MEMBERSHIP INTERESTS SECURITY AGREEMENT
Exhibit 10.2
MEMBERSHIP INTERESTS SECURITY AGREEMENT
This MEMBERSHIP INTERESTS SECURITY AGREEMENT is made as of July 27, 2011 (this “Agreement”), by ARI NETWORK SERVICES, INC., a Wisconsin corporation (“Grantor”), to and in favor of FIFTH THIRD BANK, an Ohio banking corporation (hereinafter, together with its successors and assigns, referred to as “Lender”).
R E C I T A L S:
WHEREAS, Grantor is the sole member of ARI Europe B.V. (“ARI Europe” or “Issuer”);
WHEREAS, Lender is making or may in the future make loans (the “Loans”) to Grantor pursuant to that certain Loan and Security Agreement dated as of even date herewith (as amended, restated, modified or supplemented and in effect from time to time, the “Loan Agreement”); and
WHEREAS, as a condition precedent to Lender’s making the Loans, Lender has required that Grantor execute and deliver this Agreement to Lender to secure the prompt and complete performance all of the obligations and payment of all of the indebtedness under the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement) (all such obligations and indebtedness are hereinafter referred to collectively as the “Liabilities”).
NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.
Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“Code” shall mean the Uniform Commercial Code as the same may from time to time be in effect in the State of Illinois.
“Loan Documents” shall have the meaning specified in the Loan Agreement.
“Operating Agreement” shall mean, with respect to Issuer, its articles or certificate of formation or organization and its limited liability company or operating agreement and/or its other organizational and governing documents and agreements, as each may be hereafter amended from time to time in accordance with the terms of this Agreement.
“Proceeds” shall mean “proceeds”, as such term is defined in the Code and, in any event, shall include, but not be limited to, (i) any and all payments (in any form whatsoever) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the “Pledged Collateral” (as hereinafter defined) by any governmental body, authority, bureau or agency (or any person acting under color of governmental authority), (ii) any and all amounts paid or payable to Grantor for or in connection with any sale or other disposition of Grantor’s interests in Issuer and
(iii) any and all other amounts from time to time paid or payable under or in connection with any of the Pledged Collateral.
“Security Interest” shall mean the security interest granted pursuant to Section 2 hereof.
2.
Grant of Security Interest. As security for the prompt and complete payment and performance when due of the Liabilities, Grantor hereby grants to Lender a security interest in and pledges to Lender all of the following (all of which being herein collectively called the “Pledged Collateral”):
(a)
all of Grantor’s right, title and interest as a member in or owner of Issuer, including without limitation, all of Grantor’s right to receive distributions at any time or from time to time of cash and other property, real, personal or mixed, from Issuer upon complete or partial liquidation or otherwise;
(b)
all of Grantor’s right, title, and interest, if any, in specific property of Issuer;
(c)
all of Grantor’s right, title and interest, if any, to participate in the management of Issuer, including rights to vote any of the Pledged Collateral;
(d)
all of Grantor’s right, title and interest in and to:
(i)
all rights, privileges, authority and power of Grantor as owner and holder of the items specified in (a), (b), and (c) above, including but not limited to, all contract rights related thereto;
(ii)
all options and other agreements for the purchase or acquisition of any membership or ownership interests in Issuer; and
(iii)
any documents or certificates representing or evidencing any of Grantor’s rights and interests in Issuer; and
(iv)
to the extent not otherwise included, all Proceeds and products of any of the foregoing.
Notwithstanding anything to the contrary contained herein, the term “Pledged Collateral” shall not include more than sixty-five percent (65%) of the issued and outstanding shares of equity interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of ARI Europe if such inclusion would reasonably be expected to cause
(A)
the undistributed earnings of ARI Europe as determined for United States federal income tax purposes to be treated as a deemed dividend to ARI Europe’s United States parent, or
(B)
any material adverse tax consequences (it being understood and agreed that the Pledged Collateral shall include one hundred percent (100%) of the issued and
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outstanding shares of equity interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) or other equity interests of ARI Europe)
provided that, if, as a result of any change in the tax laws of the United States after the date of this Agreement, the pledge by Grantor under this Agreement of any additional shares of capital stock entitled to vote in a ARI Europe would not result in the events described in subclauses (A) and (B) of this paragraph, then, promptly after the change in such laws, all such additional equity securities shall be so pledged under this Agreement.
