EXHIBIT 10.4
SECURITY AGREEMENT
This Security Agreement (the "Agreement") made this 2nd day of February
1998, between CTI Group (Holdings), Inc. ("Guarantor"), a Delaware
corporation having its chief executive office at 901 South Trooper Road, P.O.
Box 89360, Valley Forge, PA 19484, and Siemens plc ("Secured Party"), an
English company.
BACKGROUND
Pursuant to a certain Asset Purchase Agreement of even date herewith
between CTI Data Solutions (International) Ltd., an English company and a
wholly-owned subsidiary of Guarantor ("Borrower") and Secured Party, Secured
Party advanced a loan to Borrower in the principal amount of Two Million
Dollars ($2,000,000.00) (the "Term Loan"). The Term Loan is evidenced by a
Secured Promissory Note of even date herewith executed and delivered by
Borrower to Secured Party in the principal amount of Two Million Dollars
($2,000,000.00) (the "Note"). As incentive for Secured Party to make the
Term Loan to the Borrower, the Guarantor executed a Guaranty in favor of
Secured Party relating to the performance of Borrower's obligations under the
Note (the "Guaranty"), a Collateral Pledge Agreement (the "Pledge Agreement")
and is entering into this Security Agreement. Borrower's obligations to
Pledgee, as evidenced by the Note are hereinafter referred to as the
("Obligations").
NOW, THEREFORE, the parties hereto, intending to be legally bound,
covenant and agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
1.1 "Account", "Account Debtor", "Contracts", "Document",
"Equipment", "Fixtures", "General Intangibles", "Goods", "Instrument",
"Inventory", "Proceeds" and "Purchase Money Security Interest" shall have the
same respective meanings as are given to these terms in or for the purposes
of the Uniform Commercial Code as enacted in the Commonwealth of Pennsylvania
("UCC").
1.2 "Books and Records" means all present and future books of
account of every nature, correspondence, memoranda, invoices, ledger cards,
bills of lading and other shipping evidence, tapes, disks, diskettes and
other software storage media and devices, papers, books and other documents,
or transcribed information of any type, whether expressed in ordinary or
machine language, and whether on or off the premises of Guarantor.
1.3 "Collateral" means the property of Guarantor described in
Section 2 of this Agreement.
1.4 "Note" means the Secured Promissory Note of even date herewith
executed by CTI Data Solutions (International) Ltd., an English company and a
wholly-owned subsidiary of Guarantor ("Debtor"), in favor of the Secured
Party.
1.5 "Event of Default" shall have the meaning ascribed to such
term in the Note.
1.6 "Obligations" means any and all obligations of Borrower under
the Note and Guarantor under the Guaranty (the "Guaranty") of even date
herewith executed by the Guarantor in favor of the Secured Party and which
guarantees the performance of Borrower under the Note, whether direct or
indirect, absolute or contingent, primary or secondary, due or to become due,
now existing or hereafter arising, regardless of how they arise or by what
instrument they must be evidenced or whether evidenced by any agreement or
instrument, and includes obligations to perform acts and refrain from acting
as well as obligations to pay money.
1.7 "Permitted Liens" means the liens, claims or encumbrances, if
any, described on Exhibit A attached hereto, incorporated herein by this
reference and hereby made a part hereof .
1.8 "Person" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, joint
venture, court or government or political subdivision or agency thereof.
SECTION 2. COLLATERAL SECURITY.
2.1 As security for the prompt payment, performance and
satisfaction of all Obligations, Guarantor hereby assigns, pledges,
hypothecates, transfers and sets over to Secured Party, all of Guarantor's
right, title and interest in and to, and hereby grants to Secured Party a
continuing lien on and security interest in and to, all of the following,
wherever located, whether now owned or existing or hereafter acquired or
arising, together with all replacements, accessions, parts, additions and
substitutions therefor and thereof:
2
2.2 All Goods and Inventory including, without limitation, all
stock-in-trade, raw materials, work-in-process and materials used, produced
or consumed in Guarantor's business, all tangible personal property held by
Guarantor for sale, consignment or lease, or to be furnished under contracts
of service and all property which Guarantor has so sold, consigned, leased or
furnished, Goods that are returned, reclaimed or repossessed, together with
rights of Guarantor as a seller of Goods and rights to returned or
repossessed Goods and the proceeds from the sale of any and all Goods and
Inventory;
2.3 All Accounts, Contracts, Document, Equipment, Fixtures,
General Intangibles, Goods, Instrument, Inventory, Proceeds, including,
without limitation, (a) rights and remedies under or relating to guaranties,
contracts of suretyship, letters of credit and credit and other insurance
related to the Collateral, (b) rights of stoppage in transit, replevin,
repossession, reclamation and other rights and remedies of an unpaid vendor,
lienor or secured party, (c) goods described in invoices, documents,
contracts or instruments with respect to, or otherwise representing or
evidencing, Collateral, including, without limitation, returned, repossessed
and reclaimed goods, and (d) deposits by and property of account Borrowers or
other persons securing the obligations of account Borrowers;
2.4 All property of Guarantor which at any time Secured Party
shall have in its possession, or which is in transit to it; and
2.5 Without limiting the generality of any of the foregoing, all
property which is now owned by Guarantor or which will be acquired by the
Guarantor until such time as the Obligations are satisfied.
