CHARGE OVER SHARES IN CTI
DATA SOLUTIONS LTD.
between
CTI GROUP (HOLDINGS), INC.
as Chargor
and
NATIONAL CITY BANK
as the Secured Party
relating to
USD $ 10,600,000 LOAN AGREEMENT
(XXXXXXX & XXXXXXX LOGO)
XxxxXxxxx Xxx Xxxxxxxxx Xxxxxx Xxxxxx XX0X 0XX
T x00 (0)00 0000 0000 F x00 (0)00 0000 0000 DX Box No 12
CONTENTS
1. Definitions and interpretation........................................ 1
2. Covenant and Charge................................................... 2
3. Deposit of certificates............................................... 2
4. Voting rights and dividends........................................... 3
5. Chargor's representations and undertakings............................ 3
6. Further assurance..................................................... 4
7. Power of attorney..................................................... 5
8. Power of sale......................................................... 5
9. Receiver.............................................................. 5
10. Effectiveness of collateral........................................... 6
11. Subsequent interests and accounts..................................... 7
12. Costs and expenses.................................................... 7
13. Currency conversion................................................... 8
14. Notices............................................................... 8
15. Successors............................................................ 8
16. Counterparts.......................................................... 8
17. Third party rights.................................................... 8
18. Law................................................................... 8
19. Jurisdiction.......................................................... 8
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THIS AGREEMENT is dated as of December 22, 2006 and made
BETWEEN:
(1) CTI GROUP (HOLDINGS), INC., (the "Chargor"), a Delaware corporation in
the United States having its principal office at 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000; and
(2) NATIONAL CITY BANK, (the "Secured Party"), a national banking
association in the United States and having its principal place of
business at Xxx Xxxxxxxx Xxxx Xxxxxx, Xxxxx 000X, Xxxxxxxxxxxx, Xxxxxxx
00000.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement:
"Act" means the Law of Property Xxx 0000.
"Charged Portfolio" means the Shares and the Related Assets.
"Collateral Rights" means all rights, powers and remedies of the
Secured Party provided by this Agreement or by law.
"Debenture" means the debenture, of even date herewith, entered into by
and between the Chargor and the Secured Party.
"Enforcement Event" means an Event of Default.
"Finance Documents" means the Loan Agreement, the Notes, the U.S.
Security Agreements, the U.S. Guaranties, the Debenture, this
Agreement, the Ryder Charge Over Shares and "Finance Document" means
any one of them.
"Loan Agreement" means the Loan Agreement, of even date herewith,
entered into by and between the Chargor and the Secured Party.
"Notes" means, collectively, (i) that certain Acquisition Loan
Promissory Note in the original principal amount of $2,600,000 issued
by the Obligor in favour of the Bank of even date herewith, and (ii)
that certain Revolving Loan Promissory Note in the original principal
amount of $8,000,000 issued by the Obligor in favour of the Bank of
even date herewith;
"Related Assets" means all dividends, interest and other moneys payable
in respect of the Shares and all other rights, benefits and proceeds in
respect of or derived from the Shares (whether by way of redemption,
bonus, preference, option, substitution, conversion or otherwise).
"Ryder Charge Over Shares" means the charge by CTI Data Solutions Ltd.
to the Secured Party of its shareholding in Ryder Systems Ltd. dated of
even date herewith.
"Secured Obligations" means all obligations owing to the Secured Party
by the Chargor on any account, whether present or future, actual or
contingent (and whether incurred by the Chargor alone or jointly, and
whether as principal or surety or in some other capacity) under the
Finance Documents as amended or supplemented to by agreement.
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"Shares" means all of the shares in the share capital of CTI Data
Solutions Ltd., a company registered in England, held by, to the order
or on behalf of the Chargor at any time.
