exv10w14



 





Exhibit 10.14









Credit Agreement



This agreement dated as of
July 9, 2004 between Bank One, NA, with its main office in Chicago, IL, and its successors and assigns, (the
“Bank”), whose address is III E. Wisconsin Ave, Milwaukee, Wl 53202,
and AW Network Services, Inc. (the “Borrower”), whose address is 11425
West Lake Park Drive, Suite 900, Milwaukee, WI 53224.





	1.	 	Credit Facilities.






	1.1	 	Scope. This agreement governs Facility A, and,
unless otherwise agreed to in writing by the Bank and the
Borrower or prohibited by applicable law, governs the Credit Facilities.
	 
	1.2	 	Facility A (Line of Credit). The Bank has
approved a credit facility to the Borrower in the principal
sum not to exceed $500,000.00 in the aggregate at any one time
outstanding (“Facility A”). Credit under facility A shall be
repayable as set forth in a Line of Credit None executed
concurrently with this agreement, and any renewals,
modifications or extensions thereof. The proceeds of Facility
A shall be used for following purpose: working capital needs.
	 
	1.3	 	Borrowing Base. The aggregate principal amount
of advances outstanding at any one time under Facility A (the
“Aggregate Outstanding Amount”) shall not exceed the
Borrowing Base or the maximum principal amount then available
under the Line of Credit Note (and any renewals,
modifications or extensions thereof) evidencing Facility A,
whichever is less (the “Maximum Available Amount”). If at any
time the Aggregate Outstanding Amount exceeds the Maximum
Available Amount, the Borrower shall immediately pay the Bank
an amount equal to such excess. “Borrowing Base”
means the
aggregate of:
	 
	 	 	A.     80% of the book value of all Eligible Accounts, minus
	 
	 	 	B.     $75,000.00.






	2.	 	Definitions. As used in this agreement, the fallowing terms have the
following respective meanings:






	2.1	 	“Credit Facilities” means all extensions of
credit from the Bank to the Borrower, whether now existing or
hereafter arising, including but not limited in those
described in Section 1.
	 
	2.2	 	“Liabilities” means all obligations, indebtedness
and liabilities of the Borrower to any one or more of the
Bank, BANK ONE CORPORATION, and any of their subsidiaries,
affiliates or successors, now existing or later arising,
including, without limitation, all loans, advances, interest,
costs, overdraft indebtedness, credit card indebtedness, lease
obligations, or obligations relating to any Rate Management
Transaction, all monetary obligations incurred or accrued
during the pendency of my bankruptcy, insolvency, receivership
or other similar proceedings, regardless of whether allowed or
allowable in such proceeding, and all renewals, extensions,
modifications, consolidations or substitutions of any of the
foregoing, whether the Borrower may be liable jointly with
others or individually liable as a debtor, maker, co-maker,
drawer, endorser, guarantor, surety or otherwise, and whether
voluntarily or involuntarily incurred, due or not due,
absolute or contingent, direct or indirect, liquidated or
unliquidated. The term “Rate Management Transaction” in this agreement means any transaction (including
an agreement with respect thereto)
now existing or hereafter entered into among the Borrower, the Bank or BANK
ONE CORPORATION, or any of its
subsidiaries or affiliates or their successor, which is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction
(including any option with respect to any of these transactions) or any
combination thereof, whether linked to one or more interest rates,
foreign currencies, commodity prices, equity
prices or other financial measures.
	 
	2.3	 	“Notes” means the Line of Credit Note(s) described in Section 1,
and all promissory notes, instruments and/or contracts evidencing the terms and conditions of the Liabilities.




 









 






	2.4	 	“Account” means a trade account, account receivable, other
receivable, or other right to payment for personal property sold,
licensed or leased or services rendered awing to the Borrower (or to
a third party grantor acceptable to the Bank).
	 
	2.5	 	“Account Debtor” means the person or entity
obligated upon an Account.
	 
	2.6	 	“Affiliate” means any person, corporation or other entity
directly or indirectly controlling, controlled by or under common
control with the Borrower and any director or officer of the Borrower
or any subsidiary or the Borrower.
	 
	2.7	 	“Capital Expenditures” mans any expenditure or the incurrence
of any obligation or liability by the Borrower for
any asset which is classified as a capital asset.
	 
	2.8	 	“Distributions” means all dividends and other distributions made
by the Borrower to its shareholders, partners,
owners or members, as the case may be, other than salary, bonuses, and
other compensation for services expended in
the current accounting period.
	 
