


34.     APPLICABLE LAW


This Agreement and the relationship created hereby shall be governed and
construed in all respects in accordance with the law of the State of Georgia,
United States of America.


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.



	 	 	 	 	 	 	 
	HITACHI TELECOM (USA), INC.	 	XETA TECHNOLOGIES
	 	 	 	 	 	 	 
	By:	 	
        /s/ Joe Boechl
	 	By:
	 	
        /s/ Donald E. Reigel
	 	 	


	 	 	 	

	 	 	 	 	 	 	 
	Title:	 	
VP, Operations & PBX
	 	Title:
	 	Regional VP
	 	 	 	 	 	 	 



 






 



EXHIBITS



for



HCX5000IHCX50001®



AUTHORIZED DISTRIBUTOR



AGREEMENT for 2003



by and between



HITACHI TELECOM (USA), INC.



and



XETA CORPORATION



 






 





EXHIBIT A



PRODUCT DEFINITION



     The term “HITEL PRODUCT” as used in this Agreement means the digital
HCX5100 and HCX5000i PBX systems, and all related application software. The
term “Supplier PRODUCT” as used in this Agreement means telephone sets for
guest rooms supplied by Teledex, Telematrix and/or SciTek and voice mail
systems supplied by Innovations.. The term “PRODUCT” as used in this Agreement
means any or all HITEL PRODUCT, MAXimilian personal computer-based, application
software and Supplier PRODUCT collectively. The HCX systems above referred
include both hardware and software required to enable the systems to function
according to their respective specifications. All PRODUCT software, including
MAXimilian, is licensed to DISTRIBUTOR pursuant to the terms and conditions of
this Agreement, including this Exhibit A, and shall not be deemed to be sold to
or purchased by DISTRIBUTOR.


ALL OF THE SOFTWARE PROVIDED PURSUANT TO THIS AGREEMENT INCLUDING EACH OF THE
APPLICATION PRODUCTS IS PROVIDED FOR THE LIMITED PURPOSES CONTEMPLATED IN THIS
AGREEMENT. DISTRIBUTOR SHALL ONLY BE AUTHORIZED TO USE, SUBLICENSE OR THE LIKE
ANY OF THE SOFTWARE PROVIDED BY HITEL OR ITS SUPPLIERS WITH THE SPECIFIC
HCX5000 OR HCX5000i THAT INCORPORATES SUCH SOFTWARE OR FOR WHICH SUCH SOFTWARE
IS EXPRESSLY PROVIDED AND IN CONJUNCTION WITH LEGITIMATE EFFORTS BY DISTRIBUTOR
TO RESELL THE DIGITAL HCX5000 OR HCX5000i COVERED BY THIS AGREEMENT. IN
ADDITION, DISTRIBUTOR AND ITS CUSTOMERS SHALL BE BOUND BY THE TERMS AND
CONDITIONS OF USE OF THE SOFTWARE CONTAINED IN THE SHRINK-WRAP LICENSES
PACKAGED WITH EACH RESPECTIVE SOFTWARE PACKAGE, A COPY OF HITEL’S SHRINK-WRAP
LICENSE IS ATTACHED TO THIS EXHIBIT A.


THE TERM “PRODUCT” NOT ONLY INCLUDES THE ABOVE SYSTEMS AND PARTS, BUT ALSO
UPGRADES, SUBCOMPONENTS AND REPAIRED ITEMS TO THESE SYSTEMS THAT ARE OFFERED
FOR SALE BY HITEL OR ITS SUPPLIERS. UPGRADES FROM THESE SYSTEMS TO OTHER
HCX5000 SYSTEMS THAT ARE NOT LISTED ARE NOT INCLUDED IN THE TERM “PRODUCTS”.


 






 


SHRINK-WRAP LICENSE AGREEMENT



READ THE TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT CAREFULLY BEFORE
OPENING THE PACKAGE CONTAINING THE PROGRAM DISKETTES, THE SOFTWARE THEREIN, AND
ACCOMPANYING DOCUMENTATION (THE “PROGRAM”). THE PROGRAM IS COPYRIGHTED AND
LICENSED (NOT SOLD). BY OPENING THE PACKAGE CONTAINING THE PROGRAM, YOU ARE
ACCEPTING AND AGREEING TO THE TERMS OF THIS LICENSE AGREEMENT. IF YOU ARE NOT
WILLING TO BE BOUND BY THE TERMS OF THIS LICENSE AGREEMENT, YOU SHOULD PROMPTLY
RETURN THE PACKAGE IN UNOPENED FORM.


Hitachi Telecom (USA), Inc. (“Licensor”) hereby grants to you, and you hereby
accept the non-exclusive right to use the Program Diskettes and the computer
programs contained therein in machine-readable, object code form only
(collectively referred to as the “Software”), and the accompanying
documentation only as authorized in this License Agreement. The Software may be
used only on a single computer which is owned, leased, or otherwise controlled
by you solely for the purpose of your own internal business operation. You may
NOT distribute copies of the Software or related documentation to others. You
shall use any documentation provided by Licensor only in conjunction with your
business use of the Software. This License is restricted to use within the
United States and Canada and is not transferable except as expressly provided
herein.