3.
Representations and Warranties. Grantor represents and warrants that:
(a)
Grantor is the sole owner of each item of the Pledged Collateral, free and clear of any and all liens and claims whatsoever except for the security interest granted to Lender pursuant to this Agreement.
(b)
Grantor’s interests in Issuer consist of a one hundred percent (100%) membership/ownership interest, including the same percentage interests in all distributions by Issuer to its members or owners of cash or other property, whether in complete or partial liquidation or otherwise.
(c)
Grantor has all power, statutory and otherwise, to execute and deliver this Agreement, to perform Grantor’s obligations hereunder and to subject the Pledged Collateral to the security interest created hereby, all of which has been duly authorized by all necessary action of Grantor.
(d)
No amendments or supplements have been made to Issuer’s Operating Agreement since it was originally entered into; the Operating Agreement remains in effect; and no party to Issuer’s Operating Agreement is presently in default thereunder.
(e)
To the knowledge of Grantor, no authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required either for (i) Grantor’s granting of a security interest in the Pledged Collateral pursuant to this Agreement for the execution, delivery or performance of this Agreement by Grantor or (ii) the exercise by Lender of the rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement (except, to the extent that any Pledged Collateral consists of securities under applicable law, as may be required in connection with such disposition by laws affecting the offering and sale of securities generally).
(f)
Upon the transfer of the Pledged Collateral, or any portion thereof, to any party pursuant to Section 10 below, Issuer shall continue in existence and Issuer’s Operating Agreement provides for such continuation.
4.
Covenants. Grantor covenants and agrees that from and after the date of this Agreement and until the Liabilities are fully satisfied:
(a)
Further Documentation; Pledge of Instruments. At any time and from time to time, upon the written request of Lender, and at the sole expense of Grantor,
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Grantor will promptly and duly execute and deliver any and all such further instruments and documents and take such further actions as Lender may reasonably deem desirable to obtain the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (i) the execution and filing of any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the security interest granted hereby, (ii) taking any action necessary under the laws of The Netherlands to properly perfect and make enforceable the security interest in Pledged Collateral relating to ARI Europe, and (iii) whether or not otherwise required hereunder, transferring Pledged Collateral to the possession of Lender or causing Issuer to agree (in writing) that it will only comply with instructions originated by the Lender without further consent by the Grantor. Grantor also hereby authorizes Lender to file any such financing or continuation statement without the signature of Grantor to the extent otherwise permitted by applicable law. If any amount payable under or in connection with any of the Pledged Collateral shall be or become evidenced by any promissory note or other instrument or chattel paper, such note or instrument or chattel paper shall be immediately pledged hereunder and a security interest therein hereby granted to Lender and shall be duly endorsed without recourse or warranty in a manner satisfactory to Lender and delivered to Lender. If at any time Grantor’s right or interest in any of the Pledged Collateral becomes an interest in real property, Grantor immediately shall execute, acknowledge and deliver to Lender such further documents as Lender deems necessary or advisable to create a first priority perfected mortgage lien in favor of Lender in such real property interest.
(b)
Priority of Liens. Grantor will defend the right, title and interest hereunder of Lender, as a first priority security interest in the Pledged Collateral, against the claims and demands of all persons whomsoever.
(c)
Continuous Perfection. Grantor will not change Grantor’s name in any manner which might make any financing or continuation statement filed hereunder seriously misleading within the meaning of Section 9-507 of the Code (or any other then-applicable provision of the Code), unless Grantor shall have given Lender at least thirty (30) days’ prior written notice thereof and shall have taken all action (or made arrangements to take such action substantially simultaneously with such change if it is impossible to take such action in advance) necessary or reasonably requested by Lender to amend such financing statement or continuation statement so that it is not seriously misleading. Grantor will not sign or authorize the signing on Grantor’s behalf of any financing statement naming Grantor as debtor covering all or any portion of the Pledged Collateral, except financing statements naming Lender as secured party.