	2.9	 	“Eligible Accounts” means, at any time, all of the Borrower’s
Accounts which contain selling terms and conditions acceptable to the
Bank, are payable on ordinary trade terms, and are not evidenced by a
promissory note or chattel
paper. The net amount of any Eligible Account against which the
Borrower may borrow shall exclude all returns,
discounts, credits, and offsets of any nature. Unless otherwise
agreed to by the Bank in writing, Eligible Accounts
do not include Accounts: (1) which are not owned by the Borrower free
and clear of all security interests, liens,
encumbrances, and claims or third parties, except the Bank; (2) with
respect to which the Account Debtor is an
employee or agent of the Borrower; (3) with respect to which the
Account Debtor is affiliated with or related to the
Borrower; (4) with respect to which goods are placed on consignment,
guaranteed sale, or other terms by reason of
which the payment by the Account Debtor may be conditional; (5) which
respect to which the Account Debtor is not a
resident of the United States, except to the extent such Accounts are
otherwise Eligible Accounts and are supported
by insurance, bonds or other assurances satisfactory to the Bank; (6)
subject to the U.S. Office of Foreign Asset
Control Special Designated Nationals and Blocked Person’s List, or
with respect to which the Account Debtor is
otherwise a person or entity with whom the Borrower or the Bank is
prohibited from doing business by any
applicable law, regulation, executive order or other legal directive;
(7) which are not payable in U.S. Dollars; (8)
with respect to which the Borrower is or may become liable to the
Account Debtor for goods sold or services
rendered by the Account Debtor to the Borrower; (9) which we subject
to dispute, counterclaim, withholding,
defense or setoff provided, that to the extent that the Borrower
requests for the Bank to consider any portion of such
particular Account to be an Eligible Account and the Bank determines
a portion to not be subject to dispute,
counterclaim, withholding, defense or setoff, they shall be deemed to
be Eligible Accounts if the other eligibility
requirements are all met, and otherwise shall be deemed to be
ineligible; (10) with repeat to which the goods have
not been shipped or delivered, or the services have not been
rendered, to the Account Debtor, or which otherwise
constitute pre-billed Accounts; (11) which constitute retainage, or
are bonded Accounts; (12) with respect to which
the Bank, in its role discretion, deems the creditworthiness or
financial condition of the Account Debtor to be
unsatisfactory; (13) of any Account Debtor who has filed or has had
filed against it a petition in bankruptcy or an
application for relief under any provision of any state or federal
bankruptcy, insolvency, or debtor-in-relief acts; or
who has had appointed a trustee, custodian, or receiver for the
assets of such Account Debtor; or who has made an
assignment for the benefit of creditors or has become insolvent or
fails generally to pay its debts (including its
payrolls) as such debts become due; (14) which respect to which the
Account Debtor is the United States government
or any department or agency of the United States; and (15) which have
not been paid in full within ninety (90) days
from the invoice date.






	3.	 	Conditions Precedent.






	3.1	 	Conditions Precedent to Initial Extension of Credit. Before me
first extension of credit governed by this agreement, whether by
disbursement of a loan, issuance of a letter of credit, or otherwise,
the Borrower shall deliver to the Bank, in form and substance
satisfactory to the Bank;




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	 	 	A.     Loan Documents. The Notes, and as applicable, the letter of credit
applications, the security agreements, the
pledge agreements, financing statements, mortgages or deeds of trust,
the guaranties, the subordination agreements, and
any other loan documents which the Bank may reasonably require to
give effect to the transactions described in this
agreements;
	 
	 	 	B.     Evidence or Due Organization and Good Standing,
Evidence, satisfactory to the Bank, of the due
organization and good sanding of the Borrower and every other
business entity that is a party to this agreement or any
other loan document required by this agreements; and
	 
	 	 	C.     Evidence of Authority to Enter into Loan Documents. Evidence that
(i) each party to this agreements and any
other loan document required by this agreement is authorized to enter
into the transactions described in this agreement
and the other loan documents, and (ii) the person signing on behalf
of each such party is authorized to do.
	 
