FOURTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT

Exhibit 10.1

FOURTH AMENDMENT TO REVOLVING CREDIT
AND TERM LOAN AGREEMENT

This Fourth Amendment to Revolving Credit and Term Loan Agreement is dated as of September 28, 2006, between XETA TECHNOLOGIES, INC. , an Oklahoma corporation (“Borrower”), and BANK OF OKLAHOMA, N.A. (“Bank”).

RECITALS

A.            Reference is made to the Revolving Credit and Term Loan Agreement dated as of October 1, 2003, and amended June 7, 2004, September 30, 2005, and December 21, 2005 (as amended, the “Credit Agreement”) between Borrower and Bank, pursuant to which currently exists:  (i) a term loan in the original principal amount of $3,374,734.33 (“Term Loan”), (ii) a real estate loan in the original principal amount of $2,238,333.48 (“Real Estate Loan”), and (iii) a revolving line of credit in the amount of $7,500,000 (“Revolving Line”).  Terms used herein shall have the meanings ascribed to them in the Credit Agreement unless otherwise defined herein.

B.            Borrower has requested that Bank (i) extend the commitment under the Revolving Line to September 28, 2007, and (ii) amend certain terms of the Credit Agreement; and Bank has agreed to accommodate such request, subject to the terms and conditions set forth below.

AGREEMENT

For valuable consideration received, it is agreed as follows:

1.             AMENDMENTS TO THE CREDIT AGREEMENT .  The Credit Agreement is hereby amended as follows:

1.1.          Section 1.18 (Debt Service Coverage Ratio) is hereby deleted and replaced with the following:

“1.18    ‘ Debt Service Coverage Ratio ’ shall mean pre-tax income less cash taxes paid plus interest expense plus depreciation and amortization less treasury stock purchases, for the immediately preceding four (4) consecutive quarters, divided by interest expense plus current maturities of long term debt, all determined without duplication and in accordance with GAAP, consistently applied.”

1.2.          Section 1.20(b) (EBITDA) is hereby deleted and replaced with the following:

“1.20(b)   ‘ EBITDA ’ shall mean net income plus (i) interest expense, (ii) depreciation, depletion, obsolescence and amortization of property (iii) capitalized lease expense, and (iv) tax expense, all determined in accordance with GAAP, and for a particular period.”

1.3.          The Revolving Line Note, attached to the Credit Agreement as Schedule “1.49” is hereby replaced by the $7,500,000 Promissory Note in form and content as set forth on Schedule “1.3” attached hereto (“Renewal Note”).

1.4.          Section 1.53 (Termination Date) is hereby amended to reflect that the date “September 28, 2006” shall now mean and read “September 28, 2007”.

1.5.          Section 7.6 of the Credit Agreement is hereby amended to add the following sentence at the end of the section:

“Notwithstanding the above, commencing October 1, 2006, Borrower may purchase its own capital stock, and may allocate and set apart all sums necessary for the purchase of such capital stock.”

1.6.          Section 8.3 (Debt Service Coverage Ratio) is hereby deleted and replaced with the following:

“8.3   Debt Service Coverage Ratio .  Maintain a Debt Service Coverage Ratio not less than (i) 1.25 to 1 when excluding treasury stock purchases, and (ii) 1.1 to 1 when including treasure stock purchases.”

2.             CONDITIONS PRECEDENT .  Borrower shall deliver to Bank at or before closing:

2.1.          This Amendment and all schedules hereto;

2.2.          The Renewal Note; and

2.3.          Any other instruments, documents or agreements reasonably requested by Bank in connection herewith.

3.             Borrower Ratification .  Borrower hereby ratifies and confirms the Credit Agreement, Security Agreement and all other instruments, documents and agreements executed by Borrower in connection with the Credit Agreement, and acknowledges and agrees that they remain in full force and effect, binding and enforceable against the Borrower in accordance with their terms.

4.             Representations .  Borrower represents and warrants that (i) no Event of Default exists under the Credit Agreement or any instruments, documents or agreements executed by Borrower in connection therewith (collectively, the “Loan Documents”), and (ii) all representations and warranties made in the Loan Documents remain true and correct as of the date hereof.  Borrower further represents and warrants that all authority documents delivered to Bank in connection with the Credit Agreement remain in full force and effect and have not been modified or changed whatsoever.

5.             Governing Law and Binding Effect .  This document shall be governed by and construed in accordance with the laws of the State of Oklahoma, and shall inure to the benefit of and be binding upon the parties hereto, their successors and assigns.

6.             No Change .  Except as expressly amended hereby, the Credit Agreement, and all instruments, documents and agreements executed and/or delivered by Borrower to Bank in connection therewith, shall remain in full force and effect and unchanged.

7.             Costs, Expenses and Fees .  Borrower agrees to pay all costs, expenses and fees incurred by Bank or otherwise in connection herewith, including, without limitation, all reasonable attorney fees, costs and expenses of Riggs, Abney, Neal, Turpen, Orbison & Lewis.

8.             Multiple Counterparts .  This Amendment may be executed in multiple counterparts.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

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