Exhibit 10.1

RIGHTS AGREEMENT

BY AND BETWEEN

ARI NETWORK SERVICES, INC.

AND

AMERICAN STOCK TRANSFER & TRUST COMPANY

RIGHTS AGENT

DATED AS OF AUGUST 7, 2003

TABLE OF CONTENTS

 

PAGE

SECTION 1.  CERTAIN DEFINITIONS

1

SECTION 2.  APPOINTMENT OF RIGHTS AGENT

5

SECTION 3.  ISSUE OF RIGHT CERTIFICATES

5

SECTION 4.  FORM OF RIGHT CERTIFICATES

6

SECTION 5.  COUNTERSIGNATURE AND REGISTRATION

7

SECTION 6.  TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT

     CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES

7

SECTION 7.  EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS

8

SECTION 8.  CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES

10

SECTION 9.  AVAILABILITY OF PREFERRED SHARES

10

SECTION 10.  PREFERRED SHARES RECORD DATE

10

SECTION 11.  ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF

     RIGHTS

11

SECTION 12.  CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES

18

SECTION 13.  CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING

     POWER

19

SECTION 14.  FRACTIONAL RIGHTS AND FRACTIONAL SHARES

20

SECTION 15.  RIGHTS OF ACTION

22

SECTION 16.  AGREEMENT OF RIGHT HOLDERS

22

SECTION 17.  RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER

23

SECTION 18. CONCERNING THE RIGHTS AGENT

23

SECTION 19.  MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT

24

SECTION 20.  DUTIES OF RIGHTS AGENT

24

SECTION 21.  CHANGE OF RIGHTS AGENT

26

SECTION 22.  ISSUANCE OF NEW RIGHT CERTIFICATES

27

SECTION 23.  REDEMPTION

27

SECTION 24.  EXCHANGE

28

SECTION 25.  NOTICE OF CERTAIN EVENTS

29

SECTION 26.  NOTICES

30

SECTION 27.  SUPPLEMENTS AND AMENDMENTS

31

SECTION 28.  SUCCESSORS

31

SECTION 29.  BENEFITS OF THIS AGREEMENT

31

SECTION 30.  SEVERABILITY

32

SECTION 31.  DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS

32

SECTION 32.  GOVERNING LAW

32

SECTION 33.  COUNTERPARTS

32

SECTION 34.  DESCRIPTIVE HEADINGS

32

Signatures

34

Exhibit A

Form of Attachment to the Articles of Amendment of Incorporation of ARI Network

     Services, Inc

A-1

Exhibit B

Form of Right Certificate

B-1

Exhibit C

Summary of Rights to Purchase Preferred Shares

C-1

  

RIGHTS AGREEMENT

THIS RIGHTS AGREEMENT (“Agreement”), dated as of August 7, 2003, is made between
ARI NETWORK SERVICES, INC., a Wisconsin corporation (the “Company”), and
AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation (the “Rights
Agent”).

WHEREAS, the Board of Directors of the Company (the “Board”) has authorized and
declared a dividend of one preferred share purchase right (a “Right”) for each
Common Share (as hereinafter defined) of the Company outstanding on the Record
Date (as hereinafter defined), each Right representing the right to purchase one
one-thousandth of a Preferred Share (as hereinafter defined), upon the terms and
subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined);

Accordingly, in consideration of the premises and the mutual agreements herein
set forth, the parties hereby agree as follows:

SECTION 1.  CERTAIN DEFINITIONS.

For purposes of this Agreement, the following terms have the meanings indicated:

(a)

“Acquiring Person” shall mean any Person who or which, together with all
Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of
10% or more of the Common Shares of the Company then outstanding, but shall not
include an Excepted Person so long as such Person continues to meet the
definition of Excepted Person, the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan.  Notwithstanding the foregoing, no
Person shall become an “Acquiring Person” as the result of an acquisition of
Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 10% or more of the Common Shares of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 10% or
more of the Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of an additional 1% or more of the Common Shares of
the Company then outstanding, then such Person shall be deemed to be an
“Acquiring Person.”  Notwithstanding the foregoing, if the Board determines in
good faith that a Person who would otherwise be an “Acquiring Person,” as
defined pursuant to the foregoing provisions of this Section 1(a), has become
such inadvertently, and without any plan or intention to seek or affect control
of the Company, and such Person divests as promptly as practicable (without
exercising or retaining any power, including voting, with respect to such
shares) a sufficient number of Common Shares so that such Person would no longer
be an “Acquiring Person,” as defined pursuant to the foregoing provisions of
this Section 1(a), then such Person shall not be deemed to be an “Acquiring
Person” for any purposes of this Agreement.

(b)

“Affiliate” and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

(c)

A Person shall be deemed the “Beneficial Owner” of and shall be deemed to
“beneficially own” any securities:

(i)

which such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly, within the meaning of Rule 13d-3 of the General
Rules and Regulations under the Exchange Act as in effect on the date hereof;

(ii)

which such Person or any of such Person’s Affiliates or Associates has:

(A)

the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person’s Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or

(B)

the right to vote pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report); or

(iii)

which are beneficially owned, directly or indirectly, by any other Person with
which such Person or any of such Person’s Affiliates or Associates has any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of any securities of the Company.

Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase “then outstanding,” when used with reference to a Person’s
Beneficial Ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be
deemed to own beneficially hereunder.

(d)

“Business Day” shall mean any day other than a Saturday, Sunday, or a day on
which banking institutions in the State of Wisconsin are authorized or obligated
by law or executive order to close.

