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                                                                    EXHIBIT 99.1
                PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
                        SAFE HARBOR COMPLIANCE STATEMENT
                         FOR FORWARD-LOOKING STATEMENTS

     In passing the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"), 15 U.S.C.A. Sections 77z-2 and 78u-5 (Supp. 1996), Congress
encouraged public companies to make "forward-looking statements" by creating a
safe harbor to protect companies from securities law liability in connection
with forward-looking statements.  Melita International Corporation ("Melita" or
the "Company") intends to qualify both its written and oral forward-looking
statements for protection under the Reform Act and any other similar safe
harbor provisions.

     "Forward-looking statements" are defined by the Reform Act.  Generally,
forward-looking statements include expressed expectations of future events and
the assumptions on which the expressed expectations are based.  All
forward-looking statements are inherently uncertain as they are based on
various expectations and assumptions concerning future events and they are
subject to numerous known and unknown risks and uncertainties which could cause
actual events or results to differ materially from those projected.  Due to
those uncertainties and risks, the investment community is urged not to place
undue reliance on written or oral forward-looking statements of Melita.  The
Company undertakes no obligation to update or revise this Safe Harbor
Compliance Statement for forward-looking statements (the "Safe Harbor
Statement") to reflect future developments.  In addition, Melita undertakes no
obligation to update or revise forward-looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes to future
operating results over time.  This Safe Harbor Statement supersedes that
certain Safe Harbor Statement filed as Exhibit 99.1 to the Company's Quarterly
Report on Form 10-Q dated August 14, 1997.

     Melita provides the following risk factor disclosure in connection with
its continuing effort to qualify its written and oral forward-looking
statements for the safe harbor protection of the Reform Act and any other
similar safe harbor provisions.  Important factors currently known to
management that could cause actual results to differ materially from those in
forward-looking statements include the following:


               DEPENDENCE ON LIMITED PRODUCT LINE; RISKS ASSOCIATED WITH
               SERVICING THE MARKET FOR CALL CENTER SOLUTIONS

                  The Company currently derives substantially all of its
               revenues from sales of its PhoneFrame Explorer and upgrades and
               additions to its PhoneFrame CS products and related services.
               PhoneFrame CS was introduced in early 1995 and PhoneFrame
               Explorer in late 1997. The Company expects that these products
               and related services will continue to account for a substantial
               portion of the Company's revenues for the foreseeable future.
               Although the Company intends to enhance these products and
               develop related products, the Company expects to continue to
               focus on providing customer contact and intelligent call center
               management solutions as its primary line of business. As a
               result, any factors adversely affecting the market for call
               center systems in general, or the PhoneFrame Explorer and
               PhoneFrame CS products in particular, could adversely affect the
               Company's business, financial condition and results of
               operations. The Company faces a potential charge resulting from
               the impact of having to write down inventory of outdated products
               which cannot be sold. The market for call center systems is
               intensely competitive, highly fragmented and subject to rapid
               change. The Company's future success will depend on continued
               growth in the market for call center automated solutions, and
               there can be no assurance that this market will continue to grow.
               If this market fails to grow or grows more slowly than the
               Company currently anticipates, the Company's business, financial
               condition and results of operations would be materially adversely
               affected.

               RELIANCE ON SIGNIFICANT CUSTOMERS

                  The Company has derived and believes that it will continue to
               derive a significant portion of its revenues in any period from a
               limited number of large corporate clients. During 1997, the
               Company's five largest customers accounted for 27.9% of the
               Company's total revenues. In 1996, the Company's five largest
               customers accounted for 24.5% of its total revenues. In 1995, the
               Company's five largest customers accounted for 25.0% of its total
               revenues. Although the specific customers may change from period
               to period, the Company expects that large sales to a limited
               number of customers will continue to account for a significant
               percentage of its revenues in any particular period for the
               foreseeable future. Therefore, the loss, deferral or cancellation
               of an order could have a significant impact on the Company's
               operating results in a particular quarter. There can be no
               assurance that its current customers will place additional
               orders, or that the Company will obtain orders of similar
               magnitude from other customers. The loss of any major customer or
               any reduction, delay in or cancellation of orders by any such
               customer or the failure of the Company to market successfully to
               new customers could have a material adverse effect on the

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               Company's business, financial condition and results of
               operations.

