Exhibit 4.2
REVOLVING LINE OF CREDIT
PROMISSORY NOTE
$8,000,000.00 December 22, ▇▇▇▇
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1. AGREEMENT TO PAY. FOR VALUE RECEIVED, CTI GROUP (HOLDINGS), INC., a
Delaware corporation ("BORROWER"), hereby promises to pay to the order of
NATIONAL CITY BANK, a national banking association, its successors and assigns
("LENDER"), the principal sum of Eight Million and No/100 Dollars
($8,000,000.00) ("LOAN"), or so much thereof as may be advanced pursuant to that
certain Loan Agreement of even date herewith between Borrower and Lender ("LOAN
AGREEMENT") at the place and in the manner hereinafter provided, together with
interest thereon at the rate or rates described below, and any and all other
amounts which may be due and payable hereunder from time to time without relief
from valuation or appraisement laws.
2. INTEREST RATE. Interest shall accrue on the outstanding principal
balance of this Note from the date hereof through the Revolving Loan Maturity
Date (as defined in the Loan Agreement) at the interest rate as set forth in the
Loan Agreement.
3. PAYMENT TERMS.
3.1 PRINCIPAL AND INTEREST. Payments of principal and interest due
under this Note, if not sooner declared to be due in accordance with the
provisions hereof, shall be made as follows:
(a) Payment of interest shall be made as set forth in the Loan
Agreement.
(b) The unpaid principal balance of this Note, if not sooner paid
or declared to be due in accordance with the terms hereof or the terms
of the Loan Agreement, together with all accrued and unpaid interest
thereon and any other amounts due and payable hereunder or under any
other Loan Document (as hereinafter defined), shall be due and payable
in full at the Revolving Loan Maturity Date.
(c) Provided no Event of Default (as hereinafter defined) exists,
any portion of the principal balance of this Note which is repaid may
be reborrowed by Borrower prior to the Revolving Loan Maturity Date
provided that in no event shall the outstanding principal balance of
this Note at any time exceed Eight Million and No/100 Dollars
($8,000,000.00).
3.2 APPLICATION OF PAYMENTS. Prior to the occurrence of an Event of
Default, all payments and prepayments on account of the indebtedness
evidenced by this Note shall be applied as follows: (a) first, to fees,
expenses, costs and other similar amounts
then due and payable to Lender, including, without limitation any
prepayment premium, exit fee or late charges due hereunder, (b) second, to
accrued and unpaid interest on the principal balance of this Note, (c)
third, to the payment of principal due in the month in which the payment or
prepayment is made, (d) fourth, to any escrows, impounds or other amounts
which may then be due and payable under the Loan Documents, (e) fifth, to
any other amounts then due Lender hereunder or under any of the Loan
Documents, and (f) last, to the unpaid principal balance of this Note. Any
prepayment on account of the indebtedness evidenced by this Note shall not
extend or postpone the due date or reduce the amount of any subsequent
payment of principal or interest due hereunder. After an Event of Default
has occurred and is continuing, payments may be applied by Lender to
amounts owed hereunder and under the Loan Documents in such order as Lender
shall determine, in its sole discretion.
3.3 METHOD OF PAYMENTS. All payments of principal and interest
hereunder shall be paid by automatic debit, wire transfer, check or in coin
or currency which, at the time or times of payment, is the legal tender for
public and private debts in the United States of America and shall be made
at such place as Lender or the legal holder or holders of this Note may
from time to time appoint in the payment invoice or otherwise in writing,
and in the absence of such appointment, then at the offices of Lender at
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made by check shall be deemed paid on the date Lender receives such check;
provided, however, that if such check is subsequently returned to Lender
unpaid due to insufficient funds or otherwise, the payment shall not be
deemed to have been made and shall continue to bear interest until
collected. Notwithstanding the foregoing, the final payment due under this
Note must be made by wire transfer or other final funds. If requested by
Borrower, interest, principal payments and any fees and expenses owed
Lender from time to time will be deducted by Lender automatically on the
due date from Borrower's account with Lender, as designated in writing by
Borrower. Borrower will maintain sufficient funds in the account on the
dates Lender enters debits authorized by this Note. If there are
insufficient funds in the account on the date Lender enters any debit
authorized by this Note, the debit will be reversed. Borrower may terminate
this direct debit arrangement at any time by sending written notice to
Lender at the address specified in the Loan Agreement.
3.4 LATE CHARGE. If any payment of interest or principal due hereunder
is not made within ten (10) days after such payment is due in accordance
with the terms hereof, then, in addition to the payment of the amount so
due, Borrower shall pay to Lender a "late charge" of the greater of: (i)
five cents for each whole dollar so overdue or (ii) Twenty-Five Dollars
($25.00) to defray part of the cost of collection and handling such late
payment. Borrower agrees that the damages to be sustained by the holder
hereof for the detriment caused by any late payment are extremely difficult
and impractical to ascertain, and that the amount of five cents for each
one dollar due is a reasonable estimate of such damages, does not
constitute interest, and is not a penalty.