(d)
Transfer of Assets. Grantor will not directly or indirectly sell, pledge, mortgage, assign, transfer, or otherwise dispose of or create or suffer to be created any lien, security interest, charging order, or encumbrance on any of the Pledged Collateral or the assets of Issuer other than the liens relating to the Loans.
(e)
Performance of Obligations. Grantor will perform all of Grantor’s obligations under the Operating Agreement prior to the time that any interest or penalty would attach against Grantor or any of the Pledged Collateral as a result of Grantor’s
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failure to perform any of such obligations, and Grantor will do all things necessary to maintain Issuer as a limited liability company under the laws of the jurisdiction of organization and to maintain Grantor’s interest as a member in or owner of each Issuer in full force and effect without diminution.
(f)
Operating Agreement. Grantor will not (x) suffer or permit any amendment or modification of the Operating Agreement in any way which could reasonably be expected to materially adversely affect the interests of Lender without the prior written consent of Lender, or (y) waive, release, or compromise any rights or claims Grantor may have against any other party which arise under the Operating Agreement. Grantor will not vote under the Operating Agreement to cause Issuer to dissolve, liquidate, merge or consolidate with any other entity or take any other action under the Operating Agreement that would adversely affect the Security Interest, including, without limitation, the value or priority thereof. Grantor will not permit, suffer or otherwise consent to the issuance of any new or additional membership interests or options or other agreements granting any right to receive membership or ownership interests in either Issuer.
(g)
Securities. Grantor shall, or shall permit Lender to, promptly take all action necessary or appropriate to cause Lender to have sole and exclusive “control” over the Pledged Collateral, as such term is defined in Article 9 of the Code. At all times Grantor shall take, or shall permit Lender to take, all action necessary or appropriate to create, perfect and maintain a first perfected priority security interest in the Pledged Collateral in favor of Lender. Without limiting the foregoing, Grantor shall deliver any and all certificates that evidence any of the Pledged Collateral together with assignments separate from certificate executed in blank relating thereto. Grantor hereby represents and warrants that none of the membership or ownership interests of Issuer constitutes “securities” under Article 8 of the Code.
5.
Grantor’s Powers.
(a)
So long as an “Event of Default” (as hereinafter defined) shall not then exist, Grantor shall be the sole party entitled (1) to exercise for any purpose any and all voting rights and powers, and (2) to receive any and all distributions, in each case arising from or relating to the Pledged Collateral; provided, however, that Grantor shall not exercise such rights or powers, or consent to any action of Issuer that would be in contravention of the provisions of, or constitute an Event of Default under, this Agreement or any of the other Loan Documents.
(b)
Upon the occurrence and during the continuance of an Event of Default, unless Lender designates in writing to Grantor to the contrary, all rights of Grantor provided in Section 5(a) hereof shall cease, and all voting rights and powers and rights to distributions included in the Pledged Collateral or otherwise described in such Section 5(a) shall thereupon become vested in Lender, and Lender shall thereafter have the sole and exclusive right and authority to exercise such voting rights and powers. Grantor shall execute such documents and instruments, including but not limited to, statements that Grantor no longer has the right to act as a member or owner or otherwise relating to such
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change as Lender may request. Grantor agrees that Issuer may rely conclusively upon any notice from Lender that Lender has the right and authority to exercise any rights and powers of Grantor as a member or owner of Issuer. Grantor irrevocably waives any claim or cause of action against Issuer who deals directly with Lender following receipt of such notice from Lender.
6.
Lender’s Appointment as Attorney-in-Fact.