(e)

“Close of business” on any given date shall mean 5:00 P.M., Milwaukee, Wisconsin
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., Milwaukee, Wisconsin time, on the next succeeding
Business Day.

(f)

“Common Shares” when used with reference to the Company shall mean the shares of
common stock, $.001 par value per share, of the Company.  “Common Shares” when
used with reference to any Person other than the Company, shall mean the capital
stock (or equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.

(g)

“Distribution Date” shall mean the earlier of (i) the tenth day after the Shares
Acquisition Date (as such term is hereinafter defined), or (ii) the tenth
business day (or such later date as may be determined by action of the Board
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of any
such plan) of, or the first public announcement of the intention of any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) to commence, a
tender or exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 10% or more of the
then outstanding Common Shares (including any such date which is after the date
of this Agreement and prior to the issuance of the Rights).

(h)

“Excepted Percentage” applicable to any Excepted Person shall, at any particular
time, be a percentage of the Common Shares then outstanding, which percentage
shall be equal to the sum of (A) the lesser of (i) the percentage of the
outstanding Common Shares beneficially owned by such Person on the date of this
Agreement or (ii) the lowest percentage of the outstanding Common Shares
beneficially owned by such Person at any time thereafter, and (B) 1.0%.

(i)

“Excepted Person” shall mean any Person that, on the date of this Agreement, is
the Beneficial Owner of 10% or more of the Common Shares then outstanding, but
only so long as such Person has not become the Beneficial Owner of a percentage
of the Common Shares then outstanding in excess of the then applicable Excepted
Percentage.

(j)

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, as in
effect on the date of this Agreement.

(k)

“Final Expiration Date” shall mean August 18, 2013.

(l)

“NASDAQ” shall mean the National Association of Securities Dealers, Inc.
Automated Quotations System.

(m)

“Parity Common Shares” shall mean 50% of the number of Common Shares of the
Company for which a Right is then exercisable pursuant to Section 11(a)(ii).

(n)

“Person” shall mean any individual, firm, corporation, limited liability company
or other entity, and shall include any successor (by merger or otherwise) of
such entity.

(o)

“Preferred Shares” shall mean shares of Series B Junior Preferred Stock, $.001
par value per share, of the Company having the rights and preferences set forth
in the Form of Attachment to the Articles of Incorporation of ARI Network
Services, Inc. attached to this Agreement as Exhibit A.

(p)

The “Purchase Price” for each one one-thousandth of a Preferred Share
purchasable pursuant to the exercise of a Right shall mean $10.00, subject to
adjustment from time to time as provided in Sections 11 and 13 hereof.

(q)

“Record Date” shall mean August 18, 2003.

(r)

“Redemption Date” shall mean that date, if any, on which the Board shall redeem
the Rights as provided in Section 23 hereof.

(s)

“Redemption Price” shall mean $0.01 per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof.

(t)

“Right Certificate” shall mean certificates evidencing ownership of Rights in
substantially the form set out in Exhibit B hereto.

(u)

“Share Exchange” shall mean an exchange pursuant to Section 180.1102 of the
Wisconsin Business Corporation Law.

(v)

“Shares Acquisition Date” shall mean the first date of public announcement by
the Company or an Acquiring Person that an Acquiring Person has become such.

(w)

“Subsidiary” of any Person shall mean any corporation or other entity of which a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such Person.

(x)

“Trading Day” shall mean a day on which the principal national securities
exchange on which a security is listed or admitted to trading is open for the
transaction of business or, if the security is not listed or admitted to trading
on any national securities exchange, a Business Day.

SECTION 2.  APPOINTMENT OF RIGHTS AGENT.

The Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment.  The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.  The Rights Agent shall
have no duty to supervise, and in no event shall be liable for, the acts or
omissions of any such Co-Rights Agent.

SECTION 3.  ISSUE OF RIGHT CERTIFICATES.

(a)

Until the Distribution Date, (i) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Shares registered in the names of the holders of the Common Shares and
not by separate certificates, and (ii) Rights will be transferable only in
connection with the transfer of the underlying Common Shares (including a
transfer to the Company).

(b)

As promptly as practicable following the Record Date, the Company will send a
copy of a Summary of Rights to Purchase Preferred Shares, in substantially the
form attached hereto as Exhibit C (“Summary of Rights”), by first class mail,
postage prepaid, to each record holder of the Common Shares as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates of the Common Shares outstanding as
of the Record Date, until the Distribution Date or the earlier surrender for
transfer thereof or the Redemption Date or Final Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates for the Common Shares together with a copy of the
Summary of Rights, and the registered holders of the Common Shares shall also be
the registered holders of the associated Rights. Until the earlier of the
Distribution Date, the Redemption Date or the Final Expiration Date, the
transfer of any of the certificates for the Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Shares represented by such certificates.

(c)

Rights shall be issued in respect of all Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record Date, but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date.
 Certificates representing such Common Shares shall also be deemed to represent
the related Rights.  After the Record Date, but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date,
certificates representing Common Shares shall have impressed on, printed on,
written on, or otherwise affixed to them the following legend:

“This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement between ARI Network Services, Inc. and
American Stock Transfer & Trust Company dated August 7, 2003 which may be
amended from time to time (the “Rights Agreement”), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of ARI Network Services, Inc.  Under certain
circumstances, as set forth in the Rights Agreement, such Rights shall be
evidenced by separate certificates and shall no longer be evidenced by this
certificate.  ARI Network Services, Inc. shall mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor.  Under certain circumstances, as set forth in the
Rights Agreement, Rights issued to any Person who becomes an Acquiring Person or
any Associate or Affiliate of an Acquiring Person (as such terms are defined in
the Rights Agreement) (or nominee of any of them) may become null and void.”