4. SECURITY. This Note is secured by (i) the Loan Agreement, (ii) the
Guaranties (the "U.S. GUARANTIES") of even date herewith from CTI Data Solutions
(USA) Inc., CTI Billing Solutions, Inc., CTI Delaware Holdings, Inc., Centillion
Data Systems, L.L.C., CTI Data
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Solutions Ltd, CTI Billing Solutions Ltd and Ryder Systems Ltd to Lender, (iii)
the Security Agreements ("U.S. SECURITY AGREEMENTS") of even date herewith from
Borrower, CTI Data Solutions (USA) Inc., CTI Billing Solutions, Inc., CTI
Delaware Holdings, Inc. and Centillion Data Systems, L.L.C. to Lender, (iv) the
Charge Over Shares In Ryder Systems Ltd from Ryder Systems Ltd to Lender of even
date herewith (the "CHARGE OVER SHARES"), (v) the Debentures between the
Borrower, CTI Data Solutions Ltd and Ryder Systems Ltd, and Lender of even date
herewith (the "UK DEBENTURES"), and (vi) the Guarantee and Indemnities between
CTI Data Solutions Ltd and Ryder Systems Ltd and Lender of even date herewith
(the "UK GUARANTEES") (the Loan Agreement, the U.S. Guaranties, the U.S.
Security Agreements, the Charge Over Shares, the UK Debentures, the UK
Guarantees and any other document now or hereafter given to evidence or secure
payment of this Note or delivered to induce Lender to disburse the proceeds of
the Loan, as such documents may hereafter be amended, restated or replaced from
time to time, are hereinafter collectively referred to as the "LOAN DOCUMENTS").
Reference is hereby made to the Loan Documents (which are incorporated herein by
reference as fully and with the same effect as if set forth herein at length)
for a statement of the covenants and agreements contained therein, a statement
of the rights, remedies, and security afforded thereby, and all matters therein
contained.
5. EVENTS OF DEFAULT. The occurrence of any "Event of Default" under any of
the Loan Documents (after the expiration of any applicable notice and/or cure
periods) shall constitute an "EVENT OF DEFAULT" under this Note.
6. REMEDIES. At the election of the holder hereof, and after written notice
to Borrower, the principal balance remaining unpaid under this Note, and all
unpaid interest accrued thereon and any other amounts due hereunder, shall be
and become immediately due and payable in full upon the occurrence and during
the continuance of any Event of Default. Failure to exercise this option shall
not constitute a waiver of the right to exercise same in the event of any
subsequent Event of Default. No holder hereof shall, by any act of omission or
commission, be deemed to waive any of its rights, remedies or powers hereunder
or otherwise unless such waiver is in writing and signed by the holder hereof,
and then only to the extent specifically set forth therein. The rights, remedies
and powers of the holder hereof, as provided in this Note, the Loan Agreement
and in all of the other Loan Documents are cumulative and concurrent, and may be
pursued singly, successively or together against Borrower, any guarantor
thereof, the security given at any time to secure the repayment hereof, all at
the sole discretion of the holder hereof. If any suit or action is instituted or
attorneys are employed to collect this Note or any part hereof, Borrower
promises and agrees to pay all costs of collection, including reasonable
attorneys' fees and court costs.
7. COVENANTS AND WAIVERS. Borrower and all others who now or may at any
time become liable for all or any part of the obligations evidenced hereby,
expressly agree hereby to be jointly and severally bound, and jointly and
severally: (i) waive and renounce any and all homestead, redemption and
exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness evidenced by this Note or by any extension or renewal
hereof; (ii) waive presentment and demand for payment, notices of nonpayment and
of dishonor, protest of dishonor, and notice of protest; (iii) waive any and all
notices in connection with the delivery and acceptance hereof and all other
notices in connection with the performance, default, or enforcement of the
payment hereof or hereunder; (iv) waive any and all lack of diligence and
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delays in the enforcement of the payment hereof; (v) agree that the liability of
Borrower, guarantor, endorser or obligor shall be unconditional and without
regard to the liability of any other person or entity for the payment hereof,
and shall not in any manner be affected by any indulgence or forbearance granted
or consented to by Lender to any of them with respect hereto; (vi) consent to
any and all extensions of time, renewals, waivers, or modifications that may be
granted by Lender with respect to the payment or other provisions hereof, and to
the release of any security at any time given for the payment hereof, or any
part thereof, with or without substitution, and to the release of any person or
entity liable for the payment hereof; and (vii) consent to the addition of any
and all other makers, endorsers, guarantors, and other obligors for the payment
hereof, and to the acceptance of any and all other security for the payment
hereof, and agree that the addition of any such makers, endorsers, guarantors or
other obligors, or security shall not affect the liability of Borrower, any
guarantor and all others now liable for all or any part of the obligations
evidenced hereby. This provision is a material inducement for Lender making the
Loan to Borrower.