"U.S. Guaranties" means those certain Guaranties, of even date
herewith, entered into for the benefit of the Secured Party by each of
CTI Data Solutions (USA) Inc., CTI Billing Solutions, Inc., CTI
Delaware Holdings, Inc., Centillion Data Systems, LLC, CTI Data
Solutions Ltd, CTI Billing Solutions Ltd. and Ryder Systems Ltd..
"U.S. Security Agreements" means those certain Security Agreements, of
even date herewith, entered into for the benefit of the Secured Party
by each of CTI Data Solutions (USA) Inc., CTI Billing Solutions, Inc.,
CTI Delaware Holdings, Inc., Centillion Data Systems, LLC and Ryder
Systems Ltd..
1.2 In this Agreement, any reference to (a) a "clause" is, unless otherwise
stated, a reference to a clause hereof and (b) "this Agreement" is a
reference to this Agreement as amended, varied or supplemented from
time to time. Clause headings are for ease of reference only.
1.3 Unless expressly defined in this Agreement, capitalised terms defined
in the Loan Agreement have the same meaning in this Agreement.
1.4 The provisions of clauses of the Loan Agreement apply to this Agreement
as though they were set out in full in this Agreement except that
references to the Agreement are to be construed as references to this
Agreement.
2. COVENANT AND CHARGE
2.1 The Chargor shall on demand of the Secured Party discharge each of the
Secured Obligations and pay to the Secured Party, when due and payable,
the Secured Obligations.
2.2 The Chargor charges the Charged Portfolio, with full title guarantee
and by way of first fixed charge, in favour of the Secured Party for
the payment and discharge of all of the Secured Obligations.
3. DEPOSIT OF CERTIFICATES
3.1 The Chargor shall, on the date of this Agreement deposit with the
Secured Party:
(A) all certificates and other documents of title to the Shares,
and
(B) stock transfer forms (executed in blank by or on behalf of the
Chargor) in respect of the Shares.
3.2 The Chargor shall, promptly upon the accrual, offer or issue of any
Related Assets (in the form of stocks, shares, warrants or other
securities) in which the Chargor has a beneficial interest, procure the
delivery to the Secured Party of:
(A) all certificates and other documents of title representing
those Related Assets, and
(B) such stock transfer forms or other instruments of transfer
forms (executed in blank by or on behalf of the Chargor) in
respect of those Related Assets as the Secured Party may
require.
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4. VOTING RIGHTS AND DIVIDENDS
4.1 Prior to an Enforcement Event the Secured Party agrees that the Chargor
shall be entitled:
(A) to receive all dividends, interest and other moneys arising
from the Charged Portfolio unless prohibited from doing so
under terms of the Loan Agreement; and
(B) to exercise all voting rights in relation to the Charged
Portfolio PROVIDED THAT the Chargor shall not exercise such
voting rights in any manner, or otherwise permit or agree to
any (a) variation of the rights attaching to or conferred by
all or any part of the Charged Portfolio, or (b) increase in
the issued share capital of any company whose shares are
charged pursuant to this Agreement, which in the opinion of
the Secured Party would prejudice the value of, or the ability
of the Secured Party to realise, the security created by this
Agreement.
4.2 At any time whilst an Enforcement Event is continuing, the Secured
Party may at its discretion (in the name of the Chargor or otherwise
and without any further consent or authority from the Chargor):
(A) require the Chargor to do all things that the Secured Party
may require to transfer the Shares to, and register the Shares
in the name of, the Secured Party (or its nominees);
(B) require the Chargor to issue such instructions as the Secured
Party may require in order to procure the issue or transfer to
the Secured Party (or its nominees) of the Related Assets;
(C) exercise (or refrain from exercising) any voting rights in
respect of the Charged Portfolio (and the Secured Party may
revoke, or cause to be revoked, any proxies given pursuant to
clause 4.1(B));
(D) apply all dividends, interest and other moneys arising from
the Charged Portfolio as though they were the proceeds of sale
under this Agreement;
(E) exercise (or refrain from exercising) the powers and rights
conferred on or exercisable by the legal or beneficial owner
of the Charged Portfolio including the right, in relation to
any company whose shares or other securities are included in
the Charged Portfolio, to concur or participate in:
(1) the reconstruction, amalgamation, sale or other
disposal of such company or any of its assets or
undertaking (including the exchange, conversion or
reissue of any shares or securities as a consequence
thereof),
(2) the release, modification or variation of any rights
or liabilities attaching to such shares or
securities, and
(3) the exercise, renunciation or assignment of any right
to subscribe for any shares or securities,
in each case in such manner and on such terms as the Secured
Party may think fit, and the proceeds of any such action shall
form part of the Charged Portfolio.