You may NOT transfer the Software and License to another person or company
unless:


1.     you receive the prior written consent of Licensor, and


2.     the person or company to whom you are transferring it agrees to accept the
terms and conditions of this License and does so in a writing signed by that
party. If you transfer the Software, you must at the same time either transfer
all copies, whether in printed or machine readable form, to the same party or
destroy any copies not transferred. This includes all portions of the Software
contained or merged into other programs.


You agree to reproduce and include the copyright notice on any copy,
modification or portion merged into another program.


You acknowledge and agree that the Software is a proprietary, unpublished
product of Licensor, protected under U.S. copyright law and trade secret laws
of general applicability. You further acknowledge and agree that all right,
title and interest in and to the Software is and shall remain with Licensor.
This License does not convey to you an interest in or to the Software but only
a limited right of use revocable in accordance with the terms of this License.
You hereby agree that Licensor may hold you liable or responsible for any
violation of this License.


 






 


YOU MAY NOT USE, COPY, SUBLICENSE, ASSIGN OR TRANSFER THE LICENSE OR THE
SOFTWARE IN WHOLE OR IN PART, EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS LICENSE.
YOU MAY NOT MODIFY, TRANSLATE, ADAPT, REVERSE ENGINEER, DECOMPILE,
DISASSEMBLE, OR CREATE DERIVATIVE WORKS BASED ON THE SOFTWARE OR RELATED
DOCUMENTATION. IF YOU TRANSFER POSSESSION OF ANY COPY, MODIFICATION OR MERGED
PORTION OF THE SOFTWARE TO ANOTHER PARTY WITHOUT PRIOR WRITTEN CONSENT OF
LICENSOR, YOUR LICENSE IS AUTOMATICALLY TERMINATED.


Any attempt to sublicense, assign or transfer any of the rights under this
License, except as expressly provided for in this License, will void any of
Licensor’s duties or obligations hereunder.


TERM


The License is effective until terminated by either party. You may terminate it
at any time by destroying the Software together with all copies, modifications,
and merged portions in any form. The License will also terminate upon the
conditions set forth elsewhere in the Agreement or if you fail to comply with
any term or condition of the Agreement. You agree that upon termination, you
will destroy the Software together with all copies, modifications and merged
portions in any form.


LIMITED WARRANTY


THE SOFTWARE IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED
OR IMPLIED, INCLUDING, BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE ENTIRE RISK AS TO THE
QUALITY AND PERFORMANCE OF THE SOFTWARE IS WITH YOU. SHOULD THE SOFTWARE PROVE
DEFECTIVE, YOU (AND NOT LICENSOR) ASSUME THE ENTIRE COST OF ALL NECESSARY
SERVICING, REPAIR OR CORRECTION. SOME STATES DO NOT ALLOW THE EXCLUSION OF
IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU. THIS WARRANTY
GIVES YOU SPECIFIC LEGAL RIGHTS AND YOU MAY ALSO HAVE OTHER RIGHTS, WHICH VARY,
FROM STATE TO STATE.


Licensor does not warrant that the functions contained in the Software will
meet your requirements or that the operation of the Software will be
uninterrupted or error free.


LIMITATIONS OF REMEDIES


Licensor’s entire liability to you or any other party for any loss or damages
resulting from any claim, demands, or actions arising out of or relating to
this License and your exclusive remedy shall be:


1.     the replacement of any media which is returned to Licensor, or


2.     if Licensor is unable to deliver a replacement media free from defects in
materials and workmanship, you may terminate this License by returning any
copies of the Software.


 






 


IN NO EVENT SHALL LICENSOR OR ITS SUPPLIER(S) BE LIABLE FOR ANY DAMAGES,
INCLUDING ANY LOST PROFITS, LOST SAVINGS, OR OTHER INCIDENTAL, INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OR INABILITY TO USE
SUCH SOFTWARE EVEN IF LICENSOR OR ITS SUPPLIER(S) HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY OTHER PARTY.


SOME STATES DO NOT ALLOW LIMITATIONS OR EXCLUSION OF LIABILITY FOR INCIDENTAL
OR CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATIONS MAY NOT APPLY TO YOU.


UPDATES


ALL UPDATES, MODIFICATIONS, AND ENHANCEMENTS PROVIDED TO YOU SHALL BECOME PART
OF THE MATERIALS GOVERNED BY THE TERMS OF THIS LICENSE. IF THE REGISTRATION
CARD IS NOT RECEIVED BY LICENSOR, LICENSOR IS UNDER NO OBLIGATION TO MAKE
AVAILABLE TO YOU ANY UPDATES EVEN THOUGH YOU HAVE MADE PAYMENT OF THE
APPLICABLE UPDATE FEE.


GENERAL


This License Agreement shall be governed by the laws of the state of Georgia
and shall inure to the benefit of Licensor, its successors, administrators,
heirs, and assigns. Should you have any questions concerning this Agreement,
you may contact Licensor by writing to Hitachi Telecom (USA), Inc., 3617
Parkway Lane, Norcross, GA 30092.


