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Exhibit 10.2
LOAN AGREEMENT
This
LOAN AGREEMENT, dated as of December 22, 2006 (the "Agreement"),
is
executed by and between CTI GROUP (HOLDINGS), INC., a Delaware
corporation
("Borrower"), whose address is 333 North Alabama Street, Suite
240,
Indianapolis, Indiana 46240, and NATIONAL CITY BANK, a national
banking
association (the "Bank"), whose address is One National City
Center, Suite 200E,
Indianapolis, Indiana 46255.
In
consideration of the mutual agreements hereinafter set forth,
the
Borrower and the Bank hereby agree as follows:
1. DEFINITIONS.
1.1
Defined Terms. For the purposes of this Agreement, the
following
capitalized words and phrases shall have the meanings set forth
below.
"Acquisition Loan" shall mean the direct advance made by the Bank
to
the Borrower in the form of a term loan under and pursuant to this
Agreement, as
set forth in Section 2.1 of this Agreement.
"Acquisition Loan Commitment" shall mean Two Million Six
Hundred
Thousand and No/100 Dollars ($2,600,000.00).
"Acquisition Loan Maturity Date" shall mean December 21, 2009,
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 substitution for the Acquisition Loan Note.
"Acquisition Loan Note" shall have the meaning set forth in
Section
4.1 hereof.
"Acquisitions" shall mean any transaction, or any series of
related
transactions, consummated on or after the date of this Agreement,
by which the
Borrower or any of its Subsidiaries (i) acquires any going business
or all or
substantially all of the assets of any firm, corporation or
division thereof,
whether through purchase of assets, merger or otherwise, or (ii)
directly or
indirectly acquires (in one transaction or as the most recent
transaction in a
series of transactions) at least a majority (in number of votes) of
the
securities of a corporation which have ordinary voting power for
the election of
directors (other than securities having such power only by reason
of the
happening of a contingency) or a majority (by percentage or voting
power) of the
outstanding partnership interests of a partnership.
"Affiliate" shall mean any Person other than the Borrower that
directly or indirectly controls, is controlled by, or is under
common control of
the Borrower.
"Applicable LIBOR Interest Rate" shall mean, with respect to a
particular thirty (30) day period, the rate per annum equal to the
LIBOR Base
Rate applicable to such thirty (30)
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day-period plus the Applicable Margin for the Acquisition Loan or
the Revolving
Loan. The Applicable LIBOR Interest Rate shall adjust automatically
upon each
adjustment of the LIBOR Base Rate.
"Applicable Interest Rate" as of any date shall mean a rate per
annum
equal to (i) the Applicable LIBOR Interest Rate in effect on such
date or (ii)
in the event the LIBOR Base Rate is not available, then the
Floating Rate in
effect on such date.
"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:
<TABLE>
<CAPTION>
Loans
Applicable Margin
-----
-----------------
<S>
<C>
Acquisition Loan
2.00%
Revolving Loan
2.35%
</TABLE>
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as
now
existing or hereafter amended.
"Borrowing Base Amount" shall mean an amount equal to the sum of:
(i)
one hundred percent (100%) of the cash held in Borrower's
collateral account
#985306193 with the Bank, (ii) eighty percent (80%) of the net
amount of the
Domestic Eligible Accounts, and (iii) ninety percent (90%) of the
net amount of
the Foreign Eligible Accounts.
"Business Day" shall mean any day other than a Saturday, Sunday or
a
legal holiday on which banks are authorized or required to be
closed for the
conduct of commercial banking business in Indianapolis, Indiana, or
for purposes
of determining the LIBOR Base Rate, in London, United Kingdom.
"Capital Expenditures" shall mean expenditures (including
Capital
Lease obligations which should be capitalized under GAAP) for the
acquisition of
fixed assets which are required to be capitalized under GAAP.
"Capital Lease" shall mean, as to any Person, a lease of any
interest
in any kind of property or asset, whether real, personal or mixed,
or tangible
or intangible, by such Person as lessee that is, or should be, in
accordance
with Financial Accounting Standards Board Statement No. 13, as
amended from time
to time, or, if such Statement is not then in effect, such
statement of GAAP as
may be applicable, recorded as a "capital lease" on the balance
sheet of the
Borrower prepared in accordance with GAAP.
"Change in Control" shall have the meaning set forth in Section
10.9
hereof.
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"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collateral" shall have the meaning set forth in the Security
Agreement executed by Borrower in favor of Bank.
"Consolidated" (whether in upper or lower case) refers to the
consolidation of the accounts of the Borrower and its Subsidiaries,
in
accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum for
such
period of (a) Consolidated Net Income, plus (b) to the extent
included in the
calculation of Consolidated Net Income for such period, (i)
Consolidated
Interest Charges, (ii) federal, state and local income taxes, and
(iii)
depreciation, amortization and other non-cash charges, minus (c)
cash payments
made during such period with respect to any non-cash charges
previously added
back in determining Consolidated EBITDA for any prior period.