5. CHARGOR'S REPRESENTATIONS AND UNDERTAKINGS
5.1 Except with the Secured Party's prior written consent, the Chargor
shall not:
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(A) assign or dispose of all or any part of the Charged Portfolio;
or
(B) create, grant or permit to exist:
(1) any security interest over, or
(2) any restriction on the ability to transfer or realise,
all or any part of the Charged Portfolio.
5.2 The Chargor hereby represents and warrants to the Secured Party and
undertakes during the subsistence of this Agreement that:
(A) it is and will be the sole legal and beneficial owner of the
Charged Portfolio free from any security interest and all
third party rights except as created by this Agreement;
(B) it has not sold or disposed of, and will not sell or dispose
of, the benefit of all or any of its rights, title and
interest in the Charged Portfolio;
(C) it has and will have the necessary power to enable it to enter
into and perform its obligations under this Agreement;
(D) this Agreement constitutes its legal, valid and binding
obligation and is an effective security over the Charged
Portfolio; and
(E) all necessary authorisations to enable it to enter into this
Agreement have been obtained and are, and will remain, in full
force and effect.
5.3 The Chargor represents to the Secured Party that the Shares are fully
paid and represent the whole of the issued Share Capital of CTI Data
Solutions Ltd. The Chargor undertakes to pay all calls or other
payments due in respect of any part of the Charged Portfolio. If the
Chargor fails to make any such payment the Secured Party may make that
payment on behalf of the Chargor and any sums so paid by the Secured
Party shall be reimbursed by the Chargor on demand together with
interest thereon. Such interest shall be calculated from the due date
up to the actual date of payment (after, as well as before, judgement)
at the Default Rate as defined in the Loan Agreement or at such
commercial rate as the Secured Party may reasonably determine.
6. FURTHER ASSURANCE
6.1 The Chargor shall promptly execute all documents (including transfers)
and do all things (including the delivery, transfer, assignment or
payment of all or part of the Charged Portfolio to the Secured Party or
its nominee(s)) that the Secured Party may reasonably specify for the
purpose of:
(A) exercising the Collateral Rights or
(B) securing and perfecting its security over or title to all or
any part of the Charged Portfolio (including transferring the
Charged Portfolio into the name of the Secured Party or its
nominee(s)).
6.2 The Chargor shall upon demand from the Secured Party, at any time
whilst an Enforcement Event is continuing:
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(A) procure the transfer of the Charged Portfolio, into the name
of the Secured Party or such nominee(s), agents or purchasers
as it shall direct, and
(B) execute all documents and do all other things that the Secured
Party may require to facilitate the realisation of the Charged
Portfolio.
7. POWER OF ATTORNEY
7.1 The Chargor, by way of security, irrevocably appoints the Secured Party
to be its attorney and in its name, on its behalf and as its act and
deed to execute, deliver and perfect all documents (including any stock
transfer forms and other instruments of transfer) and do all things
that the Secured Party may consider to be requisite for (a) carrying
out any obligation imposed on the Chargor under this Agreement or (b)
exercising any of the rights conferred on the Secured Party by this
Agreement or by law, (including, after the security constituted hereby
has become enforceable, the exercise of any right of a legal or a
beneficial owner of the Charged Portfolio). The Chargor shall ratify
and confirm all things done and all documents executed by the Secured
Party in the exercise of that power of attorney.