BY USING THE SOFTWARE, YOU ACKNOWLEDGE THAT YOU HAVE READ THIS AGREEMENT,
UNDERSTAND IT, AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS. YOU FURTHER
AGREE THAT IT IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN
US WHICH SUPERSEDES ANY PROPOSAL OR PRIOR AGREEMENT, ORAL OR WRITTEN, AND ANY
OTHER COMMUNICATIONS BETWEEN US RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT.


COPY RETENTION


The Software media may not be copy protected in all cases. You may make backup
copies for your own use, if available, but this does not mean that you can make
unlimited copies. The Software is protected by copyright law. IT IS ILLEGAL TO
GIVE A COPY OF THE SOFTWARE TO ANOTHER PERSON OR COMPANY.


 






 



	 	 	DISTRIBUTOR shall be given access to certain software downloads only upon
the terms and conditions of this Agreement, including the Software
Download Agreement below.



SOFTWARE UPDATE DOWNLOAD AGREEMENT



This Software Update Download Agreement is provided by Hitachi Telecom (USA),
Inc. (“Hitel”) only to its Authorized Distributors, in good standing, subject
to the terms and conditions of the Authorized Distributor Agreement, including
all licensing terms contained or referred to in Exhibit A thereto, and the
following. You are not an Authorized Distributor unless you are a party to a
current HCX5000/HCX5000i Authorized Distributor Agreement with Hitel. By
downloading each software update, you represent and warrant that: you are a
Hitel HCX5000/HCX5000i Authorized Distributor in good standing under a current
Authorized Distributor Agreement; and, you have read, understood and will
comply with all of the terms and conditions hereof.


1.     You shall provide written notice to Hitel of each and every site to which
you apply each software update and the Update Level for that site that is
provided by this download, within twenty-four (24) hours of your application of
this software update to the respective site(s).


2.     You shall comply in all material respects with any and all instructions
provided by Hitel relating to the application of this software update.


3.     You shall download this software update in its entirety at each site to
which you apply this software update. Partial downloads are prohibited.


4.     After completely applying this software update to a system, you shall
IMMEDIATELY perform a system reload.


5.     You shall NOT distribute or copy this software update in any form, including
electronic and/or printed copies.


6.     You shall comply with whatever instructions Hitel may give, should Hitel
determine this software update needs to be replaced, including all Hitel
instructions relating to obtaining and applying replacement software.


7.     You have agreed in writing that this Software Update Download Agreement is
an Addendum to and incorporated in the Authorized Distributor Agreement between
you and Hitel.


8.     It is the responsibility of the Distributor to keep their sites at the
current Software Update Level.


9.     You are required to comply with the terms and conditions of the EXPORT
CONTROL PROVISIONS as included in Section 15 of this Agreement.



	 	 	 	 	 	 	 
	Signed: 	 	
/s/ D Reigel

	 	Date: 
	 	3/20/03

	 	 	


	 	 	 	




 






 


EXHIBIT B



DISTRIBUTOR REQUIREMENTS



1. GEOGRAPHICAL COVERAGE



     HITEL appoints DISTRIBUTOR as a nonexclusive distributor for PRODUCTS as
described in Exhibit A. DISTRIBUTOR’S appointment covers the sale and service
of PRODUCTS in DISTRIBUTOR’S REGIONS shown on the schedule below. DISTRIBUTOR
may close any marketing location and relocate it within DISTRIBUTOR’S
geographical area of coverage. HITEL reserves the right to appoint additional
PRODUCT sales distributors anywhere in the United States including any or all
of the marketing locations shown below. DISTRIBUTOR shall maintain an adequate
and aggressive sales organization at all times during the term of this
Agreement in order to assure maximum distribution of PRODUCTS.


     REGION


        US


2. REQUIRED SUPPORT CAPABILITIES



     (a)  Technical Assistance Center


     DISTRIBUTOR is required to maintain a Technical Assistance Center (TAC) to
provide second level remote maintenance support of all geographical areas
covered in (1). DISTRIBUTOR agrees to provide TACs as described above located
as follows:



	 	 	 
	XETA TECHNOLOGIES
	1814 W. Tacoma
	Broken Arrow, OK
	 	
74012-1406





	 	     DISTRIBUTOR will inform
HITEL which systems will be handled by each TAC.

	 
	 	     (b)  Spare Parts.
DISTRIBUTOR is required to maintain an adequate supply
of spare parts (as defined in Exhibit G) in each geographical region covered
in (1) to support troubleshooting of system or PRODUCT problems and normal
system or PRODUCT maintenance.

	 
	 	     (c)  DISTRIBUTOR is
required to maintain or provide access to a minimum
of two (2) HITEL Certified Technicians per geographical region served.
National Distributors (REGION is Continental U.S.) are required to maintain a
minimum of 15 HITEL Certified Technicians.




 






 

	 	     (d)  DISTRIBUTOR is required to furnish to HITEL as part of this
Agreement, a list of HITEL certified technicians. DISTRIBUTOR is also
required to furnish to HITEL a technical support authorization, in writing,
designating the certified technicians authorized by DISTRIBUTOR to call HITEL
for third level support, and authorized by DISTRIBUTOR to issue purchase
orders to HITEL during non-business hours and in emergency situations. Such
list must include technician’s name and certification number.

