<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED
NOVEMBER 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-13616
INTERVOICE, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1927578
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
17811 WATERVIEW PARKWAY DALLAS, TX 75252
(Address of principal executive offices)
972-454-8000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
The Registrant had 14,082,090 shares of common stock, no par value per
share, outstanding as of the close of the period covered by this report.
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<PAGE> 2
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED NOVEMBER 30, 1998
NOTE A -- BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information. The
consolidated balance sheet at February 28, 1998 has been derived from audited
financial statements at that date. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the unaudited November 30, 1998 and 1997 consolidated financial
statements have been included. Operating results for the three and nine month
periods ended November 30, 1998 are not necessarily indicative of the results
that may be expected for the year ending February 28, 1999 as the annual results
may be affected by a number of factors, including the timing and ultimate
receipt of orders from significant customers which continue to constitute a
large portion of the Company's sales, the sales channel mix of products sold,
and changes in general economic conditions, any of which could have an adverse
effect on operations.
NOTE B - REVENUE RECOGNITION
The Company recognizes revenue for sales of systems which do not require
customization by the Company at the time of shipment. Subsequent to December 1,
1997, revenue for systems which require customization by the Company is
recognized per the contract method of accounting using percentage of completion
for larger, more complex systems (generally over a $500,000 sales price) and the
completed contract method for smaller systems. Prior to December 1, 1997, the
Company recognized revenue on systems requiring customization at the date of
shipment or at the point after shipment when the remaining obligations of the
Company became insignificant. This change in accounting was required by the
American Institute of CPA's Statement of Position 97-2 which was adopted by the
Company as of December 1, 1997 and is required to be applied prospectively for
transactions entered into after that date.
The Company recognizes revenue from services at the time the service is
performed or over the period of the contract for maintenance/support.
NOTE C - EARNINGS PER SHARE
Basic earnings per share exclude any dilutive effect of stock options and
restricted stock arrangements. Diluted earnings per share includes the dilutive
impact of stock options and restricted stock arrangements.
On December 14, 1998 the Company announced a 2 for 1 stock split in the form of
a one hundred percent stock dividend payable on January 11, 1999 to shareholders
of record as of December 28, 1998. The computations of basic and diluted
earnings per share for all periods presented in this Note C and in the
Consolidated Statements of Operations reflect this change in capital
structure resulting from the stock split. All other references in this report
to the Company's shares are on a pre-split basis.
<PAGE> 3
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- -----------------------------
November 30, November 30, November 30, November 30,
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Numerator:
Net Income $ 5,506,708 $ 256,258 $12,938,436 $ 2,743,301
=========== =========== =========== ===========
Denominator:
Denominator for basic earnings per share
weighted average shares outstanding 27,957,360 30,874,884 27,801,632 31,855,166
=========== =========== =========== ===========
Effect of dilutive securities:
Employee Stock Options 2,634,108 191,304 1,839,090 214,000
Non-vested restricted stock -0- 14,640 -0- 50,224
----------- ----------- ----------- -----------
Dilutive Potential common shares 2,634.108 205,944 1,839,090 264,224
----------- ----------- ----------- -----------
Denominator for diluted earnings per share 30,591,468 31,080,828 29,640,722 32,119,390
=========== =========== =========== ===========
Net income per common share - basic $ 0.20 $ 0.01 $ 0.47 $ 0.09
=========== =========== =========== ===========
Net income per common share - diluted $ 0.18 $ 0.01 $ 0.44 $ 0.09
=========== =========== =========== ===========
</TABLE>
Options to purchase 35,000 and 3,792,514 shares of common stock at average
prices of $13.64 and $6.70, respectively, were outstanding during the three
months ended November 30, 1998 and 1997, respectively, but were not included in
the computation of diluted earnings per share because the options' prices were
greater than the average market price of the Company's common shares during such
periods and, therefore, the effect would have been anti-dilutive. For the same
reasons, 654,100 and 1,869,024 shares of common stock at average prices of
$10.61 and $8.44, respectively, were outstanding and not included in the
computation of diluted earnings per share during the nine months ended November
30, 1998 and 1997, respectively.
NOTE D - INTANGIBLE ASSETS
On September 15, 1998, the Company purchased a computer telephony software suite
from Dronen Consulting, Incorporated for $3,533,723 in cash and 75,000 shares of
the Company's stock valued at $1,518,750. The transaction was accounted for as
an asset purchase. The full purchase price of $5,052,473 will be depreciated
over the software suite's estimated useful life of five years.
<PAGE> 4
InterVoice, Inc.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
November 30, February 28,
ASSETS 1998 1998
------------- -------------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 10,967,994 $ 4,190,940
Accounts and notes receivable, net of allowance
for doubtful accounts of $457,247 in 1999 and
$368,005 in 1998 39,264,516 26,040,332
Inventory 11,340,714 9,343,338
Prepaid expenses and other current assets 975,869 4,490,813
Deferred income taxes 2,325,745 2,325,745
------------- -------------
64,874,838 46,391,168
PROPERTY AND EQUIPMENT
Building 16,285,631 16,249,914
Computer equipment 24,511,419 24,496,337
Furniture, fixtures and other 3,570,296 3,756,164
Service equipment 5,050,031 4,582,221
------------- -------------
49,417,377 49,084,636
Less allowance for depreciation 20,726,272 16,736,766
------------- -------------
28,691,105 32,347,870
OTHER ASSETS
Purchased software and other assets,
net of amortization of $2,837,287
in 1999 and $1,679,113 in 1998 10,324,721 6,154,437
------------- -------------
$ 103,890,664 $ 84,893,475
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 14,548,120 $ 10,491,913
Customer deposits 5,245,563 2,625,498
Deferred income 3,738,689 5,500,743
Short term borrowings -- 9,000,000
Income taxes payable 917,491 --
------------- -------------
24,449,863 27,618,154
DEFERRED INCOME TAXES 644,803 644,803
LONG TERM BORROWINGS 9,000,000 --
STOCKHOLDERS' EQUITY
Preferred Stock, $100 par value--2,000,000
shares authorized: none issued
Common Stock, no par value, at nominal
assigned value--62,000,000 shares
authorized: 20,076,890 issued,
14,082,090 outstanding in 1999
and 19,503,291 issued, 13,802,491
outstanding in 1998 10,033 9,726
Additional capital 50,412,060 44,314,685
Treasury stock - at cost (56,073,637) (50,202,999)
Retained earnings 75,447,542 62,509,106
------------- -------------
69,795,998 56,630,518
------------- -------------
$ 103,890,664 $ 84,893,475
============= =============
</TABLE>
<PAGE> 5
InterVoice, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
November 30, November 30, November 30, November 30,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 35,010,205 $ 25,545,358 $ 98,080,821 $ 79,563,975
Cost of goods sold 13,714,612 11,755,893 39,688,701 34,652,227
------------ ------------ ------------ ------------
Gross margin 21,295,593 13,789,465 58,392,120 44,911,748
------------ ------------ ------------ ------------
Research and development expenses 3,264,998 3,256,266 9,788,021 9,758,871
Selling, general and administrative
expenses 9,525,284 10,250,538 28,538,341 31,641,530
------------ ------------ ------------ ------------
Income from operations 8,505,311 282,661 20,065,758 3,511,347
Other income (expense) - net (98,122) 83,422 (312,420) 407,655
------------ ------------ ------------ ------------
Income before income taxes 8,407,189 366,083 19,753,338 3,919,002
Income taxes 2,900,481 109,825 6,814,902 1,175,701
------------ ------------ ------------ ------------
Net income $ 5,506,708 $ 256,258 $ 12,938,436 $ 2,743,301
============ ============ ============ ============
Net income per share - basic $ .20 $ .01 $ .47 $ .09
============ ============ ============ ============
Net income per share - diluted $ .18 $ .01 $ .44 $ .09
============ ============ ============ ============
</TABLE>
See Note C to Consolidated Financial Statements for a discussion of net income
per share computations.
<PAGE> 6
InterVoice, Inc.
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
------------------------ Additional Treasury Retained
Shares Amount Capital Stock Earnings Total
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at February 28, 1998 13,802,491 $ 9,726 $44,314,685 ($50,202,999) $ 62,509,106 $ 56,630,518
Exercise of stock
options 573,599 307 6,097,375 -- -- 6,097,682
Purchase of treasury
stock, net (294,000) -- -- (5,870,638) -- (5,870,638)
Net income -- -- -- 12,938,436 12,938,436
-----------------------------------------------------------------------------------------
Balance at November 30, 1998 14,082,090 $10,033 $50,412,060 ($56,073,637) $ 75,447,542 $ 69,795,998
=========================================================================================
</TABLE>
<PAGE> 7
InterVoice, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------- --------------------------
November 30, November 30, November 30, November 30,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 5,506,708 $ 256,258 $ 12,938,436 $ 2,743,301
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 2,871,225 2,277,451 8,032,944 6,496,907
Changes in operating assets
and liabilities: (2,844,932) 1,989,553 (5,633,811) 905,274
------------ ------------ ------------ ------------
NET CASH FROM OPERATIONS 5,533,001 4,523,262 15,337,569 10,145,482
INVESTING ACTIVITIES
Purchase of property
and equipment (1,031,021) (1,416,896) (3,459,101) (7,539,049)
Purchased software (5,081,610) (432,675) (5,328,458) (2,277,831)
------------ ------------ ------------ ------------
(6,112,631) (1,849,571) (8,787,559) (9,816,880)
FINANCING ACTIVITIES
Exercise of stock options 4,778,746 20,716 6,097,682 228,577
Purchase of Treasury Stock (1,485,000) (16,438,576) (5,870,638) (18,235,675)
------------ ------------ ------------ ------------
3,293,746 (16,417,860) 227,044 (18,007,098)
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 2,714,116 (13,744,169) 6,777,054 (17,678,496)
Cash and cash equivalents,
beginning of period 8,253,878 20,227,697 4,190,940 24,162,024
------------ ------------ ------------ ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 10,967,994 $ 6,483,528 $ 10,967,994 $ 6,483,528
============ ============ ============ ============
</TABLE>
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SALES. Sales in the first nine months and third quarter of fiscal 1999
increased approximately $18.5 million and $9.5 million, respectively, or 23% and
37%, respectively, when compared to the same periods of fiscal 1998. These
increases were due primarily to increased domestic customer premise equipment
(CPE) sales. A portion of the increase is attributable to customer demand for
the Company's recently released host computer and operating system independent
products. The Company also has been successful in focusing its efforts on
diversifying into vertical markets in which the Company has not previously
participated, such as inbound call centers. This diversification helped the
Company to increase domestic CPE sales. For both the first nine months and third
quarter of fiscal 1999, such sales constituted 61% of the Company's total sales
and increased 29% and 50%, respectively, when compared to the same periods of
fiscal 1998.
Worldwide telecommunications (Telco) sales for the first nine months and third
quarter of fiscal 1999 constituted 17% and 14%, respectively, of the Company's
total sales. Such sales for the first nine months and third quarter of fiscal
1999 increased 26% and 10%, respectively, when compared to the same periods of
fiscal 1998. Sales to domestic Telco customers constituted 61% and 84% of the
Company's worldwide telecommunications sales during the first nine months and
third quarter of fiscal 1999, respectively. A sale to a domestic long distance
company constituted approximately 65% of domestic Telco sales during the third
quarter of fiscal 1999. While international Telco sales during the third quarter
of fiscal 1999 were weak, the Company believes international demand,
particularly in Latin America, remains strong.