"Consolidated Fixed Charge Coverage Ratio" means, at any date
of
determination, the ratio of (a) Consolidated EBITDA for the
applicable Reference
Period, to (b) the sum of (i) Consolidated Interest Charges for
such Reference
Period, plus (ii) principal payments due and payable on
Consolidated Funded Debt
during such Reference Period, plus (iii) Capital Lease obligations
due and
payable during such Reference Period, plus (iv) federal, state and
local income
taxes for such Reference Period, plus (v) dividends and
distributions made by
Borrower or any of its Subsidiaries during such Reference Period
(other than by
a Wholly-Owned Subsidiary to Borrower or another Wholly-Owned
Subsidiary), plus
(vi) capital expenditures made during such Reference Period.
"Consolidated Funded Debt Ratio" as of any date shall mean (a) the
sum
of (i) Consolidated Funded Debt as of such date; plus (ii) accrued
and unpaid
Consolidated Interest Charges as of such date; plus (iii) all other
liabilities
and obligations of Borrower to Bank or any other lender as of such
date; divided
by (b) an amount equal to Consolidated EBITDA for the applicable
Reference
Period multiplied by (i) two (2) if such Reference Period consists
of two
calendar quarters, (ii) four thirds (4/3) if such Reference Period
consists of
three calendar quarters, or (iii) one (1) if such Reference Period
consists of
four calendar quarters.
"Consolidated Funded Debt" at any time of determination means the
sum
at such time, without duplication, of (a) the outstanding principal
amount of
the Loans and any other outstanding Obligations, plus (b) the
outstanding
principal amount of any other Indebtedness for borrowed money owed
by the
Borrower or any of its Subsidiaries, plus (c) all obligations
(contingent or
otherwise) relating to letters of credit (other than the Security
Letter of
Credit) issued for the account of the Borrower or its Subsidiaries,
plus (d) to
the extent not otherwise included, all liabilities in respect of
Capitalized
Leases of the Borrower or its Subsidiaries, plus (e) to the extent
not otherwise
included, all purchase money Indebtedness; all as determined on a
consolidated
basis in accordance with GAAP.
"Consolidated Interest Charges" shall mean, for any period, the
sum,
without duplication, of (a) all interest, charges and related
expenses payable
by Borrower and its Subsidiaries for such period on or related to
borrowed money
or the deferred purchase price of
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assets that are treated as interest in accordance with GAAP, plus
(b) the
portion of rent payable by Borrower and its Subsidiaries for such
period under
Capital Leases that should be treated as interest in accordance
with GAAP, plus
(c) all charges paid or payable by Borrower and its Subsidiaries
during such
period pursuant to any Interest Rate Agreements; all determined on
a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, the net
income
of the Borrower and its Subsidiaries for such period determined on
a
consolidated basis in accordance with GAAP, after eliminating all
extraordinary
or nonrecurring gains or losses, including, without limitation, any
gains (or
losses) from the sale of assets or services other than in the
ordinary course of
business.
"Consolidated Net Worth" means, as of any date, the excess of
the
total assets of Borrower and its Subsidiaries over the total
liabilities of
Borrower and its Subsidiaries, as determined at such date on a
consolidated
basis in accordance with GAAP.
"Consolidated Tangible
Net Worth" of Borrower and its Subsidiaries at
any date of determination shall mean (a) the Consolidated Net Worth
as of such
date, minus (b) the sum (in each case only to the extent included
in the
determination of such Consolidated Net Worth) of (i) all assets
that would be
classified as intangible assets under GAAP, including, without
limitation,
goodwill (whether representing the excess of cost over book value
of assets
acquired or otherwise), patents, tradenames, copyrights,
franchises, operating
permits, unamortized debt discount and expense, organization costs,
research and
development costs and any revaluation or write-up in the book value
of assets
subsequent to the date of this Agreement, (ii) treasury stock and
minority
interests in subsidiaries or other entities, (iii) cash set apart
and held in a
sinking or other similar fund established for the purpose of
redemption or other
retirement of capital stock, and (iv) reserves for depreciation,
depletion,
obsolescence and amortization and all other reserves or
appropriations of
retained earnings that, in accordance with GAAP, should be
established in
connection with the businesses conducted by Borrower and its
Subsidiaries.
"Contingent Liability" and "Contingent Liabilities" shall mean,
respectively, each obligation and liability of the Borrower and all
such
obligations and liabilities of the Borrower incurred pursuant to
any agreement,
undertaking or arrangement by which the Borrower: (a) guarantees,
endorses or
otherwise becomes or is contingently liable upon (by direct or
indirect
agreement, contingent or otherwise, to provide funds for payment,
to supply
funds to, or otherwise to invest in, a debtor, or otherwise to
assure a creditor
against loss) the indebtedness, dividend, obligation or other
liability of any
other Person in any manner (other than by endorsement of
instruments in the
course of collection), including without limitation, any
indebtedness, dividend
or other obligation which may be issued or incurred at some future
time; (b)
guarantees the payment of dividends or other distributions upon the
shares or
ownership interest of any other Person; (c) undertakes or agrees
(whether
contingently or otherwise): (i) to purchase, repurchase, or
otherwise acquire
any indebtedness, obligation or liability of any other Person or
any property or
assets constituting security therefor, (ii) to advance or provide
funds for the
payment or discharge of any indebtedness, obligation or liability
of any other
Person (whether in the form of loans, advances, stock purchases,
capital
contributions or otherwise), or to maintain solvency, assets, level
of income,
working capital or other financial condition of any
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other Person, or (iii) to make payment to any other Person other
than for value
received; (d) agrees to lease property or to purchase securities,
property or
services from such other Person with the purpose or intent of
assuring the owner
of such indebtedness or obligation of the ability of such other
Person to make
payment of the indebtedness or obligation; (e) to induce the
issuance of, or in
connection with the issuance of, any letter of credit for the
benefit of such
other Person; or (f) undertakes or agrees otherwise to assure a
creditor against
loss. The amount of any Contingent Liability shall (subject to any
limitation
set forth herein) be deemed to be the outstanding principal amount
(or maximum
permitted principal amount, if larger) of the indebtedness,
obligation or other
liability guaranteed or supported thereby.