	 
	 	     (e)  Immediately upon termination or separation from DISTRIBUTOR’s
employ of any such listed certified technician, DISTRIBUTOR is required to
notify HITEL in writing of such termination or separation, Until such
written notice is received, HITEL may provide such technician with the
services for which they were previously authorized and HITEL will in no way
be responsible for the actions of such terminated technician. Upon receipt
of such written notice, HITEL will remove said technician’s name from its
approved list until such time as said technician has been employed and
re-registered with HITEL by the same or another Authorized Distributor. The
charge by HITEL to Authorized Distributors for re-registration of certified
technicians shall be seventy-five ($75.00) Dollars per individual
re-registered.




 






 



EXHIBIT B DISTRIBUTOR REQUIREMENTS (cont)



HITACHI CERTIFIED TECHNICIANS




	 	 	 	 	 	 	 
	Distributor:	 	 	 	Date:	 	 
	 	 	


	 	 	 	




Contract Year:   Jan-Dec 2003                     see attached



	 	 	 	 	 	 	 	 	 
	Technician Name	 	 	City, State	 	HCX ID #
	
	 	 	
	 	




     List all employees who have received a Technician Certification Number.
DISTRIBUTOR is responsible for notifying HITEL when a technician leaves the
employ of the DISTRIBUTOR.


 






 


Xeta Technologies

Hitachi Certified Employees

As of March 1. 2003

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*




	 	 	* The asterisk (*) indicates that material has been omitted
pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the rules to the
Securities and Exchange Act of 1934, as amended.



 






 






EXHIBIT C



SYSTEM QUANTITIES AND DISCOUNTS



     HITEL periodically issues list price information in written or
“Configurator” form for new systems, upgrade orders, parts, sub-components and
HITACHI PRODUCTS Return Material Authorization (RMA). This information is
referred to in this Agreement as HITEL Price Guides. The current new system
Configurator or upgrade and Unit Parts Price Guide represent the only
definition of PRODUCTS list prices except where superseded in specific
instances by other written quotations issued by HITEL. Discounts in this
Exhibit apply to list prices of hardware (or other items defined as
discountable in HITEL Price Guides, except for items for which other specific
discounts are specified in such Price Guides).


     1.     DISTRIBUTOR agrees to purchase and pay for a minimum $ *
in total net to Hitel, from Hitel during this contract year. These
purchases will receive a discount as defined above of * %.


Table 1




	 	 	 	 	 
	Commitment ($)	 	Discount
	*	 	 	*	 




	2.	 	SPECIAL CONSIDERATION. HITEL will review DISTRIBUTOR sales versus
commitment quarterly. If DISTRIBUTOR does not order, accept delivery and
pay for at least the amount of prorated PRODUCT committed, HITEL has the
option, upon sixty (60) days written notice, to change the discount
schedule



         OTHER DISCOUNTS. The following discounts to list prices also apply:


- UpGrade Orders. Upgrade orders are quoted at a net price. No discount
maybe applied.


* The asterisk (*) indicates that material has been omitted pursuant to a
request for confidential treatment. The omitted material has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
of the rules to the Securities and Exchange Act of 1934, as amended.


 






 


- Parts Orders:


     (a)  A volume order of more than $ * net price, covered by one (1) purchase
order, shipped as a unit (except for back order items) to one (1) address with
a minimum delivery schedule of thirty (30) days, shall receive the discount
shown above off list price. NOTE: The $ * amount must be met after the
discount is applied.


     (b)  Less than $ * net cost per order shall receive a discount of * % off
list price.


     (c)  All expedited orders shall be charged the then current expedite fees.



	 	 	 	 	 
	- Sub-component orders	 	
0	%	 
	 	 	 	 	 
	- Material Return Authorization Repair and Return	 	
0	%	 



* The asterisk (*) indicates that material has been omitted pursuant to a
request for confidential treatment. The omitted material has been filed
separately with the Securities and Exchange Commission pursuant to Rule 24b-2
of the rules to the Securities and Exchange Act of 1934, as amended.


 






 




30/60/90 Day Forecast



EXHIBIT D – 90 DAY FORECAST SHEET




	 	 	 
	Distributor	 	
Date




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Customer Information	 	System Information	 	 	 	 	InnSpeed	 	 	 	 	 	Probability to Ship
	 	 	Customer	 	City	 	St.	 	Sys	 	S/W	 	Lines	 	Dollars	 	C	 	L	 	 	 	Ports	 	Auto Q.#	 	This Mo.	 	30-60 Days	 	60-90 Days
	1
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	2
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	3
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	4
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	5
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	6
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	7
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	8
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	9
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	10
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	11
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	12
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	13
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	14
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	15
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	16
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	17
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	18
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	19
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 
	20
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	%	 	 	 	%	 	 	 	%	 




	 	 	 	 	 
	C – Contract Signed	 	
L – Lease (Financing) Completed
	 	Confidential



 






 


EXHIBIT E



PAYMENT AND ADDITIONAL DELIVERY TERMS



     Standard payment terms are net thirty (30) days after invoice from HITEL
for the total outstanding invoiced amount, including new systems, parts,
patches, upgrades, expansions, etc., within the preset credit line. For the
portion, if any, exceeding the preset credit line, HITEL requires a cash
payment or issuance of an irrevocable letter of credit before shipment. HITEL
may revoke the net thirty (30) days payment terms at any time upon written
notice to DISTRIBUTOR stating the reason(s) for such revocation and insist upon
an irrevocable letter of credit, payment in advance or such other method as
HITEL may determine for all goods to be delivered after such notice.