International CPE sales and service revenue constituted the remaining 22% and
25% of the Company's total sales during the first nine months and third quarter
of fiscal 1999, respectively. No customer accounted for 10% or more of the
Company's total sales during the third quarter of fiscal 1999.
COST OF GOODS SOLD. Cost of goods sold of approximately $39.7 million
during the first nine months decreased to 40% of total sales from 44% in the
same period of the previous year. This was the result of increased sales and the
Company's continued emphasis on expense control. For the same reasons, cost of
goods sold of approximately $13.7 million during the third quarter of fiscal
1999 decreased to 39% of total sales from 46% in the same period of the previous
year.
<PAGE> 9
RESEARCH AND DEVELOPMENT. Research and development expenses were
approximately $9.8 million and $3.3 million during the first nine months and
third quarter of fiscal 1999, respectively. Research and development expenses
during the first nine months and third quarter of fiscal 1999 were approximately
equal to such expenses in the same periods of the previous year as a result of
the Company's emphasis on expense control. Research and development expenses
during the first nine months and third quarter of fiscal 1999 included porting
the Company's InterSoft core software to the UNIX and Windows NT operating
systems; developing computer platform independent voice automation hardware and
software; developing the NSP 5000 platform; and integrating the ESP product line
purchased from Integrated Telephony Products, Inc. and the computer telephony
software suite purchased from Dronen Consulting, Incorporated into the Company's
product offerings. Additionally, expenditures were made for the ongoing
development of the Company's OneVoice Software Agent Platform, including
OneVoice Systems (the Company's IVR system), InVision (the Company's custom
application development tool), AgentConnect (the Company's call center product
offering), OneLink (a digital interface for analog switches), and digital
VocalCard software and hardware functionality.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative expenses decreased to approximately $28.5 million and $9.5
million during the first nine months and third quarter of fiscal 1999,
respectively, from approximately $31.6 million and $10.3 million during the same
periods of the previous year. As a percentage of the Company's total sales, such
expenses decreased to 29% in the first nine months of fiscal 1999 from 40% in
the same period of fiscal 1998, and to 27% in the third quarter of fiscal 1999
from 40% in the same period of fiscal 1998. This is a result of the Company's
continued focus on expense control, particularly selling, general and
administrative expenses.
OTHER INCOME/EXPENSE. Other expense of approximately $0.3 million and
$0.1 million during the first nine months and third quarter of fiscal 1999,
respectively, was primarily net interest expense paid on short term borrowings.
INCOME FROM OPERATIONS. Operating income and net income during the
first nine months of fiscal 1999 were approximately $20.1 million and $12.9
million, respectively, compared to $3.5 million and $2.7 million, respectively,
during the same period of the previous year. Operating income and net income
during the third quarter of fiscal 1999 were approximately $8.4 million and $5.5
million, respectively, compared to approximately $0.3 million and $0.2 million,
respectively, during the same period of the previous year. The increases in
operating income and net income are the result of increased sales and the
Company's efforts to control expenses.
LIQUIDITY AND CAPITAL RESOURCES. At November 30, 1998, the Company had
cash reserves of approximately $11.0 million while borrowings under the
Company's unsecured, revolving credit line with NationsBank were $9.0 million.
Operating cash flow during the first nine months and third quarter of fiscal
1999 were approximately a positive $15.3 million and $5.5 million, respectively.
Investing activities, primarily the purchase of computer
<PAGE> 10
and test equipment and the purchase of a computer telephony software suite from
Dronen Consulting, Incorporated (see below) during the first nine months and
third quarter of fiscal 1999 consumed $8.8 million and $6.1 million,
respectively. The re-purchase of the Company's common stock during the first
nine months and third quarter of fiscal 1999 consumed $5.9 million and $1.5
million, respectively. Proceeds from the exercise of employee stock options
during the first nine months and third quarter of fiscal 1999 contributed $6.1
million and $4.8 million, respectively. Net cash flow during the first nine
months and third quarter of fiscal 1999 was $6.7 million and $2.7 million,
respectively. The Company did not increase its borrowings during the quarter.
The Company reviews share repurchase and acquisition opportunities from time to
time. During the first nine months and third quarter of fiscal 1999, the Company
repurchased 294,000 and 60,000 shares, respectively, of its common stock at
costs of $5,870,638 and $1,485,000, respectively, pursuant to an authorization
by its Board of Directors. The Company believes that market conditions made the
repurchase of such shares of value to its shareholders and that it has access to
the financial resources necessary to pursue attractive repurchase and/or
acquisition opportunities as they arise.
On September 15, 1998, the Company purchased a computer telephony software
suite from Dronen Consulting, Incorporated for approximately $3.5 million in
cash and 75,000 shares of the Company's common stock valued at approximately
$1.5 million. The transaction was accounted for as an asset purchase. The full
purchase price of approximately $5.1 million will be depreciated over the
software suite's estimated useful life of five years. The cash portion of the
purchase price was sourced from cash reserves. The Company's borrowings were
not increased as a result of the purchase.
The Company believes its cash reserves and internally generated cash flow are
sufficient to meet its operating cash requirements for the foreseeable future.
Additionally, the Company completed the re-negotiation of its unsecured,
revolving credit line with NationsBank on November 18, 1998. Such credit line
was increased to $20 million and expires on November 18, 2001.
On December 14, 1998, the Company announced a 2 for 1 stock split in the form of
a 100% stock dividend payable on January 11, 1999 to shareholders of record as
of December 28, 1998. Basic and diluted earnings per share have been
retroactively adjusted to reflect the stock split.
YEAR 2000 COMPLIANCE
Many installed computer systems used by numerous companies to run a variety of
applications are not capable of processing date sensitive information that falls
beyond the twentieth century. Unless these computer systems are replaced or
upgraded prior to the year 2000 to process such date sensitive information, the
systems may experience severe operating difficulties or system failures.
Beginning in fiscal 1996, the Company initiated a program to replace and upgrade
its information systems to accommodate the Company's growth, improve
productivity and remediate any century compliance problems. This program should
be substantially completed by July 1999.
<PAGE> 11
Additionally, the Company has created a year 2000 project team to review and
test its information technology systems and non-information technology systems
and to resolve any century compliance issues that are found. The team also is
attempting to ensure that any replacements and upgrades to the Company's
information systems are century compliant before they are implemented. In this
regard, the team is continuing to work with third party vendors to assess the
year 2000 readiness of its information technology systems. The year 2000
readiness of the Company's information technology systems is, therefore,
partially dependent upon the accuracy of disclosures and representations made by
third party vendors, such as Oracle, PeopleSoft, MicroSoft, IBM and Dell
Computer. The Company anticipates that its testing and remediation program for
year 2000 issues with respect to mission critical systems should be
substantially completed by August 1999. Because most of the expenditures to
replace and upgrade the Company's internal systems have been made and will be
incurred in the ordinary course of business, (i.e. on a non-accelerated basis),
the Company does not anticipate that it will incur material incremental expenses
in connection with its year 2000 remedial efforts. As a result of the program to
replace and upgrade its internal systems, and the efforts of the year 2000
project team, the Company believes that its internal systems will be century
compliant prior to the year 2000. However, there is no assurance that the
Company will identify and resolve any and all century compliance problems with
its internal systems in a timely manner, that the expenses associated with such
remedial efforts will not be significant, or that such problems will not have a
material adverse effect on the Company's business, operating results and
financial condition.
In addition to assessing and testing internal business systems for year 2000
readiness issues, the Company is also in the process of reviewing its other
contingency plans for system failures that might arise in connection with the
millennium transition. The Company currently has certain disaster recovery
processes and procedures designed to allow it to continue critical business
operations in the event of a software or hardware failure, or the failure of
infrastructure services (e.g., electricity, telephone services, water transport,
internet services, etc.). These disaster recovery processes and procedures
generally involve manual "work arounds" and alternate computerized solutions.
The Company is in the process of reviewing the adequacy of these processes and
procedures in light of potential century compliance issues.
Based on a thorough review and testing of its software products and other
products, the Company believes that its current products are century compliant.
The Company began designating certain products as such in June 1997. The
Company's assessment of its current products is partially dependent upon the
accuracy of disclosures and representations concerning century compliance made
by its suppliers, such as MicroSoft, IBM and Dell Computer. However, many of the
Company's customers are using earlier versions of the Company's software
products and other products that may not be century compliant. The Company has
instituted programs to actively warn these customers of the risks associated
with using software and other products which may not be century compliant, and
to actively encourage such customers to migrate to the Company's current
products.
The Company's products are generally integrated with a customer's enterprise
system, which involves software products developed by other vendors. A customer
may mistakenly believe that century compliance problems with its enterprise
system are attributable to products provided by
<PAGE> 12
the Company. The Company may in the future be subject to claims based on century
compliance issues related to a customer's enterprise system or other products
provided by third parties, custom modifications to the Company's products made
by third parties, the Company's earlier products which may not be completely
century compliant, the Company's performance and warranty obligations under
customer contracts, or issues arising from the customer's unique application or
the integration of the Company's products with other products. The Company has
not been a party to any proceeding involving its products or services in
connection with century compliance issues, however, there is no assurance that
the Company will not in the future be required to defend its products or
services in such proceedings against claims of century compliance issues, and
any resulting liability of the Company for damages could have a material adverse
effect on the Company's business, operating results and financial condition.
Based on recent discussions with current and potential customers, the Company
believes that the timing of purchases and implementations of call processing
systems may be influenced by year 2000 readiness issues. Year 2000 readiness
issues might encourage some customers to purchase new call processing systems,
or upgrades to existing systems, in order to ensure that they have century
compliant current systems. On the other hand, some customers may have to spend
significant amounts to remedy year 2000 readiness issues with their internal
computer systems not related to their call processing systems. These
expenditures could cause customers to delay or forego purchases of other
computerized systems, such as call processing systems. Some customers may also
choose to delay the implementation or purchase of new or upgraded computer
systems, including call processing systems, in order to stabilize their internal
operations and reduce the risk of introducing new year 2000 issues. Accordingly,
the Company believes that year 2000 issues may simultaneously encourage certain
customers to purchase call processing systems prior to the year 2000, and may
cause other customers to delay their purchases of call processing systems. If
year 2000 concerns lead to a net reduction in the Company's revenues, such a
reduction could have a material adverse effect on the Company's business,
financial condition and results of operations.
FORWARD LOOKING STATEMENTS. This report on Form 10-Q includes
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements other than statements of historical facts included in
this report regarding the Company's financial position, business strategy, plans
and objectives of management of the Company for future operations, and industry
conditions, are forward-looking statements. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to be correct. In
addition to the year 2000 considerations and other factors discussed above, the
following significant factors, among others, sometimes have affected, and in the
future could affect, the Company's actual results and could cause such results
during fiscal 1999, and beyond, to differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company:
o The Company faces intense competition based on product capabilities and
experiences ever-increasing demands from its actual and prospective
customers for its products to be
<PAGE> 13
compatible with a variety of rapidly proliferating computing, telephony and
computer networking technologies and standards. The ultimate success of the
Company's products is dependent, to a large degree, on the Company
allocating its resources to developing and improving products compatible
with those technologies, standards and functionalities that ultimately
become widely accepted by the Company's actual and prospective customers.
