Document:

exv10w15

 

EXHIBIT 10.15

Continuing Security Agreement

	 	 	 
	Name of Debtor:

	 	ARI Network Services, Inc.
	Taxpayer
I.D. No.:

	 	39-1388360
	State Organization No.:

	 	1A12669
	Debtor’s Address:

	 	11425 W. Lake Park Dr.,
Suite 900, Milwaukee, WI 53224

Dated as of July 9, 2004

Grant of Security Interest. ARI Network Services, Inc. (the “Debtor”) grants to
Bank One, NA, with its main office in Chicago, IL, whose address is [ILLEGIBLE]
E. Wisconsin Ave, Milwaukee, WI 53202, on behalf of itself and its successors
and assigns (the “Bank”), as secured party, a continuing security interest in
all of the “Collateral” (as hereinafter defined) to secure the payment and
performance of the Liabilities.

Borrower. The term “Borrower” in this agreement means ARI Network Services,
Inc.

Liabilities. The term “Liabilities” in this agreement 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 any
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 successors, 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.

Collateral. Accounts;
Chattel Paper; Deposit Accounts; Documents; Equipment;
General Intangibles; Instruments; Inventory; Investment Property; and Letter
of Credit Rights.

Description of Collateral.
As used in this agreement, the term “Collateral”
means all of the Debtor’s property of the types indicated above and defined
below, whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located, including but not limited to any
items listed on any schedule or list attached hereto. In addition, the term
“Collateral” includes all “proceeds”, “products” and “supporting obligations”
(as such terms are defined in the “UCC”, meaning the Uniform Commercial Code
of Wisconsin, as in effect from time to time) of the Collateral indicated
above, including but not limited to all stock rights, subscription rights,
dividends, stock dividends, stock splits, or liquidating dividends, and all
cash, accounts, chattel paper, “instruments,” “investment property,” and
“general intangibles” (as such terms are defined in the
UCC) arising from the
sale, rent, lease, casualty loss or other disposition of the Collateral, and
any Collateral returned to, repossessed by or stopped in transit by the
Debtor, and all insurance claims relating to any of the Collateral (defined
above). The term “Collateral” further includes all of the
Debtor’s right,
title and interest in and to all books, records and data relating to the
Collateral identified above, regardless of the form of media containing such
information or data, and all software necessary or desirable to use any of the
Collateral identified above or to access, retrieve, or process any of such
information or data. Where the Collateral is in the possession of the
Bank or
the Bank’s agent, the Debtor agrees to deliver to the Bank any property that
represents an increase in the Collateral or profits or proceeds of the
Collateral.

	1.	 	“Accounts” means all of the Debtor’s “accounts” as defined in Article 9 of
the UCC.
	 
	2.	 	“Chattel Paper” means all of the Debtor’s “chattel paper” as defined in
Article 9 of the UCC.

	3.	 	“Deposit Accounts” means all of the Debtor’s “deposit accounts” as defined
in Article 9 of the UCC.
	 
	4.	 	“Documents” means all of the Debtor’s “documents” as defined in Article 9 of
the UCC.

 

 

	5.	 	“Equipment” means all of the Debtor’s “equipment” as defined in Article 9
of the UCC. In addition, “Equipment” includes any “documents” (as defined in
Article 9 of the UCC) issued with respect to any of the Debtor’s “equipment”
(as defined in Article 9 of the UCC). Without limiting the security interest
granted, the Debtor represents and warrants that the Debtor’s Equipment is
presently located at 11425 W. Lake Park Dr., Suite 900, Milwaukee, Wl 53224.

	6.	 	“General Intangibles” means all of the Debtor’s “general intangibles”,
as defined in Article 9 of the UCC. In addition, “General Intangibles”
further includes any right to a refund of taxes paid at any time to any
governmental entity.

	7.	 	“Instruments” means all of the Debtor’s “instruments” as defined in Article
9 of the UCC.

	8.	 	“Inventory” means all of the Debtor’s
“inventory” as defined in Article 9
of the UCC. In addition, “Inventory” includes any “documents” issued with
respect to any of the Debtor’s “inventory” (as defined in Article 9 of
the UCC). Without limiting the security interest granted, the Debtor
represents and warrants that the Debtor’s Inventory is presently located
at 11425 W. Lake Park Dr., Suite 900, Milwaukee, WI 53224.

	9.	 	“Investment Property” means all of the Debtor’s “investment property” as
defined in Article 9 of the UCC.

	10.	 	“Letter of Credit Rights” means all of the Debtor’s “letter of credit
rights” as defined in Article 9 of the UCC.