(a)
Grantor hereby irrevocably constitutes and appoints Lender and each officer or agent of Lender with full power of substitution, as Grantor’s true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Grantor and in the name of Grantor or in such attorney-in-fact’s own name, from time to time in the discretion of each such attorney-in-fact following the occurrence and during the continuance of an Event of Default, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement and, without limiting the generality of the foregoing, hereby gives each such attorney-in-fact the power and right, from and after and during the continuance an Event of Default, on behalf of Grantor, without notice to or assent by Grantor, to do the following:
(i)
to collect and otherwise take possession of and title to any and all distributions of cash or other property due or distributable at any time after the date hereof to Grantor as a member or owner from Issuer, whether in complete or partial liquidation or otherwise, and to prosecute or defend any action or proceeding in any court of law or equity or otherwise deemed appropriate by such attorney-in-fact for the purpose hereof;
(ii)
to ask, demand, collect, receive and give acceptances and receipts for any and all moneys due and to become due under any Pledged Collateral and, in the name of Grantor or such attorney-in-fact’s own name or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Pledged Collateral and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by such attorney-in-fact for the purpose of collecting any and all such moneys due under any Pledged Collateral whenever payable;
(iii)
to pay or discharge any taxes, liens, security interests or other encumbrances levied or placed on or threatened against any of the Pledged Collateral, to effect any insurance called for with respect to any of the Pledged Collateral by the terms of this Agreement and to pay all or any part of the premiums therefor and the costs thereof; and
(iv)
(A) to direct any party liable for any payment under any of the Pledged Collateral to make payment of any and all moneys due and to become due thereunder directly to Lender or as such attorney-in-fact shall direct; (B) to receive payment of and receipt for any and all moneys, claims and other amounts
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due and to become due at any time in respect of or arising out of any Pledged Collateral; (C) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Pledged Collateral or any portion thereof and to enforce any other right in respect of any Pledged Collateral; (D) to defend any suit, action or proceeding brought against Grantor with respect to any Pledged Collateral; (E) to settle, compromise or adjust any suit, action or proceeding described above and, in connection therewith, to give such discharges or releases as such attorney-in-fact may deem appropriate; and (F) generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Pledged Collateral as fully and completely as though such attorney-in fact were the absolute owner thereof for all purposes, and to do, at the option of such attorney-in-fact at Grantor’s expense, at any time, or from time to time, all acts and things which such attorney-in-fact reasonably deems necessary to protect, preserve or realize upon the Pledged Collateral and the security interest of Lender therein, in order to effect the intent of this Agreement, all as fully and effectively as Grantor might do.
Grantor hereby ratifies, to the extent permitted by law, all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.
(b)
The powers conferred on each attorney-in-fact hereunder are solely to protect the interest in the Pledged Collateral of Lender and shall not impose any duty upon any such attorney-in-fact to exercise any such powers. Each such attorney-in-fact shall be accountable only for amounts that it actually receives as a result of the exercise of such powers and neither it nor any of its officers, directors, employees or agents shall be responsible to Grantor for any act or failure to act unless such action or failure to act constitutes gross negligence.
(c)
Grantor also authorizes Lender and each officer or agent of Lender at any time and from time to time upon the occurrence and during the continuance of any Event of Default, to execute, in connection with the sale provided for in Section 10 of this Agreement, any endorsements, assignments or other instruments of conveyance or transfer with respect to any of the Pledged Collateral.
7.
Distributions. In the event Grantor receives any distributions in respect of the Pledged Collateral that are made in violation of the Loan Agreement, Grantor will hold the same in trust for Lender and promptly transfer the property that was so distributed in the form that it was received.
8.
Performance by Lender of Grantor’s Obligations. If Grantor fails to perform or comply with any of Grantor’s agreements contained herein and Lender as provided for by the terms of this Agreement shall itself perform or comply, or otherwise cause performance or compliance, with such agreement, the expenses of Lender incurred in connection with such performance or compliance, together with interest thereon at the rate applicable to the revolving loan facility when a default exists as specified in the Loan Agreement, shall be payable by Grantor to Lender on demand and shall constitute Liabilities secured hereby.
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9.
Default. Any of the following shall constitute an “Event of Default” hereunder:
(a)
A failure by Grantor to observe or perform any obligation, covenant, condition, or agreement hereof to be performed by Grantor;
(b)
Any representation or warranty made by Grantor in this Agreement is not true and correct in any material respect; or
(c)
The occurrence of any “Event of Default” under the Loan Agreement or any other Loan Document.
10.
Remedies, Rights Upon Default.