               POTENTIAL VARIABILITY OF QUARTERLY FINANCIAL RESULTS

                  The Company's revenues and operating results could vary
               substantially from quarter to quarter. Among the factors that
               could cause these variations are changes in the demand for the
               Company's products, the level of product and price competition,
               the length of the Company's sales process, the size and timing of
               individual transactions, the mix of products and services sold,
               software defects and other product quality problems, any delay in
               or cancellation of customer installations, the Company's success
               in expanding its direct sales force and indirect distribution
               channels, the timing of new product introductions and
               enhancements by the Company or its competitors, customer order
               deferrals in anticipation of enhancements or new products offered
               by the Company or its competitors, commercial strategies adopted
               by competitors, changes in foreign currency exchange rates,
               customers' fiscal constraints, the Company's ability to control
               costs and general economic conditions. In addition, a limited
               number of relatively large customer orders has accounted for and
               is likely to continue to account for a substantial portion of the
               Company's total revenues in any particular quarter. Sales of the
               Company's software products generally involve a significant
               commitment of management attention and resources by prospective
               customers. Accordingly, the Company's sales process is often
               lengthy and subject to delays associated with the long approval
               process that accompanies significant customer initiatives or
               capital expenditures. The Company's sales cycle, from initial
               trial to complete installation, varies substantially from
               customer to customer. Because a high percentage of the Company's
               costs are for staffing and operating expenses and are fixed in
               the short term, based on anticipated revenue levels, variations
               between anticipated order dates and actual order dates, as well
               as non-recurring or unanticipated large orders, can cause
               significant variations in the Company's operating results from
               quarter to quarter. As a result of the foregoing factors, the
               Company's operating results for a future quarter may be below the
               expectations of securities analysts and investors. In such event,
               the market price of the Company's common stock likely will be
               adversely affected.

               LIMITED PREDICTABILITY OF SALES DUE TO LENGTHY SALES PROCESS

                  The sale of the Company's products generally requires the
               Company to provide a significant level of education to
               prospective customers regarding the use and benefits of the
               Company's products. In addition, implementation of the Company's
               products involves a significant commitment of resources by
               prospective customers and is commonly associated with substantial
               integration efforts which may be performed by the Company or the
               customer. For these and other reasons, the length of time between
               the date of initial contact with the potential customer and the
               installation and use of the Company's products is typically six
               months or more, and may be subject to delays over which the
               Company has little or no control. The Company's


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               implementation cycle could be lengthened in the future by
               increases in the size and complexity of its installations. Delay
               in or cancellation of sales could have a material adverse effect
               on the Company's business, financial condition and results of
               operations, and could cause the Company's operating results to
               vary significantly from quarter to quarter.

               COMPETITION

                  The market for the Company's products is intensely
               competitive, fragmented and subject to rapid change. Because the
               Company's principal products are call center systems, which
               include both software applications and hardware, the Company
               competes with a variety of companies which provide these
               components independently or as an integrated system. The
               Company's principal competitors in the field of integrated
               inbound/outbound call management systems are Davox Corporation
               ("Davox"), EIS International, Inc. ("EIS") and Mosaix
               International, Inc. ("Mosaix"). The Company also competes in the
               CTI segment of the market, where principal competitors include
               AnswerSoft, Inc., Genesys Telecommunications Laboratories, Inc.,
               and Nabnasset Corporation, among others. The Company may face
               additional competition from PBX/ACD vendors, system integrators,
               other communications equipment and service providers, computer
               hardware and software vendors and others. The Company may also
               face additional competition from non-traditional competitors in
               the emerging computer telephony market. Such competitors may
               include Interactive Intelligence and others. The Company
               generally faces competition from one or more of its principal
               competitors on major installations and believes that price is a
               major factor considered by its prospective customers.