Representations, Warranties and Covenants. The Debtor represents and warrants
to, and covenants and agrees with the Bank that:

	1.	 	Its principal residence or chief executive office is at the address shown
above;
	 
	2.	 	The Debtor’s name as it appears in this agreement is its exact name as it
appears in the Debtor’s organizational documents, as
amended, including any trust documents;
	 
	3.	 	It is or will become the owner of the Collateral free from any liens,
encumbrances or security interests, except for this security
interest and existing liens disclosed to and accepted by the Bank in writing,
or otherwise permitted under Section 5.2 E of the
Credit Agreement and it will defend the Collateral against all claims and
demands of all persons at any time claiming any interest
in the Collateral;
	 
	4.	 	It will keep the Collateral free of liens, encumbrances and other
security interests, except for this security interest, maintain the
Collateral in good repair, not use it illegally and exhibit the Collateral to
the Bank on demand;
	 
	5.	 	At its own expense, the Debtor will maintain comprehensive casualty
insurance on the Collateral against such risks, in such amounts, with
such deductibles and with such companies as may be satisfactory to the
Bank. Each insurance policy shall contain a lender’s loss payable
endorsement satisfactory to the Bank and a prohibition against
cancellation or amendment of the policy or removal of the Bank as loss
payee without at least thirty (30) days prior written notice to the Bank.
In all events, the amounts of such insurance coverages shall conform to
prudent business practices and shall be in such minimum amounts that the
Debtor will not be deemed a co-insurer. The policies, or certificates
evidencing (them, shall, if the Bank so requests, be deposited with the
Bank. The Debtor authorizes the Bank to endorse on the Debtor’s behalf
and to negotiate drafts reflecting proceeds of insurance of the
Collateral, provided that the Bank shall remit to the Debtor such
surplus, if any, as remains after the proceeds have been applied, at the
Bank’s option, to the satisfaction of all of the Liabilities (in such
order of application as the Bank may elect) or to the establishment of a
cash collateral account for the Liabilities;
	 
	6.	 	It will not sell, lease, license or offer to sell, lease, license or
otherwise transfer the Collateral or any rights in or to the Collateral,
without the written consent of the Bank, except in the ordinary course of
business;
	 
	7.	 	It will not change the location of the Collateral from the locations of
the Collateral described in this agreement, without providing at
least ten (10) days prior written notice to the Bank.
	 
	8.	 	It will pay promptly when due all taxes and assessment upon the Collateral,
or for the use or operation of the Collateral;
	 
	9.	 	No financing statement covering all or any part of the Collateral or any
proceeds is on file in any public office, unless the Bank has
approved that filing. From time to time at the Bank’s request, the Debtor
will execute one or more financing statements in form
satisfactory to the Bank and will pay the cost of filing them in all public
offices where filing is deemed by the Bank to be necessary or
desirable. In addition, the Debtor shall execute and deliver, or cause to be
executed and delivered, such other documents as the Bank
may from time to time request to perfect or to further evidence the security
interest created in the Collateral by this agreement
including, without limitation: (a) any certificate or certificates of title
to the Collateral with the security interest of the Bank noted
thereon or executed applications for such certificates of title in form
satisfactory to the Bank; (b) any assignments of claims under
government contracts which are included as part of the Collateral, together
with any notices and related documents at the Bank may
from time to time request; (c) any assignment of any specific account
receivable as the Bank may from time to time request; (d) a
notice of security interest and a control agreement with respect to any
Collateral, all in form and substance satisfactory to the Bank; (e)
a notice to and acknowledgment from any person holding possession of any
Collateral as a [ILLEGIBLE] for the Bank’s benefit, all in form
and substance satisfactory to the Bank; and (f) any consent to the assignment
of proceeds of any letter of credit, all in form and
substance satisfactory to the Bank;

	10.	 	It will not, without the Bank’s prior written consent, change the
Debtor’s name, the Debtor’s business organization, the jurisdiction
under which the Debtor’s business organization is formed or organized, or the
Debtor’s chief executive office, or of any additional places of the Debtor’s business;

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	11.	 	It will provide any information that the Bank may reasonably request and
will permit the Bank or the Bank’s agents to inspect and copy
its books, records, data and the Collateral at any time during normal
business hours;
	 
	12.	 	The Bank shall have the tight now, and at any time in the future in its
sole and absolute discretion, after default, without notice to
the Debtor, to (a) prepare, file and sign the Debtor’s name on any proof of
claim in bankruptcy or similar document against any
owner of the Collateral and (b) prepare, file and sign the Debtor’s name on
any financing statement, notice of lien, assignment or
satisfaction of lien or similar document in connection with the Collateral.
The Debtor hereby authorizes the Bank to file financing
statements containing the collateral description “All of the Debtor’s assets
whether now owned or hereafter acquired,” or such
lesser amount of assets as the Bank may determine, or the Bank may, at its
option, file financing statements containing any
collateral description which reasonably describes the Collateral in which a
security interest is granted under this agreement;
	 
	13.	 	Immediately upon the Debtor’s receipt of any Collateral evidenced by an
agreement, “instrument”, “chattel paper”, certificated
“security” or “document” (as such terms are
defined in the UCC)
(collectively, “Special Collateral”), the Debtor shall mark the
Special Collateral to show that it is subject to the Bank’s security
interest and, upon request of the Bank, shall deliver the original
to the Bank together with appropriate endorsements and other specific
evidence of assignment in form and substance satisfactory
to the Bank;
	 
	14.	 	The Debtor shall keep all tangible Collateral in good order and repair
and shall not waste or destroy any of the Collateral, nor use
any of the Collateral in violation of any applicable law or any policy of
insurance therein. To the extent that the Collateral
consists of “farm products” (as defined in the UCC), the Debtor shall attend
to and care for the crops and livestock in accordance
with the best practices of good husbandry, and do, or cause to be done, any
and all acts that may at any time be appropriate or
necessary to grow, raise, harvest, care for, preserve and protect the farm
products;

	15.	 	Except as may be otherwise disclosed in writing by the Debtor to the
Bank, none of the Collateral is attached to real estate so as to
constitute a “fixture” (as defined in the UCC) and none of the Collateral
shall at any time hereafter be attached to real estate so as
to constitute a fixture. If any of the Collateral is now or at any time
hereafter becomes so attached to real estate so as to constitute
a fixture, the Debtor shall, at any time upon the Bank’s request, furnish
the Bank with a disclaimer of interest in the Collateral
executed by each person or entity having an interest in such real estate.