SECTION 3. OBLIGATIONS SECURED.
The Collateral secures all of the Obligations and may be retained
by Secured Party until all such Obligations have been paid and satisfied in
full.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Guarantor hereby represents and warrants, which representations and
warranties shall be deemed continuing until all Obligations have been paid
and satisfied in full, as follows:
4.1 Guarantor is a corporation duly organized and in good standing
under the laws of its state of formation and is duly qualified as a foreign
corporation and in good standing in all
3
states or other jurisdictions where the nature and extent of the business
transacted by it or the ownership of assets makes such qualification
necessary, except for those jurisdictions in which the failure to so qualify
would not have a material adverse effect on Guarantor's financial condition,
results of operation or business or the rights of Secured Party in or to any
of the Collateral;
4.2 The execution, delivery and performance of this Agreement, the
Guaranty, the Pledge Agreement and the transactions contemplated hereunder
and thereunder are all within Guarantor's corporate powers, have been duly
authorized by Guarantor and will not violate any provision of any applicable
law, rule or regulation, judgement, order, writ or decree, or of any
contract, agreement, indenture or instrument to which Guarantor is a party or
by which Guarantor or its assets (including the Collateral) are or may be
bound;
4.3 This Agreement, the Guaranty, the Pledge Agreement, the
Obligations and all related instruments, agreements and documents, when
executed and/or delivered by Guarantor, will represent the legal, valid and
binding Obligations of Guarantor, enforceable against Guarantor in accordance
with their respective terms;
4.4 No Event of Default or event which, with the passage of time
or the giving of notice, or both, will result in an Event of Default has
occurred;
4.5 Guarantor is not in default in any respect under, or in
violation in any respect of, any of the terms of, any agreement, contract,
instrument, lease or other commitment to which it is a party or by which it
or any of its assets are bound, and Guarantor is in compliance in all
respects with all applicable provisions of laws, rules, regulations,
licenses, permits, approvals and orders of any foreign, federal, state or
local governmental authority, except to the extent such default, violation or
non-compliance would not result in or cause a material adverse change in the
assets, business or prospects of Guarantor, or have an adverse effect on the
legality, validity or enforceability of this Agreement, the Guaranty or the
Pledge Agreement or priority of the security interests or liens of Secured
Party in the Collateral, or would impair the ability of Guarantor to perform
its obligations under this Agreement or under any of the other financing
agreements, or of Secured Party to enforce any Obligation or realize upon any
Collateral;
4.6 There are no judgments or judicial or administrative orders or
proceedings pending, or to the knowledge of Guarantor threatened, against or
affecting Guarantor in any court or before any governmental authority or
arbitration board or tribunal which may adversely affect the condition
(financial or otherwise) of Guarantor or the assets (including the
Collateral) of Guarantor, or the ability of Guarantor to perform its
obligations under this Agreement, the Guaranty, the Pledge Agreement, the
Obligations or any related instruments, agreements or documents;
4
4.7 The security interests and liens granted to Secured Party
under this Agreement constitute valid and perfected first priority liens and
security interests in and upon the Collateral, subject only to Permitted
Liens;
4.8 Guarantor has good and marketable title in fee simple (or its
equivalent under applicable law) to all of the properties and assets it
purports to own, free from liens, claims and encumbrances of any third
Person, except for Permitted Liens;
4.9 The Guarantor has no knowledge of any fact that would impair
the validity or collectability of any of the Collateral that is accounts
receivable, chattel paper, contract rights, documents or instruments and each
obligor upon such Collateral has or will have (as the case may be) capacity
to contract;
4.10 Each account receivable is or will be (as the case may be) a
true and correct statement of the initial indebtedness incurred by each
account Borrower with respect thereto and will arise out of or in connection
with the sale or lease of goods or for the rendering of services by the
Guarantor to each such account Borrower;
4.11 No presently effective financing statement under the UCC
naming the Guarantor as Borrower is on file in any jurisdiction and the
Guarantor has not signed any presently effective security agreement
authorizing any secured party thereunder to file a financing statement,
except for financing statements naming the Secured Party as the secured party
and except as otherwise disclosed on Exhibit A.1 hereto;
4.12 The Guarantor's exact legal name is set forth at the beginning
of this Agreement and the Guarantor does not conduct business under any other
name; and
4.13 Guarantor's chief executive office, and the address at which
the Books and Records relating to the Collateral are located, is as set forth
on the first page of this Agreement, and all other locations of the
Collateral, if any, are shown on Exhibit B attached hereto, incorporated
herein by this reference and hereby made a part hereof. Exhibit B correctly
identifies any Collateral locations which are not owned by Guarantor and sets
forth the owners and/or operators thereof, and to the best of Guarantor's
knowledge, the holders of any mortgages on such location.