     Any invoices which remain due and payable after thirty (30) days are
subject to a 1.67 percent (1.67%) per month service charge for each month or
the fraction thereof that the payment is not received by HITEL, or, if this
interest rate exceeds the maximum allowed by applicable law, then at the
maximum lawful rate.


     Two other payment terms may be chosen by noting their selection on the
purchase order, If no selection is noted, net 30 days will apply.


     1.     - Net 60 with Interest. (Only available for orders of $10,000.00 or
greater net cost.) Payment terms are net sixty (60) days after shipment from
HITEL for the total outstanding invoiced amount, including new systems, parts,
patches, upgrades, expansions, etc., within the preset credit line. For the
portion, if any, exceeding the preset credit line, HITEL requires a cash
payment or issuance of an irrevocable letter of credit before shipment. A
service charge equal to 1.2 percent (1.2%) of the total invoiced amount shall
be added to each such invoice by HITEL and shall be due and payable by
DISTRIBUTOR as part of such invoice. HITEL may revoke the Net 60 with Interest
payment terms at any time upon written notice to DISTRIBUTOR stating the
reason(s) for such revocation and insist upon an irrevocable letter of credit,
payment- in advance or such other method as HITEL may determine for all goods
to be delivered after such notice.


     Any balance which remains due and payable after sixty (60) days is subject
to a 1.67 percent (1.67%) per month service charge for each month or the
fraction thereof that the payment is not received by HITEL, or, if this
interest rate exceeds the maximum allowed by applicable law, then at the
maximum lawful rate.


 






 


     2.     - 50/50. (Only available for orders of $10,000.00 or greater net cost.)
Payment terms are 50% before shipment and 50% net sixty (60) days after
shipment from HITEL for the total outstanding invoiced amount, including new
systems, parts, patches, upgrades, expansions, etc., within the preset credit
line. For the portion, if any, exceeding the preset credit line, HITEL requires
a cash payment or issuance of an irrevocable letter of credit before shipment.
HITEL may revoke the 50/50 payment terms at any time upon written notice to
DISTRIBUTOR stating the reason(s) for such revocation and insist upon an
irrevocable letter of credit, payment in advance or such other method as HITEL
may determine for all goods to be delivered after such notice. HITEL may revoke
the 50/50 payment terms at any time upon written notice to DISTRIBUTOR stating
the reason(s) for such revocation and insist upon an irrevocable letter of
credit, payment in advance or such other method as HITEL may determine for all
goods to be delivered after such notice.


     Any balance which remains due and payable after the above mentioned terms
is subject to a 1 .67 percent (1.67%) per month service charge for each month
or the fraction thereof that the payment is not received by HITEL, or, if this
interest rate exceeds the maximum allowed by applicable law, then at the
maximum lawful rate.


     Security Interest, So long as HITEL has not received full and complete
payment for any delivered PRODUCTS, a purchase money security interest in the
PRODUCTS shall be created and remain in HITEL until HITEL receives full payment
of the full invoice amount thereof. It is further understood and agreed that
until said security interests are extinguished as set forth herein, HITEL shall
have the absolute right to repossess and resell the PRODUCTS.


     It is understood by the parties hereto that the ability of DISTRIBUTOR to
make the payments contemplated hereunder is of the essence of this Agreement
and in the event that DISTRIBUTOR is unable to make the payments in accordance
with the terms and conditions of this Agreement, for any reason or cause,
including without limitation, by virtue of any regulation or order of any
government authority, HITEL, in addition to whatever other remedies may be
available to it, may elect to terminate this Agreement immediately.


     Delivery terms for all HITEL PRODUCTS and Supplier PRODUCTS shipped from
HITEL’s Norcross facilities shall be F.C.A. HITEL’s plant, Norcross, GA
(Incoterms 2000). Delivery terms for all Supplier PRODUCT that is drop-shipped
by HITEL’s supplier(s) or otherwise not shipped from HITEL’s Norcross location
shall be F.C,A. HITEL’s supplier’s shipping location (Incoterms 2000).


     Any orders, which at DISTRIBUTOR’S request, are not shipped within sixty
(60) days of acceptance by HITEL shall be subject to a rental charge as
described in HITEL price guides.


     DISTRIBUTOR shall not have the right to cancel, reschedule, change or
modify all or any portion or installment of any PRODUCT covered by this
Agreement without HITEL’s prior written consent. Each cancellation so agreed to
by HITEL shall be subject to a cancellation fee as described in HITEL price
guides.


 






 


EXHIBIT F



NOTICES



All notices to be given pursuant to this Agreement shall be in writing and sent
by registered or certified mail.