Accounts; Chattel Paper; General Intangibles and Instruments. If the
Collateral includes the Debtor’s “Accounts, Chattel Paper, General Intangibles
and Instruments” and until the Bank gives notice to the Debtor to the
contrary, the Debtor will, in the usual course of its business and at its own
expense, on the Bank’s behalf but not as the Bank’s agent, demand and receive
and use its best efforts to collect all moneys due or to become due with
respect to the Collateral. Until the Bank gives notice to the Debtor to the
contrary or until the Debtor is in default, it may use the funds collected in
its business. Upon notice from the Bank or upon default, the Debtor agrees
that all sums of money it receives on account of or in payment or settlement
of the Accounts, Chattel Paper, General Intangibles and Instruments shall be
held by it as trustee for the Bank without commingling with any of the
Debtor’s other funds, and shall immediately be delivered to the Bank with
endorsement to the Bank’s order of any check or similar
instrument. It is
agreed that, at any time the Bank to elects, the Bank shall be entitled, in
its own name or in the name of the Debtor or otherwise, but at the expense and
cost of the Debtor, both before and after judgment, to collect, demand,
receive, sue for or compromise any and all Accounts, Chattel Paper, General
Intangibles, and Instruments, and to give good and sufficient releases, to
endorse any checks, drafts or other orders for the payment of money payable to
the Debtor and, in the Bank’s discretion, to file any claims or lake any
action or proceeding which the Bank may deem necessary or advisable. It is
expressly understood and agreed, however, that the Bank shall not be required
or obligated in any manner to make any demand or to make any inquiry as to the
nature or sufficiency of any payment received by it or to present or file any
claim or take any other action to collect or enforce the payment of any amounts
which may have been assigned to the Bank or to which the Bank may be entitled
at any time or times. All notices requited in this paragraph will be
immediately effective when sent Such, notices need not be given prior to the
Bank’s taking action. The Debtor appoints the Bank or the Bank’s designee as
the Debtor’s attorney-in-fact to do all things, following a default, with
reference to the Collateral as provided for in this section including without
limitation (1 ) to notify the post office authorities to change the Debtor’s
mailing address to one designated by the Bank, (2) to receive, open and
dispose of mail addressed to the Debtor, (3) to sign the Debtor’s name on any
invoice or bill of lading relating to any Collateral, on assignments and
verifications of account and on notices to the Debtor’s customers, and (4) to
do all things necessary to carry out this agreement. The Debtor ratifies and
approves all acts of the Bank as attorney-in-fact. The Bank shall not be
liable for any act or omission, nor any error of judgment or mistake of fact
or law, but only for its gross negligence or willful misconduct. This power
being coupled with an interest is irrevocable until all of the Liabilities
have been fully satisfied.

Default; Remedies. If
any of the Liabilities are not paid as maturity, whether
by acceleration or otherwise, or if a default by anyone occurs, subject to any
cure provision agreed to by the Bank, under the terms of any agreement
related to any of the Liabilities, then the Bank shall have the rights and
remedies provided by law or this agreement, including but not limited to the
right to require the Debtor to assemble the Collateral and make it available
to the Bank at a place to be designated by the Bank which is reasonably
convenient to both parties, the right to take possession of the Collateral
with or without demand and with or without process of law, and the right to
sell and dispose of it and distribute the proceeds according to law, Should a
default occur, the Debtor will pay to the Bank all costs reasonably incurred
by the Bank for the purpose of enforcing its rights hereunder, to the extent
not prohibited by law, including, without limitation; costs of foreclosure,
costs of obtaining money damages; and a reasonable fee for the services of
internal and outside attorneys employed or engaged by the Bank for any purpose
related to this agreement, including, without limitation, consultation,
drafting documents, sending notices or instituting, prosecuting or defending
litigation or any proceeding. The Debtor agrees that upon default the Bank
may dispose of any of the Collateral in its then present condition, that the
Bank has no duly to repair or clean the Collateral prior to sale, and that the
disposal of the Collateral in its