"Default Rate" shall mean a per annum rate of interest equal to
the
Applicable Interest Rate plus five percent (5%) per annum.
"Domestic Eligible Accounts" shall mean those accounts receivable
of
the Borrower and its Subsidiaries (which are included in the term
"Borrower" for
purposes of this definition only) which:
(a) are genuine in all respects and have arisen in the ordinary
course
of
the Borrower's business from (i) the performance of services by
the
Borrower, which services have been fully performed, acknowledged
and
accepted by the account debtor or (ii) the sale or lease of Goods
by the
Borrower, including C.O.D. sales, which Goods have been completed
in
accordance with the account debtor's specifications (if any) and
delivered
to
and accepted by the account debtor, and the Borrower has possession
of,
or
has delivered to the Bank at the Bank's request, shipping and
delivery
receipts evidencing such shipment;
(b) are evidenced by an invoice delivered to the account debtor
thereunder, and are not more than ninety (90) days (or one hundred
twenty
(120) days in the case of Extended Pay Account Debtors) past
invoice date;
(c) do not arise from a "sale on approval" or a "sale or
return";
(d) have not come from an account debtor which is the United States
or
any
state, county, city or other governmental body, or any
department,
agency or instrumentality thereof;
(e) are not due from an account debtor which is a Subsidiary or
a
director, officer, employee, agent, parent or Affiliate of the
Borrower;
(f) arise in connection with a sale to an account debtor who is
either
a
resident or citizen of, or that is an entity domiciled and
principally
doing business in, the United States of America;
(g) do not arise in connection with a sale to an account debtor who
is
located within a state which requires the Borrower, as a
precondition to
commencing or maintaining an action in the courts of that state,
either to
(i)
receive a certificate of
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authority to do business and be in good standing in such state, or
(ii)
file
a notice of business activities or similar report with such
state's
taxing authority, unless (A) the Borrower has taken one of the
actions
described in clauses (i) or (ii), (B) the failure to take one of
the
actions described in either clause (i) or (ii) may be cured
retroactively
by
the Borrower at its election, or (C) the Borrower has proven to
the
satisfaction of the Bank that it is exempt from any such
requirements under
such
state's laws;
(h) do not arise out of a contract or order which, by its
terms,
forbids or makes void or unenforceable the assignment by the
Borrower to
the
Bank of the Account arising with respect thereto and are not
unassignable to the Bank for any other reason;
(i) do not arise out of a contract or order which, by its
terms,
requires payment by an account debtor in advance of services
provided by
Borrower or its Subsidiaries;
(j) are the valid, legally enforceable and unconditional obligation
of
the
account debtor, are not the subject of any setoff,
counterclaim,
credit, allowance or adjustment by the account debtor, or of any
claim by
the
account debtor denying liability thereunder in whole or in part,
and
the
account debtor has not refused to accept and has not returned
or
offered to return any of the Goods or services which are the
subject of
such
account, provided that any account that would qualify as an
Domestic
Eligible Account except for the existence of a credit with respect
to such
account shall qualify as a Domestic Eligible Account to the extent
of the
positive difference between the amount of the account and the
amount of the
credit with respect to such account; and
(k) are not subject to any Lien whatsoever, other than the Lien of
the
Bank
and Permitted Liens.
An
account which is a Domestic Eligible Account shall cease to be
a
Domestic Eligible Account whenever it ceases to meet any one of the
foregoing
requirements.
If
invoices representing twenty-five percent (25%) or more of the
unpaid
net amount of all accounts from any one account debtor are more
than ninety (90)
days (or one hundred twenty (120) days in case of Extended Pay
Account Debtors)
past invoice date, then all accounts relating to such account
debtor shall cease
to be Domestic Eligible Accounts.
"Employee Plan" includes any pension, stock bonus, employee
stock
ownership plan, retirement, disability, medical, dental or other
health plan,
life insurance or other death benefit plan, profit sharing,
deferred
compensation, stock option, bonus or other incentive plan, vacation
benefit
plan, severance plan or other employee benefit plan or arrangement,
including,
without limitation, those pension, profit-sharing and retirement
plans of the
Borrower or its Subsidiaries described from time to time in the
financial
statements of the Borrower or its Subsidiaries and any pension
plan, welfare
plan, Defined Benefit Pension Plans (as defined in ERISA) or any
multi-employer
plan, maintained or administered by the Borrower or its
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Subsidiaries or to which the Borrower or its Subsidiaries is a
party or may have
any liability or by which the Borrower or its Subsidiaries is
bound.