The Company's success is also dependent, to a large degree, on the
Company's ability to implement arrangements with other vendors with
complementary product offerings to provide actual and prospective customers
greater functionality and to ensure that the Company's products are
compatible with the increased variety of technologies and standards.
o Continued availability of suitable non-proprietary computing platforms and
system operating software that are compatible with the Company's products.
o Certain of the components for the Company's products are available from
limited suppliers. The Company's operating results could be adversely
affected if the Company were unable to obtain such components in the
future.
o Increasing litigation with respect to the enforcement of patents,
copyrights and other intellectual property.
o The ability of the Company to retain its customer base and, in particular,
its more significant customers such as Siemens AG, an InterVoice
distributor, which accounted for over ten percent of the Company's total
sales during fiscal 1998, since such customers generally are not
contractually obligated to place further orders with the Company.
o Legislative and administrative changes and, in particular, changes
affecting the telecommunications industry, such as the Telecommunications
Act of 1996. While many industry analysts expect the Telecommunications Act
of 1996 ultimately to result in at least a temporary surge in the
procurement of telecommunications equipment and related software and other
products, there is no assurance that the Company can estimate with
sufficient accuracy those products which will ultimately be purchased, the
timing of any such purchases or the quantities to be purchased.
o Risks involved in the Company's international distribution and sales of
its products, including unexpected changes in regulatory requirements,
unexpected changes in exchange rates, the difficulty and expense of
maintaining foreign offices and distribution channels, tariffs and other
barriers to trade, difficulty in protecting intellectual property rights,
and foreign governmental regulations that may limit or restrict the sales
of call automation systems. Additionally, changes in foreign credit markets
and currency exchange rates may result in requests by many international
customers for extended payment terms and may have an adverse impact on the
Company's cash flow and its level of accounts receivable.
o The quantity and size of large sales (sales valued at approximately $1
million or more) during any fiscal quarter, which can cause wide variations
in the Company's sales and earnings on a quarter to quarter basis.
<PAGE> 14
o Ability of the Company to properly estimate costs under fixed price
contracts in developing application software and otherwise tailoring its
systems to customer-specific requests.
o The Company's ability to hire and retain, within the Company's
compensation parameters, qualified technical talent and outside contractors
in highly competitive markets for the services of such personnel.
o Mergers and acquisitions between companies in the telecommunications and
financial industries which could result in fewer companies purchasing the
Company's products for telecommunications and financial applications,
and/or delay such purchases by companies that are in the process of
reviewing their strategic alternatives in light of a merger or acquisition.
o Extreme price and volume trading volatility in the U.S. stock market,
which has had a substantial effect on the market prices of securities of
many high technology companies, frequently for reasons other than the
operating performance of such companies. These broad market fluctuations
could adversely affect the market price of the Company's common stock.
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERVOICE, INC.
Date: 1/14/99 By: /s/ ROB-ROY J. GRAHAM
---------------------
Rob-Roy J. Graham
Chief Financial Officer
(Chief Accounting Officer)
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
---------- ------------------------------------------------------
<S> <C>
10.1 Amended and Restated Loan Agreement dated as of
November 18, 1998 between the Company and NationsBank,
N.A.
10.2 Amended and Restated Promissory Note dated as of
November 18, 1998 between the Company and NationsBank,
N.A.
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 10.1
AMENDED AND RESTATED
LOAN AGREEMENT
This Amended and Restated Loan Agreement (this "Agreement") dated as of
November 18, 1998, by and between NationsBank, N.A. a national banking
association ("Bank"), successor-in-interest to NationsBank of Texas, N.A. and
Borrower (as defined below), amends and restates that certain Loan Agreement
dated as of November 3, 1997, by and between Bank and Borrower.
In consideration of the Loan described below and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, Bank and
Borrower agree as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any other terms defined
herein, the following terms shall have the meaning set forth with respect
thereto:
A. AFFILIATE: of any Person means any Person which, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power (i) to vote more than fifty percent (50%) of the
securities having ordinary voting power for the election of directors of the
controlled Person, or (ii) to direct or cause the direction of the management
and policies of the controlled Person, whether through the ownership of voting
shares or by contract or otherwise.
B. BORROWER: Intervoice, Inc., a Texas corporation.
C. BORROWER'S ADDRESS:
17811 Waterview Parkway
Dallas, TX 75252
D. CAPITAL EXPENDITURES: means the aggregate amount paid by Borrower
for expenditures which were capitalized in accordance with GAAP.
E. CHANGE IN CONTROL: means (a) the acquisition by a person (as such
term is used in Section 13)(d) and Section 14(d)(2) of the Exchange Act) or
related persons constituting a group (as such term is used in Rule 13d-5 under
the Exchange Act) of the beneficial ownership of issued and outstanding shares
of the voting stock of Borrower, the result of which acquisition is that such
person or such group possess in excess of 30% of the combined voting power of
all the issued and outstanding voting stock of Borrower, or (b) during any
period of eleven consecutive calendar months, individuals who were directors of
Borrower on the first day of such period shall cease to constitute a majority of
the Board of Directors of Borrower.
F. CLOSING DATE: means November 18, 1998.
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 1
<PAGE> 2
G. CURRENT MATURITIES: means, on any date of calculation, the current
portion of the Debt of Borrower.
H. DEBT: of any Person means as of any date, without duplication, (i)
all indebtedness, obligations and liabilities of such Person evidenced by bonds,
debentures, notes or other similar instruments, whether recourse or non-recourse
and whether secured or unsecured, (ii) all other indebtedness (including
capitalized lease obligations, but excluding operating leases, trade payables,
royalties payable, and accrued liabilities) of such Person on which interest
charges are customarily paid or accrued, (iii) all obligations for indebtedness
in respect of guarantees of another Person's Debt by such Person, (iv) the
unfunded or unreimbursed portion of all letters of credit not issued by Bank for
the account of such Person, and (v) all other indebtedness, obligations and
liabilities of such Person of any Debt, and (vi) all indebtedness, obligations
and liabilities of such Person as a general partner or joint venturer of a
partnership or joint venture.
I. DEFAULT: means any condition which with the giving of notice, the
passage of time, or both, would constitute an Event of Default.
J. DISTRIBUTIONS: by any Person, means (i) with respect to any stock
issued by such Person or any partnership or joint venture interest of such
Person, the retirement, redemption, repurchase, or other acquisition for value
of such stock, partnership or joint venture interest, (ii) the declaration or
payment (without duplication) of any dividend or other distribution, whether
monetary or in kind, on or with respect to any stock, partnership or joint
venture of any Person, and (iii) any other payment or distribution of assets of
a similar nature or in respect of an equity investment.
K. EBITDA: means, for any period, determined in accordance with GAAP on
a consolidated basis, for Borrower the sum of (i) Net Income plus (ii) Taxes (to
the extent that such amounts have been deducted in determining Net Income for
such period), plus (iii) Interest Expense (to the extent that such amounts have
been deducted in determining Net Income for such period), plus (iv) all amounts
attributable to depreciation and/or amortization of intangible and other assets
of Borrower (to the extent that such amounts have been deducted in determining
Net Income for such period), plus (or minus) (v) any other non-cash charges to
the extent deducted (or included) in determining Net Income for such period.
L. EVENT OF DEFAULT: has the meaning set forth in Section 6 of this
Agreement.
M. FIXED CHARGE COVERAGE RATIO: means, as of the end of any fiscal
quarter, the ratio of (i) EBITDA to (ii) the sum of (a) Interest Expense, plus
(b) Current Maturities, plus (c) Lease Expense, (d) plus Taxes, each as actually
earned or paid during the immediately preceding four (4) fiscal quarters.
N. FUNDED DEBT: means, as of any date, all Debt of Borrower and its
Subsidiaries which is evidenced by promissory notes, loan agreements, bonds or
similar instruments, as such amount is required to be shown on the consolidated
financial statements of Borrower, prepared in accordance with GAAP; provided,
such amount excludes (i) all other indebtedness (including obligations under
operating leases, trade payables, royalties payable, and accrued
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 2
<PAGE> 3
liabilities) of such Person on which interest charges are customarily paid or
accrued, (ii) all obligations for indebtedness in respect of guarantees of
another Person's debt by such Person, and (iii) the unfunded or unreimbursed
portion of all letters of credit not issued by Bank for the account of such
Person.
O. GUARANTY: means a continuing guaranty (whether one or more) of
payment of the Line of Credit, including, without limitation, principal,
interest and expenses under and pursuant to the Loan Documents, executed by a
guarantor in favor of Bank, as it may from time to time be renewed, extended,
amended or restated.
P. HAZARDOUS MATERIAL: has the meaning set forth in Section 4.H of this
Agreement.
Q. INTEREST EXPENSE: means, for any period, the interest expense which
is required to be shown as such on the financial statements of Borrower,
prepared in accordance with GAAP on a consolidated basis.
R. LEASE EXPENSE: means, for any period, the lease expense under all
Operating Leases of Borrower and its Subsidiaries.
S. LETTER OF CREDIT: has the meaning set forth in Section 2.A.
T. LETTER OF CREDIT EXPOSURE: means the aggregate amount of the
unfunded portion of each Letter of Credit outstanding at any time.
U. LEVERAGE RATIO: means, as of the end of any fiscal quarter, as
determined in accordance with GAAP the ratio of (i) total Funded Debt on the
date of determination to (ii) EBITDA for the immediately preceding four (4)
fiscal quarters.
V. LINE OF CREDIT: has the meaning set forth in Section 2.4 of this
Agreement.
W. LOAN: means any loan or loans made by Bank under the Line of Credit
as described in Section 2 hereof.
X. LOAN DOCUMENTS: means this Agreement and any and all promissory
notes executed by Borrower in favor of Bank and all other documents,
instruments, guarantees, certificates and agreements executed and/or delivered
by Borrower, any guarantor or third party in connection with any Loan.
Y. MATERIAL ADVERSE EFFECT: means an effect resulting from any
circumstance or event of whatever nature (including but not limited to the
filing of, or any adverse determination or development in, any litigation,
arbitration or governmental investigation or proceeding) which (i) could
reasonably be expected to have any adverse effect whatsoever upon the validity
or enforceability of any Loan Document, (ii) in the reasonable judgment of Bank
is considered to be material and adverse to the financial condition of Borrower
or any Subsidiary (on a consolidated
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 3
<PAGE> 4
basis) and it is reasonably probable that such circumstance or event will
result in a Default or Event of Default.
Z. NET INCOME: means, for any period, the net income after Taxes of
Borrower, determined in accordance with GAAP, on a consolidated basis.
AA. NET WORTH: means, as of any date, the shareholders' equity, as
shown on a balance sheet of Borrower, prepared in accordance with GAAP on a
consolidated basis.
BB. NOTE: means that certain Amended and Restated Promissory Note dated
as of October _, 1998, executed by Borrower and payable to the order of Bank in
the principal amount of $20,000,000.00.
CC. OPERATING LEASES: means any operating lease, as defined in the
Financial Accounting Standard Board Statement of Financial Accounting Standards
No. 13 dated November, 1976, or otherwise in accordance with GAAP.
DD. PERSON: means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
EE. SUBSIDIARY: means any entity for which Borrower owns fifty percent
(50%) or more of the equity interests (whether stock, partnership interests,
membership interests or any other ownership interests) in such entity.
FF. TAXES: means all taxes, assessments, filing or other fees, levies,
imposts, duties, deductions, withholdings, stamp taxes, interest equalization
taxes, capital transaction taxes, foreign exchange taxes or other charges of any
nature whatsoever, from time to time or at any time imposed by law or any
federal, state or local governmental agency. "Tax" means any one of the
foregoing.
