UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 28, 2002
INTERVOICE-BRITE, INC.
(Exact name of registrant as specified in its charter)
Texas 0-13616 75-1927578
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
17811 Waterview Parkway
Dallas, Texas 75252
(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code: (972) 454-8000
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
On August 29, 2002, InterVoice-Brite, Inc., which announced that it
will be changing its corporate name to Intervoice, Inc. (the "Company"), issued
a press release (the "Financing Press Release") providing information relating
to the Company's entry into a new three-year credit facility (the "New Credit
Facility") with Foothill Capital Corporation ("Foothill"). The New Credit
Facility will provide for both a revolver loan and a term loan, as discussed
below. The loan agreement and certain other documents for the New Credit
Facility have been signed, but the transaction has not yet closed and the
availability of funding is subject to certain closing conditions.
The revolver loan is subject to certain closing conditions, including:
(a) the closing of the revolver loan before September 16, 2002; (b) the
execution and delivery of certain related closing documents by the Company and
its subsidiaries to Foothill; (c) unless the Company's 6% convertible notes in
the original principal amount of $10 million (the "Notes") are paid from funds
made available for such payment from the term loans described below, a
subordination and inter-creditor agreement with the holders of the Notes; (d)
the execution and delivery of documentation necessary to grant Foothill a lien
on substantially all of the Company's assets (including cash on deposit with
Foothill and/or its affiliates), including subsidiary guaranties, the Company's
pledge of equity interests in certain of its subsidiaries, a second lien on the
Company's headquarters facility in Dallas, Texas, patent and trademark security
agreements, and security agreements on certain of the Company's other assets in
the United States and the United Kingdom; (e) the Company having a minimum of $5
million in the aggregate of unrestricted cash and cash equivalents on hand
and/or available credit capacity under the New Credit Facility after reserving
for those amounts necessary to provide for current liabilities; (f) the receipt
by Foothill of satisfactory evidence that certain of the Company's proprietary
software is on file with the United States Copyright Office and is encumbered by
a copyright security agreement; and (g) the receipt by Foothill of a landlord's
waiver, evidence of satisfactory insurance, a satisfactory three-year business
plan, certain appraisals, legal opinions, title insurance, and an acceptable
environmental report. The Company will have availability under the revolver loan
of up to $15 million, subject to a borrowing base determined in part on
Foothill's valuation of the accounts receivable of both the Company and
Intervoice-Brite Limited, the Company's United Kingdom subsidiary ("Limited"),
in the United States and the United Kingdom. Interest on any advances under the
revolver loan will accrue at a rate equal to the then prevailing prime rate of
interest plus a margin of 0.5% to 1.5%, or at a rate equal to the then
prevailing London Inter-bank Offering Rate plus a margin of 3% to 4%. The
availability of funding based on Limited's accounts receivable is also
contingent on the satisfaction of the term loan conditions, discussed below, and
on Foothill's collateral audit with respect to Limited's assets and an
examination of its books.
The New Credit Facility will also provide for a term loan, and requires
the Company to use the proceeds of the term loan to redeem the Notes. The terms
of the Notes require 14 days notice of the Company's intent to redeem the Notes,
which the Company will not give until if and when the term loan closes. If the
Company gives notice in September or early October 2002 under these notice
provisions, then the Company will redeem all of the indebtedness under the Notes
in the amount of approximately $9 million after the Company makes its scheduled
principal payment in September. There will also be an early cash redemption
charge of approximately $450,000 and a non-cash $2 million debt restructuring
charge that the Company
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will take in the quarter in which the redemption of the Notes occurs. If the
Notes are redeemed, the Company will not have to make monthly principal payments
on the Notes of $1 million plus associated interest through April 2003. Under
the term loan, the Company will make payments of principal and interest in the
approximate amount of $300,000 per month (based on current interest rates)
during the term of the New Credit Facility. Interest on the term loan will
accrue at a rate equal to the then prevailing prime rate of interest plus 2.75%.
The term loan is subject to certain closing conditions, including: (w) the
receipt by Foothill of certified copies of insurance policies relating to
Limited's assets; (x) the receipt by Foothill of certain documents relating to
the term loan from Limited; (y) the receipt by Foothill of satisfactory evidence
of the security interests related to Limited; and (z) the closing conditions
(other than the United Kingdom collateral audit) relating to the revolver loan
having been met.