"Environmental Laws" shall mean all federal, state, district and
local
laws, rules, regulations, ordinances, and consent decrees relating
to Hazardous
Materials, pollution and environmental matters, as now or at any
time hereafter
in effect, applicable to the Borrower's or its Subsidiaries'
businesses or
facilities owned and operated by the Borrower or its Subsidiaries,
including
laws relating to emissions, discharges, releases or threatened
releases of
pollutants, contamination, chemicals, or hazardous, toxic or
dangerous
substances, materials or wastes in the environment (including,
without
limitation, ambient air, surface water, land surface or subsurface
strata) or
otherwise relating to the generation, manufacture, processing,
distribution,
use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act
of
1974, as amended from time to time.
"Event of Default" shall mean any of the events or conditions
set
forth in Section 10 hereof.
"Extended Pay Account Debtors" shall mean the account debtors
listed
on Schedule 1.1 attached hereto, if any, as the same may be amended
to add
additional account debtors subject to the prior written consent of
the Bank in
its sole and absolute discretion.
"Floating Rate" means, for any day, a rate per annum equal to
the
Prime Rate minus one-half percent (0.5%).
"Foreign Eligible Accounts" shall mean those accounts receivable
of
the Borrower and its Subsidiaries (which are included in the term
"Borrower" for
purposes of this definition only) which are not Domestic Eligible
Accounts and
are insured by Euler Hermes, Inc.
"GAAP" shall mean United States generally accepted accounting
principles; provided, however, that GAAP as applied in the
preparation of any
interim financial statements or reports shall exclude normal fiscal
year-end
adjustments that are not materially adverse and information
required by GAAP to
be disclosed in footnotes to financial statements.
"Guaranties" shall mean, collectively, the U.S. Guaranties and the
UK
Guarantees.
"Guarantors" shall mean, collectively, the U.S. Guarantors and the
UK
Guarantors who shall be jointly and severally liable for all
obligations
guaranteed pursuant to the Guaranties.
"Hazardous Materials" shall mean any hazardous, toxic or
dangerous
substance, materials and wastes, including, without limitation,
hydrocarbons
(including naturally occurring or man-made petroleum and
hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation,
radioactive
materials, biological substances, polychlorinated biphenyls,
pesticides,
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herbicides and any other kind and/or type of pollutants or
contaminants
(including, without limitation, materials which include hazardous
constituents),
sewage, sludge, industrial slag, solvents and/or any other similar
substances,
materials or wastes that are or become regulated under any
Environmental Law
(including without limitation, any that are or become classified as
hazardous or
toxic under any Environmental Law).
"Indebtedness" shall mean, as to any Person, (a) all Liabilities
of
the Person, including, but not limited to, every obligation of such
Person (i)
for borrowed money, (ii) every obligation of such Person under
Capital Leases,
and (iii) any other debt, secured or unsecured, created, issued,
incurred or
assumed by such Person for the deferred purchase price of any
property or
services; (b) all indebtedness secured by any Lien existing on
property owned by
such Person whether or not such Person is personally liable for
payment of such
indebtedness; and (c) all Contingent Liabilities of such Person
whether or not
required by GAAP to be reflected on such Person's balance
sheet.
"Indemnified Party" and "Indemnified Parties" shall mean,
respectively, each of the Bank and any parent corporations,
affiliated
corporations or subsidiaries of the Bank, and each of their
respective officers,
directors and employees, attorneys and agents, and all of such
parties and
entities.
"Interest Rate Agreements" shall mean any interest rate
protection
agreement, interest rate swap or other interest rate hedge
arrangement (other
than any interest rate cap or other similar agreement or
arrangement pursuant to
which the Borrower has no credit exposure to the Bank) to or under
which the
Borrower or any Subsidiary of the Borrower is a party or
beneficiary.
"Liabilities" shall mean at all times all liabilities of the
Borrower
or any Subsidiary that would be shown as such on a balance sheet of
the Borrower
or its Subsidiary prepared in accordance with GAAP.
"LIBOR Base Rate" shall mean the rate of interest per annum as
determined by the Bank for each consecutive thirty (30)-day period
based on the
rates for thirty (30)-day dollar deposits (in an amount comparable
to the then
outstanding principal amount of the Loans) offered two Business
Days prior to
the applicable thirty (30)-day period by major banks in the London
interbank
market, as selected by the Bank. The Bank shall not be obligated to
give notice
of any change in the LIBOR Base Rate.
"Lien" shall mean any mortgage, pledge, hypothecation, judgment
lien
or similar legal process, title retention lien, or other lien or
security
interest, including, without limitation, the interest of a vendor
under any
conditional sale or other title retention agreement and the
interest of a lessor
under a lease of any interest in any kind of property or asset,
whether real,
personal or mixed, or tangible or intangible, by such Person as
lessee that is,
or should be, a Capital Lease on the consolidated balance sheet of
the Borrower
and its Subsidiaries prepared in accordance with GAAP.
