Exhibit 10.4

Promissory Note

(Term Loan)

June 21, 2013

 

Borrower:

inContact, Inc., a Delaware corporation

 

Lender:

Zions First National Bank, a national banking association

 

Loan Amount:

$4,000,000

 

Maturity Date:

June 21, 2017

For value received, Borrower promises to pay to the order of Lender at Zions
First National Bank, Corporate Banking Group, One South Main Street, Suite 200,
Salt Lake City, Utah 84133, or at such other address as the holder of this
Promissory Note at any given time may designate by written notice to Borrower,
the sum of $4,000,000, or such other principal balance as may be outstanding, in
lawful money of the United States with interest thereon calculated and payable
as provided herein.

Definitions

Terms used in the singular shall have the same meaning when used in the plural
and vice versa.  Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Loan Agreement (as defined herein).  As used
in this Promissory Note, the term:

“Applicable Margin” means 4.25% per annum.

“Default Rate” means the interest rate in effect hereunder from time to time
(including any applicable margin) plus 3.0% per annum.

“Dollars” and the sign “$” mean lawful money of the United States.

“Draw Period” means the Effective Date through June 20, 2014.

“Effective Date” means June 21, 2013.

“FHLB Rate” means the rate per annum quoted by Lender as Lender’s FHLB rate
based upon the FHLB Seattle rate as quoted in Bloomberg, or on the FHLB Seattle
internet web site at www.FHLBsea.com, or other comparable service selected by
Lender for the applicable Interest Period.  This definition of FHLB Rate is to
be strictly interpreted and is not intended to serve any purpose other than
providing an index to determine the rate used herein.  It is not necessarily the
lowest rate charged by Lender on its loans.  If the FHLB Rate becomes
unavailable during the term of this Promissory Note, Lender may designate a
substitute index after notifying Borrower.

“Interest Period” means, with respect to any advance or balance for which
interest is based on the LIBOR Rate, the period commencing on the date such
advance is made or, as to an existing balance, the date selected by Borrower and
ending, as Borrower may select, on the numerically corresponding day in the
first year thereafter, except that each such Interest Period that commences on
the last Banking Business Day of a calendar month (or on any day for which there
is no numerically corresponding day in the appropriate

 

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subsequent calendar month) shall end on the last Banking Business Day of the
appropriate subsequent calendar month; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:

 

a.

No Interest Period may extend beyond the termination of the Loan Agreement;

 

b.

No Interest Period may extend beyond the aforesaid Maturity Date or such later
date to which it is extended; and

 

c.

If an Interest Period would end on a day that is not a Banking Business Day,
such Interest Period shall be extended to the next Banking Business Day unless
such Banking Business Day would fall in the next calendar month, in which event
such Interest Period shall end on the immediately preceding Banking Business
Day.

“LIBOR Rate” applicable to any Interest Period means the rate per annum quoted
by Lender two Banking Business Days prior to the commencement of the Interest
Period as its LIBOR Rate based upon quotes from the London Interbank Offered
Rate from the British Bankers Association Interest Settlement Rates as quoted
for United States Dollars by Bloomberg or other comparable services selected by
Lender for the applicable Interest Period.  This definition of LIBOR Rate is to
be strictly interpreted and is not intended to serve any purpose other than
providing an index to determine the interest rate used herein.  The LIBOR Rate
of Lender may not necessarily be the same as the quoted offered side in the
Eurodollar time deposit market quoted by any particular institution or service
applicable to any Interest Period.  It is not the lowest rate at which Lender
may make loans to any of its customers, either now or in the future.

“Loan Agreement” means that certain Amended and Restated Loan Agreement dated
April 30, 2012 between Lender and Borrower, as amended by the First Amendment,
together with any exhibits, schedules, amendments, addenda, and modifications
thereto.

“Maturity Date” shall have the meaning set forth in the heading of this
Promissory Note.

“Ninety Day FHLB Rate” means the rate per annum quoted by Lender as Lender’s
Ninety Day FHLB rate based upon the FHLB Seattle rate as quoted in Bloomberg, or
on the FHLB Seattle internet web site at www.FHLBsea.com, or other comparable
service selected by Lender.  This definition of Ninety Day FHLB Rate is to be
strictly interpreted and is not intended to serve any purpose other than
providing an index to determine the rate used herein.  It is not necessarily the
lowest rate charged by Lender on its loans.  If the Ninety Day FHLB Rate becomes
unavailable during the term of this Promissory Note, Lender may designate a
substitute index after notifying Borrower.

“Ninety Day LIBOR Rate” means the rate per annum quoted by Lender as its Ninety
Day LIBOR Rate based upon quotes from the London Interbank Offered Rate from the
British Bankers Association Interest Settlement Rates as quoted for United
States Dollars by Bloomberg or other comparable services selected by Lender.
 This definition of Ninety Day LIBOR Rate is to be strictly interpreted and is
not intended to serve any purpose other than providing an index to determine the
interest rate used herein.  The Ninety Day LIBOR Rate of Lender may not
necessarily be the same as the quoted offered side in the Eurodollar time
deposit market quoted by any particular institution or service.  It is not
necessarily the lowest rate at which Lender may make loans to any of its
customers, either now or in the future.