                  Increased competition has contributed significantly to price
               reductions and the Company expects these price reductions to
               continue. In addition, increased competition may result in
               reduced operating margins and loss of market share, either of
               which could materially adversely affect the Company's business,
               financial condition and results of operations.

                  Many of the Company's current and potential competitors have
               significantly greater financial, technical, marketing and other
               resources than the Company. As a result, they may be able to
               respond more quickly to new or emerging technologies and changes
               in customer requirements, or to devote greater resources to the
               development, promotion and sale of their products than could the
               Company. Competition from these or other sources could result in
               price reductions and loss of market share which could adversely
               affect the Company's business, financial condition and results of
               operations.



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               CONTROL BY PRINCIPAL SHAREHOLDER

                  Aleksander Szlam, the Company's Chairman of the Board, Chief
               Executive Officer and principal shareholder, is the beneficial
               owner of approximately 73.5% of the outstanding shares of Common
               Stock. Accordingly, Mr. Szlam is in a position to control the
               Company through his ability to control any election of members of
               the Board of Directors, as well as any decision whether to merge
               or sell the assets of the Company, to adopt, amend or repeal the
               Company's Amended and Restated Articles of Incorporation and
               Bylaws, or to take other actions requiring the vote or consent of
               the Company's shareholders. This concentration of ownership could
               also discourage bids for the shares of Common Stock at a premium
               to, or create a depressive effect on, the market price of the
               Common Stock.

               COMPETITIVE MARKET FOR PERSONNEL

                  The future success of the Company's growth strategy will
               depend to a significant extent on its ability to attract, train,
               motivate and retain highly skilled professionals, particularly
               software developers, sales and marketing personnel and other
               senior technical personnel. An inability to hire such additional
               qualified personnel could impair the Company's ability to
               adequately manage and complete its existing sales and to bid for,
               obtain and implement new sales. Further, the Company must train
               and manage its growing employee base, requiring an increase in
               the level of responsibility for both existing and new management
               personnel. There can be no assurance that the management
               personnel and systems currently in place will be adequate or that
               the Company will be able to assimilate new employees
               successfully. Highly skilled employees with the education and
               training required by the Company are in high demand. Accordingly,
               there can be no assurance that the Company will be successful in
               attracting or retaining current or future employees.

               RISKS ASSOCIATED WITH TECHNOLOGICAL ADVANCES; NECESSITY OF
               DEVELOPING NEW PRODUCTS; COMPLIANCE TO INDUSTRY REQUIREMENTS

                  The market for call center systems is subject to rapid
               technological change, changing customer needs, frequent new
               product introductions and evolving industry standards that may
               render existing products and services obsolete. As a result, the
               Company's position in this market could be eroded rapidly by
               unforeseen changes in customer and technological requirements for
               application features, functions and technologies. The Company's
               growth and future operating results will depend in part upon its
               ability to enhance existing applications and develop and
               introduce new applications that anticipate, meet or exceed
               technological advances in the marketplace, that meet changing
               customer requirements, that respond to competitive products and
               that achieve market acceptance. The Company's product development
               and testing efforts have required, and are expected to continue
               to require, substantial investments by the Company. There can be
               no assurance the Company will possess sufficient resources to
               make these necessary investments. The Company has in the