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"Loans" shall mean, collectively, the Acquisition Loan and the
Revolving Loan made by the Bank to the Borrower under and pursuant
to this
Agreement.
"Loan Documents" shall have the meaning set forth in Section
3.1.
"Note" and "Notes" shall mean, respectively, each of and
collectively,
the Acquisition Loan Note and the Revolving Note.
"Obligations" shall mean the Loans, as evidenced by the Notes,
all
interest accrued thereon, any fees due the Bank hereunder, any
expenses incurred
by the Bank hereunder and any and all other liabilities and
obligations of the
Borrower and its Subsidiaries to the Bank hereunder or under any of
the other
Loan Documents, howsoever created, arising or evidenced, and
howsoever owned,
held or acquired, whether now or hereafter existing, whether now
due or to
become due, direct or indirect, absolute or contingent, and whether
several,
joint or joint and several, including, but not limited to, any
Interest Rate
Agreements.
"Obligor" shall mean the Borrower, any guarantor, accommodation
endorser, third party pledgor, or any other party liable with
respect to the
Obligations.
"Permitted Liens" shall have the meaning set forth in Section
7.2.
"Person" shall mean any individual, partnership, limited
liability
company, corporation, trust, joint venture, joint stock company,
association,
unincorporated organization, government or agency or political
subdivision
thereof, or other entity.
"Prime Rate" shall mean, for any day, the rate of interest in
effect
for such day as publicly announced from time to time by the Bank as
its prime
rate (whether or not such rate is actually charged by the Bank),
which is not
intended to be the Bank's lowest or most favorable rate of interest
at any one
time. Any change in the Prime Rate announced by the Bank shall take
effect at
the opening of business on the day specified in the public
announcement of such
change; provided that the Bank shall not be obligated to give
notice of any
change in the Prime Rate.
"Reference Period shall mean:
(a)
in reference to March 31, 2007, the calendar quarter ending on
such
date;
(b)
in reference to June 30, 2007, the period of two consecutive
calendar
quarters ending on such date;
(c)
in reference to September 30, 2007, the period of three
consecutive
calendar quarters ending on such date; and
(d)
in reference to December 31, 2007, and each succeeding date that is
the
last day of a calendar quarter, the period of four consecutive
calendar quarters
ending on such date.
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<PAGE>
"Revolving Loan" shall mean each direct advance and the aggregate
of
all such direct advances, from time to time made by the Bank to the
Borrower
under and pursuant to this Agreement, as set forth in Section 2.2
of this
Agreement.
"Revolving Loan Availability" shall mean at any time, the lesser
of
(a) the Revolving Loan Commitment, or (b) the Borrowing Base
Amount.
"Revolving Loan Commitment" shall mean Eight Million and 00/100
Dollars ($8,000,000.00).
"Revolving Loan Maturity Date" shall mean December 21, 2009,
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 substitution for the Revolving Note.
"Revolving Note" shall have the meaning set forth in Section
4.2
hereof.
"Security Letter of Credit" shall mean that certain
irrevocable,
standby letter of credit issued by SEB Bank, located in Sweden, to
the Bank
securing the Acquisition Loan and expiring December 21, 2010, that,
except to
the extent inconsistent with its express terms, shall be subject to
the Uniform
Customs and Practice for Documentary Credits, 1993 Revision,
International
Chamber of Commerce Publication No. 500.
"SPA" means the Stock Purchase Agreement by and between the
Borrower's
Subsidiary, CTI Data Solutions Ltd, and the shareholders of Ryder
Systems Ltd,
dated December 22, 2006, providing for the purchase by CTI Data
Solutions Ltd.
of all the stock of Ryder Systems Ltd.
"Subsidiary" and "Subsidiaries" shall mean any corporation,
association, trust, partnership, limited liability company or other
business
entity of which the designated parent shall at any time own
directly or
indirectly through a Subsidiary or Subsidiaries at least a majority
(by number
of votes) of the outstanding Voting Stock.
"UCC" shall mean the Uniform Commercial Code in effect in Indiana
from
time to time.
"UK Guarantees" shall have the meaning set forth in Section
3.1(h).
"UK Guarantors" shall mean, collectively, CTI Data Solutions Ltd,
CTI
Billing Solutions Ltd and Ryder Systems Ltd., who shall be jointly
and severally
liable for all obligations guaranteed pursuant to the UK
Guarantees.
"U.S. Guaranties" shall have the meaning set forth in Section
3.1(g).
"U.S. Guarantors" shall mean, collectively, CTI Data Solutions
(USA)
Inc., CTI Billing Solutions, Inc., Centillion Data Systems, L.L.C.,
CTI Delaware
Holdings, Inc., CTI Data
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Solutions Ltd, CTI Billing Solutions Ltd and Ryder Systems Ltd.,
who shall be
jointly and severally liable for all obligations guaranteed
pursuant to the U.S.
Guaranties.
"Voting Stock" shall mean the capital stock or similar interests
of
any class or classes (however designated) of a corporation or any
other Person,
the holders of which are at the time entitled to vote for the
election of a
majority of the directors (or persons performing similar functions)
of such
Person.