	 	 	 	 	 
	 	 	
DISTRIBUTOR:
	 	XETA TECHNOLOGIES
	 	 	 	 	1814 W. Tacoma
	 	 	 	 	Broken Arrow, OK 74012-1406
	 	 	 	 	 
	 	 	 	Attention: President
	 	 	 	 	 
	 	 	 	 	 
	 	 	
HITEL:
	Hitachi Telecom (USA), Inc.
	 	 	 	3617 Parkway Lane
	 	 	 	Norcross, GA 30092
	 	 	 	 	 
	 	 	 	Attention: President or Director PBX Business



 






 



EXHIBIT G



HITEL PRODUCTS RETURN MATERIAL AUTHORIZATION POLICY



     Attached is HITEL’s current HITACHI PRODUCTS Return Material Authorization
Policy. This policy is subject to change by HITEL upon written notice. (All
repair and return of Supplier PRODUCTS is handled directly between DISTRIBUTOR
and Supplier.)


 






 


RETURN MATERIAL AUTHORIZATION PROCEDURE



FOR HITEL PRODUCT ONLY




	I.	 	POLICIES
	 
	1.	 	The Return Material Authorization (RMA) program as per contracted
agreement described herein is offered only to authorized Hitachi Telecom
(USA), Inc. (HITEL)
Distributors.
	 
	2.	 	Subject to the terms and conditions of the Distributors and HITEL and the
terms and conditions set forth in this statement, HITEL will provide
printed circuit boards and technical support for each HCX5000 sold to
Distributors for a period often (10) years from the date that the last
HCX5000 is sold and shipped to Distributors by HITEL.
	 
	3.	 	Distributors are required to have Hitachi certified technicians and to
stock spare parts sufficient to handle normal maintenance and most
emergencies as defined in Appendix A. In order for Distributors to obtain
parts and repair of parts from HITEL, Distributors must follow the
procedures set forth herein.
	 
	4.	 	This Return Material Authorization procedure specifies the terms and
conditions for returning parts to HITEL.
	 
	5.	 	HITEL will use reasonable efforts to repair or replace defective parts as
specified herein within thirty (30) days from the date of receipt of said
defective parts by HITEL. HITEL in its sole discretion may replace
defective equipment with either used or new equipment, as it deems
appropriate.
	 
	6.	 	Warranty coverage on new HCX5000 systems and parts is defined in the
Distributorship Agreement.
	 
	7.	 	Warranty coverage on repaired parts shall be identical to the warranty
set forth in the Distributorship Agreement with new HCX5000 systems and
parts with the exception that the warranty covering repaired parts will be
effective for three (3) months from shipment date or the remainder of the
original warranty, whichever is longer.
	 
	8.	 	Any parts returned without a bar code label will be considered out of
warranty.
	 
	9.	 	HITEL will only provide advance replacement parts in limited situations
described herein under RMA Definitions and Replacement Parts.



 






 




	II.	 	RMA DEFINITIONS
	 
	1.	 	RMA Repair and Return. All parts returned to HITEL pursuant to this RMA
statement will be treated as RMA Repair and Return, except for cases of
RMA Special Approval and RMA DOA as defined herein. All RMA Repair and
Return will be considered as either in-warranty or out-of-warranty.
	 
	2.	 	In-Warranty. Parts which are covered by a HITEL warranty that has not
expired and is other-wise in effect and which are not subject to any
exceptions, exclusions or the like (including but not limited to
exceptions listed in the Authorized Distributor Agreement) will be
treated as in-warranty according to the warranty provisions set out in
the Distributor Agreement.
	 
	3.	 	Out-of-Warranty. Parts which are not covered by a HITEL warranty for
whatever reason will be treated as out-of-warranty.
	 
	4.	 	RMA DOA. Parts will be treated as Dead on Arrival (DOA) only when
they meet the following criteria:




	 	a.	 	New system and parts found to be defective due to poor
material or workmanship within sixty (60) days of the date of
shipment must be reported to HITEL Sales Administration Department
within sixty (60) days of the date of shipment.
	 
	 	b.	 	RMA DOA may be issued under the following conditions only:




	 	 	 	 	 	 	 
	 	 	 	
1.	 	 	Adequate spares are available on site to
troubleshoot the system.
	 	 	 	 	 	 	 
	 	 	 	
2.	 	 	A Distributor’s HITEL certified technician is
troubleshooting the system on site; and HITEL’s PBX Technical
Support personnel, working with the Distributor’s certified
technician, declare the part to be DOA.
	 	 	 	 	 	 	 
	 	 	 	
3.	 	 	Adequate time is available to troubleshoot the
system.




	5.	 	RMA Special Approval. The following cases will be treated as RMA
Special Approval. No system or parts will be treated as RMA Special
Approval without written approval and an RMA number issued by HITEL’s
Sales Administration Department prior to return shipment to HITEL. RMA
Special Approval may be issued only under the following conditions:




	 	a.	 	Shipment by HITEL of systems or parts that were not ordered.
	 
	 	b.	 	The return of loaned equipment.
	 
	 	c.	 	Return of Distributor’s Sales Demonstration Equipment for
Refurbishment or Upgrade.