	3.2	 	Conditions Precedent to Each Extension of Credit. Before
any extension of credit governed by this agreement whether by
disbursement of a loan issuance of a letter of credit or otherwise,
the following conditions must be satisfied:
	 
	 	 	A.     Representations. The representations of the
Borrower are true in all material the extension of
credit;
	 
	 	 	B.     No Event of Default No default has occurred in any provision of
this agreement, the Notes or any agreement
related to the Credit facilities and is consuming or would result from
the extension of credit, and no event has occurred
which would constitute the occurrence of any default but for the
lapse of time until the end of any grace or care period;
and
	 
	 	 	C.     Additional Approvals,
Opinions, and Documents. The Bank has
received any other approvals, opinions and
documents as it my reasonably request.






	4.	 	Affirmative Covenants, The Borrower shall:






	4.1	 	Insurance, Maintain insurance with financially sound and
reputable insurers covering in properties and business
against those casualties and contingencies and in the types and
amounts as are in accordance with sound business
and industry practices.
	 
	4.2	 	Existence. Maintain its existence and business operations as
presently in effect in accordance with all applicable
laws and regulations, pay its debts and obligations when due under
normal terms, and pay on or before their due
date, all taxes, assessments, fees and other governmental monetary
obligations, except as they may be contested in
good faith if they have been properly reflected on its books and, at
the Bank’s request, adequate funds or security has
been pledged to insure payment.
	 
	4.3	 	Financial Records. Maintain proper books and records of
account, in accordance which generally accepted accounting
principles, and consistent with financial statements previously
submitted to the Bank.
	 
	4.4	 	Inspection. Permit the Bank to inspect and copy the Borrower’s
business records at such times and as such intervals
as the Bank may reasonably require, and to discuss the Borrower’s
business, operations, and financial condition with
the Borrower’s officers and accountants.
	 
	4.5	 	Financial Reports. Furnish to the Bank whatever information,
books and records the Bank may reasonably request,
including at a minimum:
	 
	 	 	A.     Within forty-five (45) days after each monthly period, a balance
sheet as of the end of that period and statements of income, cash
flow and retained earnings, from the beginning of that fiscal year to
the end of that period, certified as correct by one of its authorized
against (not required the month that the quarterly 10-QSB is due);
and/or via either the EDGAR System or its Home Page, within forty-five
(45) days after the filing or its Quarterly request on Form 10-QSB
for the fiscal quarter then ended with the Securities and Exchange
Commission, copies of the financial statements for such fiscal quarter as
contained in such Quarterly Report on Form 10-QSB.




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	 	 	B.     Viz either the EDGAR system
or its Home Page, within one hundred
and twenty (120) days after the filing of
its Annual Report on Form 10-KSB for the fiscal year then ended with
the Securities and Exchange Commission, the
financial Statements for such fiscal year as contained in such Annual
Report on Form 10-QSB and, as soon as it shall
become available, the annual report to shareholders of the Borrower for
the fiscal year then ended.
	 
	 	 	C.     Within thirty (30) days ate and as of the end of each calendar
month a list of accounts receivable, aged from
date of invoice and certified as correct by one of its authorized
agents.
	 
	 	 	D.     A borrowing base certificate, in from and detail satisfactory to
the Bank, along with such supporting
documentation as the Bank may request, at the following times: (A)
within thirty (30) days after and as of the and of
each calender month in which there was an outstanding advance of
principal under Facility A on the last day of such
calender month, and (B) if no borrowing box certificate has been
provided or is otherwise due as of the end of the
immediately preceding calender month, with any request of an advance
under the Credit Facilities.
	 
	4.6	 	Notices of Claims, Litigation, Defaults, etc. Promptly inform
the Bank in writing of (1) all existing and all threatened
litigation, claims, investigations, administrative proceedings and
similar actions affecting the Borrower which could materially affect
the financial condition of the Borrower; (2) the occurrence of my
event which gives rise to the Bank’s option to terminate the Credit
Facilities; (3) the institution of steps by the Borrowers to
withdraw from, or the institution of any steps to terminate, any
employee benefit plan as to which the Borrower may have liability;
(4) any additions to or changes in the locations of the Borrower’s
business; and (5) any alleged breach of any provision of this
agreement or of any other agreement related to the Credit Facilities
by the Bank.
	 
	4.7	 	Additional Information. Furnish such additional information
and statements, as the Bank may request from time to time.
	 
	4.8	 	Insurance Reports. Furnish to the Bank, upon request of the
Bank, reports on each wining insurance policy showing such
information as the Bank may reasonably request.
	 
	4.9	 	Other agreements. Comply with all terms and conditions of all
other agreements, whether now or hereafter existing, between the
Borrower and any other party.
	 