"Wholly-Owned" shall mean a Subsidiary all of whose equity
interests
are owned, directly or indirectly, legally and beneficially by the
Borrower.
1.2
Accounting Terms. Any accounting terms used in this Agreement which
are
not specifically defined herein shall have the meanings customarily
given them
in accordance with GAAP. Calculations and determinations of
financial and
accounting terms used and not otherwise specifically defined
hereunder and the
preparation of financial statements to be furnished to the Bank
pursuant hereto
shall be made and prepared, both as to classification of items and
as to amount,
in accordance with GAAP as used in the preparation of the most
recently audited
financial statements of the Borrower. If any changes in accounting
principles or
practices from those used in the preparation of the financial
statements are
hereafter occasioned by the promulgation of rules, regulations,
pronouncements
and opinions by or required by the Financial Accounting Standards
Board or the
American Institute of Certified Public Accountants (or any
successor thereto or
agencies with similar functions), which results in a material
change in the
method of accounting in the financial statements required to be
furnished to the
Bank hereunder or in the calculation of financial covenants,
standards or terms
contained in this Agreement, the parties hereto agree to enter into
good faith
negotiations to amend such provisions so as equitably to reflect
such changes to
the end that the criteria for evaluating the financial condition
and performance
of the Borrower will be the same after such changes as they were
before such
changes; and if the parties fail to agree on the amendment of such
provisions,
the Borrower will furnish financial statements in accordance with
such changes
but shall provide calculations for all financial covenants and
perform all
financial covenants herein in accordance with applicable accounting
principles
and practices in effect immediately prior to such changes.
1.3
Other Terms Defined in UCC. All other capitalized words and
phrases
used herein and not otherwise specifically defined shall have the
respective
meanings assigned to such terms in the UCC, as amended from time to
time, to the
extent the same are used or defined therein.
1.4
Other Definitional Provisions; Construction. Whenever the context
so
requires, the neuter gender includes the masculine and feminine,
the single
number includes the plural, and vice versa, and in particular the
word
"Borrower" shall be so construed. The words "hereof", "herein" and
"hereunder"
and words of similar import when used in this Agreement shall refer
to this
Agreement as a whole and not to any particular provision of this
Agreement, and
references to Article, Section, Subsection, Schedule, Exhibit and
like
references are references to this Agreement unless otherwise
specified. An Event
of Default shall "continue" or be "continuing" until such Event of
Default has
either been cured by the Borrower with the Bank's written consent
thereto or
waived by the Bank in accordance with Section 12.3 hereof.
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<PAGE>
References in this Agreement to any party shall include such
party's successors
and permitted assigns. References to any "Section" shall be a
reference to such
Section of this Agreement unless otherwise stated. To the extent
any of the
provisions of the other Loan Documents are inconsistent with the
terms of this
Loan Agreement, the provisions of this Loan Agreement shall
govern.
2. COMMITMENT OF THE BANK.
2.1
Acquisition Loan.
(a) Acquisition Loan Commitment. Subject to the terms and
conditions
of
this Agreement and the other Loan Documents, and in reliance upon
the
representations and warranties of the Borrower and its Subsidiaries
set
forth herein and in the other Loan Documents, the Bank agrees to
make the
Acquisition Loan. The Acquisition Loan shall be used by the
Borrower to
purchase all of the shares of Ryder Systems Ltd. The Acquisition
Loan may
be
prepaid in whole or in part at any time pursuant to Section 2.1(c),
but
shall be due in full on the Acquisition Loan Maturity Date, unless
the
credit extended under the Acquisition Loan is otherwise terminated
or
extended as provided in this Agreement.
(b) Acquisition Loan Interest and Payments. Except as otherwise
provided in this Section 2.1(b), the principal amount of the
Acquisition
Loan
outstanding from time to time shall bear interest at the
Applicable
Interest Rate. Accrued and unpaid interest on the unpaid principal
balance
of
the Acquisition Loan outstanding from time to time shall be due
and
payable monthly, in arrears, commencing on January 5, 2007 and
continuing
on
the 5th day of each calendar month thereafter, and on the
Acquisition
Loan
Maturity Date. Any amount of principal or interest on the
Acquisition
Loan
which is not paid when due, whether at stated maturity, by
acceleration or otherwise, shall bear interest payable on demand at
the
Default Rate.
(c) Principal Prepayments. The Borrower may from time to time
prepay
the
Acquisition Loan, in whole on in part, without any prepayment
premium
or
penalty whatsoever.
2.2
Revolving Loan.
(a) Revolving Loan Commitment. Subject to the terms and conditions
of
this
Agreement and the other Loan Documents, and in reliance upon
the
representations and warranties of the Borrower and its Subsidiaries
set
forth herein and in the other Loan Documents, the Bank agrees to
make
advances on such Revolving Loan at such times as the Borrower may
from time
to
time request until, but not including, the Revolving Loan Maturity
Date,
and
in such amounts as the Borrower may from time to time request,
provided, however, that the aggregate principal balance of all
Revolving
Loan
outstanding at any time shall not exceed the Revolving Loan
Availability. The Revolving Loan made by the Bank may be repaid
and,
subject to the terms and conditions hereof, borrowed again up to,
but not
including, the Revolving Loan Maturity
12
<PAGE>
Date
unless the Revolving Loan is otherwise terminated or extended
as
provided in this Agreement. The Revolving Loan shall be used by
the
Borrower for the purpose of acquiring all of the shares of Ryder
Systems
Ltd
and working capital.