(a)
Upon the occurrence and during the continuance of any Event of Default, Lender or Lender’s designee may, at Lender’s option, elect to become the substituted member in or owner of Issuer with respect to the Pledged Collateral and Grantor shall execute or cause to be executed all documents necessary to evidence Lender so becoming substituted member or owner. If any Event of Default shall occur and be continuing, Lender or Lender’s designee may exercise in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Liabilities, all rights and remedies of a secured party under the Code. Without limiting the generality of the foregoing, Grantor expressly agrees that in any such event Lender, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon Grantor or any other person (all and each of which demands, advertisements and/or notices are hereby expressly waived), may forthwith collect, receive, appropriate and realize upon the Pledged Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or sell or otherwise dispose of and deliver said Pledged Collateral (or contract to do so), or any part thereof, in one or more parcels at public or private sale or sales, at any exchange or broker’s board or at any of Lender’s offices or elsewhere at such prices as it may deem best, for cash or on credit or for future delivery without the assumption of any credit risk. Grantor expressly acknowledges that private sales may be less favorable to a seller than public sales but that private sales shall nevertheless be deemed commercially reasonable and otherwise permitted hereunder. In view of the fact that federal and state securities laws and/or other applicable laws may impose certain restrictions on the method by which a sale of the Pledged Collateral may be effected, Grantor agrees that upon the occurrence and during the continuance of an Event of Default, Lender may, from time to time, attempt to sell all or any part of the Pledged Collateral by means of a private placement, restricting the prospective purchasers to those who will represent and agree that they are purchasing for investment only and not for distribution. In so doing, Lender may solicit offers to buy the Pledged Collateral, or any part thereof, for cash, from a limited number of investors deemed by Lender in its judgment, to be financially responsible parties who might be interested in purchasing the Pledged Collateral, and if Lender solicits such offers, then the acceptance by Lender of the highest offer obtained therefrom shall be deemed to be a commercially reasonable method of disposing of the Pledged Collateral.
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Lender or Lender’s designee shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of said Pledged Collateral so sold, free of any right or equity of redemption, which equity of redemption Grantor hereby releases. Grantor further agrees, at the request of Lender, to assemble the Pledged Collateral and make it available to Lender at places which Lender shall reasonably select, whether at Grantor’s premises or elsewhere. Lender shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale as provided in Section 10(d) of this Agreement. Only after so paying over such net proceeds and after the payment by Lender of any other amount required by any provision of law, including Section 9-608(1)(C) of the Code, need Lender account for the surplus, if any, to Grantor. To the extent permitted by applicable law, Grantor waives all claims, damages, and demands against Lender arising out of the repossession, retention or sale of the Pledged Collateral except in each case such as arise out of the gross negligence or willful misconduct of Lender. Any notification of intended disposition of any of the Pledged Collateral required by law will be deemed to be a reasonable authenticated notification of disposition if given at least ten (10) days prior to such disposition and such notice shall (i) describe Lender and Grantor, (ii) describe the Pledged Collateral that is the subject of the intended disposition, (iii) state the method of the intended disposition, (iv) state that Grantor is entitled to an accounting of the Liabilities and state the charge, if any, for an accounting and (v) state the time and place of any public disposition or the time after which any private sale is to be made. Lender may disclaim any warranties that might arise in connection with the sale, lease or other disposition of the Pledged Collateral and has no obligation to provide any warranties at such time.
(b)
Grantor also agrees to pay all costs of Lender, including reasonable attorneys’ fees and expenses, incurred with respect to the collection of any of the Liabilities or the enforcement of any of Lender’s rights hereunder.
(c)
Grantor hereby waives presentment, demand, or protest (to the extent permitted by applicable law) of any kind in connection with this Agreement or any Pledged Collateral. Except for notices provided for herein, Grantor hereby waives notice (to the extent permitted by applicable law) of any kind in connection with this Agreement.
(d)
The proceeds of any sale, disposition or other realization upon all or any part of the Pledged Collateral shall be distributed by Lender in the following order of priorities:
first, to Lender in an amount sufficient to pay in full the expenses of Lender in connection with such sale, disposition or other realization, including all expenses, liabilities and advances incurred or made by Lender in connection therewith, including reasonable attorneys’ fees and expenses;
second, to Lender until the other Liabilities are paid in full; and
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finally, upon payment in full of all of the Liabilities, to Grantor, or its representative or as a court of competent jurisdiction or Grantor may direct.