Disbursement

This Promissory Note shall be an amortizing term loan.  Amounts borrowed and
repaid may not be re-advanced or re-borrowed by Borrower.  The right of Borrower
to draw funds and the obligation of Lender to make any advance of the proceeds
of this Promissory Note to Borrower shall not accrue, in the case of each

 

 

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requested advance, until all of the conditions set forth in Section 4 of the
Loan Agreement or in the First Amendment, as applicable, have been fully
satisfied, and shall terminate on the earlier to occur of: (i) the end of the
Draw Period, or (ii) upon occurrence of an Event of Default or event which, with
the passage of time or giving of notice or both, would constitute an Event of
Default.  Any principal amounts for which disbursement has not been requested
during the Draw Period shall not be disbursed hereunder and Borrower shall not
be liable to repay such non-disbursed amounts.  All amounts owing under this
Promissory Note shall be due and payable in full by Borrower upon maturity,
whether at the stated maturity date, upon acceleration thereof, or upon renewal
or extension thereof.

Provided no Event of Default has occurred, proceeds of this Promissory Note
shall be disbursed from time to time during the Draw Period upon request of
Borrower according to the terms set forth in the Loan Agreement.  Requests for
disbursements shall be given in writing or orally no later than 12:00 p.m.
Mountain Time of the Banking Business Day on which the advance is to be made.
 Disbursements hereunder shall be made to Borrower’s account with Lender.

Payment Terms

Interest is to be paid in arrears commencing July 1, 2013, and on the same day
of each month thereafter.

Principal outstanding as of the end of the Draw Period is to be paid in 36 equal
monthly installments commencing August 1, 2014, and on the same day of each
month thereafter through the Maturity Date.

All outstanding principal, unpaid interest and all other amounts due under this
Promissory Note or any of the other Loan Documents shall be paid in full on the
Maturity Date.

All payments shall be applied (a) first, to reimbursable fees, late charges,
costs and expenses payable by Borrower under this Promissory Note or any of the
other Loan Documents, (b) second, to accrued interest and (c) the remainder, if
any, to principal.

Interest shall accrue from the date of disbursement of the principal amount
until paid, both before and after judgment, in accordance with the terms set
forth herein.

Interest Rate Election

From the Effective Date through the completion of the Draw Period (or thereafter
if Borrower fails to elect to convert the interest rate), interest on the entire
outstanding principal balance hereunder shall accrue based on the Ninety Day
LIBOR Rate.

Not less than three Banking Business Days prior to the end of the Draw Period,
Borrower shall notify Lender in writing of its election for the entire
outstanding principal balance hereunder to accrue interest based on either the
Ninety Day LIBOR Rate or the LIBOR Rate for a specified Interest Period.  Upon
the expiration of any elected Interest Period, the interest rate hereunder shall
automatically convert to one based on the Ninety Day LIBOR Rate unless Borrower
gives three Banking Business Days prior written notice to Lender to renew the
LIBOR Rate for a specified Interest Period; provided that no Event of Default
has occurred and is continuing at the time of any such election.  

Any election to convert to an interest rate based on the LIBOR Rate for a
specified Interest Period may not be changed after notice is given by Borrower
hereunder without consent of Lender until the expiration of the selected
Interest Period.  

 

 

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Interest Based on Ninety Day LIBOR Rate

Interest based on the Ninety Day LIBOR Rate shall be calculated as follows:

 

1.

Interest shall be at a variable rate computed on the basis of a 360 day year,
actual days elapsed, at the Ninety Day LIBOR Rate from time to time in effect,
adjusted as of any change in the Ninety Day LIBOR Rate, plus the Applicable
Margin.

 

2.

Notwithstanding the foregoing, if Lender determines (which determination shall
be conclusive) that (a) quotations of interest rates in the relevant amounts or
for the relevant maturities are not being provided for purposes of Lender
determining the Ninety Day LIBOR Rate, (b) the Ninety Day LIBOR Rate does not
adequately cover the cost to Lender of making or maintaining advances based on
the Ninety Day LIBOR Rate, or (c) the adoption of any applicable law, rule, or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
compliance by Lender with any request or directive (whether or not having the
force of law) of any such authority, central bank, or comparable agency, shall
make it unlawful or impossible for Lender to offer loans based on the Ninety Day
LIBOR Rate, then (i) the right of Borrower to request interest pricing based on
the Ninety Day LIBOR Rate shall be suspended until Lender notifies Borrower that
the circumstances giving rise to such suspension no longer exist, and (ii) upon
notice to Borrower by Lender, the outstanding principal amount of the balances
based on the Ninety Day LIBOR Rate shall be immediately converted to a balance
based on the Ninety Day FHLB Rate plus Applicable Margin.  Any prepayment based
upon such action shall not be subject to any prepayment fees or charges.