(b) Revolving Loan Interest and Payments. Except as otherwise
provided
in
this Section 2.2(b), the principal amount of the Revolving Loan
outstanding from time to time shall bear interest at the
Applicable
Interest Rate. Accrued and unpaid interest on the unpaid principal
balance
of
the Revolving Loan outstanding from time to time shall be due
and
payable monthly, in arrears, commencing on January 5, 2007 and
continuing
on
the 5th day of each calendar month thereafter, and on the Revolving
Loan
Maturity Date. Any amount of principal or interest on the Revolving
Loan
which is not paid when due, whether at stated maturity, by
acceleration or
otherwise, shall bear interest payable on demand at the Default
Rate.
(c)
Revolving Loan Principal Repayments.
(i) Mandatory Principal Prepayments. The Revolving Loan shall
be
repaid by the Borrower on the Revolving Loan Maturity Date,
unless
payable sooner pursuant to the provisions of this Agreement. In
the
event the aggregate outstanding principal balance of the
Revolving
Loan hereunder exceeds the Revolving Loan Availability, the
Borrower
shall, without notice or demand of any kind, immediately make
such
repayments of the Revolving Loan or take such other actions as
shall
be necessary to eliminate such excess.
(ii) Optional Prepayments. In addition to a mandatory
prepayment
under Section 2.2(c)(i), the Borrower may from time to time prepay
the
Revolving Loan, in whole or in part, without any prepayment premium
or
penalty whatsoever.
2.3
Interest and Fee Computation; Collection of Funds. Except as
otherwise
set forth herein, all interest and fees shall be calculated on the
basis of a
year consisting of 360 days and shall be paid for the actual number
of days
elapsed. Principal payments submitted in funds not immediately
available shall
continue to bear interest until collected. If any payment to be
made by the
Borrower hereunder or under the Notes shall become due on a day
other than a
Business Day, such payment shall be made on the next succeeding
Business Day and
such extension of time shall be included in computing any interest
in respect of
such payment.
2.4
Commitment Fee and Funds Transfer Fee. In addition to the principal
and
interest and other amounts payable under the Notes, Borrower agrees
to pay to
Bank (i) a nonrefundable commitment fee in the amount of
Twenty-Five Thousand
and No/100 Dollars ($25,000.00), which is due and payable on even
date herewith,
and (ii) a funds transfer fee in the amount of $20,319.40 to
compensate the Bank
for the Bank's use of funds necessary to make the Loans available
to the
Borrower on even date herewith in order for the Borrower to
consummate the
transactions contemplated by the SPA.
13
<PAGE>
2.5
Unused Revolving Loan Commitment Fee. The Borrower agrees to pay to
the
Bank a fee with respect to the unused portion from time to time of
the Revolving
Loan Commitment calculated at the rate of one-quarter percent
(0.25%) per annum
for each calendar quarter (or portion thereof) from the date of
this Agreement
to the Revolving Loan Maturity Date on the average daily amount by
which the
Revolving Loan Commitment exceeds the outstanding principal amount
of the
Revolving Loan during such calendar quarter. Such fee shall be
payable quarterly
in arrears on the fifth day after the end of each calendar quarter,
with a final
payment on the earlier of the Revolving Loan Maturity Date or such
other date on
which the Revolving Loan Commitment terminates.
2.6
Indemnity. Borrower agrees to indemnify and hold Bank harmless from
and
against any loss, cost or expense that Bank incurs as a result of
(i) any
default by Borrower in payment, when due, of the principal or
interest on any
Loan, including any loss or expense arising from interest or fees
payable by
Bank to banks for funds obtained by it in order to maintain its
LIBOR Base Rate,
or (ii) Borrower's payment of principal on a Loan on a day that
either (i) is
not the last day of a thirty (30)-day period for which the LIBOR
Base Rate has
been, or is to be, determined, or (ii) if the last day of such a
thirty (30)-day
period is not a Business Day, on the first Business Day following
such thirty
(30)-day period.
3. CONDITIONS OF BORROWING.
Notwithstanding any other provision of this Agreement, the Bank
shall not
be required to disburse or make all or any portion of the Loans if
any of the
following conditions shall have occurred.
3.1
Loan Documents. At the initial disbursement of the Acquisition
Loan,
the Borrower shall have failed to execute and deliver to the Bank
any of the
following Loan Documents (collectively, the "Loan Documents"), all
of which must
be reasonably satisfactory to the Bank and the Bank's counsel in
form, substance
and execution:
(a) Loan Agreement. Three copies of this Agreement duly executed
by
the
Borrower.
(b)
Acquisition Loan Note. An Acquisition Loan Note duly executed
by
the
Borrower.
(c) Revolving Note. A Revolving Note duly executed by the
Borrower.
(d) Security Agreement. A Security Agreement duly executed by each
of
the Borrower, CTI Data
Solutions (USA) Inc., CTI Billing Solutions, Inc.,
Centillion Data Systems, L.L.C. and CTI Delaware Holdings, Inc.