With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
 In the event that the Company purchases or acquires any Common Shares after the
Record Date, but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares which are
no longer outstanding.

(d)

As soon as practicable after the Distribution Date, the Company shall promptly
notify the Rights Agent thereof and provide the Rights Agent with a list of
shareholders of Common Shares, and the Company shall prepare and execute, the
Rights Agent shall countersign, and the Company shall send or cause to be sent
(and the Rights Agent shall, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one Right for each Common
Share so held.  As of the Distribution Date, the Rights shall be evidenced
solely by such Right Certificates.

SECTION 4.  FORM OF RIGHT CERTIFICATES.

The Right Certificates (and the forms of election to purchase Preferred Shares
and of assignment to be printed on the reverse thereof) shall be substantially
the same as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, and which do not affect the rights, duties or responsibilities
of the Rights Agent, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to
conform to usage.  Subject to the provisions of Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a Preferred Share as shall be set forth therein at the
Purchase Price set forth therein, but the number of such one one-thousandths of
a Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.

SECTION 5.  COUNTERSIGNATURE AND REGISTRATION.

The Right Certificates shall be executed on behalf of the Company by any of its
Chairman of the Board, its Chief Executive Officer, or its Chief Financial
Officer, and attested by its Secretary or any Assistant Secretary or any Vice
President, either manually or by facsimile signature.  The Right Certificates
shall not be valid for any purpose unless countersigned by the Rights Agent.  In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who holds any such office at the actual date of the execution of
such Right Certificate, although at the date of the execution of this Rights
Agreement such person was not such an officer.

Following the Distribution Date and receipt by the Rights Agent of all relevant
information, the Rights Agent shall keep or cause to be kept, at its offices
designated for such purpose, books for registration and transfer of the Right
Certificates issued hereunder.  Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates, and the date of each of the Right
Certificates.

SECTION 6.  TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHT CERTIFICATES; MUTILATED, DESTROYED,
LOST OR STOLEN RIGHT CERTIFICATES.

Subject to the provisions of Section 14 hereof, at any time after the close of
business on the Distribution Date and at or prior to the close of business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or other Right Certificates,
entitling the registered holder to purchase a like number of one one-thousandths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase.  Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose.  Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
 Thereupon the Rights Agent shall countersign and deliver to the person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so
requested.  The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.  

Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, at the Company’s request, reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right Certificate
if mutilated, the Company shall make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered holder in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.  

SECTION 7.  EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS

(a)

The registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate (with the
form of election to purchase on the reverse side thereof duly executed) to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each one one-thousandth of a
Preferred Share as to which the Rights are exercised, at or prior to the
earliest of:

(i)

the close of business on the Final Expiration Date,

(ii)

the close of business on the Redemption Date, or

(iii)

the time at which such Rights are exchanged as provided in Section 24 hereof.

(b)

The Purchase Price shall be payable in lawful money of the United States of
America in accordance with Section 7(c).

(c)

Upon receipt of a Right Certificate representing exercisable Rights (with the
form of election to purchase duly executed), accompanied by payment (by
certified check, cashier’s check, or money order payable to the order of the
Company) of the Purchase Price for the shares to be purchased and an amount
equal to any applicable tax or governmental charge required to be paid by the
holder of such Right Certificate in accordance with Section 9 hereof, the Rights
Agent shall thereupon promptly

(i)

(A)

requisition from any transfer agent of the Preferred Shares certificates for the
number of Preferred Shares to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or

(B)

requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such request; and

(ii)

when necessary to comply with this Agreement, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof; and

(iii)

promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder; and

(iv)

when necessary to comply with this Agreement, after receipt, promptly deliver
such cash to or upon the order of the registered holder of such Right
Certificate.

(d)

In case the registered holder of any Right Certificate shall exercise less than
all the Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 6 and Section 14
hereof.

(e)

Notwithstanding anything in the Agreement to the contrary, neither the Rights
Agent nor the Company shall be obligated to undertake any action with respect to
a registered holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i) completed and
signed the certificate contained in the form ef election to purchase set forth
on the reverse side of the Right Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.

SECTION 8.  CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.

All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement.  The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof.  The Rights Agent shall
deliver all canceled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.

SECTION 9.  AVAILABILITY OF PREFERRED SHARES.

The Company covenants and agrees that it shall cause to be reserved and kept
available out of its authorized and unissued Preferred Shares, the number of
Preferred Shares that shall be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 hereof.

The Company covenants and agrees that it shall take all such actions as may be
necessary to ensure that all Preferred Shares delivered upon exercise of the
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares, except as
otherwise provided by Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law, or any successor provision, and judicial interpretations
thereof.

The Company covenants and agrees that it shall pay when due and payable any and
all taxes and governmental charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any Preferred Shares upon
the exercise of Rights. The Company shall not, however, be required to pay any
tax or governmental charge which may be payable in respect of any transfer or
delivery of Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the Preferred Shares in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or to deliver any
certificates or depositary receipts for Preferred Shares upon the exercise of
any Rights until any such tax or governmental charge shall have been paid (any
such tax or governmental charge being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company’s reasonable satisfaction that no such tax or governmental charge is
due.