5
SECTION 5. COVENANTS.
Guarantor covenants and agrees with Secured Party that, so long as
any of the Obligations remain unpaid or unsatisfied, it shall continuously
take all steps that are necessary or prudent to protect and maintain the
security interest of the Secured Party in the Collateral and, without
limiting the generality of the foregoing, will comply with the following
covenants:
5.1 Guarantor will promptly notify Secured Party, in writing at
Secured Party's address set forth on the first page of this Agreement, of any
prospective change of business location or of any additions or changes to the
locations of Collateral shown on the first page of this Agreement or on
[Exhibit C];
5.2 Guarantor will execute and deliver to Secured Party all such
further instruments and do all such further acts and things as Secured Party
may request or as may be necessary or desirable to effectuate the purposes of
this Agreement, or for filing financing or continuation statements or other
instruments or records necessary or proper for perfection of the security
interest of Secured Party. Secured Party may execute on behalf of any
Guarantor and file or record any such documents in such manner as Secured
Party may see fit to effectuate the purposes hereof;
5.3 Guarantor shall keep complete and accurate Books and Records
and make all necessary entries therein to reflect the quantities, costs and
location of the Collateral. Guarantor further agrees to mark its Books and
Records, in such fashion so as to indicate the liens on and security
interests in and to the Collateral granted to Secured Party pursuant to this
Agreement. Guarantor shall permit Secured Party or any other holder of the
Note, its officers, employees, agents and representatives at any time and
from time to time, to have full access to all of the Books and Records and
any other records pertaining to Guarantor's business or the Collateral which
Secured Party may request, and shall cause all Persons to make all such Books
and Records in their possession available to Secured Party, its officers,
employees, agents and representatives and, if deemed necessary by Secured
Party, in its sole discretion, permit Secured Party, its officers, employees,
agents and representatives to remove the Books and Records from Guarantor's
place(s) of business or any other place where they may be found for the
purpose of examining, auditing and/or reproducing the same. Subject to the
terms and conditions of this Agreement, any of Guarantor's Books and Records
so removed by Secured Party, its officers, employees, agents or
representatives, shall be returned to Guarantor as soon as Secured Party
shall have completed its inspection, audit and/or reproduction thereof.
