General :: Xinetd Server Configuration - Infinite Loop?

I have a java server console program that I have configured xinetd to start when connection comes in on a given port and then the program runs in an infinite loop receiving inputstream from telephone exchanges. The thing is, when a new chunk of stream comes from the exchange xinetd forks a new process each time. I tried setting the wait parameter to yes and restarted the deamon, but no success. How can I stop this behavior and have the deamon just direct the stream to the process already running? Am I missing something in my config or is it just incorrect?

My config is as follow:
defaults
{
instances = 60
log_type = SYSLOG authpriv
log_on_success = HOST PID
log_on_failure = HOST
cps = 50 10
}
includedir /etc/xinetd.d

And then my actual config,
service aos_larmar
{
socket_type = stream
protocol = tcp
user = root
type = UNLISTED
wait = yes
instances = 256
server = /home/gunnl/java/start.sh
port = 5204
disable = no
}

My server OS is, Red Hat Enterprise Linux ES release 4 (Nahant Update 7)