 






 




	6.	 	DOA Advance Replacement Parts. DOA advance replacement parts are
available only under RMA DOA conditions. This allows a Distributor to
order replacement parts and when the RMA DOA parts are returned, HITEL
will issue a credit against the parts order upon receipt and inspection
of the parts. Credit will be issued only if the Distributor has
contacted Hitachi Telecom (USA), Inc.’s PBX Technical Support Department
who has verified that parts are defective. Parts to be returned must
match with the same quantity, serial numbers and bar code labels as the
parts originally shipped.
	 
	7.	 	Rejection. HITEL in its sole discretion may reject any equipment or
parts that are returned if HITEL determines one of the following
conditions exists:




	 	a.	 	Equipment damaged by other that defective components or
workmanship.
	 
	 	b.	 	Equipment with missing parts.
	 
	 	c.	 	Improperly packaged equipment. (Refer to Procedure for All
Return Material Authorizations, paragraph 8.)
	 
	 	d.	 	Packages containing returned equipment that do not display
appropriate RMA numbers.
	 
	 	e.	 	Equipment modified by other than certified Hitel personnel.




	8.	 	Non-Returnable Parts. The following parts are not repairable and
shall not be returned to HITEL unless HITEL so requests.




	 	a.	 	Any parts which are defective or damaged due to causes other
than defective parts or workmanship (including but not limited to
lightning strikes, power surge, water damage, etc.)
	 
	 	b.	 	Consumable and non-returnable items shown in the HCX5000
Technician’s Manual CG-50-3090. Labels, fuses, mounting hardware,
cables, etc.
	 
	 	c.	 	Manual, drawings, faceplates and floppy diskettes.
	 
	 	 	 	NOTE: To order replacement or additional consumable parts, the
Distributor may contact HITEL’s Sales Administration Department.



III. PROCEDURE FOR ALL RETURN MATERIAL AUTHORIZATIONS




	1.	 	Distributor must notify HITEL in written form as to which employees
of the Distributor are authorized to issue purchase orders to HITEL.
	 
	2.	 	Distributor must obtain an RMA number for RMA Repair and Returns and
RMA DOAs from HITEL’s Sales Administration Department.



 






 




	3.	 	Distributor must issue a purchase order to HITEL to order the RMA
parts and work requested.
	 
	4.	 	Distributor must return equipment with an appropriate Defect Tag
attached to each machine and part returned. Distributor must include a
packing list which lists all RMA parts contained in one box. Boxes must
be clearly marked with the HITEL assigned RMA numbers. (Example: RMA
#19209R3)
	 
	5.	 	RMA DOA must be returned within thirty (30) days of the issue date of
the appropriate RMA DOA number. The RMA DOA number must be written on
the attached Defect Tag. (See Appendix B)




	 	 	 	 
	 	NOTE:	 	
In all instances, Distributor must enclose, for each
returned part, a detailed report stating the problem with that
part.




	6.	 	RMA DOA parts not returned to HITEL within thirty (30) days of the
issue date of the RMA number for the part(s) in question, will be
treated as RMA Repair and Return following contact and confirmation with
the Distributor. RMA DOA parts that do not match the serial numbers and
bar code labels recorded for that RMA DOA authorization will be treated
as RMA Repair and Returns. All RMA systems and parts shall be shipped
freight pre-paid by Distributors to the following address:




	 
	Hitachi Telecom (USA), Inc.
	Return Material Authorization
#___________________
	3617 Parkway Lane
	Norcross, GA 30092




	 	 	 	 
	 	NOTE:	 	
Those items hand carried are to be delivered to the
receiving department at the Warehouse. These items must follow
Packing Returns as stated in item 8 below.




	7.	 	RMA Repair and Return — HITEL will use reasonable efforts to ship
repaired parts to the Distributor within thirty (30) days of receipt of
the defective part. Exceptions to this thirty (30) day period are
SelecSets, which will normally be returned within sixty (60) days of
receipt of the defective SelecSets.
	 
	 	 	RMA DOA — when HITEL receives DOA parts within thirty (30) days of the
date that HITEL issues the RMA number, HITEL will issue credit against
the replacement part(s) order, if the part(s) being returned qualify for
DOA.
	 
	 	 	When DOA parts are received after thirty (30) days of the RMA
Authorization date, or if the wrong parts are returned to HITEL, the RMA
request will be treated as an RMA Repair and Return following contact and
confirmation with Distributor. All equipment must be returned to HITEL.



 






 




	8.	 	Packing Returns. Returned materials must be properly packed when
returned to HITEL. Printed circuit boards must be placed in an
anti-static bag and then placed individually in cartons in accordance
with commercially acceptable standards. If the material is returned
without the anti-static bag and/or proper packing, the returned material
will be rejected by HITEL. For this reason, it is suggested that a
quantity of the original anti-static bags and shipping cartons be kept
in storage for reuse.
	 
	9.	 	Charge for RMA Services. Repair fees for each case are shown in
Appendix C.
	 
	  10.	 	All in-warranty repaired equipment will be returned freight pre-paid
by HITEL.




	 	 	 	 
	 	 NOTE:	 	
SelecSets and VDUs received with missing external
parts (cables, cords and handsets) will be returned complete
and all replaced external parts will be billed over and above
the repair price.