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               past experienced delays both in developing new products and
               customizing existing products. These delays have occurred due to
               the complex nature of the Company's products, difficulties in
               getting newly-developed software applications to function
               properly with existing applications, difficulty in recruiting
               sufficient numbers of programmers with the proper technical
               skills and capabilities, loss of programmers and other technical
               personnel with existing knowledge of the Company's products,
               changing standards or protocols within the computer and telephony
               equipment with which the Company's products integrate, inherent
               limitations in, and unforeseen problems with using, other company
               or industry products and software, changes in design
               specifications once technical problems are uncovered, and
               unforeseen problems with the implementation of a client server
               architecture and distributed processing. There can be no
               assurance that the Company will not experience difficulties that
               could cause such delays in the future. In addition, there can be
               no assurance that such products will meet the requirements of the
               marketplace and achieve market acceptance, or that the Company's
               current or future products will conform to industry standards. If
               the Company is unable, for technological or other reasons, to
               develop and introduce new and enhanced products in a timely
               manner, the Company's business, financial condition and results
               of operations could be materially adversely affected. The Company
               recently evaluated its Products for issues relating to Year 2000
               ("Y2K") Compliance. Although the Company has made substantial
               changes to its Products to assure Y2K Compliance, no assurance
               can be made that the Products will, in fact, operate correctly.
               Any Y2K related defects which are detected will necessarily
               detract resources from development of other products and may
               result in delays in deploying additional products and features.
               In addition, any litigation as a result of Y2K non-compliance may
               materially adversely affect the Company's financial condition,
               the Company's business or results of operations.

               MANAGEMENT OF GROWTH

                  The Company has recently experienced significant growth in
               revenue, operations and personnel. Continued growth will place
               significant demands on its management and other resources. In
               particular, the Company will have to continue to increase the
               number of its personnel, particularly skilled technical,
               marketing and management personnel, and continue to develop and
               improve its operational, financial, communications and other
               internal systems. The Company's inability to manage its growth
               effectively could have a material adverse effect on the quality
               of the Company's services and projects, its ability to attract
               and retain key personnel, its business prospects and its results
               of operations and financial condition. The Company recently
               implemented a new help-desk information system to upgrade its
               automated customer support capability. No assurance can be given
               that the implementation of this system will not result in
               disruptions to the Company's business. In addition, the Company
               is in the process of implementing a plan to decentralize its
               sales and support functions throughout existing and planned
               regional offices. There can be no assurance that the Company will
               be successful in implementing this decentralization plan or
               managing the transition without disruptions in the sales and
               support functions or that the new decentralized sales and


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               support organization will be effective. The Company is also
               implementing a plan to outsource a significant portion of the
               Product's production and integration to a non-affiliated third
               party. There can be no assurance that the implementation of this
               outsourcing plan will be successful or that managing the
               transition can be accomplished without disruption to the
               Company's normal operation. In addition, due to the highly
               complex nature of the Company's products, no assurance can be
               made that the Products produced and integrated by the outsourcing
               third-party will provide operation as reliable as those produced
               and integrated by Employees of the Company. Any disruptions
               resulting from the implementation of the help-desk information
               system the decentralization plan or the outsourcing plan, or the
               failure to implement these changes in a timely manner, could have
               a material adverse effect on the Company's business, results of
               operations and financial condition.

               INTERNATIONAL OPERATIONS

                  Revenue from sales outside the United States in 1995, 1996 and
               1997 accounted for 22.5%, 21.0% and 18.4%, respectively, of the
               Company's total revenues. International operations are subject to
               inherent risks, including the impact of possible recessionary
               environments in economies outside the United States, changes in
               legal and regulatory requirements including those relating to
               telemarketing activities, changes in tariffs, seasonality of
               sales, costs of localizing products for foreign markets, longer
               accounts receivable collection periods and greater difficulty in
               accounts receivable collection, difficulties and costs of
               staffing and managing foreign operations, reduced protection for
               intellectual property rights in some countries, potentially
               adverse tax consequences and political and economic instability.
               There can be no assurance that the Company will be able to
               sustain or increase international revenue, or that the factors
               listed above will not have a material adverse impact on the
               Company's international operations. While the Company's expenses
               incurred in foreign countries typically are denominated in the
               local currencies, revenues generated by the Company's
               international sales typically are paid in U.S. dollars or British
               pounds. Accordingly, while exposure to currency fluctuations to
               date has been insignificant, there can be no assurance that
               fluctuations in currency exchange rates in the future will not
               have a material adverse impact on the Company's international
               operations. The Company currently does not engage in currency
               hedging activities.