(collectively, the "U.S. Security Agreements").
(e) Charge Over Shares In Ryder Systems Ltd. A Charge Over Shares
In
Ryder Systems Ltd duly executed by Ryder Systems Ltd (the "Ryder
Charge
Over
Shares").
14
<PAGE>
(f) Charge Over Shares in CTI Data Solutions Ltd. A Charge Over
Shares
In CTI Data Solutions (the
"CTI Charge Over Shares").
(g) Debenture. A Debenture duly executed by each of the Borrower,
CTI
Data
Solutions Ltd. and Ryder Systems Ltd. (collectively, the "UK
Security
Agreements").
(h) Guaranty. A Guaranty duly executed by each of the U.S.
Guarantors
(collectively, the "U.S. Guaranties").
(i) Guarantee and Indemnity. A Guarantee and Indemnity duly
executed
by
each of the UK Guarantors (collectively, the "UK Guarantees").
(j) Borrowing Base Certificate. If required by Bank in its sole
discretion, a Borrowing Base Certificate in a form satisfactory to
Bank in
its
sole discretion (a "Borrowing Base Certificate"), certified as
accurate
by
the Borrower.
(k) Resolutions. Resolutions of the board of directors,
shareholders,
managers and/or members of the Borrower and Guarantors authorizing
the
execution of this Agreement and the Loan Documents.
(l) Additional Documents. Such other certificates, financial
statements, schedules, resolutions, opinions of counsel, notes and
other
documents which are provided for hereunder or which the Bank
shall
reasonably require.
3.2
Insurance. Borrower shall fail to furnish to Bank evidence of
insurance
coverage as required by the Loan Documents.
3.3
Event of Default. Any Event of Default, or any event which, with
notice
or lapse of time, or both would constitute an Event of Default,
shall have
occurred and be continuing.
3.4
Adverse Changes. A material adverse change in the financial
condition
or affairs of the Borrower or any Guarantor, as determined in the
Bank's
reasonable discretion, shall have occurred.
3.5
Litigation. Any litigation or governmental proceeding shall have
been
instituted against the Borrower, its Subsidiaries, any Guarantor or
any of their
respective officers, managers or members which in the opinion of
the Bank's
legal counsel, materially adversely affects the financial condition
or continued
operation of the Borrower, its Subsidiaries or any Guarantor.
3.6
Representations and Warranties. Any representation or warranty of
the
Borrower, its Subsidiaries or any Guarantor contained herein or in
any Loan
Document shall be untrue or incorrect as of the date of any Loan as
though made
on such date, except to the extent such representation or warranty
expressly
relates to an earlier date.
15
<PAGE>
3.7
Stock Purchase Agreement. At the initial disbursement of the
Acquisition Loan, Borrower shall fail to furnish to Bank a
fully-executed copy
of the SPA and evidence of the closing on the date of this
Agreement of the
purchase of stock pursuant to the SPA, all in form and substance
satisfactory to
Bank in its sole discretion.
4. NOTES EVIDENCING LOANS.
4.1
Acquisition Loan Note. The Acquisition Loan shall be evidenced by
a
single note (together with any and all renewal, extension,
modification or
replacement notes executed by the Borrower and delivered to the
Bank and given
in substitution therefor, the "Acquisition Loan Note") duly
executed by the
Borrower and payable to the order of the Bank. At the time of the
initial
disbursement of the Acquisition Loan or a repayment made in whole
or in part
thereon, an appropriate notation thereof shall be made on the books
and records
of the Bank. All amounts recorded shall be, absent demonstrable
error,
conclusive and binding evidence of (i) the principal amount of the
Acquisition
Loan advanced hereunder, (ii) any unpaid interest owing on the
Acquisition Loan,
and (iii) all amounts repaid on the Acquisition Loan. The failure
to record any
such amount or any error in recording such amounts shall not,
however, limit or
otherwise affect the obligations of the Borrower under the
Acquisition Loan Note
to repay the principal amount of the Acquisition Loan, together
with all
interest accruing thereon.
4.2
Revolving Note. The Revolving Loan shall be evidenced by a single
note
(together with any and all renewal, extension, modification or
replacement notes
executed by the Borrower and delivered to the Bank and given in
substitution
therefor, the "Revolving Note"), duly executed by the Borrower and
payable to
the order of the Bank. At the time of the initial disbursement of
the Revolving
Loan and at each time an additional disbursement shall be requested
hereunder or
a repayment made in whole or in part thereon, an appropriate
notation thereof
shall be made on the books and records of the Bank. All amounts
recorded shall
be, absent demonstrable error, conclusive and binding evidence of
(i) the
principal amount of the Revolving Loan advanced hereunder, (ii) any
unpaid
interest owing on the Revolving Loan, and (iii) all amounts repaid
on the
Revolving Loan. The failure to record any such amount or any error
in recording
such amounts shall not, however, limit or otherwise affect the
obligations of
the Borrower under the Revolving Note to repay the principal amount
of the
Revolving Loan, together with all interest accruing thereon.
5. MANNER OF BORROWING.
Each
advance of the Revolving