8. OTHER GENERAL AGREEMENTS.
8.1 The Loan is a business loan and is not being made for personal,
family or household purposes.
8.2 Time is of the essence hereof.
8.3 This Note is governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the
statutes, laws and decisions of the State of Indiana. This Note may not be
changed or amended orally but only by an instrument in writing signed by
the party against whom enforcement of the change or amendment is sought.
8.4 Lender shall not be construed for any purpose to be a partner,
joint venturer, agent or associate of Borrower or of any lessee, operator,
concessionaire or licensee of Borrower in the conduct of its business, and
by the execution of this Note, Borrower agrees to indemnify, defend, and
hold Lender harmless from and against any and all damages, costs, expenses
and liability that may be incurred by Lender as a result of a claim that
Lender is such partner, joint venturer, agent or associate.
8.5 This Note has been made and delivered at Indianapolis, Indiana and
all funds disbursed to or for the benefit of Borrower will be disbursed in
Indianapolis, Indiana.
8.6 The obligations and liabilities of Borrower under this Note shall
be binding upon and enforceable against Borrower and its successors and
assigns. This Note shall inure to the benefit of and may be enforced by
Lender and its successors and assigns.
8.7 If any provision of this Note is deemed to be invalid by reason of
the operation of law, or by reason of the interpretation placed thereon by
any administrative agency or any court, Borrower and Lender shall negotiate
an equitable adjustment in the provisions of the same in order to effect,
to the maximum extent permitted by law, the
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purpose of this and the validity and enforceability of the remaining
provisions, or portions or applications thereof, shall not be affected
thereby and shall remain in full force and effect.
8.8 If the interest provisions herein or in any of the Loan Documents
shall result, at any time during the Loan, in an effective rate of interest
which, for any month, exceeds the limit of usury or other laws applicable
to the Loan, all sums in excess of those lawfully collectible as interest
of the period in question shall, without further agreement or notice
between or by any party hereto, be applied upon principal immediately upon
receipt of such monies by Lender, with the same force and effect as though
the payer has specifically designated such extra sums to be so applied to
principal and Lender had agreed to accept such extra payment(s) as a
premium-free prepayment. Notwithstanding the foregoing, however, Lender may
at any time and from time to time elect by notice in writing to Borrower to
reduce or limit the collection to such sums which, when added to the said
first-stated interest, shall not result in any payments toward principal in
accordance with the requirements of the preceding sentence. In no event
shall any agreed to or actual exaction as consideration for this Loan
transcend the limits imposed or provided by the law applicable to this
transaction or the makers hereof.
8.9 Lender may at any time, upon prior written notice to Borrower,
assign its rights in this Note and the Loan Documents, or any part thereof
and transfer its rights in any or all of (i) the Collateral (as such term
is defined in the U.S. Security Agreements), (ii) the Charged Portfolio (as
such term is defined in the Charge Over Shares), and (iii) the Real
Property, Chattels, Controlled Accounts, Policies, Intellectual Property,
Investments, Rental Income, Contracts and Debts (as such terms are defined
in the UK Debentures), and Lender thereafter shall be relieved from all
liability with respect to such Collateral. In addition, Lender may at any
time sell one or more participations in this Note. Borrower may not assign
its interest in this Note, or any other agreement with Lender or any
portion thereof, either voluntarily or by operation of law, without the
prior written consent of Lender.
8.10 Capitalized terms not defined herein shall have the same meaning
given to them in the Loan Agreement.
9. NOTICES. All notices required under this Note will be in writing and
will be transmitted in the manner and to the addresses or facsimile numbers
required by the Loan Agreement, or to such other addresses or facsimile numbers
as Lender and Borrower may specify from time to time in writing.
10. WAIVER OF JURY TRIAL. THE LENDER AND THE BORROWER, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE IRREVOCABLY, THE RIGHT TO TRIAL BY JURY WITH RESPECT TO
ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS NOTE OR ANY OF THE OTHER OBLIGATIONS, THE COLLATERAL, OR ANY OTHER
AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS NOTE
OR THE LOAN DOCUMENTS, OR ANY COURSE OF
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CONDUCT OR COURSE OF DEALING IN WHICH THE LENDER AND THE BORROWER ARE ADVERSE
PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GRANTING ANY
FINANCIAL ACCOMMODATION TO THE BORROWER.
11. CONSENT TO JURISDICTION. BORROWER (I) AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN
THE COURTS OF THE STATE OF INDIANA OR IN ANY FEDERAL COURT SITTING IN INDIANA;
(II) CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY SUCH COURT AND SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN THE LOAN AGREEMENT; AND (III) HEREBY WAIVES ANY OBJECTION THAT IT
MAY NOW OR IN THE FUTURE HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the
day and year first written above.
BORROWER:
CTI GROUP (HOLDINGS), INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇,
Chief Executive Officer
Above Signatures Witnessed
by the Following Employee
of Lender:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Vice President
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