	4.10	 	Title to Assets and property. Maintain good and marketable title
to all of the Borrower’s assets and properties.
	 
	4.11	 	Additional Assurance Make, executes and deliver to the Bank
such other agreements as the Bank may reasonably
request to evidence the Credit facilities and to perfect any security
interests.
	 
	4.12	 	Employee benefits Plan Maintain each employee benefit plan as
to which the Borrower may have any liability, in
compliance with all applicable requirements of law and regulations.
	 
	4.13	 	Depository Relationship. Establish and maintain its primary
banking depository account(s) with the Bank,






	5.	 	Negative Covenants.






	5.1	 	Unless otherwise noted, the financial requirements set forth
in this section will be computed in accordance with generally
accepted accounts principles applies on a baa’s consistent with
financial statements previously submitted by the Borrower to the
Bank.
	 
	5.2	 	Without the written consent of the Bank, the Borrower will
not:
	 
	 	 	A.     Dividends. Acquire or retire any of its shares of capital stock,
or declare or pay dividends or make any
other distributions upon any of its shares of capital stock, except,
in the absence of the occurrence of any default, the
Borrower may declare and pay dividend in its capital stock and cash
dividends.
	 
	 	 	B.     Management. Fail to promptly
notify the Bank of any change in the senior
management of the Borrower.




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	 	 	C.     Debt. Incur, contract for, assume, or permit to remain
outstanding, indebtedness for borrowed money, installment
obligations, or obligations under capital leases other than (1)
unsecured trade debt incurred in the ordinary course of business,
(2) indebtedness owing to the Bank, (3) indebtedness reflected in
the latest financial statement of the Borrower furnished to the Bank
prior to execution of this agreement and that is not to be paid with
proceeds of borrowings under the Credit Facilities, (4) additional
indebtedness from others that does not exceed &50,000.000 annually,
and (5) indebtedness outstanding as of the date hereof that has been
disclosed to the Bank in writing and that is not to be paid with
proceeds of borrowings under the Credit Facilities.
	 
	 	 	D.     Guaranties. Guarantee or otherwise become or remain
secondarily liable on the undertaking of another, except
for endorsement of drafts for deposit and collection in the ordinary
course of business.
	 
	 	 	E.     Liens. Create or
permit to exist any lien on any of its property,
real or personal, except: existing liens known to
the Bank; liens to the Bank; liens incurred in the ordinary course of
business securing current non-delinquent
liabilities for taxes, worker’s compensation, unemployment
insurance, social security and pension liabilities, and
deposits and the amounts outstanding to secure the performance of
leases and contracts entered into in the ordinary
course of business, which deposits and amounts outstanding are not,
in the aggregate, material in amount.
	 
	 	 	F.     Use of Proceeds. Use, or permit any proceeds of the Credit
Facilities to be used, directly or indirectly, for the
purpose of “purchasing of carrying any margin stock” within the
meaning of Federal reserve Board Regulation U. At the
Bank’s request, the Borrower will furnish a completed Federal Reserve
Board Form U-1.
	 
	 	 	G.     Continuity of
Operations. (1) Engage in any business activities
substantially different from those in which the
Borrower is presently engaged; (2) cease operations, liquidate,
merge, transfer, acquire or consolidate with any other
entity, change its name, dissolve, or sell any assets out of the
ordinary course of business; or (3) enter into any
arrangement with any person providing for the leasing by the Borrower
of any subsidiary of real or personal property
which has been sold or transferred by the Borrower or subsidiary to
such person.
	 
	 	 	H.     Limitation on Negative Pledge Clauses. Enter into any agreements
with any person other than the Bank which prohibits or limits the
ability of the Borrower or any of its subsidiaries to create or
permit to exist any lien or any of its property, assets or revenues,
whether now owned or hereafter acquired.
	 
	 	 	I.     Conflicting Agreements. Enter into any agreement containing any
provision which would be violated or
breached by the performance of the Borrowers obligation under this
agreement.
	 
	 	 	J.     Net Worth. Permit at
any time, its total assets minus total
liabilities to be less than ($7,480,000.00) as of July 31, 2004, with
an annual step-up from the prior years’ net worth of $25,000
(effective at the last day of the fiscal year end) beginning 7/31/05 and for each fiscal year end thereafter.
	 