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present condition or without repair or clean-up shall not affect the commercial
reasonableness of such sale or disposition. The Bank’s compliance with any
applicable state or federal law requirements in connection with the
disposition of the Collateral will not adversely affect the commercial
reasonableness of any sale of the Collateral. The Bank may disclaim warranties
of title, possession, quiet enjoyment, and the like, and the Debtor agrees that
any such action shall not affect the commercial reasonableness of the sale. In
connection with the right of the Bank to take possession of the Collateral, the
Bank may take possession of any Other items of property in or on the Collateral
at the time of taking possession, and hold them for the Debtor without
liability on the part of the Bank. The Debtor expressly agrees that the Bank
may enter upon the premises where the Collateral is believed to be located
without any obligation of payment to the Debtor, and that the Bank may, without
cost, use any and all of the Debtor’s “equipment” (as defined in the UCC) in
the manufacturing or processing of any “inventory” (as defined in the (UCC) or
in growing, raising, cultivating, caring for, harvesting, loading and
transporting of any of the Collateral that constitutes “farm products” (as
defined in the UCC). If there is any statutory requirement for notice, that
requirement shall be [ILLEGIBLE] if the Bulk sends notice to the Debtor at least ten
(10) days prior to the date of sale, disposition or other event
giving rise to the required notice, and such notice shall be deemed commercially reasonable.
The Debtor is liable for any deficiency remaining after disposition of the
Collateral.

Miscellaneous.

	1.	 	Where the Collateral is located at, used in or attached to a facility
leased by the Debtor, the Debtor will obtain from the lessor a consent to
the granting of this security interest and a release or subordination of
the lessor’s interest in any of the Collateral, in form acceptable to the
Bank.
	 
	2.	 	At its option the Bank may, but shall be under no duty or obligation to,
discharge taxes, liens, security interests or other encumbrances at any
time levied or placed on the Collateral, pay for insurance on the
Collateral, and pay for the maintenance and preservation of the
Collateral, and the Debtor agrees to reimburse the Bank on demand for any
payment made or expense incurred by the Bank, both before and after
judgment, with interest at the highest rate at which interest may accrue
under any of the instruments evidencing the Liabilities.
	 
	3.	 	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 exercise of it or the
exercise of any other right or remedy, and no waiver or
indulgence by the Bank of any default is effective unless it is in writing
and signed by the Bank, nor does a waiver on one occasion
waive that right on any future occasion.
	 
	4.	 	If any provision of this agreement is invalid, it shall be ineffective
only to the extent of its invalidity, and the remaining provisions shall
be valid and effective.
	 
	5.	 	Except as provided in the Accounts; Chattel Paper; General Intangibles;
and Instruments paragraph above, 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
recognized overnight courier service, or (c) by certified mail, postage
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 nationally recognized courier
service, or (c) on the third 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.
	 
	6.	 	All rights of the Bank benefit the Bank’s successors and assigns; and all
obligations of the Debtor bind the Debtor’s heirs, executors,
administrator, successors and assigns. If there is more than one Debtor,
their obligations are joint and several.
	 
	7.	 	A carbon, photographic or other reproduction of this agreement is
sufficient as, and can be filed as, a financing statement. The Bank is
irrevocably appointed the Debtor’s attorney-in-fact to execute any financing
statement on the Debtor’s behalf covering the Collateral
Additionally, if permitted by applicable law, the Debtor authorizes the Bank
to file one or more financing statements related to the
security interests created by this agreement, and further authorizes the
Bank, as secured partly herein, instead of the Debtor, to sign such
financing statements.

Indemnification. The Debtor agrees to indemnify, defend and hold the Bank and
BANK ONE CORPORATION, and any of its subsidiaries or affiliates or their
successors, and each of their respective shareholders, directors, officers,
employees and agents (collectively the “Indemnified Persons”) harmless from
any and all obligations, claims, liabilities, losses, damages, penalties,
fines, [ILLEGIBLE], actions, judgments, suits, costs, expenses and
disbursements of any kind or nature (including, without limitation, any
Indemnified Person’s attorneys’ fees) (collectively the “Claims”) which may he
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 Debtor’s use of the property covered by 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 Debtor’s failure to
perform all of the
Debtor’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 an Indemnified Person.

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The Debtor’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 Debtor’s assets or the Debtor’s business activities. Should any
Claim be made or brought against any Indemnified Person by reason of any event
as to which the Debtor’s indemnification obligations apply, then, upon any
Indemnified Person’s demand, the Debtor, at its sole cost and expense, shall
defend Such Claim in the Debtor’s name, if necessary, by the attorneys for the
Debtor’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 at its reasonable
discretion to defend the Debtor and to assist in its defense and the Debtor
agrees to pay the fees and disbursements of such attorneys.

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
conflicts), except to the extent that the laws regarding the perfection and
priority of property of the state in which any property securing the
Liabilities is located are applicable. The Debtor 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 Debtor submit to and accepts, for itself and
in respect of its property, generally and unconditionally, the
non[ILLEGIBLE] jurisdiction of those courts. The Debtor waives any claim that the
State of
Wisconsin is not a convenient forum or the proper venue for any such suit,
action or proceeding.

Representations. Each Debtor represents that: (a) the execution and delivery of
this agreement and the performance of the obligations it imposes do not violate
any law, do not conflict with any agreement by which it is bound, and do not
require the consent or approval of any governmental authority or any third
party; (b) this agreement is a valid and binding agreement, enforceable
according to its terms; and (c) all balance sheets, profit and loss statements,
and other financial statements furnished to the Bank in connection with the
Liabilities fairly reflect in all material respects the financial condition of
the organizations and persons to which they apply on their effective dates,
including contingent liabilities of every type, which financial condition has
not changed materially and adversely since those dates. Each Debtor, other than
a natural person, further represents that: (a) it is duly organized, existing
and in good standing under the laws where it is organized; and (b) the
execution and delivery of this agreement and the performance of the obligations
it imposes (i) are within its powers and have been duly authorized by all
necessary action of its governing body; and (ii) do not contravene the terms of
it articles of incorporation or organization, its by-laws, or any agreement
governing its affairs.