                  A significant element of the Company's business strategy is to
               continue expansion of its operations in international markets.
               This expansion has required and will continue to require
               significant management attention and financial resources to
               develop international sales channels. Because of the difficulty
               in penetrating new markets, there can be no assurance that the
               Company will be able to maintain or increase international
               revenues. To the extent that the Company is unable to do so, the
               Company's financial condition and results of operations could be
               materially adversely affected.



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               RISK OF SOFTWARE DEFECTS; DEPENDENCE ON THIRD-PARTY SOFTWARE

                  Software products as complex as those offered by the Company
               may contain errors that may be detected at any point in the
               products' life cycles. The Company has, in the past, discovered
               software errors in certain of its products and has experienced
               delays in shipment of products during the period required to
               correct these errors. In particular, the call center environment
               is characterized by a wide variety of standard and non-standard
               configurations that make pre-release testing for programming or
               compatibility errors very difficult, time consuming and may not
               uncover all defects prior to shipment and installation at a
               Customer's location. There can be no assurance that, despite
               extensive testing by the Company and by current and potential
               customers, errors will not be found, resulting in a loss of, or
               delay in, market acceptance and sales, diversion of development
               resources, injury to the Company's reputation or increased
               service and warranty cost, any of which could have a material
               adverse affect on the Company's business, financial condition and
               results of operations. Certain software used in the Company's
               products is licensed by the Company from third parties. There can
               be no assurance that the Company will continue to be able to
               resell this software under its licenses or, if any licensor
               terminates its agreement with the Company, that the Company will
               be able to develop or otherwise procure replacement software from
               another supplier on a timely basis or on commercially reasonable
               terms. In addition, such third-party software may contain errors
               which the Company is dependent upon the third-party to correct
               and that may be difficult for the Company to detect and correct.

               POTENTIAL LIABILITY TO CUSTOMERS

                  The Company's products may be critical to the operations of
               its customers' businesses and provide benefits that may be
               difficult to quantify. Any failure in a Company product or a
               customer's system could result in a claim for substantial damages
               against the Company, regardless of the Company's responsibility
               for such failure. Although the Company attempts to limit
               contractually its liability for damages arising from product
               failures or negligent acts or omissions, there can be no
               assurance the limitations of liability set forth in its contracts
               will be enforceable in all instances or would otherwise protect
               the Company from liability for damages. Although the Company
               maintains general liability insurance coverage, including
               coverage for product liability and errors or omissions, there can
               be no assurance that such coverage will continue to be available
               on reasonable terms or will be available in sufficient amounts to
               cover one or more large claims, or that the insurer will not
               disclaim coverage as to any future claim. The successful
               assertion of one or more large claims against the Company that
               exceed available insurance coverage or changes in the Company's
               insurance policies, including premium increases or the imposition
               of large deductible or co-insurance requirements, could adversely
               affect the Company's results of operations and financial
               condition.



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               RISKS ASSOCIATED WITH POSSIBLE ACQUISITIONS

                  The Company may in the future engage in selective acquisitions
               of businesses that are complementary to those of the Company,
               including other providers of call management or CTI solutions or
               technology. While the Company has from time to time in the past
               considered acquisition opportunities, it has never acquired a
               significant business and has no existing agreements or
               commitments to effect any acquisition. Accordingly, there can be
               no assurance that the Company will be able to identify suitable
               acquisition candidates available for sale at reasonable prices,
               consummate any acquisition or successfully integrate any acquired
               business into the Company's operations. Further, acquisitions may
               involve a number of additional risks, including diversion of
               management's attention, failure to retain key acquired personnel,
               unanticipated events or circumstances and legal liabilities, some
               or all of which could have a material adverse effect on the
               Company's results of operations and financial condition. Problems
               with an acquired business could have a material adverse impact on
               the performance of the Company as a whole. The Company expects to
               finance any future acquisitions with the proceeds of the
               offering as well as with possible debt financing, the issuance of
               equity securities (common or preferred stock) or a combination of
               the foregoing. There can be no assurance that the Company will be
               able to arrange adequate financing on acceptable terms. If the
               Company were to proceed with one or more significant future
               acquisitions in which the consideration consisted of cash, a
               substantial portion of the Company's available cash (possibly
               including a portion of the proceeds of the offering) could be
               used to consummate the acquisitions. If the Company were to
               consummate one or more significant acquisitions in which the
               consideration consisted of stock, shareholders of the Company
               could suffer significant dilution of their interests in the
               Company. Many business acquisitions must be accounted for as a
               purchase. Most of the businesses that might become attractive
               acquisition candidates for the Company are likely to have
               significant intangible assets and acquisition of these
               businesses, if accounted for as a purchase, would typically
               result in substantial goodwill amortization charges to the
               Company, reducing future earnings. In addition, such acquisitions
               could involve non-recurring acquisition-related charges, such as
               the write-off or write-down of software development costs or
               other intangible items.