	 	 	K.     Debt service Coverage
Ratio. Permit as of each fiscal quarter
end, its ratio of net income, plus interest expense, plus
amortization and depreciation, plus or minus extraordinary losses
or (gains), minus any Distributions, minus Capital Expenditures
which equals 50% of depreciation expense, for the twelve month
period then ending to principal payments on long term debt and
principal payments on capitalized leases plus interest expense for
the same such period to be less than 1.20 to 1.00.
	 
	 	 	L.     Government Regulation. (1) Be
 or become subject at any time to
any law, regulation, or list of any government agency (including,
without limitation, the U.S. Office of foreign Asset Control list)
that prohibits or limits Bank from making any advance or extension
of credit to Borrower or from otherwise contacting business with
Borrower, or (2) fail to provide documentary and other evidence of
Borrower’s identity as may be requested by Bank at any time to
enable Bank to verify Borrower’s identity or to comply with any
applicable law or regulation, including, without limitation, Section
326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.






	6.	 	Representations.






	6.1	 	Representations by the Borrower. Each Borrower represents that
(a) the execution and delivery of this agreement and the Notes, and
the performance of the obligations they impose, do not violate any
law, conflict with any agreement by which it is bound, or require
the consent or approval of any governmental authority or other third
party, (b) this






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	 	 	agreement and the Notes are valid and binding agreements,
enforceable according to their terms, (c) all balance sheets,
profit and loss statements, and other financial statements and
other information furnished to the Bank in connection with
the Liabilities fairly reflect the financial condition of the
organizations and persons to which they apply in all material
respects on their effective dates, including contingent
liabilities of every type, which financial condition has not changed
materially and adversely since those dates, (d) no litigation,
claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against the Borriwer is pending or
threatend, and no other event has occured which may in any one case or in
the aggregate materially adversely affect the Borrower’s financial
condition and properties, other than litigation, claims, or other
events, if any, that have been disclosed to and acknowledged by the
Bank In writing, (c) all of the Borrower’s tax returns and reports
that are or were required to be filed, have been filed, and all
taxes, assessments and other governmental charges have been paid
in full, except those presently being contested by thc Borrower in
good faith and for which adequate reserves have been provided, (f)
the Borrower is not a “holding company*” or a company
entitled by an
“investment company”, within the meaning of the Investment Company
Act of 1940, as amended, (g) the Borrower is not a “holding
company”, or a “subsidiary company” of a “holding company” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a
“holding company” within the meaning of the Public Utility Holding
Company Act of 1935 as amended, (h) there are no defenses or
counterclaims, offsets or adverse claims, demands or actions of any
kind, personal or otherwise, that the Borrower could asseh with
respect to this agreement the Credit facilities, (i) the Borrower
owns, or is licensed to use, all trademarks, trade names, copyrights,
technology, know how and processes necessary for the conduct of its
business as currently conducted, and (j) no pan of the proceeds of
the Credit Facilities will be used for “purchasing” or “carrying”
any “margin stock” within the respective meanongs of each of the
quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System of the United States (the “Board”) as now and
from time to time hereafter in effect of for any purpose which
violates the provisions of any regulations of the Board each
Borrower, other than a natural person, further represents that; (a)
it is duly organized, existing and in good standing pursuant to the
laws under which it is organized, and (b) the execution and delivery
of this aggrement and the Notes and the performance of the
obligations they impose (i) are within its powers, (i) have been
duly authorised by all necessarry action of its governing body, and
(iii) do not contravene the terms of its articles of incorporation or
organization. its by-laws, or any partnership, operating or other
agreement governing its affairs.
	 
	6.2	 	Representation Regarding Assets. With respect to any asset of
the Borrower utilized in the calculation of the Borrowing Base set
forth in this agreement, the Borrower represents and warrants is the
Bank; (1) each asset represented by the borrower to be eligible for
Borrowing base purposes of this agreement conforms to the eligibility
definitions set forth in this agreement (2) all asset values
delivered to the Bank will be true and correct, subject to
immaterial variance; and be determined on a consistent accounting
basis; (3) except as agreed to the contrary by the Bank in writing,
each asset is now and at all times hereafter will be in the
Borrower’s physical poisession and shall not be held by others on
consignment, sale or approval, of sale or return; (4) except as
reflected in schedules delivered to the Bank, each asset is now and at
all times hereafter will be of good and merchantable quality, free
from defects; (5) each asset is not now and will net at any time
hereafter be stored with a bailee, warehouseman, or similar party
without the Bank’s prior written consent, and in such event, the
Borrower will concurrently at the time of bailment cause any such
bailee, warehouseman, or similar party to issue and deliver to the
Bank, warehouseman receipts in the Bank’s name evidencing the
storage of the assets; and (6) the Bank, its assigns, or agents
shall have the right at any reasonable time and at the Borrower’s
expense to inspect examine and audit the Borrower’s records, and if
Accounts are included in the calculation of Borrowing Base, confirm
with Account Debtor; the accuracy of such Accounts, and inspect and
examine the assets and to check and test the same as to quality,
quantity, value, and condition.