WAIVER OF SPECIAL DAMAGES, THE DEBTOR 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 ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.

JURY WAIVER. THE DEBTOR AND THE BANK (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT,
TORT, OR OTHERWISE) BETWEEN OR AMONG THE DEBTOR 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.

	 	 	 	 	 	 	 
	 	 	Debtor:	 	 
	 
	 	 	 	 	 	 
	 	 	ARI Network Services, Inc.	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	-s- Timothy Sherlock	 	 
	 	 	 	 	

	

	 	 	 	Timothy Sherlock
	 	CFO
	 	 	 	 	

	

	 	 	 	Printed Name
	 	Title
	 
	 	 	 	 	 	 
	 	 	Date Signed: 7/9/04

5exv10w16

 

EXHIBIT 10.16

	 	 	 
	

	 	Line of Credit Note

	 	 	 
	

	 	$500,00.00

	Due: July 9, 2005

	 	Date: July 9, 2004

Promise to Pay. On or before July 9, 2005, for value received, ARI Network
Services, Inc. (the “Borrower”) promises to pay to Bank
One, NA, with its main
office in Chicago, IL, whose address is 111 E. Wisconsin Ave, Milwaukee, Wl
53202 (the “Bank”) or order, in lawful money of the United States of America,
the sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) or such
lesser sum as is indicated on Bank records, plus interest computed on the
basis of the actual number of days elapsed in a year of 360 days at the rate of
0% per annum above the Prime Rate (the “Note Rate”), and at the rate of 3.00%
per annum above the Note Rate, at the Bank’s option, upon the occurrence of any
default under this Note, whether or not the Bank elects to accelerate the
maturity of this Note, from the date such increased rate is imposed by the Bank.
In this Note, “Prime Rate” means a rate per annum equal to the prime rate of
interest announced from time to time by the Bank or its parent (which rate is
not necessarily the lowest rate charged to any customer), changing when and as
the prime rate changes.

In no event shall the
interest rate exceed the maximum rate allowed by law.
Any interest payment that would for any reason be unlawful under applicable
law shall be applied to principal.

Interest will be computed on the unpaid principal balance from the date of each
borrowing.

Until maturity, the Borrower will pay consecutive monthly installments of
interest only commencing August 9, 2004.

The Borrower will pay, without setoff, deduction, or counterclaim, the Bank at
the Bank’s address above or at such other place as the Bank may designate in
writing. If any payment of principal or interest on this Note shall become due
on a day that is not a Business Day, the payment will be made on the next
succeeding Business Day. The term “Business Day” in this Note means a day
other than a Saturday, Sunday or any other day on which national banking
associations are authorized to be closed. Payments shall be allocated among
principal, interest and fees at the discretion of the Bank unless otherwise
agreed or requited by applicable law. Acceptance by the Bank of any payment
that is less than the payment due at that time shall not constitute a waiver
of the Bank’s right to receive payment in full at that time or any other time.

Authorization for Direct Payments (ACH Debits). To effectuate any payment due
under this Note, the Borrower hereby authorizes the Bank to initiate debit
entries to Account Number 660612953 at the Bank and to debit the same to such
account. This authorization to initiate debit entries shall remain in full
force and effect until the Bank has received written notification of its
termination in such time and in such manner as to afford the Bank a reasonable
opportunity to act on it. The Borrower represents that the Borrower is and will
be the owner of all funds in such account. The Borrower acknowledges (1) that
such debit entries may cause an overdraft of such account which may result in
the Bank’s refusal to honor items drawn on such account until adequate
deposits are made to such account; (2) that the Bank is under no duty or
obligation to initiate any debit entry for any purpose; and (3) that if a
debit is not made because the above-referenced account dues not have a
sufficient. available balance, or otherwise, the payment may be late or past
due.

Late Fee. If any
payment is not received by the Bank within ten (10) days
after its due date, the Bank may assess and the Borrower agrees to pay a late
fee equal to the greater of: (a) five percent (5.00%) of the past due amount
or (b) Twenty Five and 00/100 Dollars ($25.00), up to the maximum amount of
One Thousand Five Hundred and 00/100 Dollars ($1,500.00) per late charge

Business Loan. The Borrower acknowledges and agrees that this Note evidences
a loan for a business, commercial, agricultural or similar commercial
enterprise purpose, and that all advances made under this Note shall not be
used for any personal, family or household purpose.

Credit Facility. The Bank has approved a credit facility to the Borrower in a
principal amount not to exceed the face amount of this Note. The credit
facility is in the form of advances made from time to time by the Bank to the
Borrower. This Note evidences the Borrower’s obligation to repay those
advances. The aggregate principal amount of debt evidenced by this Note is the
amount reflected from time to time in the records of the Bank. Until the
earliest of maturity, the occurrence of any default, or the
occurrence of any
event that would constitute a default but for the giving of notice or the
lapse of time or both until the end of any grace or cure period, the Borrower
may borrow, pay down and reborrow under this Note subject to the terms of the
Related Documents.