Grantor agrees to indemnify and hold harmless Lender, its directors, officers, employees, attorneys, agents and parent, and subsidiary corporations, and each of them, from and against any and all liabilities, obligations, claims, damages, or expenses incurred by any of them arising out of or by reason of entering into this Agreement or the consummation of the transactions contemplated by this Agreement and to pay or reimburse Lender for the fees and disbursements of counsel incurred in connection with any investigation, litigation or other proceedings (whether or not Lender is a party thereto) arising out of or by reason of any of the aforesaid; provided, however, that Grantor shall not have any obligations hereunder to Lender or its directors, officers, employees, attorneys, agents and parent, and subsidiary corporations with respect to matters caused by or resulting from the willful misconduct or gross negligence of such party. Lender will promptly give Grantor written notice of the assertion of any claim which it believes is subject to the indemnity set forth in this Section 10 and will upon the request of Grantor promptly furnish Grantor with all material in its possession relating to such claim or the defense thereof to the extent that Lender may do so without breach of duty to others. Any amounts properly due under this Section 10 shall be payable to Lender immediately upon demand.
11.
Limitation on Lender’s Duty in Respect of Pledged Collateral. Except as expressly provided in the Code, Lender shall have no duty as to any Pledged Collateral in its possession or control or in the possession or control of any agent or nominee of Lender or as to any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto.
12.
Notices. All notices, requests, demands and other communications provided for hereunder shall be in writing and addressed as follows:
If to Borrower:
ARI Network Services, Inc.
10850 West Park Place, Suite 1200
Milwaukee, Wisconsin 53224
Attention: Darin R. Janecek
with a copy to:
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
Attention: Mark C. Witt, Esq.
If to Lender:
Fifth Third Bank
222 South Riverside Plaza, 32nd Floor
Chicago, Illinois 60606
Attention: Gayne M. Underwood
with a copy to:
Dykema Gossett PLLC
10 South Wacker Drive, Suite 2300
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Chicago, Illinois 60606
Attention: Diana Y. Tsai, Esq.
or, as to each party, at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this subsection. All notices addressed as above shall be deemed to have been properly given (i) if served in person, upon acceptance or refusal of delivery; (ii) if mailed by certified or registered mail, return receipt requested, postage prepaid, on the third (3rd) day following the day such notice is deposited in any post office station or letter box; or (iii) if sent by recognized overnight courier, on the first (1st) day following the day such notice is delivered to such carrier. No notice to or demand on Borrower in any case shall entitle Borrower to any other or further notice or demand in similar or other circumstances.
13.
Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
14.
No Waiver; Cumulative Remedies. Lender shall not, by any act, delay, omission or otherwise, be deemed to have waived any of its rights or remedies hereunder. No waiver hereunder shall be valid except to the extent therein set forth in writing. A waiver of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Lender would otherwise have had on any future occasion. No failure to exercise nor any delay in exercising on the part of Lender any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or future exercise thereof or the exercise of any other right, power or privilege. Except to the extent that Lender has specifically and expressly waived such remedies in this Agreement or otherwise, the rights and remedies hereunder provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights and remedies provided by law. Lender may resort to and realize on the Pledged Collateral simultaneously with any acts or proceedings initiated by Lender in its sole and conclusive discretion to resort to or realize upon any other sources of repayment of the Liabilities, including, but not limited to, collateral granted by other security agreements and the personal liability of Grantor and any person or corporation which has guaranteed repayment of the Liabilities. None of the terms or provisions of this Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by Grantor and Lender.
15.
Successors and Assigns; Governing Law. This Agreement and all obligations of Grantor hereunder shall be binding upon the successors and assigns of Grantor, except that Grantor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of Lender and shall, together with the rights and remedies of Lender hereunder, inure to the benefit of Lender and its respective successors and assigns. Neither this Agreement nor anything set forth herein is intended to, nor shall it, confer any rights on any person or entity other than the parties hereto and all third party rights are expressly negated.
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16.