	7.	 	Default/Remedies, If any of the Credit Facilities are not
paid at
maturity, whether by acceleration or otherwise, or if a default by anyone
occurs under the terms of this agreement, the Notes or any agreement
related to the Credit Facilities, then the Bank shall have all of the
rights and remedies provided by any law agreement.
	 
	8.	 	Miscellaneous.






	8.1	 	Notice. Any notices and demands under or related to this document
shall be in writing and delivered to the intended party at its
address stated herein, and if to the Bank, at Its main office if no
other address of the Bank is specified herein, by one of the
following means; (a) by hand, (b) by a nationally recognised
overnight courier service, or (e) by certified mall, pottssage
prepaid, with return receipt requested. Notice shall be deemed
given: (a) upon receipt if delivered by hand, (b) on the Delivery
Day after the day of deposit with a nationality recognized courier
service, or (c) on the third




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	 	 	Delivery Day after the notice is deposited in the mail, “Delivery Day”
means a day other than a Saturday, a Sunday or any other day on which
national banking associations are authorized to be closed. Any party may
change its address for purposes of the receipt of notices and demands by
giving notice of such change in the manner provided in this provision.






	8.2	 	No Waiver. No delay on the part of the Bank in the
exercise of any right
or remedy waives that right or remedy, No single or partial exercise by
the Bank of any right or remedy precludes any other future exercise of it
or the exercise Of any other right or remedy, No waiver or indulgence by
the Bank of any default is effective unless it is in writing and
signed by the Bank, nor
shall a waiver on one occasion bar or waive that right on any future
occasion.
	 
	8.3	 	Integration. This agreement, the Notes, and any agreement related to the
Credit Facilities embody the entire agreement and understanding
between the Borrower and the Bank and supersede all prior agreements and
understanding relating to their subject matter. If any one or more of the
obligations of the Borrower under this agreement or the Notes is
invalid,
illegal or unenforceable in any jurisdiction, the validity, legally and
enforceability of the remaining obligations of the Borrower dull not in
any way be affected or impaired, and the invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity,
legality or enforceability of the obligations of the Borrower under
this
agreement or the Notes in any other jurisdiction.
	 
	8.4	 	Joint and Several Liability.Each Borrower, if more than
one, is jointly and severally liable.
	 
	8.5	 	Governing Law and Venue. This agreement is delivered in the State
of Wisconsin and governed by Wisconsin law (without giving effect to
its laws
of confliers), The Borrower agrees that any legal action or proceeding
with respect to any of its obligations under this agreement may be
brought by the Bank in any state or federal court located in the
State of Wisconsin,
as the Bank in its sole discretion may elect By the execution
and delivery of this agreement, the Borrower submits to and accepts, for
itself and in respect of its properly, generally and unconditionally, the
non-exclusive jurisdiction of those courts. The Borrower waives any
claim that the State or Wisconsin is not a convenient forum or the
proper venue for any such suit, action or proceeding.
	 
	8.6	 	Captions. Section headings are for convenience of reference only and do
not affect the interpretation of this agreement.
	 
	8.7	 	Subsidiaries and Affiliates of the Borrower. To the extent the context
of any provisions of this agreements makes it appropriate, including
without, limitation any represensation warranty or covenant, the word
“Borrower” as used in this agreements shall include all of the
Borrower’s subsidiaries and affiliates. Notwithstanding the
foregoing,
however, under no circumstances shall this agreement be construed to
require the Bank to make any loan or other financial accommodation to any
of the Borrower’s subsidiaries or affiliates.
	 
	8.8	 	Survival of Representations and Warranties. The Borrower understands and
agrees that in extending the Credit facilities, the Bank is relying on all
representations, warranties, and covenant made by the Borrower in this
agreement or in any certificate or other instrument delivered by the
Borrower to the Bank under this agreement. The Borrower further agree
that regardless of any investigation made by the Bank, all such
representations, warranties and covenants will survive the making of
the
Credit facilities and delivery to the Bank of this agreement, shall be
continuing in nature, and shall remain in full force and effect until
such time as the Borrower’s indebtedness to the Bank shall be paid in
full.
	 