Liabilities. The term “Liabilities” in this Note 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 any

 

 

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 Note 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 successors, 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.

Related Documents. The term “Related Documents” in this Note means all loan
agreements, credit agreements, reimbursement agreements, security agreements,
mortagages, deeds of trust, pledge agreements, assignments, guaranties, or any
other instrument or document executed in connection with this Note or in
connection with any of the Liabilities.

Security. The term “Collateral’ in this Note means all real or personal
property described in all security agreements, pledge agreements, mortgages,
deeds of trust, assignments, or other instruments now or hereafter executed in
connection with this Note or in connection with any of the Liabilities. If
applicable, the Collateral secures the payment of this Note and the
Liabilities.

Bank’s Right of Setoff. In addition to the Collateral, if any, the Borrower
grants to the Bank a security interest in, and the Bank is
authorized after default to setoff and apply, all Accounts, Securities and
Other Property, and Bank Debt against any and all Liabilities of the Borrower.
This right of setoff may be exercised at any time after default and from time
to time, and without prior notice to the Borrower. This security interest and
right of setoff may be enforced or exercised by the Bank regardless of whether
or not the Bank has made any demand under this paragraph or whether the
liabilities are contingent, matured, or unmatured. Any delay, neglect or
conduct by the Bank in exercising its rights under this paragraph will not be
a waiver of the right to exercise this right of setoff or enforce this
security interest. The rights of the Bank under this paragraph are in addition
to other rights the Bank may have in the Related Documents or by law. In this
paragraph: (a) the term “Accounts” means any and all accounts and deposits of
the Borrower (whether general, special, time, demand, provisional or final) at
any time held by the Bank (including all Accounts held jointly with another,
but excluding any IRA or Keogh Account, or any trust Account in which a
security interest would be prohibited by law): (b) the term “Securities and
Other Property” means any and all securities and other property of the
Borrower in the custody, possession or control of the Bank (other than
property held by the Bank in a fiduciary capacity); and (c) the term “Bank
Debt” means all indebtedness at any time owing by the Bank, to or for the
credit or account of the Borrower.

Representations by Borrower. Each Borrower represents that: (a) the execution,
and delivery of this Note and the performance of the obligations it imposes 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 Note is a valid and binding agreement, enforceable according
to its terms; and (c) all balance sheets, profit and loss statements, and
other financial statements furnished to the Bank in connection with the
Liabilities are accurate and 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. 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 Note
and the performance of the obligations it imposes (i) are within its powers
and have been duly authorized by all necessary action of its governing body,
and (ii) 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.

Events of Default/Acceleration. If any of the following events occur this Note
shall become due immediately, without notice, at the Bank’s option:

	1.	 	The Borrower, or any guarantor of this Note (the
“Guarantor”), fails to
pay when due any amount payable under this Note, under any
of the Liabilities, or under any agreement or instrument evidencing
debt to
any creditor.

	2.	 	The Borrower or any Guarantor (a) fails to observe or perform any other
term of this Note; (b) makes any materially incorrect or
misleading representation, warranty, or certificate to the Bank; (c) makes
any materially incorrect or misleading representation in
any financial statement or other information delivered to the Bank; or (d)
defaults under the terms of any agreement or instrument
relating to any debt for borrowed money (other than the debt evidenced by
this Note) having an outstanding principal balance of
more than $50,000.00, and the effect of such default will allow the creditor
to declare the debt due before its maturity.

	3.	 	In the event (a) there is a default under the terms of
any Related
Document, (b) any guaranty of the loan evidenced by this Note is
terminated or becomes unenforceable in whole or in part, (c) any
Guarantor fails to promptly perform under its guaranty, or (d) the
Borrower fails to comply with, or pay, or perform under any agreement,
now or hereafter in effect, between the Borrower and BANK ONE
CORPORATION, or any of its subsidiaries or affiliates or their
successors.

 2 

 

 

	4.	 	There is any loss, theft, damage, or destruction of any Collateral not
covered by insurance, and having a fair market value as
reasonably determined by the Bank which would, as a result of such loss,
theft, damage or destruction, render the Bank
inadequately secured.
	 
	5.	 	A “reportable event” (as defined in the Employee Retirement Income
Security Act of 1974 as amended) occurs that would permit
the Pension Benefit Guaranty Corporation to terminate any employee benefit
plan of the Borrower or any affiliate of the
Borrower.
	 
	6.	 	The Borrower or any Guarantor becomes insolvent or unable to pay its debts
as they become due.
	 
	7.	 	The Borrower or any Guarantor (a) makes an assignment for the benefit of
creditors; (b) consents to the appointment of a
custodian, receiver, or trustee for itself or for a substantial part of its
assets; or (c) commences any proceeding under any
bankruptcy, reorganization, liquidation, insolvency or similar laws of any
jurisdiction.
	 
	8	 	A custodian, receiver, or trustee is appointed for the Borrower or any
Guarantor or for a substantial part of its assets without its
consent.
	 