Termination. This Agreement, and the assignments, pledges and security interests created or granted hereby, shall terminate when the Liabilities shall have been fully paid and satisfied, at which time Lender shall release and reassign (without recourse upon, or any warranty whatsoever by, Lender), and deliver to Grantor all Pledged Collateral and related documents then in the custody or possession of Lender, including termination statements under the Code, all without recourse upon, or warranty whatsoever, by Lender and at the cost and expense of Grantor.
17.
Injunctive Relief. Grantor recognizes that in the event Grantor fails to perform, observe or discharge any of Grantor’s obligations hereunder, no remedy of law will provide adequate relief to Lender, and agrees that Lender shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.
18.
Waiver of Subrogation. Grantor shall have no rights of subrogation as to any of the Pledged Collateral until full and complete performance and payment of the Liabilities.
19.
Governing Law. The Loans have been or shall be made and this Agreement has been delivered at Chicago, Illinois. THIS AGREEMENT SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS AS TO INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING WITHOUT LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, and shall be binding upon Grantor and Grantor’s heirs, legal representatives, successors and assigns (and each of them, if more than one). Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this Agreement.
20.
Forum; Waiver of Jury Trial. Grantor (i) irrevocably agrees that, subject to Lender’s sole and absolute election, all actions arising directly or indirectly as a result or in consequence of this Agreement or any other agreement with Lender, shall be instituted and litigated only in courts having situs in the City of Chicago, Illinois, (ii) hereby consents to the exclusive jurisdiction and venue of any State or Federal Court located and having its situs in said city, and (iii) waives any objection based on forum non-conveniens. IN ADDITION, GRANTOR HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, THE LOANS, ANY ALLEGED TORTIOUS CONDUCT BY GRANTOR OR LENDER OR WHICH IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN GRANTOR AND LENDER, waives personal service of any and all process, and consents that all such service of process may be made by certified mail, return receipt requested, directed to the Grantor at the address indicated in Lender’s records; and service so made shall be complete five (5) days after the same has been deposited in the U.S. mails as aforesaid.
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IN WITNESS WHEREOF, Grantor has executed this Agreement or has caused the same to be executed by Grantor’s duly authorized representative as of the date first above written.
GRANTOR:
ARI NETWORK SERVICES, INC., a Wisconsin
corporation
By: /s/ Roy W. Olivier
Name: Roy W. Olivier
Title: President & CEO
ACKNOWLEDGEMENT
The undersigned hereby (a) acknowledges receipt of a copy of the foregoing Membership Interests Security Agreement, (b) waives any rights or requirement at any time hereafter to receive a copy of such Membership Interests Security Agreement in connection with the registration of any Pledged Collateral (as defined therein) in the name of Fifth Third Bank or its nominee or the exercise of voting rights by Fifth Third Bank, (c) agrees that the membership and ownership interests described in the foregoing Membership Interests Security Agreement will not be classified as “securities” under Article 8 of the Code, and (d) agrees promptly to note on its books and records the transfer of the security interest in the membership and ownership interests of the undersigned as provided in such Membership Interests Security Agreement, including the following legend:
PURSUANT TO THAT CERTAIN MEMBERSHIP INTERESTS SECURITY AGREEMENT DATED AS OF JULY 27, 2011 (AS AMENDED, RESTATED, MODIFIED OR SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME), ARI EUROPE B.V. HAS UNDER THE CIRCUMSTANCES SPECIFIED IN SUCH MEMBERSHIP INTERESTS SECURITY AGREEMENT EMPOWERED FIFTH THIRD BANK TO VOTE THE MEMBERSHIP AND OWNERSHIP INTERESTS AND EXERCISE ANY OTHER RIGHTS WITH RESPECT TO THE MEMBERSHIP AND OWNERSHIP INTERESTS OWNED BY GRANTOR PURSUANT TO SUCH MEMBERSHIP INTERESTS SECURITY AGREEMENT WITHOUT FURTHER CONSENT BY ISSUER.
Dated: as of July 27, 2011 | ARI EUROPE B.V. By: Roy W. Olivier Name: Roy W. Olivier Title: President & CEO |
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