SECTION 10.  PREFERRED SHARES RECORD DATE.

Each Person in whose name any certificate for Preferred Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable taxes and governmental charges) was made; provided, however, that if
the date of such surrender and payment is a date upon which the Preferred Shares
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Shares transfer books of
the Company are open.

Prior to the issuance of Preferred Shares upon the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.

SECTION 11.  ADJUSTMENT OF PURCHASE PRICE, NUMBER
OF SHARES OR  NUMBER OF RIGHTS.

The Purchase Price, the number of Preferred Shares covered by each Right, and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

(a)

(i)

In the event the Company shall at any time after the date of this Agreement

(A)

declare a dividend on the Preferred Shares payable in Preferred Shares,

(B)

subdivide the outstanding Preferred Shares,

(C)

combine the outstanding Preferred Shares into a smaller number of Preferred
Shares, or

(D)

issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),

except as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, the holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii).

(ii)

Subject to Section 24 of this Agreement, in the event any Person becomes an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by multiplying:

(A)

the then current Purchase Price by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable and dividing that product,
by

(B)

50% of the then current per share market price of the Company’s Common  Shares
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such event.

In the event that any Person shall become an Acquiring Person and the Rights
shall then be outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the Rights.

From and after the occurrence of such event, any Rights that are or were
acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate thereof, or nominee of any of them) shall be null and void and any
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement.  No Right Certificate shall be issued
pursuant to Section 3 hereof or otherwise that represents Rights beneficially
owned by an Acquiring Person whose Rights would be null and void pursuant to the
preceding sentence (or any Associate or Affiliate thereof, or nominee of any of
them); no Right Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be null and void pursuant to
the preceding sentence (or any Associate or Affiliate thereof or any nominee of
any of them); and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be null and void pursuant to
the preceding sentence (or any Associate or Affiliate thereof, or nominee of any
of them) shall be canceled. In addition, any Right Certificate issued pursuant
to Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person (or any Associate or Affiliate thereof, or nominee of any of them) and
any Right Certificate issued at any time upon the transfer of any Rights to an
Acquiring Person (or any Associate or Affiliate thereof, or nominee of any of
them) and any Right Certificate issued pursuant to Sections 6, 7(d), 11, or 22
hereof upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain the following legend:

“The Rights represented by this Right Certificate were issued to a Person who
was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person
(as such terms are described in the Rights Agreement) or a nominee of one of
them. This Right Certificate and the Rights represented hereby may become void
in the circumstances specified in the Rights Agreement.”

(iii)

In the event that there shall not be sufficient Common Shares issued but not
outstanding or authorized but unissued to permit the exercise in full of the
Rights in accordance with the foregoing Section 11(a)(ii), the Company shall
take all such actions as may be necessary to authorize additional Common Shares
for issuance upon exercise of the Rights. In the event the Company, after good
faith effort, shall be unable to take all such actions as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exercise of a Right, a number
of Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.

(b)

In case the Company shall fix a record date for the issuance of rights, options
or warrants to all holders of Preferred Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights, privileges and
preferences as the Preferred Shares (“Equivalent Preferred Shares”)) or
securities convertible into Preferred Shares or Equivalent Preferred Shares at a
price per share (or having a conversion price per share, if a security
convertible into Preferred Shares or Equivalent Preferred Shares) less than the
then current per share market price of the Preferred Shares on such record date,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
Equivalent Preferred Shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or Equivalent Preferred Shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
the exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and holders
of the Rights. Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation.

Such adjustment shall be made successively whenever such a record date is fixed;
and in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

(c)

In case the Company shall fix a record date for the making of a distribution to
all holders of the Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or assets (other than a
regular quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights, options or warrants (excluding those referred to in Section
11(b) hereof), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the then current
per share market price of the Preferred Shares on such record date, less the
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and holders of the Rights)
of the portion of the assets or evidences of indebtedness so to be distributed
or of such subscription rights, options or warrants applicable to one Preferred
Share and the denominator of which shall be such current per share market price
of the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon the exercise of one Right.

Such adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

(d)

(i)

For the purpose of any computation hereunder, the “current per share market
price” of any security (a “Security” for the purpose of this Section 11(d)(i))
on any date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days immediately prior to
such date; provided, however, that in the event that the current per share
market price of the Security is determined during a period following the
announcement by the issuer of such Security of a dividend or distribution on
such Security payable in shares of such Security or securities convertible into
such shares, or any subdivision, combination or reclassification of such
Security, and prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be:

(A)

the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange, or

(B)

if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading, or

(C)

if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
NASDAQ or such other system then in use, including prices quoted on The Nasdaq
Stock Market or the OTC Bulletin Board, or

(D)

if the Security is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Security selected by the Board.

(ii)

For the purpose of any computation hereunder, the “current per share market
price” of the Preferred Shares shall be determined in accordance with the method
set forth in Section 11(d)(i).  If the Preferred Shares are not publicly traded,
the “current per share market price” of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares as determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the Record Date), multiplied by one thousand.  If neither the Common Shares nor
the Preferred Shares are publicly held or so listed or traded, “current per
share market price” shall mean the fair value per share as determined in good
faith by the Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent.

(e)

No adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment.  All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one ten-millionth of a Preferred Share or
one ten-thousandth of any other share or security as the case may be.
 Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.