               REGULATORY ENVIRONMENT

                  Certain uses of outbound call processing systems are regulated
               by federal, state and foreign laws and regulations. While the
               Company's systems are generally designed to operate in compliance
               with these laws and regulations through the use of appropriate
               calling lists and calling campaign time parameters, compliance
               with these laws and regulations may limit the usefulness of the
               Company's products to its customers and potential customers, and
               these laws and regulations could therefore adversely affect
               demand for the Company's products. In addition, there can be no
               assurance that future legislation or regulatory activity further
               restricting telephone or other communications practices, if
               enacted, would not adversely affect the Company.



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               INTELLECTUAL PROPERTY RIGHTS

                  The Company relies on a combination of patent, copyright,
               trade secret and trademark laws, confidentiality procedures and
               contractual provisions to protect its proprietary rights in its
               products and technology. There can be no assurance, however, that
               these measures will be adequate to protect its trade secrets and
               proprietary technology. Further, the Company may be subject to
               additional risks as it enters into transactions in countries
               where intellectual property laws are not well developed or are
               poorly enforced. Legal protections of the Company's rights may be
               ineffective in such countries. Litigation to defend and enforce
               the Company's intellectual property rights could result in
               substantial costs and diversion of resources and could have a
               material adverse effect on the Company's business, financial
               condition and results of operations, regardless of the final
               outcome of such litigation. Despite the Company's efforts to
               safeguard and maintain its proprietary rights both in the United
               States and abroad, there can be no assurance that the Company
               will be successful in doing so or that the steps taken by the
               Company in this regard will be adequate to deter misappropriation
               or independent third-party development of the Company's
               technology or to prevent an unauthorized third party from copying
               or otherwise obtaining and using the Company's products or
               technology. There can be no assurance that others will not
               independently develop similar technologies or duplicate any
               technology developed by the Company. Any such events could have a
               material adverse affect on the Company's business, financial
               condition and results of operations.

                  With certain exceptions, the Company historically has not
               actively pursued infringements of these patents. There can be no
               assurance that any future attempt by the Company to enforce its
               patents would be successful or would result in royalties which
               exceed the cost of such enforcement efforts, or that the Company
               will be able to detect all instances of infringement. The Company
               generally enters into confidentiality agreements with its
               employees, consultants, clients and potential clients and limits
               access to, and distribution of, its proprietary information. The
               Company maintains trademarks and service marks to identify its
               products, development tools and service offerings and relies upon
               trademark and trade dress laws to protect its proprietary rights
               in these marks.

                  The Company has entered into agreements with certain of its
               distributors giving them a limited, non-exclusive right to use
               portions of the Company's source code to create foreign language
               versions of the Company's products for distribution in foreign
               markets. In addition, the Company has entered into agreements
               with a number of its customers requiring the Company to place its
               source code in escrow. These escrow arrangements typically
               provide that these customers have a limited, non-exclusive right
               to use such code in the event that there is a bankruptcy
               proceeding by or against the Company, if the Company ceases to do
               business or if the Company fails to meet its support obligations.
               These arrangements may increase the likelihood of
               misappropriation by third parties.