The New Credit Facility contains terms, conditions and representations
that are generally customary for asset-based credit facilities, including
certain financial covenants. In particular, the Company is initially required to
have EBITDA in minimum cumulative amounts on a monthly basis through August 31,
2003 (which amounts range from ($9.4) million for the two-month period ending
October 31, 2002 to $9.0 million for the 12-month period ending August 31,
2003). Thereafter, the Company is required to have minimum cumulative EBITDA of
$15 million and $20 million for the 12-month periods ending November 30, 2003
and February 28, 2004, respectively, and $25 million for the 12-month periods
ending each fiscal quarter thereafter. In order for the Company to comply with
the minimum EBITDA requirements under the New Credit Facility, the Company will
have to increase its revenues and/or lower its expenses as compared to the
quarter completed on May 31, 2002. The Company believes that the expense
reductions it has undertaken during the first and second quarters of fiscal 2003
will aid the Company in meeting these minimum EBITDA requirements.
The Company also announced in the Financing Press Release information
relating to the Company's termination on August 29, 2002 of its existing credit
agreement dated June 1, 1999 with Bank of America National Trust and Savings
Association, as agent, and certain other lenders (the "Existing Credit
Agreement"). The Existing Credit Agreement is being terminated by the Company
for a number of reasons, including: (a) to avoid the escalating interest rates
and fees under the Existing Credit Agreement; (b) the Company has no current
borrowings under the Existing Credit Agreement; (c) the Company's belief that
the financial covenants of the Existing Credit Agreement are too restrictive for
the Company's current business plan; and (d) the Company is required to
terminate the Existing Credit Agreement when it receives funds under the New
Credit Facility.
In connection with the New Credit Facility, the Company anticipates
closing and funding of the term loan and to have borrowing availability under
the revolver loan in September 2002. The Company believes that it will be able
to close the loans under the New Credit Facility, but there can be no guaranty
that the loans will ultimately close or the timing of any closing. While the
Company believes that it has sufficient cash to satisfy its current liquidity
and capital requirements, in the event the New Credit Facility is not closed,
the Company will not have a revolving credit facility to fund any unanticipated
liquidity or capital requirements.
Separately, on August 28, 2002 the Company issued a press release (the
"Annual Meeting Press Release") indicating that, at its annual meeting of
shareholders on that date, the
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shareholders had approved changing the Company's corporate name from
"InterVoice-Brite, Inc." to "Intervoice, Inc." At the meeting the shareholders
also approved (i) a proposal to issue shares of the Company's common stock upon
conversion of the Company's outstanding Notes, in lieu of cash payments on the
Notes, and upon the exercise of the Company's outstanding warrants, to the
extent that such issuance would require shareholder approval under the rules of
the Nasdaq National Market; and (ii) a proposal to amend the Company's Employee
Stock Purchase Plan to increase from 1,000,000 to 1,500,000 the aggregate number
of shares of common stock authorized for issuance under the plan.
The foregoing is qualified by reference to the Financing Press Release,
the Annual Meeting Press Release, and the Loan and Security Agreement between
the Company and Foothill, which are filed as exhibits to this Report and
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
(c) EXHIBITS.
99.1 Financing Press Release dated August 29, 2002, announcing
information relating to the Company's entry into a new credit
facility on August 29, 2002.
99.2 Annual Meeting Press Release dated August 28, 2002, announcing
stockholder approval of change of Company's corporate name and
other matters on August 28, 2002.
99.3 Loan and Security Agreement by and among InterVoice-Brite,
Inc., as borrower, and Foothill Capital Corporation, as
lender, dated as of August 29, 2002.
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 hereunto duly authorized.
INTERVOICE-BRITE, INC.
By: /s/ Dean C. Howell
-----------------------------
Dean C. Howell
Executive Vice President and
Date: August 29, 2002 General Counsel
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INDEX TO EXHIBITS
Item
Number Exhibit
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99.1 Financing Press Release dated August 29, 2002, announcing
information relating to the Company's entry into a new credit
facility on August 29, 2002.
99.2 Annual Meeting Press Release dated August 28, 2002, announcing
stockholder approval of change of Company's corporate name and
other matters on August 28, 2002.
99.3 Loan and Security Agreement by and among InterVoice-Brite,
Inc., as borrower, and Foothill Capital Corporation, as
lender, dated as of August 29, 2002.
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