8. POWER OF SALE
8.1 At any time whilst an Enforcement Event is continuing, the Secured
Party shall be entitled, without prior notice to the Chargor or prior
authorisation from any court, to sell or otherwise dispose of all or
any part of the Charged Portfolio (at the times, in the manner and on
the terms it thinks fit). The Secured Party shall be entitled to apply
the proceeds of that sale or other disposal in paying the costs of that
sale or disposal and in or towards the discharge of the Secured
Obligations.
8.2 The power of sale or other disposal in clause 8.1 shall operate as a
variation and extension of the statutory power of sale under section
101 of the Act. The restrictions contained in sections 93 and 103 of
the Act shall not apply to this Agreement or to any exercise by the
Secured Party of its right to consolidate mortgages or its power of
sale.
8.3 A certificate in writing by an officer or agent of the Secured Party
that any power of sale or other disposal has arisen and is exercisable
shall be conclusive evidence of that fact, in favour of a purchaser of
all or any part of the Charged Portfolio.
9. RECEIVER
9.1 At any time whilst an Enforcement Event is continuing or if a petition
is presented for the making of an administration order in relation to
the Chargor or if requested by the Chargor, the Secured Party may by
writing (acting through an authorised officer of the Secured Party)
without notice to the Chargor appoint one or more persons to be
receiver of the whole or any part of the Charged Portfolio (each such
person being:
(A) entitled to act individually as well as jointly and
(B) for all purposes deemed to be the agent of the Chargor).
9.2 In addition to the powers of the Secured Party conferred by clause 8
(Power of Sale), each person appointed pursuant to clause 9.1 shall
have, in relation to the part of the Charged Portfolio in respect of
which he was appointed, all the powers:
(A) conferred by the Act on a receiver appointed under that Act,
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(B) of an administrative receiver set out in Schedule 1 to the
Insolvency Xxx 0000 (whether or not such person is an
administrative receiver) and
(C) (if such person is an administrative receiver) all the other
powers exercisable by an administrative receiver in relation
to the Chargor by virtue of the Insolvency Xxx 0000.
9.3 The Secured Party may fix the remuneration of any receiver appointed by
it.
9.4 Each receiver is deemed to be the agent of the Chargor for all purposes
and accordingly is deemed to be in the same position as a receiver duly
appointed by a mortgagee under the Act. The Chargor alone shall be
responsible for his contracts, engagements, acts, omissions, defaults
and losses and for liabilities incurred by him and the Secured Party
shall not incur any liability (either to the Chargor or to any other
person) by reason of the Secured Party making his appointment as a
receiver or for any other reason.
10. EFFECTIVENESS OF COLLATERAL
10.1 The obligations of the Chargor and the Collateral Rights shall not be
discharged, impaired or otherwise affected by:
(A) any winding-up, dissolution, administration or re-organisation
of or other change in the Chargor or any other person;
(B) any of the Secured Obligations being at any time illegal,
invalid, unenforceable or ineffective;
(C) any time or other indulgence being granted to the Chargor any
other person;
(D) any amendment, variation, waiver or release of any of the
Secured Obligations;
(E) any failure to take or failure to realise the value of any
other collateral in respect of the Secured Obligations or any
release, discharge, exchange or substitution of any such
collateral; or
(F) any other act, event or omission which but for this provision
would or might operate to impair, discharge or otherwise
affect the obligations of the Chargor hereunder.
10.2 The collateral constituted by this Agreement and the Collateral Rights
shall be cumulative, in addition to and independent of every other
security which the Secured Party may at any time hold for the Secured
Obligations or any rights, powers and remedies provided by law. No
prior security held by the Secured Party over the whole or any part of
the Charged Portfolio shall merge into the collateral hereby
constituted.