(f)

If, as a result of an adjustment made pursuant to Section 11(a) hereof, the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Preferred Shares, thereafter
the number of such other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred Shares
contained in Sections 11(a) through (c), inclusive, and the provisions  of
Sections 7, 9, 10 and 13 hereof with respect to the Preferred Shares shall apply
on like terms to any such other shares.

(g)

All Rights originally issued by the Company subsequent to any adjustment made to
the Purchase Price hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-thousandths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.

(h)

Unless the Company shall have exercised its election as provided in Section
11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-thousandths of
a Preferred Share (calculated to the nearest one ten-millionth of a Preferred
Share) obtained by:

(i)

multiplying the number of one one-thousandths of a share covered by a Right
immediately prior to this adjustment by the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and

(ii)

dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.

(i)

The Company may elect on or after the date of any adjustment of the Purchase
Price to adjust the number of Rights, in substitution for any adjustment in the
number of one one-thousandths of a Preferred Share purchasable upon the exercise
of a Right.  Each of the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to such
adjustment.  Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price.  The Company shall promptly
notify the Rights Agent and make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made.  This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement.

If Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing, subject to Section 14 hereof,
the additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
 Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.

(j)

Irrespective of any adjustment or change in the Purchase Price or the number of
one one-thousandths of a Preferred Share issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one one-thousandths of a Preferred
Share which were expressed in the initial Right Certificates issued hereunder.

(k)

Before taking any action that would cause an adjustment reducing the Purchase
Price below one one-thousandth of the then par value, if any, of the Preferred
Shares issuable upon exercise of the Rights, the Company shall take any
corporate actions which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable (except as provided by Section 180.0622(2)(b) of the Wisconsin
Business Corporation Law, or any successor provision, and judicial
interpretations thereof) Preferred Shares at such adjusted Purchase Price.

(l)

In any case in which this Section 11 shall require that an adjustment in the
Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer (and shall promptly notify the Rights Agent of any
such election) until the occurrence of such event the issuing to the holder of
any Right exercised after such record date of the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder’s right to receive such additional shares upon the occurrence of the
event requiring such adjustment.

(m)

Anything in this Section 11 to the contrary notwithstanding, the Company shall
be entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Shares, issuance wholly for cash
of any Preferred Shares at less than the current market price, issuance wholly
for cash of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, dividends on Preferred Shares payable
in Preferred Shares, or issuance of rights, options or warrants referred to
herein above in Section 11(b), hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such shareholders.

(n)

In the event that at any time after the Record Date and prior to the
Distribution Date, the Company shall:

(i)

declare or pay any dividend on the Common Shares payable in Common Shares, or

(ii)

effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares,

then in any such case,

(A)

the number of one one-thousandths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying the
number of one one-thousandths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such event,
and

(B)

each Common Share outstanding immediately after such event shall have issued
with respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it.

The adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.  If an event occurs which would require an
adjustment under Section 11(a)(ii) and this Section 11(n), the adjustments
provided for in this Section 11(n) shall be in addition and prior to any
adjustment required pursuant to Section 11(a)(ii).

SECTION 12.  CERTIFICATE OF ADJUSTED PURCHASE
PRICE OR NUMBER OF SHARES.

Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly:

(a)

prepare a certificate setting forth such adjustment, and a brief, reasonably
detailed statement of the facts and computations accounting for such adjustment,

(b)

file with the Rights Agent and with each transfer agent for the Common Shares or
the Preferred Shares a copy of such certificate, and

(c)

mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 25 hereof.

The Rights Agent shall be fully protected in relying on the terms of any such
certificate and on any adjustment contained therein, and shall have no duty with
respect to, and shall not be deemed to have knowledge of, any such adjustment
unless and until it shall have received such a certificate.

SECTION 13.  CONSOLIDATION, MERGER OR SALE OR
TRANSFER OF ASSETS OR EARNING POWER.

In the event, directly or indirectly, at any time after a Person has become an
Acquiring Person,

(a)

the Company shall consolidate with, or merge with and into, any other Person,

(b)

any Person shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving corporation of such
merger and, in connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property,

(c)

the Company shall be a party to a Share Exchange immediately following which the
Company is a Subsidiary of any other Person, or

(d)

the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person other than
the Company or one or more of its wholly owned Subsidiaries, then, and in each
such case, proper provision shall be made so that

(i)

each holder of a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of validly
authorized and issued, fully paid, nonassessible (except as provided by Section
180.0622(2)(b) of the Wisconsin Business Corporation Law, or any successor
provision, and judicial interpretations thereof) and freely tradeable Common
Shares of such other Person (including the Company as successor thereto or as
the surviving corporation) as shall equal the result obtained by multiplying the
then current Purchase Price by the number of one one-thousandths of a Preferred
Share for which a Right is then exercisable and dividing that product by 50% of
the then current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d) hereof) on the date of consummation
of such consolidation, merger, Share Exchange, sale or transfer;

(ii)

the issuer of such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, Share Exchange, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement;

(iii)

the term “Company” shall thereafter be deemed to refer to such issuer; and

(iv)

such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter deliverable upon
the exercise of the Rights.

The Company shall not consummate any such consolidation, merger, Share Exchange,
sale or transfer unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental agreement so
providing.  

The Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights.

The provisions of this Section 13 shall similarly apply to successive
consolidations, mergers, Share Exchanges, sales, or other transfers.

SECTION 14.  FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

(a)

The Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights.  In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use,
including prices quoted on The Nasdaq Stock Market or the OTC Bulletin Board,
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board. If on any such
date no such market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the Board shall be used.