	8.9	 	Non-Liability of the Bank. The relationship between
the Borrower and the
Bank created by this agreement is strictly a debtor and creditor
relationship and not fiduciary in nature, nor is the relationship to be
construed as creating any partnership or joint venture between the Bank and
the Borrower, the Borrower is excercising the Borrower’s own judgement with
respect to the Borrower’s business. All information supplied to the Bank is
for the Bank’s protection only and no other party is entitled to rely on
such information. There is no duty for Bank to review, impact,
supervise or
inform the Borrower of any matter with respect to the Borrower’s
business. The Bank and the Borrower intend that the Bank may
reasonably rely on all information supplied by the Borrower to be Bank,
together with all representation and warranties given by the Borrower to
the Bank, without investigation or confirmation by the Bank and that any
investigations or failure to investigate will not diminish the Bank’s
right to so rely.
	 
	8.10.	 	Indemnification of the Bank. The Borrower agrees to indemnify, defend
and hold the Bank and BANK ONE CORPORATION, or any of its subsidiaries or
affiliates or their successors, and each of their respective




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	 	 	shareholders, directors, officers, employees and agents (collectively,
“indemnified persons”) harmless from any and all obligations, claims
liabilities, losses, damages, penalties, fines, forfeitures, actions,
judgments, suits, costs, expenses and disbursements of any kind or nature (
including, without limitation any Indemnified Person’s attorneys’ fees)
(collectively, “claims”) which may be imposed upon, incurred by or assessed
against any Indemnified Person both before and after judgment, (whether or not
caused by any Indemnified Person’s sole, concurrent, or contributory
negligence) arising out of or relating to this agreement; the exercise of the
rights and remedies granted under this agreement (including, without
limitation, the enforcement of this agreement and the defense of any
indemnified Person’s action or inaction in connection with this agreement); and
in connection with the Borrower’s failure to perform all of the Borrower’s
obligations under this agreement, except to the limited extent that the Claims
against any such Indemnified Person are proximately caused by such Indemnified
Person’s gross negligence or willful misconduct. Subject to applicable law,
including applicable statutes of limitations, the Indemnification provided for
in this section shall survive the termination of this agreement and shall
extend to and continue to benefit each individual or entity who is or has at
any time been as Indemnified Person.
	 
	 	 	The Borrower’s Indemnity obligations under this section shall not in any way be
affected by the presence or absence of covering insurance, or by the amount of
such insurance or by the failure or refusal of any insurance carrier to perform
any obligation on its part under any insurance policy or policies affecting the
Borrower’s assets or the Borrower’s business activities. Should any Claim be
made or brought against any Indemnified Person by reason of any event as to
which the Borrower’s indemnification obligations apply, then, open any
Indemnified Person’s demand, the Borrower, at its sole cost and expense, shall
defend such Claim in the Borrower’s name, if necessary, by the attorneys for
the Borrower’s insurance carrier (if such Claim is covered by insurance), or
otherwise by such attorneys as any Indemnified Person shall approve. Any
Indemnified Person may also engage its own attorneys as its reasonable
discretion to defend the Borrower to assist in its defense and the Borrower
agrees to pay the fees and disbursements of such attorneys.
	 
	8.11	 	Counterparts. This agreement may be executed in multiple counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts, taken together, shall constitute one and the same agreement.
	 
	8.12	 	Sole Discretion of the Bank. Whenever the Bank’s consent or approval is
required under this agreement, the decision as to whether or not to consent of
approve shall be in the sole and exclusive discretion of the Bank and the
Bank’s decision shall be final and conclusive.
	 
	8.13	 	Advise of Counsel. The Borrower acknowledges that it has been advised by
counsel, or had the opportunity to be advised by counsel, in the negotiation,
execution and delivery of this agreement and any documents executed and
delivered in connection with the Credit Facilities.
	 
