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SECURITY AGREEMENT
CTI GROUP (HOLDINGS), INC., a Delaware corporation (hereinafter
referred to as
"Debtor"), hereby grants a security interest to NATIONAL CITY BANK,
a national
banking association, located at One National City Center, Suite
200E,
Indianapolis, Indiana 46255 (hereinafter referred to as "Secured
Party"), in and
to and collaterally assigns to Secured Party all of its interest
in, all assets
of Debtor, wherever located, including without limitation all
furnishings,
equipment, fixtures, goods, computer and data processing systems,
software and
hardware, inventory (including, without limitation, raw materials,
work in
process, parts, supplies, finished goods, and materials used or
consumed in
Debtor's business) and other articles of personal property of
Debtor (the "
Chattels"); all contracts, leases now or hereafter entered into by
and between
Debtor and any party; all accounts (as defined in the Indiana
Uniform Commercial
Code as presently or hereafter in effect ("UCC")), deposit
accounts, credit card
receivables, funds, instruments, documents, promissory notes,
letter of credit
rights, chattel paper (whether electronic or tangible), payables
arising out of
leases, licenses and/or assignments, and all other intangibles and
general
intangibles, investment property and payment intangibles of Debtor,
now acquired
or hereafter arising, including, but not limited to, all customer
lists, logo,
good will, permits, licenses, operating rights, franchises,
inventions,
processes, formulae, patent rights, copyrights, copyright rights,
trademarks,
trademark rights, service marks, service mark rights, trade names,
trade name
rights, franchises, franchise rights and other like business
property rights,
and all applications to acquire such rights, for which application
may at any
time be made by Debtor; all refunds, payments, repayments,
deposits, supporting
obligations and monies received or to be received and all claims
therefor,
arising from or relating to the ownership, sale, lease or other
disposition of
any of the Collateral (as hereinafter defined), irrespective of the
time period
to which such refunds, payments, repayments, deposits or monies
relate,
including property tax or other tax refunds and utility refunds,
rebates or
deposits; and all additions and accessions thereto, all
replacements and
renewals of any part thereof, and the proceeds (including, without
limitation,
insurance, indemnity, warranty and guaranty proceeds) of any of
these items (all
of which property, including the Chattels and all of the other
aforementioned
property is hereinafter collectively referred to as the
"Collateral").
If any personal property which becomes part of the Collateral is
subject to a
conditional bill of sale, security agreement or other lien covering
such
property, then, in the event of any Event of Default under this
Security
Agreement, all the right, title and interest of Debtor in and to
any and all
such personal property is hereby assigned to Secured Party,
together with the
benefits of any deposits or payments now or hereafter made by
Debtor, or the
predecessors or successors in title to Debtor in the Collateral.
Should Secured
Party desire to impose the lien of this Security Agreement more
specifically
upon said fixtures and articles of said personal property, Debtor
will make,
execute and deliver, or cause to be made, executed or delivered, on
demand such
security instrument as may be deemed necessary or appropriate or
required to
effectuate the same.
It is the intention of Debtor and of this instrument, that the
terms of the
Security Agreement shall cover the interests of Debtor of whatever
kind in and
to all the chattel personal property of every kind and description
owned by
Debtor or in which Debtor may have an interest, and used or to be
used in the
operation of, or in connection with the operation of, the business
of Debtor
together with replacements of any of the chattel personal property
presently
owned by Debtor, and all increases and additions thereto, and all
after acquired
personal property used in connection with the business of Debtor or
any interest
therein, of any kind or description, hereafter acquired by Debtor
for use in the
operation of, or connected with the operation of, said business,
which after
acquired property shall become a part of the Collateral.
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The interests of Secured Party hereunder shall be held by Secured
Party and its
successors and assigns, subject, however, to the terms and
conditions of this
Security Agreement.
ARTICLE I
SECURITY
Section 1.01. Performance and Obligations Secured. This Security
Agreement is
given to secure the payment and performance of the Obligations (as
such term is
defined in the Loan Agreement of even date herewith by and between
Debtor and
Secured Party (the "Loan Agreement")). This Security Agreement
shall also secure
any and all renewals or extensions of the whole or any part of the
Obligations,
however evidenced, with interest at such lawful rate as may be
agreed upon, and
any such renewals or extensions or any change in the terms or rate
of interest
shall not impair in any manner the validity of or the priority of
this Security
Agreement, nor release Debtor from liability for the Obligations.
Reference is
hereby made to the Loan Agreement as if set out here at length and
incorporated
herein.
ARTICLE II
REPRESENTATIONS AND COVENANTS OF DEBTOR
Debtor represents, covenants and agrees with Secured Party as
follows:
Section 2.01. Name; Formation. Debtor represents and warrants that
it is a
corporation duly organized and validly existing under the laws of
the State of
Delaware under the name of CTI Group (Holdings), Inc. Debtor's
chief executive
office is at 333 N. Alabama Street, Suite 240, Indianapolis,
Indiana 46255.
Section 2.02. Covenants of Title. Debtor warrants that it is
lawfully possessed
of and has good and complete title to all the Collateral, free and
clear of all
liens and encumbrances other than Permitted Liens (as defined in
the Loan
Agreement).
Section 2.03. Covenant To Comply with Terms. Debtor will pay and
perform all
Obligations, as the same become due, in accordance with its terms,
without
relief from valuation or appraisement laws, and it will keep,
observe and
perform all of the terms, provisions, covenants and agreements of
this Security
Agreement and the Loan Agreement.
Section 2.04. Covenant To Maintain, Repair and Replace Collateral.
Debtor will,
at all times, maintain, preserve and keep the Collateral in good
repair, working
order and condition and will not commit or suffer any waste
thereof, reasonable
wear and tear excepted.
Section 2.05. Covenants Regarding Possession of Collateral. Debtor
or a
Guarantor (as defined in the Loan Agreement) shall have possession
of the
Collateral, except where expressly otherwise provided in this
Security Agreement
or where Secured Party chooses to perfect its security interest by
possession in
addition to the filing of a financing statement. Where Collateral
is in the
possession of a third party, Debtor will, upon request of Secured
Party during
the continuance of an Event of Default, join with Secured Party in
notifying the
third party of Secured Party's security interest and obtaining an
acknowledgment
from the third party that it is holding the Collateral for the
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