Secured Party's right to take possession of the Books and Records shall be
enforceable at law by an action of replevin or by any other appropriate
remedy at law or in equity;
5.4 Guarantor shall promptly pay, when due, all taxes, assessments
and impositions upon the Collateral or for its use or operation or upon this
Agreement or the Obligations including, without limitation, any and all
documentary stamp and intangible taxes, and shall promptly furnish
6
to Secured Party the receipted bills therefor. At its option, Secured Party
may (without obligation) discharge taxes, liens or security interests, or
other encumbrances at any time levied or placed on the Collateral, and may
pay for the maintenance and preservation of the Collateral. Guarantor agrees
to reimburse Secured Party, on demand, together with interest at the highest
rate set forth in the Note, for any payment made, or any expense incurred by
Secured Party, pursuant to the foregoing authorization;
5.5 Guarantor shall upon reasonable notice during regular business
hours allow Secured Party, by or through any of its officers, employees,
agents or representatives, to examine or inspect the Collateral, wherever
located;
5.6 If any of the Collateral or any of the Books and Records are,
at any time, to be located on premises leased by Guarantor or on premises
owned by Guarantor subject to a mortgage or other lien, Guarantor shall
obtain and deliver, or cause to be obtained and delivered to Secured Party,
prior to delivery of any Collateral or Books and Records to such premises, an
agreement, in form and substance satisfactory to Secured Party and its
counsel, pursuant to which such landlord, mortgagee or other lien holder
waives its rights, if any, to enforce any claims against Guarantor for monies
due under a landlord's lien, mortgagee's mortgage or other lien by levy or
distraint, or similar proceeding against the Collateral or the Books and
Records, and assuring Secured Party's ability to have access to the
Collateral and the Books and Records in order to exercise Secured Party's
rights to take possession thereof and to remove the same from such premises
and/or to prepare for disposition and dispose of the same at or about such
premises;
5.7 Guarantor shall promptly notify Secured Party, in writing, of
(a) any event causing a material loss or decline in the value of the
Collateral (whether or not covered by insurance) and of the amount of such
loss or depreciation, (b) the inability or unwillingness of any Account
Guarantor to pay or preserve the Collateral, and of any defense, set-off or
counterclaim asserted by any Account Borrower, and (c) any Collateral having
been returned by any Account Guarantor to Guarantor for any reason.
Guarantor agrees not to return any Inventory to the supplier thereof, or to
sell or otherwise dispose of Goods returned or repossessed from Secured
Party, lessees or consignees thereof, without Secured Party's prior written
consent;
5.8 Guarantor shall, at its sole cost and expense, (a) preserve
the Collateral and Guarantor's rights against any Person free and clear of
all liens, claims and encumbrances, except for Permitted Liens and liens,
claims and encumbrances created pursuant to this Agreement, (b) defend its
right, title and interest in and to the Collateral and (c) defend the
Collateral against any and all claims and demands of all Persons at any time
or from time to time claiming the same or any interest therein. Guarantor
will not grant to any Person, other than Secured Party, any lien on or
security interest in and to the Collateral, nor allow any Person other than
Secured Party to obtain a lien on or security interest in and to or levy upon
the Collateral;
7
5.9 Guarantor shall, at its sole cost and expense, maintain the
Collateral in good condition and repair at all times, subject to ordinary
wear and tear, and shall not waste, abuse or destroy, or use in violation of
any applicable laws, any of the Collateral;
5.10 Guarantor shall, at all times, maintain with financially sound
and reputable insurers insurance with respect to the Collateral against loss
or damage and all other insurance of the kinds and in the amounts customarily
insured against or carried by corporations of established reputation engaged
in the same or similar businesses and similarly situated. Guarantor shall
furnish such certificates, policies or endorsements to Secured Party as
Secured Party shall require as proof of such insurance, and, if Guarantor
fails to do so, Secured Party is authorized, but not required, to obtain such
insurance at the expense of Guarantor. All policies shall provide for at
least thirty (30) days prior written notice to Secured Party of any
cancellation or reduction of coverage and that Secured Party may act as
attorney for Guarantor in obtaining, and at any time an Event of Default
exists or has occurred and is continuing, adjusting, settling, amending and
canceling such insurance. Guarantor shall cause Secured Party to be named as
a loss payee and an additional insured (but without any liability for any
premiums) under such insurance policies and Guarantor shall obtain
non-contributory loss payable endorsements to all insurance policies in form
and substance satisfactory to Secured Party. Such loss payable endorsements
shall specify that the proceeds of such insurance shall be payable to Secured
Party as its interest may appear and further specify that Secured Party shall
be paid regardless of any act or omission by Guarantor or any of its
affiliates. At its option, Secured Party may apply any insurance proceeds
received by Secured Party at any time to the cost of repairs or replacement
of Collateral and/or to payment of the Obligations, whether or not then due,
in any order and in such manner as Secured Party may determine or hold such
proceeds as cash collateral for the Obligations;
5.11 Guarantor will sell its Inventory only in the ordinary course
of its business consistent with past practice; and
5.12 Guarantor shall, upon request of Secured Party or Secured
Party itself may, in the name of Secured Party or Guarantor, and without
notice to Guarantor, at any time or from time to time, notify Account
Borrowers and other obligors of debts, liabilities and obligations to
Guarantor that are included in the Collateral of Secured Party's interest in
the Collateral pursuant to this Agreement and direct and cause all payments
to be made to Secured Party with respect to such Collateral. Secured Party
shall have the right at any time and from time to time, in Secured Party's
name or in the name of a nominee of Secured Party, to verify the validity,
amount or any other matter relating to any Account or Collateral, by mail,
telephone, facsimile transmission or otherwise. Secured Party may demand,
sue for, collect or receive any money or property payable or receivable on
any Inventory.