Interest Based on LIBOR Rate

Interest based on the LIBOR Rate shall be calculated as follows:

 

1.

Interest shall be at a rate computed on the basis of a 360 day year at a rate
equal to the LIBOR Rate for the applicable Interest Period, plus the Applicable
Margin.

 

2.

Notwithstanding the foregoing, if Lender determines (which determination shall
be conclusive) that (a) quotations of interest rates in the relevant amounts or
for the relevant maturities are not being provided for purposes of Lender
determining the LIBOR Rate, (b) the LIBOR Rate does not adequately cover the
cost to Lender of making or maintaining advances based on the LIBOR Rate, or
(c) the adoption of any applicable law, rule, or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) of any such
authority, central bank, or comparable agency, shall make it unlawful or
impossible for Lender to offer loans based on the LIBOR Rate, then (i) the right
of Borrower to request interest pricing based on the LIBOR Rate shall be
suspended until Lender notifies Borrower that the circumstances giving rise to
such suspension no longer exist, and (ii) upon notice to Borrower by Lender, the
outstanding principal amount of the balances based on the LIBOR Rate shall be
immediately converted to a balance based on the FHLB Rate plus Applicable
Margin.  Any prepayment based upon such action shall not be subject to any
prepayment fees or charges.

 

 

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Prepayment

Borrower may prepay all or any portion of this Promissory Note at any time
without penalty or premium; provided, however, that in the event of any
voluntary or involuntary prepayment of any LIBOR Rate based balance prior to the
end of an Interest Period, Borrower shall make Lender whole and Borrower shall
pay to Lender all breakage costs incurred by Lender in connection with such
prepayment and compensate Lender for any actual out-of-pocket loss suffered by
reason of such principal payment not being made at the end of the Interest
Period or as scheduled.  Such costs and losses to Lender shall be limited to any
loss or breakage costs arising from the re-employment of funds at rates lower
than the rate provided by this Promissory Note, cost to Lender of such funds,
any interest or fees payable by Lender to lenders of funds obtained by them in
order to make or maintain the loan evidenced by this Promissory Note and any
related costs.  Unless specified otherwise by Borrower, (a) prepayments of
principal shall be applied first to outstanding LIBOR Rate based balances, and
(b) prepayments of principal applied to LIBOR Rate based balances should be made
in the principal amount equal to the aggregate principal amount of the LIBOR
Rate based balance, if any, that has an Interest Period ending on such date of
prepayment, and so long as no Event of Default has occurred and is continuing,
Borrower may, at its option, defer the balance of the prepayment to be applied
against any other LIBOR Rate based balance until the next following Interest
Period applicable to such LIBOR Rate based balance; provided that cash in an
amount equal to the amount of any prepayment so deferred shall be deposited in a
cash collateral account maintained with the Lender.

Any prepayment received by Lender after 2:00 p.m. Mountain Time (whichever is in
effect on the date the prepayment is received) shall be deemed received on the
following Banking Business Day.

   

General

Upon default in payment of any principal or interest when due, whether due at
stated maturity, by acceleration, or otherwise, all outstanding principal shall
bear interest at the Default Rate from the date when due until paid, both before
and after judgment.

This Promissory Note is made in accordance with the Loan Agreement and is
secured by the collateral identified in and contemplated by the Loan Documents,
including, without limitation, that certain Security Agreement (All Assets)
dated July 16, 2009 between Borrower and Lender, and any and all amendments,
modifications, and replacements thereof.

If an Event of Default occurs, time being the essence hereof, then the entire
unpaid balance, with interest as aforesaid, shall, at the election of the holder
hereof and without notice of such election, become immediately due and payable
in full.

If an Event of Default occurs, Borrower agrees to pay to the holder hereof all
collection costs, including reasonable attorney fees and legal expenses, in
addition to all other sums due hereunder.

This Promissory Note shall be governed by and construed in accordance with the
laws of the State of Utah.

Borrower and all endorsers, sureties and guarantors hereof hereby jointly and
severally waive presentment for payment, demand, protest, notice of protest,
notice of protest and of non-payment and of dishonor, and consent to extensions
of time, renewal, waivers or modifications without notice and further consent to
the release of any collateral or any part thereof with or without substitution.

 

 

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[Signature Page(s) Follow]

   

   

           

   

       

 

 

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IN WITNESS WHEREOF, this Promissory Note has been executed by Borrower as of the
date first written above.

 

Borrower:

   

   

inContact, Inc.

   

   

   

   

   

   

By:

/s/ Gregory S. Ayers

   

Name:  Gregory S. Ayers

   

Title: Chief Financial Officer

   

   

 

PROMISSORY NOTE (TERM  LOAN)

Signature Page

   

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