	8.14	 	Recovery of Additional Costs. If the imposition of or any change in any
law, rule, regulation, or guideline, or the interpretation or application of
any thereof by any court or administrative or governmental authority (including
any request or policy not having the force of law) shall impose, modify, or
make applicable any taxes ( except federal, state, or local income or franchise
taxes imposed on the Bank), reserve requirements, capital adequacy
requirements, or other obligations which would (A) increase the cost to the
Bank for extending or maintaining the Credit Facilities, (B) reduce the amounts
payable to the Bank under the Credit Facilities, or (C) reduce the rate of
return on the Bank’s capital as a consequence of the Bank’s obligations with
respect to the Credit Facilities, then the Borrower agrees to pay the Bank such
additional amounts as will compensate the Bank therefore, within five (5) days
after the Bank’s written demand for such payment. The Bank’s demand shall be
accompanied by an explanation of such imposition or charge and a calculation in
reasonable detail of the additional amounts payable by the Borrower, which
explanation and calculations shall be conclusive in the absence of manifest
error, and the Bank shall certify to the Borrower that its method of allocating
such amounts is fair and reasonable.
	 
	8.15	 	Conflicting Terms. If this agreement is inconsistent with any provision in
any agreement related to the Credit Facilities, the Bank shall determine, in
the Bank’s sole and absolute discretion, which of the provisions shall control
any such inconsistency.
	 
	8.16	 	Expenses. The Borrower agrees to pay or reimburse the Bank for all its
reasonable, documented out-of-pocket costs and expenses and reasonable
attorneys fees (including the fees of in-house counsel) incurred in connection
with the development, preparation and execution of, and in connection with the
enforcement or preservation of any rights




8












 







	 	 	under, this agreement, any amendment, supplement, or
modification thereto, and my other documents prepared in
connection herewith or therewith both before and after
judgment. These costs and expenses include without limitation
any costs or expenses incurred by the Bank in any bankruptcy,
reorganization, insolvency or other similar proceeding.






	9.	 	USA PATRIOT ACT NOTIFICATION, The following notification
is provided to Borrower pursuant to Section 326 of the USA Patriot
Act of 2001, 31 U.S.C. Section 5318:






	 	 	IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT. To
help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial
institutions to obtain verify, and record information that
identifies such person or entity that opens an account, including
any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What
this means for Borrower: When Borrower opens an account, if
Borrower is an individual Bank will ask tor Borrower’s name,
taxpayer identification number, residential address, title of birth,
and other information that will allow Bank to identify Borrower,
and if Borrower is not an individual Bank will ask for Borrower’s
name, taxpayer identification number, business address, and other
information that will allow Bank to identify Borrower. Bank may
also ask, if Borrower is an individual to see Borrower’s driver’s
license or other identifying documents, and if Borrower is not an
individual to see Borrower’s legal organizational documents or
other identifying documents.






	10.	 	WAIVER OF SPECIAL DAMAGES. THE BORROWER WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED
MAY HAVE TO CLAIM OR RECOVER FROM THE BANK IN ANY LEGAL ACTON OR
PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.






	11.	 	 JURY WAIVER THE BORROWER AND THE BANK HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON
CONTRACT, PORT, OR OTHERWISE) BETWEEN THE BORROWER AND THE BANK
ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT. THIS
PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE
FINANCING DESCRIBED HEREIN. 






	 	 	 	 	 	 	 
	ADDRESS FOR NOTICES:	 	BORROWER:
	 
	 	 	 	 	 	 
	11425 W. Lake Park Dr,
Suite 900

Milwaukee, WI 53224	 	ARI Network Services, Inc.
	 
	 	 	 	 	 	 
	Attn:

	 	 	 	By:
	 	/s/ Timothy Sherlock
	

	 	
 
	 	 	 	
 
	

	 	 	 	 	 	Timothy Sherlock                      CPO
	

	 	 	 	 	 	

	

	 	 	 	 	 	Printed Name                           Title
	 
	 	 	 	 	 	 
	 	 	 	 	Date Signed: 7/9/04
	 
	 	 	 	 	 	 
	Address for Notices:	 	Bank
	 
	 	 	 	 	 	 
	III E.W Wisconsin Ave	 	Bank One NA with its main office in Chicago, IL
	Milwaukee, WI 53202	 	 	 	 
	 
	 	 	 	 	 	 
	Attn:

	 	 	 	By:
	 	/s/ Jay A. Isaman
	

	 	
 
	 	 	 	
 
	

	 	 	 	 	 	Jay A. Isaman                      Vice President
	

	 	 
	 	 	 	
 
	

	 	 	 	 	 	Printed Name                      Title
	 
	 	 	 	 	 	 
	 	 	 	 	Date Signed: 3/9/04








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