5.13 Guarantor shall join with the Secured Party at its request
from time to time in executing financing statements, amendments thereto and
continuation statements, and pay the cost of filing the same wherever the
Secured Party reasonably deems desirable, and do, make, execute
8
and deliver all additional and further acts, things, deeds, powers of
attorney, assurances, writings and instruments that the Secured Party may
reasonably require to vest completely in it and assure to it its rights
hereunder and in and to the Collateral.
5.14 Guarantor shall notify the Secured Party at least 30 days
before changing its legal name, the location of its principal place of
business or location where it keeps or holds any Collateral or any records
relating thereto or before doing any business under any name other than its
legal name.
5.15 Guarantor shall use all commercially reasonable efforts to
sell, within twelve (12) months of the date hereof, its United States
telemanagement service bureau and to make available to Borrower and to cause
Borrower to apply the net cash proceeds from such sale, up to an amount equal
to the Required Cash Amount (as the term "Required Cash Amount" is defined in
the Asset Purchase Agreement), toward reducing the principal amount
outstanding under the Note.
SECTION 6. SECURED PARTY'S RIGHTS UPON DEFAULT.
Upon the occurrence of an Event of Default, the Obligations shall
be immediately due and payable without notice or demand and Secured Party
shall have, in addition to any and all rights and remedies that Secured Party
may then have under the instruments, agreements and documents evidencing the
Obligations, the UCC or at law or in equity, at its option, and without
further action, the unconditional right to do any one or more of the
following:
6.1 Exercise any or all rights, remedies, benefits and privileges
available to Secured Party under this Agreement, the Note, and those
available to a secured party under the UCC, as well as those under any other
applicable agreement with respect to any of the Collateral, and to apply such
monies and the net Proceeds of the Collateral to any of the Obligations in
such order as Secured Party, in its sole discretion, may elect;
6.2 Require Guarantor to assemble all or part of the Collateral as
Secured Party may in its sole discretion request or demand and make the same
available to Secured Party in a place to be designated by Secured Party which
is reasonably convenient to Secured Party and Guarantor;
6.3 Without limiting the generality of the foregoing, Secured
Party may immediately, without demand of performance and without other notice
(except as specifically required by this Agreement or the Collateral
Documents) or demand whatsoever to Guarantor, all of which are hereby
expressly waived, and without advertisement, sell at public or private sale
or otherwise realize upon, in Philadelphia, Pennsylvania or elsewhere, the
whole or, from time to time, any part of the Collateral, or any interest
which Guarantor may have therein, in one or more parcels at public sale or
sales, at any exchange, broker's board or elsewhere, at such price and on
such terms as
9
Secured Party may determine, for or on credit, or for future delivery without
assumption of any credit risk. Notice of any sale or other disposition shall
be given to Guarantor at least ten (10) days before the time of any intended
public sale or of the time after which any intended private sale or other
disposition of the Collateral is to be made, which Guarantor hereby agrees
shall be reasonable notice of such sale or other disposition. Guarantor
agrees to assemble, or to cause to be assembled at its expense, the
Collateral at such place or places as Secured Party shall designate. At any
such sale or other disposition, Secured Party may, to the extent permissible
under applicable laws, purchase the whole or any part of the Collateral, free
from any right or equity of redemption on the part of Guarantor, which right
or equity is hereby waived and released.
6.4 The proceeds of any disposition of the Collateral or other
action by Secured Party shall be applied as follows:
(a) First, the costs and expenses incurred in connection
therewith or incidental thereto or to the care or safekeeping of any of the
Collateral or in any way relating to the rights of Secured Party hereunder,
including reasonable attorneys' fees and legal expenses;
(b) Second, to the satisfaction of the Obligations;
(c) Third, to the payment of any other amounts required by
applicable law (including, without limitation, Section 9-504(a)(3) of the
UCC); and
(d) Fourth, to Guarantor, to the extent of any surplus
proceeds, absent the agreement of the parties to the contrary or as directed
by a court of competent jurisdiction.