	IV.	 	FUNCTIONS
	 
	1.	 	Issue RMA. HITEL Sales Administration Department will issue a
numbered RMA form upon request of the Distributor. Distributor will
issue a Purchase Order detailing the RMA equipment and work requested.
The maximum number of items on one RMA form is ten (10). If additional
equipment is requested subsequent RMA forms will be issued. All boxes
must be marked with appropriate RMA number(s). Distributor must also
indicate the appropriate Reason Code.
	 
	 	 	HITEL Sales Administration Department will issue the RMA form with the
following filled in:




	 	 	 
	-RMA number	 	
-Repair Price
	-Salesman	 	
-Unit price
	-Issue date	 	
-Ship to
	-Distributor	 	
-Bill to
	-Purchase Order Number	 	
-Terms
	-Quantity	 	
-Comments
	-Description	 	
-Insurance
	-Sub Description	 	
-Freight carrier
	(New and Used part number)	 	
-RMA Type
	-Serial number if applicable	 	 




	2.	 	RMA Inspection. Upon receipt of equipment by HITEL, the contents of
each box will be visually checked and matched to items listed on the
RMA form(s).



 






 







	 	 	Should any problems or discrepancies with equipment received or between
customer Packing List(s) and the RMA forms, HITEL’s Sales Administration
Department will contact Distributor to clarify. A tracer on delivery may
be required or parts may need to be returned if Distributor requests.
	 
	 	 	For rejected parts, the RMA form will note rejection reason and the
part(s) will be rejected on final approval by HITEL’s Sales
Administration Department. The rejection notice will include:




	 
	-Issue date
	-Parts received date
	-Description
	-RMA number
	-Part code
	-Detailed reason
	-Comments
	-Approval
	-Shipment or disposal instructions




	3.	 	RMA Testing and Repair. RMA parts will be tested per HITEL’s
Internal Test Procedures Manual, using hardware Test Procedures of
system software and hardware.
	 
	4.	 	RMA Invoicing.




	 	a.	 	After testing, repaired and returned items will be invoiced
for the appropriate amount following shipment of the equipment.
	 
	 	h.	 	DOA and Special Approval items will be credited by issuing
a credit memo provided they meet the RMA Special Approval and DOA
requirements.



 






 






APPENDIX A



The attached table provides the recommended number of spare parts to he carried
by a Distributor based on the number of parts in the field to be supported. A
30-day Replacement cycle is assumed.


The columns of the table are as follows: The first is the name of the part. The
remainder of the columns show the number of parts that can be supported by the
number of spares listed at the top of each of these columns. However, if the
probability of not needing any spares during the life cycle of the product is
less than the probability stated below, then the number of required spares is
0. (The life cycle is assumed to be 7 years.) For example, for the ICC
connector units (IOCNU), there is a very low FIT rate, and the depot can
support up to 6 such parts without any spares. With one spare, up to 561 IOCNU
parts can be supported. The majority of the parts, however, have 0 in the
column under 0 spares. This means that no parts can be supported with 0 spares,
and at least one spare is needed when the first of such a part is put into
service.


The assumed probability values of having a spare when needed are as follows:
Critical parts are assigned a probability value of .995. These are the parts
whose failure can generally bring the system down. Semi-critical parts are
assigned a probability of .98, and are those parts whose failure can result in
a small degradation or outage of a small subset of the system.


In the case of the Floppy Disk Drive Unit (FDDU), the actual FIT rate is
67,000. However, since this part is rarely used, a FIT rate of only one-tenth,
6700, is assumed to apply in actual practice.


 






 



APPENDIX B

RMA TAG








	 
	MRF-027



PARTS ID TAG

Equipment Type (Circle One)



ATM PBX SONET OTHER




	 	 	 	 	 
	1. W/O-MRA No


	2. Serial No


	3. Part Name


	4. Part No


	5. Recv Date


	6. Iss/Rev No


	7. Customer


	8. Site


	DEFECT SYMPTON (If Known)
	 
	


	 
	


	 
	


	 	 	 	 	 
	DISPOSITION (Circle One)
	 	 	 	 	 
	GOOD STOCK	 	
DATE:	 	 
	 	 	 	 	

	RTV	 	
DATE:	 	 
	 	 	 	 	

	REJECT	 	
DATE:	 	 
	 	 	 	 	

	SCRAP	 	
DATE:	 	 
	 	 	 	 	

	 	 	 	 	 
	See Back for Details



 






 



APPENDIX B

RMA TAG







TEST/REPAIR DATA




	 	 	 	 	 	 	 	 	 	 	 	 	 
	TEST NTF RTV MG SCRAP (Circle One)	 	 	 	 	 	 	 	 	 	 
	 
	TECH.	 	
DATE
	 	 	 	/
	 	 	 	/	 	 
	

	 	 	 	

	 	 	 	

	 	 	 	

	DETAILS


	


	


	


	


	


	


	REPAIR RG MG RTV SCRAP (Circle One)	 	 	 	 	 	 	 	 	 	 
	 
	TECH.	 	
DATE
	 	 	 	/
	 	 	 	/	 	 
	

	 	 	 	

	 	 	 	

	 	 	 	

	DETAILS


	


	


	


	


	


	


	COMPONENT’S USED / LOCATION