	9.	 	Proceedings are commenced against the Borrower or any Guarantor under
any bankruptcy, reorganization, liquidation, or similar
laws of any jurisdiction, and they remain undismissed for thirty (30) days
after commencement; of the Borrower or the Guarantor
consents to the commencement of those proceedings.
	 
	10.	 	Any judgment is entered against the Borrower or any Guarantor, or any
attachment levy, or garnishment is issued against any
property of the Borrower or any Guarantor.
	 
	11.	 	The Borrower or any Guarantor dies, or a guardian or conservator is
appointed for the Borrower or any Guarantor or all or any portion of the
Borrower’s assets, any Guarantor’s assets, or the Collateral.
	 
	12.	 	The Borrower or any Guarantor, without the Bank’s written consent (a) is
dissolved, (b) merges or consolidates with any third
party, (c) leases, sells or otherwise conveys a material part of its assets
or business outside the ordinary course of its business, (d)
leases, purchases, or otherwise acquires a material part of the assets of
any other business entity, except in the ordinary course of
its business, or (e) agrees to do any of the foregoing (notwithstanding the
foregoing, any subsidiary may merge or consolidate
with any other subsidiary, or with the Borrower, so long as the Borrower is
the survivor).
	 
	13.	 	There is a substantial change in the existing or prospective financial
condition of the Borrower or any Guarantor that the Bank in
good faith determines to be materially adverse.

Cure Periods. Except as expressly provided to the contrary in this Note or any
of the Related Documents, no condition, event or occurrence shall constitute
the occurrence of a default under this Note, of a default under any of the
Liabilities or of a default under any of the Related Documents unless: (a) the
Bank has notified the Borrower of such condition, event or occurrence in
writing (a “Default Notice”); and (b) such condition, event, or occurrence has
not been fully cured (i) within five (5) days after the Borrower’s receipt of
a Default Notice, if the condition, event or occurrence giving rise to such
Default Notice can be cured solely by the payment of money or (ii) within
thirty (30) days after the Borrower’s receipt of a Default Notice, if the
condition, event or occurrence giving rise to such Default Notice is of a
nature that it cannot be cured solely by the payment of money.

Provided, however, that
the Borrower shall have no notice and cure rights
under this section if: (a) the condition, event or occurrence giving rise to
the occurrence of a default under this Note, of a default under the
Liabilities or of a default under the Related Documents (i) is a condition,
event or occurrence described in any of clauses 3(b), (6), (7), (8),
(9), (11) or (12) of the section captioned Events of Default/Acceleration section
above or (ii) constitutes a breach of any covenant in any Related Document
prohibiting the sale or transfer of (1) any assets of any Borrower,
Mortgagor, Pledgor, Debtor, Assignor, Trustor or any similar pledging
or borrowing party or (2) any of the Collateral; or (b) the Borrower, during the twelve (12)
month period immediately preceding any Default Notice, has been given either
(i) any other Default Notice covering the same condition, event or occurrence
or (ii) three (3) or more other Default Notices of any nature.

Remedies. If this Note is not paid at maturity, whether by acceleration or
otherwise, the Bank shall have all of the rights and remedies provided by any
law or agreement. The Bank is authorized to cause all or any part of the
Collateral to be transferred to or registered in its name or in the name of
any other person or business entity, with or without designating the capacity
of that nominee. Without limiting any other available remedy, the Borrower is
liable for any deficiency remaining after disposition of any
Collateral. The
Borrower is liable to the Bank for all reasonable documented costs and
expenses of every kind incurred in the making or collection of this Note, both
before and after judgment, including without limitation reasonable attorneys’
fees and court costs. These costs and expenses include without limitation any
costs or expenses incurred by the Bank in any bankruptcy, reorganization,
insolvency or other similar proceeding.

Waivers. Any party (other than the Borrower) liable on this Note waives (a) to
the extent permitted by law, all rights and benefits under any laws or
statutes regarding sureties, as may be amended; (b) any right to receive
notice of the following matters before the Bank enforces any of its rights: (i)
the Bank’s acceptance of this Note, (ii) any credit that the Bank extends to
the Borrower, (iii) the Borrower’s default, (iv) any demand, diligence,
presentment, dishonor and protest, or (v) any action that the Bank takes
regarding the Borrower, anyone else, any Collateral, or any of the
Liabilities, that it might be entitled to by law or under any other agreement;
(c) any right to require the Bank to proceed against the Borrower, any other
obligor or guarantor of the Liabilities, or any Collateral, or pursue any
remedy in the Bank’s power to pursue; (d) any defense based on any claim that
any endorser of other parties’ obligations exceed or are more burdensome than
those of the Borrower; (e) the benefit of any statute of limitations affecting
liability of any endorser or other party liable hereunder or the enforcement
hereof; (f) any defense arising by reason of any disability or other defense

  3

 

of the Borrower or by reason of the cessation from any cause whatsoever (other
than payment in full) of the obligation of the Borrower for the Liabilities;
and (g) any defense based on or arising out of any defense that the Borrower
may have to the payment or performance of the Liabilities or any portion
thereof. Any party (other than the Borrower) liable on this Note consents to any
extension or postponement of time of its payment without limit as to the number
or period, to any substitution, exchange or release of all or any part of the
Collateral, to the addition of any other party, and to the release or
discharge of, or suspension of any rights and remedies against, any person who
may be liable for the payment of this Note. The Bank may waive or delay
enforcing any of its rights without losing them. Any waiver affects only the
specific terms and time period stated in the waiver. No modification or waiver
of any provision of this Note is effective unless it is in writing and signed
by the party against whom it is being enforced.