10.3 No failure on the part of the Secured Party to exercise, or delay on
its part in exercising, any Collateral Right shall operate as a waiver
thereof, nor shall any single or partial exercise of a Collateral Right
preclude any further or other exercise of that or any other Collateral
Right.
10.4 The security created by or pursuant to this Agreement and the
Collateral Rights shall not be prejudiced by any unenforceability or
invalidity of any other agreement or document or by any time or
indulgence granted to the Chargor or any other person or by any other
thing which might otherwise prejudice that security or any Collateral
Right.
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10.5 If, at any time, any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, the legality, validity or enforceability of (a) the
remaining provisions of this Agreement and (b) such provisions under
the law of any other jurisdiction shall not in any way be affected or
impaired thereby.
10.6 None of the Secured Party, its nominee(s) or any receiver appointed
pursuant to this Agreement shall be liable by reason of (a) taking any
action permitted by this Agreement or (b) any neglect or default in
connection with the Charged Portfolio or (c) the taking possession or
realisation of all or any part of the Charged Portfolio, except in the
case of gross negligence or wilful default upon its part and shall not
be liable to account as a mortgagee in possession.
10.7 Any settlement or discharge hereunder shall be conditional upon no
security or payment to the Secured Party by, or on behalf of, the
Chargor being avoided or reduced by virtue of any bankruptcy,
insolvency, liquidation or similar laws of general application and
shall in those circumstances be void
10.8 Upon the Secured Obligations being discharged in full and the Secured
Party not being under any further actual or contingent obligation to
make advances or provide other financial accommodation to the Chargor
or any other person under any of the Finance Documents, the Secured
Party shall, at the request and cost of the Chargor, release and cancel
the security constituted by this Agreement, in each case subject to
clause 10.7 and without recourse to, or any representation or warranty
by, the Secured Party or any of its nominees.
10.9 The security constituted by this Agreement shall be continuing security
and will extend to the ultimate balance of the Secured Obligations
regardless of any intermediate payment or satisfaction of the whole or
any part of the Secured Obligations.
11. SUBSEQUENT INTERESTS AND ACCOUNTS
11.1 If the Secured Party at any time receives notice of any subsequent
mortgage, assignment, charge or other interest affecting all or any
part of the Charged Portfolio, all payments thereafter made by the
Chargor to the Secured Party shall be treated as having been credited
to a new account of the Chargor and not as having been applied in
reduction of the Secured Obligations as at the time when the Secured
Party received notice.
11.2 All moneys received, recovered or realised by the Secured Party under
this Agreement (including the proceeds of any conversion of currency)
may in its discretion be credited to and held in any suspense or
impersonal account pending their application from time to time in or
towards the discharge of any of the Secured Obligations.
12. COSTS AND EXPENSES
12.1 All the Secured Party's costs and expenses (including reasonable legal
fees, stamp duties and any value added tax) incurred in connection
with:
(A) the execution of this Agreement or otherwise in relation to
it,
(B) the perfection or enforcement of the collateral hereby
constituted or
(C) the exercise of any Collateral Right
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shall be reimbursed to the Secured Party by the Chargor on demand on a
full indemnity basis together with interest from the date the same were
incurred to the date of payment at the Default Rate as provided in the
Loan Agreement.
13. CURRENCY CONVERSION
13.1 For the purpose of or pending the discharge of any of the Secured
Obligations the Secured Party may convert any money received, recovered
or realised or subject to application by it under this Agreement from
one currency to another, as the Secured Party may think fit: and any
such conversion shall be effected at the Secured Party's spot rate of
exchange for the time being for obtaining such other currency with the
first currency.
14. NOTICES
14.1 Any notice or demand to be served by one person on another pursuant to
this Agreement may be served by leaving it at the address specified
above (or such other address as such person may previously have
specified) or by letter posted by prepaid first-class post to such
address (which shall be deemed to have been served two Business Days
(as that term is defined in the Loan Agreement) following the date of
posting, or by fax to the fax number specified above (or such other
number as such person may previously have specified) which shall be
deemed to have been received when transmission has been completed)
PROVIDED THAT any notice to be served on the Secured Party shall be
effective only when actually received by the Secured Party, marked for
the attention of the department or officer specified by the Secured
Party for such purpose.