2. LOANS.
A. LINE OF CREDIT. Bank hereby agrees subject to the terms and
conditions of this Agreement to make a line of credit (the "Line of Credit")
available to Borrower in an aggregate principal amount not to exceed Twenty
Million and No/Dollars ($20,000,000). The obligation to repay the Line of Credit
is evidenced by the Note and has a maturity date, repayment terms and interest
rate as set forth in the Note.
i. LOANS. Borrower shall be entitled, subject to the terms and
conditions of this Agreement, to obtain under the Line of Credit one or more
loans under which Borrower may from time to time repay and re-borrow; provided,
that, each Loan must be in an amount in excess of $250,000.
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 4
<PAGE> 5
ii. LETTER OF CREDIT SUBFEATURE. As a subfeature under the Line of
Credit, Bank may from time to time up to and including maturity, issue letters
of credit for the account of Borrower (each, a "Letter of Credit" and
collectively, "Letters of Credit"); provided, however, that the form and
substance of each Letter of Credit shall be subject to approval by Bank in its
sole discretion; and provided further that the aggregate undrawn amount of all
outstanding Letters of Credit plus the aggregate outstanding amount of all Loans
made under the Line of Credit of Credit shall not at any time exceed
$20,000,000. At no time shall the Letter of Credit Exposure exceed $1,000,000.
Each Letter of Credit shall be issued for a term of not more than twelve (12)
months, as designated by Borrower, provided, however, that no Letter of Credit
shall have an expiration date subsequent to the maturity of the Note. The
undrawn amount of all Letters of Credit plus any and all amounts paid by Bank in
connection with drawings under any Letter of Credit for which the Bank has not
been reimbursed shall be reserved under the Line of Credit and shall not be
available for advances thereunder. Each draft paid by Bank under a Letter of
Credit shall be deemed an advance under the Line of Credit and shall be repaid
in accordance with the terms of the Line of Credit; provided however, that if
the Line of Credit is not available for any reason whatsoever, at the time any
draft is paid by Bank, or if advances are not available under the Line of Credit
in such amount due to any limitation of borrowing set forth herein, then the
full amount of such drafts shall be immediately due and payable, together with
interest thereon, from the date such amount is paid by Bank to the date such
amount is fully repaid by Borrower, at that rate of interest applicable to
advances under the Line of Credit. In such event, Borrower agrees that Bank, at
Bank's sole discretion, may debit Borrower's deposit account with Bank for the
amount of such draft.
B. REQUESTS FOR LOANS AND LETTERS OF CREDIT. Bank's obligation to fund
any proposed Loan or issue any proposed Letter of Credit hereunder is
conditioned upon (i) no Default or Event of Default having occurred and be
continuing at the time of Bank's obligation to fund, (ii) Borrower's providing
Bank, prior to 10:00 a.m., Dallas, Texas time, on the date of any such proposed
Loan or Letter of Credit, a Request for Advance (herein so called) in the form
set forth on Exhibit A attached hereto and incorporated herein by reference
specifying its intention to borrow or reborrow such Loan or to have such Letter
of Credit issued hereunder, and (ii) upon satisfaction by Borrower of the terms
and conditions set forth in this Agreement and the Request for Advance. Bank
shall have the right to debit any amounts on account with Bank to pay any and
all interest past due under the Note.
C. GENERAL PROVISIONS AS TO PAYMENTS ON LOANS; APPLICATION OF PAYMENTS
OF LOANS. Borrower shall make each payment of principal and interest on the Note
and all fees payable hereunder or under any other Loan Document not later than
12:00 noon (Dallas time) on the date when due, in Federal or other funds
immediately available in Dallas, Texas, to Bank at Bank's address for payments
set forth above. All payments on the Note shall be applied against accrued but
unpaid interest and then against the principal portion of the Note; provided,
however, that, unless otherwise designated by Borrower or required by law,
prepayments and involuntary payments received by Bank and applied to principal
hereunder shall be applied first to the Prime Rate Portions (as defined in the
Note) (or that portion of LIBOR Rate Portions (as defined in the Note) not
subject to a prepayment penalty) and then to reduce LIBOR Rate Portions.
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 5
<PAGE> 6
D. FEES. As a condition to the Bank's entering into this Agreement,
Borrower hereby agrees to pay to Bank the following fees:
i. upfront fee in the amount of $25,000, which shall be due and
payable on the date of this Agreement.
ii. a usage fee (the "Usage Fee") in the amount of 0.1875% per annum
times the difference between (a) Twenty Million and No/100 Dollars
($20,000,000.00), minus (b) the average daily outstanding principal balance of
the Line of Credit for the preceding fiscal quarter. Borrower shall pay the
Usage Fee to Bank on the first day of each December, March, June and September,
during the term of the Line of Credit, commencing on December 1, 1998. Borrower
and Bank agree that the Usage Fee is being paid by Borrower in consideration of
the commitment of Bank to make the Line of Credit available to Borrower upon the
terms and conditions set forth in this Agreement.
iii. a letter of credit fee (the "Letter of Credit Fee") in the
amount of 0.75% per annum times the Letter of Credit Exposure. Borrower shall
pay the Letter of Credit Fee to Bank on the first day of each December, March,
June and September during the term of the Line of Credit, commencing on December
1, 1998.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants
to Bank as follows:
A. GOOD STANDING. Borrower is a Texas corporation, duly organized,
validly existing and in good standing under the laws of Texas and has the power
and authority to own its property and to carry on its business in each
jurisdiction in which Borrower does business.
B. AUTHORITY AND COMPLIANCE. Borrower has full power and authority to
execute and deliver the Loan Documents and to incur and perform the obligations
provided for therein, all of which have been duly authorized by all proper and
necessary action of the appropriate governing body of Borrower. No consent or
approval of any public authority or other third party is required as a condition
to the validity of any Loan Document, and Borrower is in compliance with all
laws and regulatory requirements to which it is subject.
C. BINDING AGREEMENT. This Agreement and the other Loan Documents
executed by Borrower constitute valid and legally binding obligations of
Borrower, enforceable in accordance with their terms.
D. LITIGATION. There is no proceeding involving Borrower pending or, to
the knowledge of Borrower, threatened before any court or governmental
authority, agency or arbitration authority, except as disclosed which could have
a material adverse effect on the consolidated financial statements of Borrower
to Bank in writing and acknowledged by Bank prior to the date of this Agreement.
E. NO CONFLICTING AGREEMENTS. There is no charter, bylaw, stock
provision,
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 6
<PAGE> 7
partnership agreement or other document pertaining to the organization, power or
authority of Borrower and no provision of any existing agreement, mortgage,
indenture or contract binding on Borrower or affecting its property, which would
conflict with or in any way prevent the execution, delivery or carrying out of
the terms of this Agreement and the other Loan Documents.
F. OWNERSHIP OF ASSETS. Borrower has good title to any collateral at
any time pledged, and such collateral is free and clear of liens, except those
granted to Bank and as disclosed to Bank in writing prior to the date of this
Agreement.
G. TAXES. All Taxes due and payable by Borrower have been paid or are
being contested in good faith by appropriate proceedings and Borrower has filed
all tax returns which it is required to file.
H. FINANCIAL STATEMENTS. The financial statements of Borrower
heretofore delivered to Bank have been prepared in accordance with GAAP applied
on a consistent basis throughout the period involved and fairly present
Borrower's consolidated financial condition as of the date or dates thereof, and
there has been no Material Adverse Change in Borrower's financial condition or
operations since May 31, 1998. All factual information furnished by Borrower to
Bank in connection with this Agreement and the other Loan Documents is and will
be accurate and complete on the date as of which such information is delivered
to Bank and is not and will not be incomplete by the omission of any material
fact necessary to make such information not misleading.
I. PLACE OF BUSINESS. Borrowor's chief executive office is at
Borrower's address.
J. SUBSIDIARIES. Borrower does not currently have any Subsidiaries
which are not currently in the process of liquidation, except as disclosed on
Schedule 3(J) attached.
K. ENVIRONMENTAL. The conduct of Borrower's business operations and the
condition of Borrower's property does not and will not violate any federal laws,
rules or ordinances for environmental protection, regulations of the
Environmental Protection Agency, any applicable local or state law, rule,
regulation or rule of common law or any judicial interpretation thereof relating
primarily to the environment or Hazardous Materials.
L. YEAR 2000 COMPLIANCE. Borrower has (i) initiated a review and
assessment of all areas within its and each of its Affiliates' business and
operations (including those affected by suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by Borrower or any of its Affiliates (or its suppliers and
vendors) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem
on a timely basis, and (iii) to date, implemented that plan in accordance with
that timetable. Borrower reasonably believes that all computer applications
(including those of its suppliers and vendors) that are material to its or any
of its Affiliates' business and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 7
<PAGE> 8
January 1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a
failure to do so could not reasonably be expected to have Material Adverse
Effect.
M. FISCAL YEAR END. Borrower's fiscal year end is the last day of
February, (the "Fiscal Year End").
N. CONTINUATION OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made under this Agreement shall be deemed to be made at and as of
the date hereof and at and as of the date of the advance of any Loan under the
Note. If Borrower forms any Subsidiary as permitted by this Agreement, each of
the representations and warranties herein made shall also apply to, and be
deemed made by, such Subsidiary from and after the formation of such Subsidiary.
4. AFFIRMATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower and each Subsidiary
(on a consolidated basis), if any, will, unless Bank consents otherwise in
writing (and without limiting any requirement of any other Loan Document):
A. FINANCIAL STATEMENTS AND OTHER INFORMATION. Maintain a system of
accounting satisfactory to Bank and in accordance with GAAP applied on a
consistent basis throughout the period involved, permit Bank's officers or
authorized representatives to visit and inspect Borrower's consolidated books of
account and other records at such reasonable times and as often as Bank may
desire, and pay the reasonable fees and disbursements of any accountants or
other agents of Bank selected by Bank for the foregoing purposes, if any such
accountant selected by Bank determines that any financial statements delivered
to Bank hereunder are false or misleading in any material respect. Unless
written notice of another location is given to Bank, Borrower's consolidated
books and records will be located at Borrower's Address. All financial
statements called for below shall be prepared in form and content acceptable to
Bank and by independent certified public accountants acceptable to Bank.
In addition, Borrower will:
i. Furnish to Bank audited financial statements of Borrower for each fiscal
year of Borrower, within ninety-seven (97) days after the close of each such
fiscal year, which financial statements shall be prepared on a consolidated and
consolidating basis; and shall include, without limitation a balance sheet and
statements of income and cash flow.
ii. Furnish to Bank quarterly financial statements (including a balance
sheet and profit and loss statement) of Borrower for each quarter of each fiscal
year of Borrower, within fifty-two (52) days after the close of each such
period, which financial statements shall be prepared on a consolidated basis and
consolidating basis, and shall include, without limitation, a balance sheet and
statements of income and cash flow.
iii. Within seven (7) days after filing thereof, a true, correct and
complete copy of each Form 10-K and Form 10-Q and each other report filed by or
on behalf of Borrower with the
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 8
<PAGE> 9
SEC; provided, that, if such filings include all of the required submissions
from (i) and (ii) above, such forms may be submitted in lieu of the submissions
required by (i) and (ii) above.
iv. Commencing on the date of this Agreement and continuing thereafter
until the Note is paid in full, furnish to Bank a compliance certificate for
(and executed by an authorized representative of) Borrower concurrently with and
dated as of the date of delivery of each of the financial statements as required
in paragraphs i and ii above, containing (a) a certification from an officer of
Borrower that to the best of such officer's knowledge and belief the financial
statements of even date are true and correct and that the Borrower is not in
default under the terms of this Agreement, and (b) computations and conclusions
in such detail as Bank may request, with respect to compliance with this
Agreement, and the other Loan Documents, including computations of all financial
covenants.
v. Furnish to Bank promptly such reasonable additional information, reports
and statements respecting the business operations and financial condition of
Borrower and its Subsidiaries from time to time, as Bank may reasonably request.