(b)

The Company shall not be required to issue fractions of Preferred Shares (other
than fractions which are integral multiples of one one-thousandth of a Preferred
Share) upon exercise of the Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions which are integral multiples
of one one-thousandth of a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-thousandth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-thousandth of a Preferred Share, the Company shall
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes of this Section
14(b), the current market value of a Preferred Share shall be the closing price
of a Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) and Section 11(d)(ii) hereof) for the Trading Day immediately prior to
the date of such exercise.

(c)

The Company shall not be required to issue fractions of Common Shares or other
securities issuable upon exercise or exchange of the Rights or to distribute
certificates which evidence any such fractional securities.  In lieu of issuing
any such fractional securities, the Company may at its election either round to
the nearest whole number of securities or pay to any Person to whom or which
such fractional securities would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of one such security.  For
purposes of this Section 14(c), the current market value of a Common Share or
other security issuable upon the exercise or exchange of Rights shall be the
closing price thereof (as determined pursuant to Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise or exchange.

(d)

The holder of a Right, by the acceptance thereof, expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise of a Right
(except as provided above).

SECTION 15.  RIGHTS OF ACTION.

All rights of action in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares).  Any registered
holder of any Right Certificate (or, prior to the Distribution Date, of the
Common Shares), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the Common
Shares), may, on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement.  Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to this Agreement.

SECTION 16.  AGREEMENT OF RIGHT HOLDERS.

Every holder of a Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a Right that:

(a)

prior to the Distribution Date, the Rights shall be transferable only in
connection with the transfer of the Common Shares;

(b)

after the Distribution Date, the Right Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the office of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer;

(c)

the Company and the Rights Agent may deem and treat the person in whose name the
Right Certificate (or, prior to the Distribution Date, the Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the Common Shares certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
and

(d)

notwithstanding anything in this Agreement to the contrary, neither the Company
nor the Rights Agent shall have any liability to any holder of a Right or other
Person as a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order,
decree or ruling (whether interlocutory or final) issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.

SECTION 17.  RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.

No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

SECTION 18.  CONCERNING THE RIGHTS AGENT.

The Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, delivery, administration, execution and amendment
of this Agreement and the exercise and performance of its duties hereunder.

The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, damage, judgment, fine, penalty, claim,
demand, settlement, cost or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement or the exercise or performance of its duties
hereunder, including, without limitation, the costs and expenses of defending
against any claim of such liability.  The indemnity provided herein shall
survive the termination of this Agreement and the termination and the expiration
of the Rights.

The Rights Agent shall be authorized to rely on, shall be protected and shall
incur no liability for, or in respect of any action taken, suffered or omitted
by it in connection with, its acceptance and administration of this Agreement or
the exercise or performance of its duties hereunder in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.

SECTION 19.  MERGER OR CONSOLIDATION OR CHANGE
OF NAME OF RIGHTS AGENT.

Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the stock transfer or shareholder
services business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
provided that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case, at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.

In case, at any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case, at that time any
of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases, such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.

SECTION 20.  DUTIES OF RIGHTS AGENT.

The Rights Agent undertakes the duties and obligations, and only the duties and
obligations, imposed by this Agreement (and no implied duties or obligations)
upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:

(a)

The Rights Agent may consult with legal counsel (who may be legal counsel for
the Company), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent, and the Rights Agent
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in good faith and in accordance with such advice or opinion.

(b)

Whenever, in the performance of its duties under this Agreement, the Rights
Agent shall deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking, suffering or omitting any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, Chief Financial Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization and protection to
the Rights Agent, and the Rights Agent shall incur no liability for or in
respect of any action taken, suffered or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.

(c)

The Rights Agent shall be liable hereunder to the Company and any other Person
only for its own negligence, bad faith or willful misconduct.

(d)

The Rights Agent shall not be liable for or by reason of any of the statements
of fact or recitals contained in this Agreement or in the Right Certificates
(except its countersignature thereof) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made by the
Company only.

(e)

The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution
of any Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights becoming
void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in Sections
3, 11, 13, 23, or 24 hereof, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice that such change
or adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares shall, when issued, be validly
authorized and issued, fully paid and nonassessable.

(f)

The Company agrees that it shall perform, execute, acknowledge and deliver (or
cause to be performed, executed, acknowledged and delivered) all such further
and other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.

(g)

The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Chairman
of the Board, the Chief Executive Officer, Chief Financial Officer, the
President, any Vice President, the Treasurer or the Secretary of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and such advice or instructions shall be full authorization and
protection to the Rights Agent and the Rights Agent shall incur no liability for
or in respect of any action taken, suffered or omitted by it in good faith in
accordance with the advice or instructions of any such officer or for any delay
in acting while waiting for such advice or instructions.

(h)

The Rights Agent and any shareholder, director, officer, member, Affiliate or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company, or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company, or otherwise act fully and freely as though it were not Rights Agent
under this Agreement.  Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other Person.

(i)

The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be answerable or accountable
for any act, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.

SECTION 21.  CHANGE OF RIGHTS AGENT.

The Rights Agent or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail.

The Company may remove the Rights Agent or any successor Rights Agent upon 30
days’ notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Shares or Preferred
Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail.

If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
 If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (i) a Person organized and doing
business under the laws of the United States or of the State of Wisconsin (or of
any other state of the United States so long as such corporation is authorized
to do business as a banking institution in the State of Wisconsin), in good
standing, having an office in the State of Wisconsin, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (ii) an Affiliate of such Person.