15. SUCCESSORS
15.1 This Agreement shall remain in effect despite any amalgamation or
merger (however effected) relating to the Secured Party; and references
to the Secured Party shall be deemed to include any assignee or
successor in title of the Secured Party and any person who, under the
laws of its jurisdiction of incorporation or domicile, has assumed the
rights and obligations of the Secured Party hereunder or to which under
such laws the same have been transferred.
16. COUNTERPARTS
This Agreement may be executed in counterparts, in which case this
Agreement will be as effective as if all signatures on the counterparts
were on a single copy of this Agreement.
17. THIRD PARTY RIGHTS
No person who is not a party to this Agreement shall have any rights
under the Contracts (Rights of Third Parties) Xxx 0000 to enforce any
term of this Agreement.
18. LAW
18.1 This Agreement shall be governed by, and construed in accordance with,
English law.
19. JURISDICTION
19.1 Subject to clause 19.2, the parties irrevocably agree that the English
courts shall have exclusive jurisdiction in relation to any legal
action or proceedings arising out of or in connection with this
Agreement ("Proceedings") and waive any objection to Proceedings in
such courts on the grounds of venue or on the grounds that Proceedings
have been brought in an inappropriate forum.
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19.2 The parties agree that clause 19.1 operates for the benefit of the
Secured Party and accordingly the Secured Party shall be entitled to
take Proceedings in any other court or courts having jurisdiction.
19.3 To the extent that the Chargor may be entitled in any jurisdiction to
claim for itself or its assets immunity from any suit, execution,
attachment (whether provisional or final, in aid of execution, before
judgment or otherwise) or other legal process or to the extent that in
any jurisdiction such immunity (whether or not claimed) may be
attributed to it or its assets, it irrevocably agrees not to claim and
irrevocably waives such immunity to the fullest extent permitted by the
laws of such jurisdiction.
IN WITNESS WHEREOF this Agreement has been signed on behalf of the Secured Party
and executed as a deed by the Chargor and is intended to be and is hereby
delivered by it as a deed on the date specified above.
CHARGOR
EXECUTED as a deed by )
CTI GROUP (HOLDINGS), INC. )
acting by
/s/ Xxxx Xxxxxxx
Director
/s/ Xxxx Xxxxxxx
Director/Secretary
SECURED PARTY
NATIONAL CITY BANK,
a national banking association in the United States
by
/s/ Xxxx X. Xxxxxxxxxxx
Vice President
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APPENDIX
Company No.: 2969593
THE COMPANIES XXX 0000
COMPANY LIMITED BY SHARES
WRITTEN RECORD
OF
CTI DATA SOLUTIONS LTD (THE "COMPANY")
Xxxx Xxxxxxx, [The] undersigned, being [the sole] Member[s] of the Company for
the time being entitled to receive notice of, attend and vote at General
Meetings of the Company unanimously pass the following Resolution and agree that
they shall take effect as though they had been passed at a general meeting of
the Company duly convened and held:
THAT Article [ ] of the Company's Articles of Association be deleted
and replaced with the following provision:
"The directors may, in their absolute discretion and without assigning
any reason therefor, decline to register the transfer of a share,
whether or not it is a fully paid share, and the first sentence of
regulation 24 in Table A shall not apply to the Company provided
however that notwithstanding any provision of these Articles or of
Table A, the directors shall not be entitled to refuse to register, and
shall register, any transfer of shares by or to [ ] or its nominees
pursuant to the [Charge Over Shares] to be dated on or about [ ] and
created by [ ] in favour of [ ]."
/s/ Xxxx Xxxxxxx
Authorised Signatory
for and on behalf of
CTI Data Solutions Ltd
DATED : 12/22/06
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