B. INSURANCE. Maintain insurance with responsible insurance companies
on such of its properties, in such amounts and against such risks as is
customarily maintained by similar businesses operating in the same vicinity,
specifically to include fire and extended coverage insurance covering all
material assets, business interruption insurance, workers compensation insurance
and liability insurance, all to be with such companies and in such amounts as
are satisfactory to Bank and providing for at least thirty (30) days prior
notice to Bank of any cancellation thereof. Borrower shall provide to Bank
satisfactory evidence of such insurance prior to the Closing Date, as well as on
each anniversary of the Closing Date.
C. SUBSIDIARIES. Immediately (i) notify Bank if any Subsidiary is
formed and (ii) require such Subsidiary to execute a Guaranty in form and
substance satisfactory to Bank securing the Line of Credit.
D. EXISTENCE AND COMPLIANCE. Maintain its existence, good standing and
qualification to do business, where required, and comply with all laws,
regulations and governmental requirements including, without limitation,
environmental laws applicable to it or to any of its property, business
operations and transactions.
E. ADVERSE CONDITIONS OR EVENTS. Promptly advise Bank in writing of (i)
any condition, event or act which comes to its attention that would or might
reasonably be expected to materially adversely affect Borrower's or any
Subsidiary's financial condition or operations or Bank's rights under the Loan
Documents, (ii) any litigation filed by or against Borrower or any Subsidiary
that could have a material adverse effect on Borrower's or such Subsidiary's
consolidated financial condition, (iii) any event that has occurred that would
constitute an event of default under any Loan Documents, and (iv) any uninsured
or partially uninsured loss through fire, theft, liability or property damage in
excess of an aggregate of $ 1,000,000.00.
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 9
<PAGE> 10
F. TAXES AND OTHER OBLIGATIONS. Pay all of its taxes, assessments and
other obligations, including, but not limited to taxes, costs or other expenses
arising out of this transaction, as the same become due and payable, except to
the extent the same an being contested in good faith by appropriate proceedings
in a diligent manner.
G. MAINTENANCE. Maintain all of its tangible property in good condition
and repair and make all necessary replacements thereof, and preserve and
maintain all licenses, trademarks, privileges, permits, franchises, certificates
and the like necessary for the operation of its business.
H. CONTINGENT LIABILITIES. Immediately inform Bank of any claim or
demand which could reasonably be expected to result in the actual or potential
incurrence of any contingent liability for which Borrower or any Subsidiary is
liable and which is equal to or in excess of $3,000,000, including the amount
and to whom the obligation is or may be payable.
I. ENVIRONMENTAL. Immediately advise Bank in writing of (i) any and all
enforcement, cleanup, remedial, removal, or other governmental or regulatory
actions instituted, completed or threatened pursuant to any applicable federal,
state, or local laws, ordinances or regulations relating to any Hazardous
Materials (as defined below) affecting Borrower's or any Subsidiary's business
operations; and (ii) all claims made or threatened by any third party against
Borrower or any Subsidiary relating to damages, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Materials. Borrower
shall immediately notify Bank of any remedial action taken by Borrower or any
Subsidiary with respect to Borrower's business operations. Neither Borrower nor
any Subsidiary will use or permit any other party to use any Hazardous Materials
at any of Borrower's places of business or at any other property owned by
Borrower or any Subsidiary except such materials as are incidental to Borrower's
or any Subsidiary's normal course of business, maintenance and repairs and which
are handled in compliance with all applicable environmental laws. Borrower
agrees to permit Bank, its agents, contractors and employees to enter and
inspect any of Borrower's or any Subsidiary's places of business or any other
property of Borrower or any Subsidiary at any reasonable times upon three (3)
days prior notice for the purposes of conducting an environmental investigation
and audit (including taking physical samples) to insure that Borrower or such
Subsidiary is complying with this covenant and Borrower and each Subsidiary
shall provide Bank, its agents, contractors, employees and representatives with
access to and copies of any and all data and documents relating to or dealing
with any Hazardous Materials used, generated, manufactured, stored or disposed
of by Borrower's business operations within five (5) days of the request
therefore. "Hazardous Material" shall have the meaning ascribed to the term
"hazardous substance" under the Superfund Amendments and Reauthorization Act of
1986.
J. YEAR 2000 COMPLIANCE. Borrower will promptly notify Bank in the
event Borrower discovers or determines that any computer application (including
those of its suppliers and vendors) that is material to its or any of its
Affiliates' business and operations will not be Year 2000 compliant on a timely
basis, except to the extent that such failure could not reasonably be expected
to have a Material Adverse Effect.
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 10
<PAGE> 11
5. NEGATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower and each Subsidiary,
if any, will not, without the prior written consent of Bank (and without
limiting any requirement of any other Loan Documents):
A. FINANCIAL CONDITIONS. Permit:
i. Borrower's Leverage Ratio to be more than 1.25 to 1.0 as of the
end of any fiscal quarter.
ii. Borrower's Fixed Charge Coverage Ratio to be less than 2.75 to
1.0 as of the end of any fiscal quarter.
iii. Borrower's Net Worth to be less than $50,000,000, plus
seventy-five percent (75%) of the Borrower's Net Income for the most
recent fiscal quarter.
B. TRANSFER OF ASSETS OR CONTROL. Enter into any merger or
consolidation unless permitted pursuant to the provisions of Section 5.I., or
sell, lease, assign or otherwise dispose of or transfer any of its material
assets or properties or any material interest therein, except, (i) in the normal
course of business (including sales, leases, assignments and transfers of assets
or properties to Subsidiaries of Borrower in the normal course of its business);
and (ii) equipment which is worthless, obsolete or not necessary for the
operation of its business, or which is replaced by equipment of equal
suitability. Additionally, Borrower will not transfer more than ten percent
(10%) of its total assets as designated in the Annual Report on Form 10-K for
the most recently completed fiscal year of Borrower ended February 28, to any
Subsidiary or Subsidiaries, in the aggregate, during the term of this agreement.
C . LIENS. (i) Grant, suffer or permit any contractual or
noncontractual lien on or security interest in its accounts receivable,
inventory, equipment, general intangibles, or any other property of Borrower or
any Subsidiary now owned or hereafter acquired, except for liens in favor of
Bank, statutory liens for taxes, statutory or contractual mechanic's and
materialsman's liens incurred in the ordinary course of business, other similar
statutory liens incurred in the ordinary course of business, including, without
limitation, liens in connection with workers compensation, unemployment
compensation, or similar legislation, liens in respect of capital leases
incurred in the ordinary course of business, liens secured by the Debt permitted
by, and as limited by, Section 5.H(ii), bank setoff rights in respect of deposit
accounts established in the ordinary course of business, or (ii) fail to
promptly pay when due all lawful claims, whether for labor, materials or
otherwise, or which are otherwise secured by the liens permitted by this Section
5.C.
D. DIVIDENDS AND DISTRIBUTIONS. Make any Distribution (other than
dividends payable in capital stock, including shares distributed in connection
with preferred shares purchase rights, of Borrower or as permitted by Section
5.J) on any shares of any class of its capital stock.
E. NO LOSSES. Not permit, as of the end of the immediately preceding
four (4) quarters, the Net Income plus non-cash, nonrecurring charges or minus
non-cash, nonrecurring gains
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 11
<PAGE> 12
of Borrower for such four fiscal quarter after any and all Distributions or any
other payments to be less than One and 00/100 Dollars ($1.00).
F. CHARACTER OF BUSINESS. Change the general character of Borrower's
business as conducted at the date hereof, or engage in any type of business not
reasonably related to Borrower's business as presently conducted.
G. CHANGE IN CONTROL. Permit a Change in Control.
H. DEBT. Incur any Debt (as defined below), except for (i) the Loans
and Letters of Credit evidenced by the Note; (ii) debt evidenced by one or more
promissory notes, provided, that (a) such debt shall in no case exceed
$30,000,000.00, (b) such debt shall be secured by existing real property assets
of Borrower (and any improvements thereon), and (c) such debt shall be without
recourse to Borrower or any Subsidiary; (iii) trade payables, royalty payments,
purchases under capitalized leases and purchase money indebtedness incurred in
the ordinary course of business; and (iv) Debt in respect of (a) taxes,
assessments, governmental charges or levies and claims for labor, materials and
supplies, (b) judgments, awards or settlements, which are in the aggregate less
than $3,000,000, and which have been in force for less than the applicable
appeal period so long as execution is not levied thereunder or in respect of
which Borrower shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall have
been obtained pending such appeal or review, (c) endorsements made in connection
with the deposits of items for credit or collection in the ordinary course of
business, and (d) unsecured indebtedness at any time in an amount not to exceed
$500,000 in the aggregate.
I. ACQUISITIONS. Neither Borrower nor any Subsidiary of Borrower shall,
without prior approval of Bank, consolidate or merge with or acquire any other
Person; provided, however, that (i) Borrower or any Subsidiary of Borrower may
consolidate with or merge into Borrower or any other Subsidiary of Borrower, and
(ii) Borrower or any Subsidiary of Borrower can make Acquisitions (as defined
below) so long as the aggregate amount of the Total Acquisition Price (as
defined below) for all Acquisitions by Borrower or any Subsidiary of Borrower
after the date hereof is less than $15,000,000.00. "Acquisition" means any
transaction pursuant to which Borrower or any of its Subsidiaries, (1) whether
by means of a capital contribution or purchase or other acquisition of stock or
other securities or other equity participation or interest, (a) acquires 50% or
more of the equity interest in any Person pursuant to a solicitation by Borrower
or such Subsidiary of tenders of equity securities of such Person, or through
one or more negotiated block, market, private or other transactions, or a
combination of any of the foregoing, or (b) makes any corporation a Subsidiary
of Borrower or such Subsidiary, or causes any corporation, other than a
Subsidiary of Borrower or such Subsidiary, to be merged into Borrower or such
Subsidiary (or agrees to be merged into any other corporation other than a
wholly-owned Subsidiary (excluding directors' qualifying shares) of Borrower or
such Subsidiary), or (2) purchases all or substantially all of the business or
assets of any Person or of any operating division of any Person. "Total
Acquisition Price" means, in connection with any Acquisition, the sum of all
cash to be paid at closing or in installments plus the value of any stock given
by Borrower in connection with such Acquisition which value is determined in
accordance with GAAP plus any other amounts paid or to be paid by Borrower or
any Subsidiary of Borrower as part of the purchase price in connection with such
Acquisition plus any
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 12
<PAGE> 13
Debt (other than trade payables incurred in the ordinary course of business)
assumed by Borrower or any Subsidiary in connection with such Acquisition;
provided, that such Total Acquisition Price shall not include incentive payments
based on the favorable performance of the acquired entity or assets after the
sale.
J. FISCAL YEAR END. Change Borrower's Fiscal Year End.
K. VIOLATE OTHER COVENANTS. Violate or fail to comply with any
covenants or agreements regarding other Debt which will or would with the
passage of time or upon demand cause the maturity of such other Debt or any
other Debt to be accelerated.
