Exhibit 4.1
FIRST MODIFICATION OF LOAN DOCUMENTS
THIS FIRST MODIFICATION OF LOAN
DOCUMENTS (this “ Agreement ”) is effective
as of the 13 day of November, 2007, by and between CTI GROUP
(HOLDINGS), INC., a Delaware corporation (“
Borrower ”), and NATIONAL CITY BANK, a national
banking association (the “ Bank ”).
RECITALS:
A. The Bank has heretofore made
loans to Borrower in the aggregate principal amount of Ten Million
Six Hundred Thousand and No/100 Dollars ($10,600,000.00) pursuant
to the terms and conditions of a Loan Agreement dated as of
December 22, 2006 between Borrower and the Bank (the
“Loan Agreement,” all terms not otherwise defined
herein shall have the meanings set forth in the Loan Agreement),
and as evidenced by (i) an Acquisition Loan Promissory Note
dated December 22, 2006, in the principal amount of Two
Million Six Hundred Thousand and No/100 Dollars ($2,600,000.00)
made payable by Borrower to the order of the Bank and (ii) a
Revolving Line of Credit Promissory Note dated December 22,
2006, in the principal amount of Eight Million and No/100 Dollars
($8,000,000.00) made payable by Borrower to the order of the
Bank.
B. The Loans are further secured
by Guaranties dated December 22, 2006 from Guarantors to the
Bank (collectively, the “Guaranties”).
C. Borrower desires to amend the
Loan Documents in order to reduce the amount of the existing
Revolving Line of Credit to Three Million and No/100 Dollars
($3,000,000.00), modify the advance basis for the Revolving Loan,
and to otherwise amend the Loan Documents as set forth
herein.
AGREEMENTS:
NOW, THEREFORE, in
consideration of (i) the facts set forth hereinabove (which
are hereby incorporated into and made a part of this Agreement),
(ii) the agreements by the Bank to modify the Loan Documents,
as provided herein, (iii) the covenants and agreements
contained herein, and (iv) for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1. Amendment to
Loan Agreement .
(a) Amendment of
Section 1.1 . Section 1.1 of the Loan Agreement is
amended by inserting the following definitions as alphabetically
appropriate:
“ Amortization ”
shall mean the total amount added to amortization expense, as
reflected on the Borrower’s financial statement and
determined in accordance with GAAP.
“ Depreciation ”
shall mean the total amounts added to depreciation, obsolescence,
valuation and other proper reserves, as reflected on the
Borrower’s financial statement and determined in accordance
with GAAP.
“ Letter of Credit to
Cure ” shall have the meaning set forth in Article 2
of the First Modification of Loan Documents.
“ Consolidated Debt Service
Coverage Ratio ” means the ratio of (a) Consolidated
Net Income plus Depreciation, Amortization and Consolidated
Interest Charges, excluding gains and losses on the sale of assets
and distributions and/or dividends; to (b) current maturities
of long-term debt plus interest.
“ Consolidated Funded Debt
Ratio ” as of any date shall mean (a) the
Consolidated Funded Debt less any debt secured by a letter of
credit or cash to (b) Consolidated EBITDA.
(b) Amendment of
Section 1.1 . Section 1.1 of the Loan Agreement is
further amended by amending and restating the following definitions
in their entirety:
“ Applicable Margin
” shall mean the rate per annum added to the LIBOR Base Rate
to determine the Interest Rate for the Acquisition Loan and the
Revolving Loan as set forth below:
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Loans |
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Applicable Margin |
| Acquisition Loan |
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2.00% |
| Revolving Loan |
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2.50% |
“ Borrowing Base Amount
” shall mean an amount equal to the sum of (i) eighty
percent (80%) of the net amount of the Domestic Eligible Accounts
and (ii) ninety percent (90%) of the net amount of the Foreign
Eligible Accounts.
“ Foreign Eligible
Accounts ” shall mean those accounts receivable of the
Borrower and its Subsidiaries (which are not included in the term
“Borrower” for purposes of this definition only) which
are not Domestic Eligible Accounts, are insured by Euler Hermes,
Inc., represent completed projects and are less than Two Thousand
Five Hundred and No/100 Dollars ($2,500.00).
“ Revolving Loan
Commitment ” shall mean Three Million and No/100 Dollars
($3,000,000.00).
“ Revolving Loan Maturity
Date ” shall mean December 30, 2010, unless extended
by the Bank pursuant to any modification, extension or renewal note
executed by the Borrower and accepted by the Bank in its sole and
absolute discretion in substation for the Revolving Note.
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“ Revolving Loan Note
” shall have the meaning set forth in Section 4.2
hereof, and shall include the First Amended and Restated Revolving
Loan Promissory Note dated as of November 13, 2007.
“ UK Guarantors ”
shall mean, collectively, CTI Data Solutions Ltd, CTI Billing
Solutions Ltd (formerly Ryder Systems Ltd), CTI Group Ltd (formerly
CTI Billing Solutions Ltd) and F BVI , who shall be jointly and
severally liable for all obligations.
(c) Amendment of
Article 2 . Article 2 of the Loan Agreement is
amended by inserting the following Section 2.7 to the end
thereof:
2.7 Arrangement Fee . In
addition to the principal and interest and other amounts payable
under the Notes and the Loan Agreement, Borrower agrees to pay Bank
a non-refundable arrangement fee in the amount of Fifteen Thousand
and No/100 Dollars ($15,000.00) to compensate Bank for its efforts
in arranging the loan modification.
(d) Amendment of
Article 8 . Article 8 of the Loan Agreement is
amended by amending and restating the following subsection 8.6(a)
as follows:
(a) “as
soon as available, and in any event, within ninety (90) days
after the close of each of its fiscal years...”
(e) Amendment of
Article 8 . Article 8 of the Loan Agreement is
amended by inserting the following Section 8.18 to the end
thereof:
8.18 Financial Statements of
Fairford Holdings, Ltd., BVI Borrower covenants that guarantor
Fairford Holdings, Ltd., BVI shall provide Bank a copy of the
annual audited financial statement of Fairford Holdings, Ltd., BVI
within ninety (90) days after the close of each of its fiscal
years.
(f) Amendment of
Article 9 . Article 9 of the Loan Agreement is
amended by deleting Section 9.1 and inserting the following in
its place:
9.1 Consolidated Debt Service
Coverage Ratio . The Borrower
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