Subordination. Any rights of any party (other than the Borrower) liable on this
Note, whether now existing or hereafter arising, to receive payment on account
of any indebtedness (including interest) owed to any party liable on this Note
by the Borrower, or to withdraw capital invested by it in the Borrower, or to
receive distributions from the Borrower, shall at all times be subordinate to
the full and prior repayment to the Bank of the Liabilities. No party liable on
this Note shall be entitled to enforce or receive payment of any sums hereby
subordinated until the Liabilities have been paid in full and any such sums
received in violation of this paragraph shall be received by such party in
trust for the Bank. Any party (other than the Borrower) liable on this Note
agrees to stand still with regard to the Bank’s enforcement of its rights,
including taking no action to delay, impede or otherwise interfere with the
Bank’s rights to realize on the Collateral. The foregoing notwithstanding,
until the occurrence of any default, any party liable on this Note is not
prohibited from receiving distributions from the Borrower in an amount equal to
any income tax liability imposed on such party liable on this Note attributable
to an ownership interest, if any, in the Borrower.

Rights of Subrogation.
Any party liable on this Note waives and agrees not to
enforce any rights of subrogation, contribution or indemnification that it may
have against the Borrower, any person liable on the Liabilities, or the
Collateral, until the Borrower and such party liable on this Note have fully
performed all their obligations to the Bank, even if those obligations are not
covered by this Note.

Reinstatement. All parties liable on this Note agree that to the extent any
payment is received by the Bank in connection with the Liabilities, and all or
any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by the Bank or
paid over to a trustee, receiver or any other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter referred to as a
“Preferential Payment”), then this Note shall continue to be effective or shall
be reinstated, as the case may be, and whether or not the Bank is in
possession of this Note, and, to the extent of such payment or repayment by
the Bank, the Liabilities or part thereof intended to be satisfied by such
Preferential Payment shall be revived and continued in full force and effect
as if said Preferential Payment had not been made.

Governing Law and Venue.
This Note is delivered in the State of Wisconsin and
governed by Wisconsin law (without giving effect to its laws of
conflicts). The
Borrower agrees that any legal action or proceeding with respect to any of its
obligations under this Note 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 Note, the Borrower submits to
and accepts, for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of those courts. The Borrower
waives any claim that the State of Wisconsin is not a convenient forum or the
proper venue for any such suit, action or proceeding.

Miscellaneous. The Borrower, if more than one, is jointly and severally liable
for the obligations represented by this Note, the term “Borrower” means any
one or more of them, and the receipt of value by any one of them constitutes
the receipt of value by the others. This Note binds the Borrower and its
successors, and benefits the Bank, its successors and assigns. Any reference
to the Bank includes any holder of this Note. Section headings are for
convenience of reference only and do not affect the interpretation of this
Note. 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 recognized overnight courier service, or (c) by certified mail,
postage 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 nationally recognized courier service, or (c) on the third
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. This Note and any
Related Documents embody the entire agreement between the Borrower and the
Bank regarding the terms of the loan evidenced by this Note and supercede all
oral statements and prior writings relating to that loan. If any provision of
this Note cannot be enforced, the remaining portions of this Note shall
continue in effect. The Borrower agrees that the Bank may provide any
information or knowledge the Bank may have about the Borrower or about any
matter relating to this Note or the Related Documents to BANK ONE
CORPORATION, or any of its subsidiaries or affiliates or their successors, or
to any one or more purchasers or potential purchasers of this Note or the
Related Documents. The Borrower agrees that the Bank may at any time sell,
assign or transfer one or more interests or participations in all or any part
of its rights and obligations in this Note to one or more purchasers whether
or not related to the Bank.

4

 

Government Regulation.
Borrower shall not (a) 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 conducting business with Borrower, or(b) 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 5 318.

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 each 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 for Borrower’s name, taxpayer identification number, residential
address, date 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.

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 ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.

JURY WAIVER. THE BORROWER AND THE BANK (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT,
TORT, OR OTHERWISE) BETWEEN THE BORROWER AND THE BANK ARISING OUT OF OR IN ANY
WAY RELATED TO THIS NOTE OR THE OTHER RELATED DOCUMENTS, THIS PROVISION IS A
MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING EVIDENCED BY THIS
NOTE.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Borrower:	 	 
	 
	 	 	 	 	 	 	 	 
	Address:	 	11425 W. Lake Park Dr., Suite 900	 	ARI Network Services, Inc.	 	 
	

	 	Milwaukee, Wl 53224	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:
	 	/s/ Timothy Sherlock	 	 
	 	 	 	 	 	 	

	

	 	 	 	 	 	Timothy Sherlock
	 	CFO
	 	 	 	 	 	 	

	

	 	 	 	 	 	Printed Name
	 	Title
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Date Signed: 7/9/04

5

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