L. NEGATIVE PLEDGE AGREEMENTS. Other than as permitted by Section 5.H.,
enter into any agreement (excluding this Agreement or any other Loan Documents)
prohibiting the creation or perfection of any lien or security interest upon any
of its accounts receivable, inventory or other assets, whether now owned or
hereinafter acquired.
6. Events of Default. The term "Event of Default" as used in this
Agreement, shall mean any one of the following:
(a) The failure of Borrower to pay when due any principal of or
interest on the Note, or any fees, charges or any other amounts payable to Bank
hereunder or under the Note or other Loan Documents;
(b) The failure, refusal or neglect of Borrower to observe, perform or
comply with any covenant or agreement contained in Section 4.A., Section 5.A. or
Section 5.E. of this Agreement, and the continuation of such failure for a
period of five (5) days after Bank has given Borrower written notice thereof;
(c) The failure, refusal or neglect of Borrower or any Subsidiary to
observe, perform or comply with any covenant or agreement (other than those
addressed in (b) above) contained in this Agreement, or any of the other Loan
Documents, and the continuation of such failure for a period of thirty (30) days
after Bank has given Borrower written notice thereof;
(d) Any representation, warranty, certification or statement made by
Borrower (either for itself or for any other Person) or any Subsidiary in this
Agreement or by Borrower or any other Person on behalf of Borrower or any
Subsidiary in any certificate, financial statement or other document delivered
pursuant to this Agreement or any other Loan Document shall prove to have been
untrue in any material respect when made or deemed to have been made, and,
(provided, that Borrower did not know nor should have known in the ordinary
course that such representation, warranty, certification or statement to be
materially incorrect) the continuation of the state of facts causing such
representation, warranty, certification or statement to be materially incorrect
for a period of thirty (30) days after Bank has given Borrower written notice
thereof;
(e) The filing or commencement by Borrower or any Subsidiary of a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 13
<PAGE> 14
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect, or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or Borrower or any Subsidiary shall consent to any such relief or to
the appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize any of
the foregoing;
(f) The filing or commencement of an involuntary case or other
proceeding against Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of sixty (60) days; or an order for relief shall be entered against
Borrower or any Subsidiary under the federal bankruptcy laws as now or hereafter
in effect;
(g) The liquidation or dissolution of Borrower or any Subsidiary
(unless substantially all assets of such Subsidiary are transferred to Borrower
or another Subsidiary of Borrower); or
(h) A Material Adverse Change occurs in the financial condition of
Borrower or any Subsidiary (on a consolidated basis), and the continuation of
such Material Adverse Change for a period of thirty (30) days after Bank has
given Borrower written notice thereof.
7. REMEDIES UPON DEFAULT. If an event of default shall occur, Bank shall
have all rights, powers and remedies available under each of the Loan Documents
as well as all rights and remedies available at law or in equity.
8. NOTICES. All notices, requests or demands which any party is required
or may desire to give to any other party under any provision of this Agreement
must be in writing delivered to the other party at the following address:
BORROWER:
Intervoice, Inc.
17811 Waterview Parkway
Dallas, TX 75252
Attn: Chief Financial Officer
BANK:
NationsBank, N.A.
Attn: Commercial Lending
901 Main Street, 7th Floor
P.O. BOX 831000
Dallas, TX 75283-1000
Attn: Matt Bryant
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 14
<PAGE> 15
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or made
as follows:
A. If sent by mail, upon the earlier of the date of receipt or five (5)
days after deposit in the U.S. Mail, first class postage prepaid;
B. If sent by any other means, upon delivery.
9. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower agrees to pay all
out-of-pocket expenses of Bank in connection with the enforcement and the
collection of the Note.
10. MISCELLANEOUS. Borrower and Bank further covenant and agree as follows,
without limiting any requirement of any other Loan Document:
A. CUMULATIVE RIGHTS AND NO WAIVER. Each and every right granted to
Bank under any Loan Document, or allowed it by law or equity shall be cumulative
of each other and may be exercised in addition to any and all other rights of
Bank, and no delay in exercising any right shall operate as a waiver thereof,
nor shall any single or partial exercise by Bank of any right preclude any other
or future exercise thereof or the exercise of any other right. Borrower
expressly waives any presentment, demand, protest or other notice of any kind,
including but not limited to notice of intent to accelerate and notice of
acceleration, except as set forth in Section 6. No notice to or demand on
Borrower in any case shall, of itself, entitle Borrower to any other or future
notice or demand in similar or other circumstances.
B. APPLICABLE LAW. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of Texas and applicable United States federal law.
C. AMENDMENT. No modification, consent, amendment or waiver of any
provision of this Agreement, nor consent to any departure by Borrower therefrom,
shall be effective unless the same shall be in writing and signed by an officer
of Bank, and then shall be effective only in the specified instance and for the
purpose for which given. This Agreement is binding upon Borrower, its successors
and assigns, and inures to the benefit of Bank, its successors and assigns;
however, no assignment or other transfer of Borrower's rights or obligations
hereunder shall be made or be effective without Bank's prior written consent,
nor shall it relieve Borrower of any obligations hereunder. There is no third
party beneficiary of this Agreement.
D. DOCUMENTS. All documents, certificates and other items required
under this Agreement to be executed and/or delivered to Bank shall be in form
and content satisfactory to Bank and its counsel.
E. PARTIAL INVALIDITY. The unenforceability or invalidity of any
provision of this Agreement shall not affect the enforceability or validity of
any other provision herein and the invalidity or unenforceability of any
provision of any Loan Document to any Person or circumstance
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 15
<PAGE> 16
shall not affect the enforceability or validity of such provision as it may
apply to other Persons or circumstances.
F. INDEMNIFICATION. Borrower agrees to indemnify Bank and hold Bank
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind (including, without limitation, all fees and disbursements
of counsel for Bank in connection with any investigative, administrative or
judicial proceeding, whether or not Bank shall be designated a party thereto)
which may be incurred by Bank, relating to or arising out of this Agreement or
any actual or proposed use of proceeds of the Loan or Loans under the Note;
PROVIDED THAT BANK SHALL NOT HAVE THE RIGHT TO BE INDEMNIFIED HEREUNDER FOR ITS
OWN AFFIRMATIVE ACTS, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IT BEING THE
INTENTION HEREBY THAT BANK SHALL BE INDEMNIFIED FOR THE CONSEQUENCES OF ITS
NEGLIGENCE (WHETHER SOLE, CONTRIBUTORY, COMPARATIVE OR OTHERWISE).
G. SURVIVABILITY. All covenants, agreements, representations and
warranties made herein or in the Loan Documents shall survive the making of the
Line of Credit and shall continue in full force and effect so long as the Line
of Credit is outstanding or the obligation of Bank to make any advances under
the Line of Credit or each Letter of Credit shall not have expired.
H. ACCOUNTING TERMS: all accounting terms not specifically defined or
specified herein shall have the meanings generally attributed to such terms
under generally accepted accounting principles ("GAAP"), as in effect from time
to time, consistently applied, with respect to the financial statements
referenced in Section 3.H. hereof.
11. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS
AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF
BORROWER'S DOMICILE. AT TIME OF THE EXECUTION OF THIS INSTRUMENT, AGREEMENT OR
DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 16
<PAGE> 17
FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION
WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE
DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF
CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN
ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL
BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS ARBITRATION PROVISION; OR
(II) BE A WAIVER BY THE BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC.
91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE
BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO)
SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR
(C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT
LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. THE BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO INSTRUMENT,
AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE
INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
12. NO ORAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 17
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal by their duly authorized representatives as of the date
first above written.
BANK: BORROWER:
NATIONSBANK, N.A., INTERVOICE, INC.,
a national banking association, a Texas corporation
successor-in-interest to
NationsBank of Texas, N.A.
By: /s/ MATT BRYANT By: /s/ ROB-ROY GRAHAM
------------------------------------ ---------------------------------
Matt Bryant, Rob-Roy Graham,
Chief Financial Officer
-----------------------------------
AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 18
<PAGE> 19
EXHIBIT A
REQUEST FOR ADVANCE
This Request for Advance is being delivered by INTERVOICE, INC., a
Texas corporation ("Borrower"), as borrower under that certain Loan Agreement
(the "Loan Agreement"), dated as of _____________, executed by Borrower and
NationsBank, N.A., a national banking association ("Bank"). Unless defined
herein or indicated otherwise, each capitalized term used herein shall have the
meaning given to such term in the Loan Agreement.
1. Borrower hereby requests a Loan in an amount equal to $_________.
Borrower represents and warrants to Bank that the aggregate Loans plus any
Letter of Credit requested herein will not cause the aggregate amount of loans
outstanding plus the Letter of Credit Exposure to exceed the amount which
Borrower is entitled to borrow pursuant to Section 2 (or any other provisions)
of the Loan Agreement.
2. Borrower requests that of the Loan requested hereby, $___________
bear interest based at the Applicable Prime Rate (as defined in the Note) and
$___________ bear interest based at the Applicable Adjusted LIBOR Rate (as
defined in the Note). With respect to the LIBOR Rate Portion (as defined in the
Note), the Interest Period (as defined in the Note) shall be ___ days, with the
Effective Date (as defined in the Note) being ______________________.
3. Borrower hereby certifies, represents and warrants to Bank that:
(a) This Request for Advance has been duly authorized by all
necessary action on the part of Borrower.
(b) The representations and warranties contained in the Loan
Agreement and the other Loan Documents remain true and correct on and
as of the date hereof (except to the extent any representation or
warranty is made as of a particular date) with the same force and
effect as though made on the date hereof.
(c) No Default or Event of Default has occurred and is continuing,
and the making of the Loan or issuing of the Letter of Credit requested
hereby shall not constitute a Default or Event of Default.
(d) Borrower has performed and complied with all agreements and
conditions in the Loan Agreement and the other Loan Documents required
to be performed or complied with by Borrower on or prior to the date
hereof.
(e) The proceeds of the Loan or Letter of Credit herein requested
will not be used in violation of any provision of the Loan Agreement or
any other Loan Document.
4. Borrower acknowledges and agrees that the making of the Loan or the
issuance of the Letter of Credit requested hereby shall not constitute a waiver
of any condition precedent to the
EXHIBIT A TO AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 1
<PAGE> 20
obligation of Bank to make further Loans under the Note or arrange for the
issuance of additional Letters of Credit.
EXECUTED as of ___________, 19___.
INTERVOICE, INC., a Texas corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
EXHIBIT A TO AMENDED AND RESTATED LOAN AGREEMENT (Intervoice) Page 2
<PAGE> 1
EXHIBIT 10.2
AMENDED AND RESTATED PROMISSORY NOTE
$20,000,000.00 Dallas, Texas November 18, 1998
FOR VALUE RECEIVED, INTERVOICE, INC., a Texas corporation ("Maker"),
hereby promises to pay to the order of NATIONSBANK, N.A., a national banking
association ("Lender"), at the offices of Lender at 901 Main Street, 7th Floor,
Dallas, Texas 75202, the principal sum of Twenty Million and No/100 Dollars
($20,000,000.00) (or the unpaid balance of all principal advanced against this
Note, if that amount is less), on or before November 18, 2001 (the "Maturity
Date"), together with interest on the unpaid principal balance of this Note from
day to day outstanding, as hereinafter provided and as provided in the Loan
Agreement (as defined below). This Note is revolving and Maker may, from time to
time, borrow, repay and re-borrow. Subject to the provisions of this Note,
including, without limitation, Section 2(i) hereof, Maker shall be entitled to
prepay this Note in full or in part at any time without penalty.