After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent, without further act or deed. The predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.

SECTION 22.  ISSUANCE OF NEW RIGHT CERTIFICATES.

Notwithstanding any of the provisions of this Agreement or of the Rights
Certificates to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.

In addition, in connection with the issuance or sale of Common Shares following
the Distribution Date and prior to the earlier of the Redemption Date and the
Final Expiration Date, the Company (i) shall with respect to Common Shares so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, or upon the exercise, conversion, or exchange of
securities, notes or debentures issued by the Company and (ii) may, in any other
case, if deemed necessary or appropriate by the Board, issue Right Certificates
representing the appropriate number of Rights in connection with such sale;
provided, however, that (i) the Company shall not be obligated to issue any such
Right Certificates if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificate
would be issued and (ii) no Right Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.

SECTION 23.  REDEMPTION.

(a)

The Board may, at its option, at any time prior to such time as any Person
becomes an Acquiring Person, redeem all but not less than all of the then
outstanding Rights at the Redemption Price.  The redemption of the Rights by the
Board may be made effective at such time on such basis and with such conditions
as the Board in its sole discretion may establish.

(b)

Immediately upon the action of the Board ordering the redemption of the Rights
pursuant to Section 23(a), and without any further action and without any
notice, the right to exercise the Rights shall terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
 The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption.  Within 10 days after such action of the
Board ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares.  Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice.  Each such
notice of redemption shall state the method by which the payment of the
Redemption Price shall be made.  Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.

SECTION 24.  EXCHANGE.

(a)

The Board may, at its option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become null and void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio
of Parity Common Shares per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the “Exchange Ratio”).
Notwithstanding the foregoing, the Board shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such Subsidiary, or
any entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.

(b)

Immediately upon the action of the Board ordering the exchange of any Rights
pursuant to Section 24(a), and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of holders of such Rights shall be to receive that number of Common
Shares equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio.  The Company shall promptly notify the Rights Agent and give
public notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
 The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent.  Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
 Each such notice of exchange shall state the method by which the exchange of
the Common Shares for Rights shall be effected and, in the event of any partial
exchange, the number of Rights which shall be exchanged.  Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of Rights.

(c)

In the event that there shall not be sufficient Common Shares issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all such
actions as may be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights.  In the event the Company shall, after good faith
effort, be unable to take all such actions as may be necessary to authorize such
additional Common Shares, the Company shall substitute, for each Common Share
that would otherwise be issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof such that the current per share market price of one
Preferred Share multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of issuance of such
Preferred Shares or fraction thereof.

(d)

The Company shall not be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional Common Shares.  In lieu of
such fractional Common Shares, the Company may at its election either round to
the nearest whole number of Common Shares or pay to the registered holders of
the Right Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share.  For the purposes of this Section
24(d), the current market value of a whole Common Share shall be the closing
price of a Common Share (as determined pursuant to the second sentence of
Section 11(d)(i) and Section 11(d)(ii) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.

SECTION 25.  NOTICE OF CERTAIN EVENTS.

(a)

In case the Company shall propose

(i)

to pay any dividend payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend),

(ii)

to offer to the holders of its Preferred Shares rights or warrants to subscribe
for or to purchase any additional Preferred Shares or shares of stock of any
class or any other securities, rights or options,

(iii)

to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares),

(iv)

to effect any consolidation or merger into or with, to effect any Share Exchange
with, or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person,

(v)

to effect the liquidation, dissolution or winding up of the Company, or

(vi)

to declare or pay any dividend on the Common Shares payable in Common Shares or
to effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),

then, in each such case, the Company shall give to the Rights Agent and each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the purposes of
such stock dividend, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, Share Exchange, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by Section 25(a)(i) or (ii) above at least 10
days prior to the record date for determining holders of the Preferred Shares
for purposes of such action, and in the case of any such other action, at least
10 days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.

(b)

In case an event set forth in Section 11(a)(ii) hereof shall occur, then the
Company shall as soon as practicable thereafter give to the Rights Agent and
each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Company Common Shares) in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of Rights under Section
11(a)(ii) hereof.

SECTION 26.  NOTICES.

Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:

ARI Network Services, Inc.

11425 W. Lake Park Drive, Suite 900

Milwaukee, Wisconsin  53224

Attention:  Corporate Secretary

Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:

American Stock Transfer & Trust Company

59 Maiden Lane

New York, New York  10038

Attention:  Corporate Trust Department

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

SECTION 27.  SUPPLEMENTS AND AMENDMENTS.

For so long as the Rights are redeemable, the Company may in its sole and
absolute discretion, and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement in any respect without the
approval of any holders of Rights or Common Shares.  From and after the time
that the Rights are no longer redeemable, the Company may, and the Rights Agent
shall, if the Company so directs, from time to time supplement or amend this
Agreement without the approval of any holders of Rights (i) to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein, or (ii) to make
any other changes or provisions in regard to matters or questions arising
hereunder which the Company may deem necessary or desirable, including but not
limited to extending the Final Expiration Date; provided, however, that no such
supplement or amendment shall adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person), and no such supplement or amendment may cause the Rights
again to become redeemable or cause this Agreement again to become amendable
other than in accordance with this sentence; provided further, that the right of
the Board to extend the Distribution Date shall not require any amendment or
supplement hereunder.  Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27 and, provided such supplement or
amendment does not change or increase the Rights Agent’s duties, liabilities or
obligations hereunder, the Rights Agent shall execute such supplement or
amendment.