6.5 Without limiting the generality of any of the rights and
remedies conferred upon Secured Party under this paragraph, Secured Party
may, to the full extent permitted by applicable laws:
(a) Enter upon the any of Guarantor's premises, exclude
therefrom Guarantor, and take immediate possession of the Collateral, either
personally or by means of a receiver appointed by a court of competent
jurisdiction, using all necessary force to do so;
(b) At Secured Party's option, use, operate, manage and
control the Collateral in any lawful manner;
(c) Exercise rights of set-off in accordance with applicable
law;
10
(d) Maintain, repair, renovate, alter, remove, abandon or
relinquish rights in and to the Collateral as Secured Party may determine in
its discretion;
(e) Cure any default in any reasonable manner and add the
cost of any such cure to the Obligations and accrue interest thereon at the
highest rate of interest then being charged to Guarantor on any of the
Obligations;
(f) Notwithstanding any outstanding commitment of any Buyer
to Guarantor to make additional and further loans, advances or extensions of
credit to or for the benefit of Guarantor, declare any such commitment null
and void and of no further force and effect whatsoever; and
(g) Retain all of Guarantor's Books and Records with respect
to the Collateral.
SECTION 7. MISCELLANEOUS.
7.1 This Agreement shall inure to the benefit of, and is and shall
continue to be binding upon, the parties hereto, Secured Party and their
respective heirs, personal representatives, successors and assigns,
including, without limitation, receivers, trustees and
Borrowers-in-possession, but nothing contained herein shall be construed to
permit Guarantor to assign this Agreement or any of Guarantor's rights or
obligations hereunder without Secured Party's prior written consent, which
consent may be withheld in Secured Party's sole and absolute discretion.
7.2 This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania. The parties to
this Agreement agree to the jurisdiction of the federal courts located in
Philadelphia, Pennsylvania for resolution of controversies arising out of or
relating to this Agreement, the Note and any related instruments, agreements
or documents. THE PARTIES HERETO IRREVOCABLY WAIVE TRIAL BY JURY IN ANY
COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT
OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED PURSUANT HERETO OR THERETO OR
ANY OTHER CLAIM OR DISPUTE HOWEVER ARISING, BETWEEN THE GUARANTOR AND THE
SECURED PARTY.
7.3 Guarantor agrees to pay upon demand, all expenses (including
reasonable fees and expenses of attorneys, experts and agents) incurred in
any way in connection with the exercise or defense of any rights or interests
of Secured Party hereunder or the enforcement of any provisions hereof, or
the management, preservation, maintenance, collection, disposition or
enforcement of any of the Collateral (all such expenses to be Obligations
hereunder). Guarantor agrees to defend, indemnify and save Secured Party and
its directors, officers, employees, and agents harmless from and against any
and all claims, losses, liabilities, costs and expenses, arising out of or
resulting from
11
this Security Agreement (including, without limitation, enforcement of this
Agreement) or Secured Party's interest in the Collateral, including claims
for the return or disgorgement of amounts paid to Secured Party, whether or
not ultimately successful, whether brought by Guarantor or any other party,
and in connection therewith to indemnify it against all costs, reasonable
counsel fees, expenses and liabilities incurred in or about the defense of
any such claims, actions or proceedings brought or threatened thereon,
whether brought by Guarantor or any other party, except claims, losses or
liabilities resulting from Secured Party's gross negligence or willful
misconduct.
7.4 If any provision of this Agreement shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof. Upon any such determination
that any provision is invalid or incapable of being enforced, such provision
shall be construed so as to effect the original intent of the parties as
closely as possible in a permissible manner in order that the transactions
contemplated hereby are consummated to the greatest extent possible.
7.5 The rights, powers and remedies of Secured Party hereunder are
cumulative, concurrent and not alternative, and shall not be exhausted by the
single assertion or exercise thereof, and the failure of Secured Party to
exercise any such right, power or remedy will not be deemed a waiver thereof
nor preclude any further or additional assertion or exercise of such right,
power or remedy. The waiver of any default, violation or Event of Default
hereunder shall not be a waiver of any subsequent default, violation or Event
of Default hereunder.
7.6 No modifications or amendments of this Agreement shall be
binding or enforceable unless in writing and signed by duly authorized
representatives of Guarantor and Secured Party.
12
IN WITNESS WHEREOF, the parties have hereunto caused this Security
Agreement to be duly executed as of the day and year first above written.
SIEMENS PLC
By: /s/ J.H. Whitfield
-----------------------------
Name: J. Whitfield
Title: Corporate Controller
CTI GROUP (HOLDINGS), INC.
By: /s/ Anthony Johns
-----------------------------
Anthony Johns
President
13