This Note has been executed and delivered pursuant to the terms of that
certain Amended and Restated Loan Agreement (as the same may be modified,
amended, supplemented, extended or restated from time to time, the "Loan
Agreement") dated as of November 18, 1998, executed by and between Maker and
Lender and is the promissory note defined therein as the "Note", the terms and
provisions of the Loan Agreement related to this Note being incorporated herein
by reference for all purposes. Each capitalized term not expressly defined
herein shall have the meaning given to such term under the Loan Agreement. The
terms of the Loan Agreement shall govern in the case of any inconsistency
between such terms and the terms hereof.
Any holder shall be entitled to all benefits and remedies and security
set forth in the Loan Agreement and all the other Loan Documents.
1. Definitions. As used herein the following terms shall have the
respective meanings set forth below:
(a) "Adjusted LIBOR Rate" shall mean on the applicable Effective Date
(defined below), with respect to a LIBOR Rate Portion, a rate per annum equal to
the sum of (A) the quotient of (i) the LIBOR Rate on the applicable Effective
Date, divided by (ii) the remainder of 1.00 minus the LIBOR Reserve Requirement
on the applicable Effective Date, plus (B) the FDIC Percentage in effect on the
applicable Effective Date.
(b) "Applicable Adjusted LIBOR Rate" shall mean the sum of the Adjusted
LIBOR Rate, plus three-quarters of one percent (.75%).
(c) "Applicable Prime Rate" shall mean the greater of (i) the Prime
Rate, or (ii) the Federal Funds Rate plus one-half of one percent (.5%).
PROMISSORY NOTE (Intervoice) Page 1
<PAGE> 2
(d) "Applicable Rate" shall mean the rate of interest applicable to the
Loan or portions thereof pursuant to the provisions of Section 2.
(e) "Business Day" means (i) for all purposes other than as covered by
clause (ii) of this definition, any day of the week, other than Saturday, Sunday
or other day Lender is required or authorized by law or executive order to
close, and (ii) with respect to all requests, notices and determinations in
connection with LIBOR Rate Portions, a day which is a Business Day described in
clause (i) of this definition and which is a day for trading by and between
banks for Dollar deposits in the London interbank market.
(f) "Effective Date" has the meaning set forth in Section 2.
(g) "FDIC Percentage" shall mean, on any day, the net assessment rate
(expressed as a percentage rounded to the next highest .01 of 1%) which is in
effect on such day (under the regulations of the Federal Deposit Insurance
Corporation or any successor) for determining the assessments paid by Lender to
the Federal Deposit Insurance Corporation (or any successor) for insuring
Eurocurrency deposits made in dollars at Lender's principal offices in Dallas,
Texas. Each determination of said percentage made by Lender shall, in the
absence of manifest error, be binding and conclusive.
(h) "Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provide that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
Lender on such day on such transactions as determined by Lender.
(i) "Interest Adjustment Date" shall mean the earlier of either the
last day of an Interest Period or the Termination Date.
(j) "Interest Period" shall mean, with respect to a LIBOR Rate Portion,
a period selected by Maker of 30, 60, 90 or 180 days, commencing on the
Effective Date of any LIBOR Rate Portion; provided that, unless the Loan is
renewed and extended prior to the maturity date of this Note, each Interest
Period ending on a date later than the Termination Date shall be deemed to end
on the Termination Date.
(k) "LIBOR Rate" shall mean, with respect to a LIBOR Rate Portion for
the Interest Period applicable thereto, the rate per annum (rounded upward to
the next higher 1/100 of 1.0%) appearing on Telerate page 3750 (or any successor
page) as the London interbank offered rate for deposits in U.S. Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such
PROMISSORY NOTE (Intervoice) Page 2
<PAGE> 3
rate is not available, the term "LIBOR Rate" shall mean, for any LIBOR Rate
Portion for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page
as the London interbank offered rate for deposits in U.S. Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
(1) "LIBOR Rate Portion" shall mean that portion or those portions of
the Loan which bear interest computed with reference to the LIBOR Rate.
(m) "LIBOR Reserve Requirement" shall mean, on any day, that percentage
(expressed as a decimal fraction) which is in effect on such date, as provided
by the Federal Reserve System for determining the maximum reserve requirements
generally applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to Lender (including, without limitation,
basic supplemental, marginal and emergency reserves) under Regulation D with
respect to "Eurocurrency liabilities" as currently defined in Regulation D, or
under any similar or successor regulation with respect to Eurocurrency
liabilities or Eurocurrency funding (or other category of liabilities which
includes deposits by reference to which the interest rate on a LIBOR Rate
Portion is determined or any category of extensions of credit which includes
loans by a non-United States office of Lender to United States residents). Each
determination by Lender of the LIBOR Reserve Requirement, shall, in the absence
of manifest error, be conclusive and binding.
(n) "Loan" shall mean the principal indebtedness evidenced by this Note
outstanding from time to time.
(o) "Loan Documents" shall have the meaning set forth in the Loan
Agreement.
(p) "Maturity Date" has the meaning set forth in the first paragraph of
this Note.
(q) "Maximum Rate" as used in this Note means the maximum nonusurious
rate of interest per annum permitted by whichever of applicable United States
federal law or Texas law permits the higher interest rate, including to the
extent permitted by applicable law, any amendments thereof hereafter or any new
law hereafter coming into effect to the extent a higher Maximum Rate is
permitted thereby. To the extent, if any, that Chapter 303 ("Chapter 303") of
the Texas Finance Code, as amended establishes the Maximum Rate, the Maximum
Rate shall be the "weekly ceiling" (as defined in Chapter 303) in effect from
time to time. The Maximum Rate shall be applied by taking into account all
amounts characterized by applicable law as interest on the debt evidenced by
this Note, so that the aggregate of all interest does not exceed the maximum
nonusurious amount permitted by applicable law.
(r) "Past Due Rate" as used in this Note means, on any day, a rate per
annum equal to the Prime Rate plus two percent (2.0%) per annum computed using
the 1/360 method described below.
PROMISSORY NOTE (Intervoice) Page 3
<PAGE> 4
(s) "Prime Rate" shall mean for each Prime Rate Portion the rate per
annum most recently established by Lender as its "prime rate". The Prime Rate is
set by Lender as a general reference rate of interest, taking into account such
factors as Lender may deem appropriate, it being understood that it is not
necessarily the lowest or best rate actually charged to any customer or a
favored rate, that it may not correspond to any future increases or decreases of
interest rates charged by other lenders, or market rates in general, and Lender
may make various commercial or other loans at rates of interest having no
relationship to such rate.
(t) "Prime Rate Portion" shall mean that portion of the Loan which will
bear interest computed with reference to the Prime Rate.
(u) "Regulatory Change" shall mean any change in applicable law or
regulation, or in the interpretation thereof by any governmental authority
charged with the administration thereof.
(v) "Termination Date" shall mean the final maturity date of this Note
on which all outstanding principal and accrued interest hereunder is due and
payable (as such maturity date may be renewed or extended, or accelerated under
the terms of this Note or otherwise).
2. Payments.
(a) Principal of this Note shall be due and payable in full on the
Maturity Date, together with all accrued and unpaid interest hereon.
(b) Interest on the Loan shall accrue at a rate per annum equal to the
lesser of (i) at Maker's option, the Applicable Prime Rate, or the Applicable
Adjusted LIBOR Rate, subject, however, to the provisions of this Section 2, or
(ii) the Maximum Rate; provided, however, if at any time the Applicable Rate
exceeds the Maximum Rate, resulting in the charging of interest hereunder to be
limited to the Maximum Rate, then any subsequent reduction in the Applicable
Rate shall not reduce the rate of interest below the Maximum Rate until the
total amount of interest accrued on the indebtedness evidenced hereby equals the
amount of interest which would have accrued on such indebtedness if the
Applicable Rate had at all times been in effect. Interest on this Note shall be
calculated at a daily rate equal to 1/360 of the annual percentage rate which
this Note bears, subject to the provisions hereof limiting interest to the
maximum permitted by applicable law. Without notice to Maker or anyone else, the
Prime Rate and the Maximum Rate shall each automatically fluctuate upward and
downward as and in the amount by which the Lender's prime rate and such maximum
nonusurious rate of interest permitted by applicable law, respectively,
fluctuate, subject always to limitations contained in this Note.
(c) Interest hereon shall be due and payable quarterly as it accrues,
commencing December 1, 1998, and continuing on the first day of each March,
June, September and December thereafter until the Maturity Date, when all
accrued but unpaid interest shall be due and payable in full.
PROMISSORY NOTE (Intervoice) Page 4
<PAGE> 5
(d) Upon at least three (3) business days prior written notice from
Maker to Lender ("Minimum Notice Period"), Maker may, on any Interest
Adjustment Date (other than the Termination Date), convert amounts of not less
than $100,000.00 (or more) of any LIBOR Rate Portion into a Prime Rate Portion
with interest accruing thereon, with reference to the Applicable Prime Rate, as
provided in paragraph (b) above in this Section 2.
(e) Upon satisfaction of the Minimum Notice Period, and subject to the
conditions provided in this Note, Maker may, on any date prior to the
Termination Date, convert amounts of not less than $100,000.00 (or more) of any
Prime Rate Portion into a LIBOR Rate Portion with interest accruing thereon with
reference to the Applicable Adjusted LIBOR Rate as provided in paragraph (b)
above in this Section 2, for the Interest Period selected in such notice.
(f) To the extent Maker has not made an effective election under and in
accordance with subparagraphs (c) or (d) above in this Section 2, the Applicable
Rate shall be the rate specified pursuant to the provisions contained herein for
a Prime Rate Portion.
(g) Each notice of LIBOR Rate Portion election by Maker must satisfy
the Minimum Notice Period and shall include the following: (i) Maker's election
of the Applicable Adjusted LIBOR Rate; (ii) Maker's choice of an Interest Period
during which the Applicable Adjusted LIBOR Rate will apply; (iii) Maker's
election of the "Effective Date" (herein so called) on which the LIBOR Rate
Portion shall begin; and (iv) the amount of outstanding loan principal which
shall not be less than $100,000.00 (or more) to which the Applicable Adjusted
LIBOR Rate shall apply.
(h) Maker's election to convert to the Applicable Adjusted LIBOR Rate
is subject to the following conditions: (i) the Interest Period shall be limited
to a period commencing on the Effective Date and ending on a date 30, 60, 90 or
180 days later elected by Maker in its notice to Lender; (ii) Maker's written
notice of an election shall be received by Lender in time to satisfy the Minimum
Notice Period; (iii) the last day of the Interest Period will not be subsequent
in time to the Termination Date; (iv) in the case of a continuation of an
Interest Period, the Interest Period applicable after such continuation shall
commence on the last day of the preceding Interest Period; (v) no LIBOR Rate
election shall be made if Lender determines by reason of circumstances affecting
the interbank Eurodollar market that either adequate or reasonable means do not
exist for ascertaining the Adjusted LIBOR Rate for any Interest Period, or it
becomes impracticable for Lender to obtain funds by purchasing U.S. dollars in
the interbank Eurodollar market, or if Lender determines that the Adjusted LIBOR
Rate will not adequately or fairly reflect the costs to Lender of maintaining
the applicable LIBOR Rate Portion at such rate, or if as a result of any
Regulatory Change it shall become unlawful or impossible for Lender to maintain
any such LIBOR Rate Portion; (vi) there shall never be more than seven (7) LIBOR
Rate Portions, in the aggregate, in effect at any one time hereunder; and (vii)
no LIBOR Rate election may be made after the occurrence and during the
continuance of a Default or an Event of Default.