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                  As the number of call management software applications in the
               industry increases and the functionality of these products
               further overlaps, software development companies like the Company
               may increasingly become subject to claims of infringement or
               misappropriation of the intellectual property rights of others.
               Although the Company believes that its software components and
               other intellectual property do not infringe on the intellectual
               property rights of others, there can be no assurance that such a
               claim will not be asserted against the Company in the future,
               that assertion of such claims will not result in litigation or
               that the Company would prevail in such litigation or be able to
               obtain a license for the use of any infringed intellectual
               property from a third party on commercially reasonable terms.
               Furthermore, litigation, regardless of its outcome, could result
               in substantial cost to the Company, divert management's attention
               from the Company's operations and delay customer purchasing
               decisions. Any infringement claim or litigation against the
               Company could, therefore, have a material adverse effect on the
               Company's results of operations and financial condition.

               DEPENDENCE ON KEY PERSONNEL

                  The Company's success will depend in large part upon the
               continued availability of the services of Aleksander Szlam, the
               Company's Chairman and Chief Executive Officer. Although the
               Company has an employment agreement with Mr. Szlam, the
               agreement does not obligate him to continue his employment with
               the Company. There can be no assurance that the Company will be
               able to retain the services of Mr. Szlam. The Company does not
               maintain key man life insurance on Mr. Szlam. The loss of the
               services of Mr. Szlam would have a material adverse effect on the
               Company's business, financial condition and results of
               operations. The Company is currently in the process of searching
               for a President/COO. There is no assurance that this position
               will be filled in the near term.

               CERTAIN ANTI-TAKEOVER PROVISIONS

                  The Board of Directors has authority to issue up to 20,000,000
               shares of preferred stock and to fix the rights, preferences,
               privileges and restrictions, including voting rights, of the
               preferred stock without further vote or action by the Company's
               shareholders. The rights of the holders of the Common Stock will
               be subject to, and may be adversely affected by, the rights of
               the holders of preferred stock that may be issued in the future.
               While the Company has no present intention to issue shares of
               preferred stock, such issuance could have the effect of making it
               more difficult for a third party to acquire a majority of the
               outstanding voting stock of the Company. In addition, the
               Company's Amended and Restated Articles of Incorporation and
               Bylaws contain provisions that may discourage proposals or bids
               to acquire the Company. These provisions could have the effect of
               making it more difficult for a third party to acquire control of
               the Company and adversely affect prevailing market prices for the
               Common Stock.


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               SHARES ELIGIBLE FOR FUTURE SALE

                  As described in the Company's Form S-8 dated December 4, 1997
               and filed with the Commission, the Company has 1,600,000 shares
               of Common Stock reserved for issuance under its stock plans, of
               which 1,116,541 shares were subject to outstanding options as of
               the date of filing of the S-8. Sales of substantial amounts of
               Common Stock in the public markets, pursuant to Rule 144 or
               otherwise, or the availability of such shares for sale could
               adversely affect the prevailing market prices for the Common
               Stock and impair the Company's ability to raise additional
               capital through the sale of equity securities in the future
               should it desire to do so.

               POSSIBLE VOLATILITY OF STOCK PRICE

                  The market price of the Common Stock could be subject to
               significant fluctuations in response to variations in quarterly
               operating results and other factors. In addition, the securities
               markets have experienced significant price and volume
               fluctuations from time to time that have often been unrelated or
               disproportionate to the operating performance of particular
               companies. Any announcement with respect to any adverse variance
               in revenue or earnings from levels generally expected by
               securities analysts or investors for a given period would have an
               immediate and significant adverse effect on the trading price of
               the Common Stock. In addition, factors such as announcements of
               technological innovations or new products by the Company, its
               competitors or third parties, rumors of such innovations or new
               products, changing conditions in the market for call center
               systems, changes in estimates by securities analysts,
               announcements of extraordinary events, such as acquisitions or
               litigation, or general economic conditions may have a significant
               adverse impact on the market price of the Common Stock.


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