(i) Maker shall indemnify Lender against any loss or expense which
Lender may, as a consequence of Maker's failure to make a payment on the date
such payment is due hereunder or the payment, prepayment or conversion of any
LIBOR Rate Portion hereunder on a day other than an
PROMISSORY NOTE (Intervoice) Page 5
<PAGE> 6
Interest Adjustment Date, sustain or incur in liquidating or employing deposits
from third parties acquired to effect, fund or maintain any such LIBOR Rate
Portion or any part thereof. Such loss or expense shall include, without
limitation, (i) the interest which, but for such failure, payment, prepayment or
conversion, Lender would have earned in respect of such LIBOR Rate Portion so
paid, for the remainder of the Interest Period applicable to such LIBOR Rate
Portion, reduced, if Lender is able to redeposit such principal amount so paid
for the balance of such Interest Period, by the interest earned by Lender as a
result of so redepositing such principal amount, plus (ii) any expenses or
penalty incurred by Lender on redepositing such principal amount. In the event
any such loss or expense is incurred by Lender, Lender shall furnish Maker with
a certificate detailing the basis upon which such loss or expense is computed.
Any such certificate shall establish the amount of such expense or loss for
purposes of this paragraph, in the absence of manifest error in calculation;
provided, however, that upon the discovery of any error, appropriate adjustments
shall be made between Lender and Maker.
(j) Maker shall also indemnify Lender against and reimburse Lender for
increased costs to Lender (except taxes based on Lender's income), as a result
of any Regulatory Change, in the maintaining of any LIBOR Rate Portion. Lender
shall give Maker written notice of such costs within ninety (90) days of its
implementation and/or compliance with any such Regulatory Change, and such costs
shall be reimbursed to Lender prior to the earlier of (i) the Termination Date
or (ii) one hundred twenty (120) days following written notice thereof from
Lender to Maker. All payments made pursuant to this paragraph shall be made free
and clear, without reduction for, or account of, any present or future taxes or
other levies of any nature, excluding net income and franchise taxes.
(k) After default, or maturity, past due principal, and past-due
interest to the extent permitted by law, shall bear interest at the Maximum Rate
or, if no Maximum Rate is established by applicable law, then at the Past Due
Rate.
3. Default. The occurrence of a Default or an Event of Default, under
and as defined in the Loan Agreement, shall constitute, respectively, a Default
or an Event of Default under this Note.
4. Remedies.
(a) All Remedies Available. Upon the occurrence and during the
continuation of an Event of Default, the holder hereof shall have the right to
declare the entire unpaid principal balance of, and all accrued unpaid interest
on, this Note at once due and payable (and upon such declaration, the same shall
be at once due and payable), to foreclose any and all liens and security
interests securing payment hereof, to offset against this Note any sum or sums
owed by it to Maker, and to exercise any of its other rights, powers and
remedies under this Note, under the Loan Agreement or any other Loan Document,
or at law or in equity.
(b) No Waiver. Neither the failure by the holder hereof to exercise,
nor delay by the holder hereof in exercising, the right to accelerate the
maturity of this Note or any other right, power or remedy upon any Default or
Event of Default shall be construed as a waiver of such Default
PROMISSORY NOTE (Intervoice) Page 6
<PAGE> 7
or Event of Default or as a waiver of the right to exercise any such right,
power or remedy at any time. No single or partial exercise by the holder hereof
of any right, power or remedy shall exhaust the same or shall preclude any other
or further exercise thereof, and every such right, power or remedy may be
exercised at any time and from time to time. All rights and remedies provided
for in this Note and in any other Loan Document are cumulative of each other and
of any and all other rights and remedies existing at law or in equity, and the
holder hereof shall, in addition to the rights and remedies provided herein or
in any other Loan Document, be entitled to avail itself of all such other rights
and remedies as may now or hereafter exist at law or in equity for the
collection of the indebtedness owing hereunder, and the resort to any right or
remedy provided for hereunder or under any such other Loan Document or provided
for by law or in equity shall not prevent the concurrent or subsequent
employment of any other appropriate rights or remedies. Without limiting the
generality of the foregoing provisions, the acceptance by the holder hereof from
time to time of any payment under this Note which is past due or which is less
than the payment in full of all amounts due and payable at the time of such
payment, shall not (i) constitute a waiver of or impair or extinguish the rights
of the holder hereof to accelerate the maturity of this Note or to exercise any
other right, power or remedy at the time or at any subsequent time, or nullify
any prior exercise of any such right, power or remedy, or (ii) constitute a
waiver of the requirement of punctual payment and performance, or a novation in
any respect.
5. Usury Savings Provisions.
(a) General Limitation. Notwithstanding anything herein or in any
other Loan Documents, expressed or implied, to the contrary, in no event shall
any interest rate charged hereunder or under any of the other Loan Documents, or
any interest contracted for, collected or received by Lender or any holder
hereof, exceed the Maximum Lawful Rate.
(b) Intent of Parties. It is expressly stipulated and agreed to be
the intent of Maker and Lender at all times to comply with applicable law
governing the maximum rate or amount of interest payable on or in connection
with this Note. If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under this Note or under any of the other
Loan Documents, or contracted for, charged, taken, reserved or received with
respect to this Note, or if acceleration of the maturity of this Note, any
prepayment by Maker, or any other circumstance whatsoever, results in Lender
having been paid any interest in excess of that permitted by applicable law,
then it is the express intent of Maker and Lender that all excess amounts
theretofore collected by Lender be credited on the principal balance of this
Note (or, if this Note has been or would thereby be paid in full, refunded to
Maker), and the provisions of this Note and the other applicable Loan Documents
immediately be deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder and thereunder.
The right to accelerate the maturity of this Note does not include the right to
accelerate any interest which has not otherwise accrued on the date of such
acceleration, and Lender does not intend to collect any unearned interest in the
event of acceleration. All sums paid or agreed to be paid to Lender for the use,
forbearance or detention of the indebtedness evidenced hereby or by any other
Loan Document shall, to the extent permitted by applicable law, be amortized,
PROMISSORY NOTE (Intervoice) Page 7
<PAGE> 8
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Lawful Rate. The term "applicable law"
as used herein shall mean the laws of the State of Texas, or any applicable
United States federal law to the extent that it permits Lender to contract for,
charge, take, reserve or receive a greater amount of interest than under Texas
law. The provisions of this paragraph shall control all agreements between Maker
and Lender.
6. General Provisions.
(a) Business Days. Whenever any payment shall be due under this Note
on a day which is not a Business Day, the date on which such payment is due
shall be extended to the next succeeding Business Day, and such extension of
time shall be included in the computation of the amount of interest then
payable.
(b) Manner of Payment. The manner in which payments are to be made
on this Note shall be governed by the provisions hereof and the Loan Agreement.
(c) Application of Payments. All payments made on this Note shall be
applied in accordance with the Loan Agreement. Nothing herein shall limit or
impair any rights of any holder hereof to apply as provided in the Loan
Documents any past due payments, any proceeds from the disposition of any
collateral by foreclosure or other collections after default.
(d) Costs of Collection. If any holder of this Note retains an
attorney in connection with any default or at maturity or to collect, enforce or
defend this Note or any other Loan Document in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any holder of
this Note in connection with this Note or any other Loan Document and does not
prevail, then Maker agrees to pay to each such holder, in addition to principal
and interest, all costs and expenses incurred by such holder in trying to
collect this Note or in any such suit or proceeding, including reasonable
attorneys' fees as and to the extent provided in the Loan Agreement.
(e) Waivers and Acknowledgments. Maker and all sureties, endorsers,
guarantors and any other party now or hereafter liable for the payment of this
Note in whole or in part, hereby severally (i) waive demand, presentment for
payment, notice of dishonor and of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all other notice
(except only for any notice that is specifically required by the terms of the
Loan Agreement or any other Loan Document), filing of suit and diligence in
collecting this Note or enforcing any of the security herefor; (ii) agree to any
substitution, subordination, exchange or release of any such security or the
release of any party primarily or secondarily liable hereon; (iii) agree that
the holder hereof shall not be required first to institute suit or exhaust its
remedies against Maker or others liable or to become liable hereon or to enforce
its rights against them or any security herefor; (iv) consent to any extension
or postponement of time of payment of this Note for any period or periods of
time and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and (v)
submit (and waive all rights to object) to personal
PROMISSORY NOTE (Intervoice) Page 8
<PAGE> 9
jurisdiction in the State of Texas, and venue in Dallas County, Texas, for the
enforcement of any and all obligations under the Loan Documents.
(f) Amendments in Writing. This Note may not be changed, amended or
modified except in a writing expressly intended for such purpose and executed by
the party against whom enforcement of the change, amendment or modification is
sought.
(g) Purpose of Proceeds. The proceeds of this Note will be used
solely for business purposes and not for personal, family, household or
agricultural purposes.
(h) Notices. Any notice required or which any party desires to give
under this Note shall be given and effective as provided in the Loan Agreement.
(i) Assignments/Participations. Maker acknowledges and agrees that
the holder of this Note may, at any time and from time to time, assign all or a
portion of its interest under the Note or transfer to any Person a participation
interest under the Note, subject to and in accordance with the terms and
conditions of the Loan Agreement; provided, that, Lender (i) will not
participate more than twenty-five percent (25%) of the Loan (ii) will only
participate said twenty-five percent (25%) to a financial institution reasonably
acceptable to Borrower, which approval shall not be unreasonably withheld or
delayed by Borrower, and (iii) will remain the lead lender for that twenty-five
percent (25%) which has been participated, except that (a) if Lender is acquired
by or merged into another financial institution so that such successor assumes
the obligations of Lender hereunder and under the Loan Documents, by agreement
or by operation of law, then such successor entity shall be entitled to exercise
the rights of Lender hereunder, and Maker will accept performance from such
successor entity, and (b) Lender may at any time pledge all or any portion of
its interest and rights under this Note to any of the twelve Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
1341.
(j) Successors and Assigns. All of the covenants, stipulations,
promises and agreements contained in this Note by or on behalf of Maker shall
bind its successors and assigns and shall be for the benefit of Lender and any
holder hereof, and their successors and assigns, as and to the extent provided
in the Loan Agreement.
(k) GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT THAT THE LAWS OF UNITED STATES
FEDERAL LAW APPLIES PURSUANT TO THE LOAN AGREEMENT OR OTHERWISE.
(l) Time of the Essence. Time shall be of the essence in this Note
with respect to all of Maker's obligations hereunder.
(m) INTEGRATION. THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR
PROMISSORY NOTE (Intervoice) Page 9
<PAGE> 10
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
(n) Amended and Restated. NationsBank, N.A., is the
successor-in-interest by merger to NationsBank of Texas, N.A. This Note amends
and restates, but does not extinguish, the indebtedness evidenced by that
certain Promissory Note, dated November 3, 1997, in the stated principal sum of
Fifteen Million and No/100 Dollars ($15,000,000.00) executed by Maker and
payable to the order of Lender (the "Original Note"). This Note amends and
restates in its entirety, but does not constitute a novation of, the Original
Note.
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
MAKER:
INTERVOICE, INC., a Texas corporation
By: /s/ ROB-ROY GRAHAM
--------------------------------------
Rob-Roy Graham, Chief Financial Officer
PROMISSORY NOTE (Intervoice) Page 10
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