SECTION 28.  SUCCESSORS.

All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.

SECTION 29.  BENEFITS OF THIS AGREEMENT.

Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Shares) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares).

SECTION 30.  SEVERABILITY.

If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

SECTION 31.  DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS.

The Board of Directors shall have the exclusive power and authority to
administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or amend this  Agreement).  All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that are done or
made by the Board of Directors in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights, as such,
and all other parties, and (y) not subject the Board of Directors to any
liability to the holders of the Rights Certificates.

SECTION 32.  GOVERNING LAW.

This Agreement, each Right and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Wisconsin and for
all purposes shall be governed by and construed in accordance with the laws
thereof applicable to contracts to be made and performed entirely within
Wisconsin.

SECTION 33.  COUNTERPARTS.

This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.

SECTION 34.  DESCRIPTIVE HEADINGS.

Descriptive headings of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

AMERICAN STOCK TRANSFER &

ARI NETWORK SERVICES, INC.

TRUST COMPANY

By: /s/ Brian E. Dearing;

By: /s/ Herbert J. Lemmer

Name: Brian E. Dearing

Name: Herbert J. Lemmer

Title: Chairman & CEO

Title: Vice President

Exhibit A

FORM OF

ATTACHMENT TO THE

ARTICLES OF INCORPORATION OF

ARI NETWORK SERVICES, INC.

PREFERENCES, LIMITATIONS AND

RELATIVE RIGHTS OF THE SERIES B

JUNIOR  PREFERRED STOCK

1.  Dividends and Distributions.

(a)  Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
B Junior Preferred Stock (the “Series B Junior Preferred Stock”) with respect to
dividends, the holders of shares of Series B Junior Preferred Stock, in
preference to the holders of Common Stock, par value $0.001 per share (the
“Common Stock”), of the Company and of any other junior stock, shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on the
first day of February, May, August and November in each year (each such date
being referred to herein as a “Quarterly Dividend Payment Date”), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Junior Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (i) $10.00 or (ii) subject
to the provision for adjustment hereinafter set forth, 1,000 times the aggregate
per share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series B Junior Preferred
Stock. In the event the Company shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of Series B Junior Preferred
Stock were entitled immediately prior to such event under clause (ii) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

(b)  The Company shall declare and pay a dividend or distribution on the Series
B Junior Preferred Stock as provided in paragraph (a) of this Section at the
same times that it declares or pays a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock).

(c)  Dividends shall begin to accrue and be cumulative on outstanding shares of
Series B Junior Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series B Junior Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date.  Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Junior Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B Junior
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.

2.  Voting Rights.  The holders of shares of Series B Junior Preferred Stock
shall have the following voting rights:

(a)  Subject to the provision for adjustment hereinafter set forth, each share
of Series B Junior Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the shareholders of the Company. In
the event the Company shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series B
Junior Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

(b)  Except as otherwise provided herein, in any Articles of Amendment or such
other similar document creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series B Junior Preferred Stock and
the holders of shares of Common Stock and any other capital stock of the Company
having general voting rights shall vote together as one class on all matters
submitted to a vote of shareholders of the Company.

(c)  Except as set forth herein, or as otherwise provided by law, holders of
Series B Junior Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.

3. Certain Restrictions.

(a)  Whenever quarterly dividends or other dividends or distributions payable on
the Series B Junior Preferred Stock as provided in Section 1, above, are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Junior Preferred
Stock outstanding shall have been paid in full, the Company shall not:

(i)  declare or pay dividends, or make any other distributions, on any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Junior Preferred Stock;

(ii)  declare or pay dividends, or make any other distributions, on any shares
of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Junior Preferred Stock, except
dividends paid ratably on the Series B Junior Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;

(iii)  redeem or purchase or otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up), to the Series B Junior Preferred Stock, provided that the Company
may at any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Company ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the Series B
Junior Preferred Stock; or

(iv)  redeem or purchase or otherwise acquire for consideration any shares of
Series B Junior Preferred Stock, or any shares of stock ranking on a parity with
the Series B Junior Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.

(b)  The Company shall not permit any subsidiary of the Company to purchase or
otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under paragraph (a) of this Section 3, purchase or otherwise
acquire such shares at such time and in such manner.

4.  Reacquired Shares.  Any shares of Series B Junior Preferred Stock purchased
or otherwise acquired by the Company in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof.  All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the Amended and
Restated Articles of Incorporation, or in any Articles of Amendment or such
other similar document creating a series of Preferred Stock or any similar stock
or as otherwise required by law.

5.  Liquidation, Dissolution or Winding Up.  Upon any liquidation, dissolution
or winding up of the Company, no distribution shall be made (a) to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Preferred Stock unless, prior
thereto, the holders of shares of Series B Junior Preferred Stock shall have
received $10,000 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series B Junior Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (b) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Junior Preferred
Stock, except distributions made ratably on the Series B Junior Preferred Stock
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series B
Junior Preferred Stock were entitled immediately prior to such event under the
proviso in clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

6.  Consolidation, Merger, etc.  In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series B Junior
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Company
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series B Junior Preferred Stock shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

7.  No Redemption.  The shares of Series B Junior Preferred Stock shall not be
redeemable.

8.  Rank.  The Series B Junior Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Company’s Preferred Stock.

Exhibit B

Form of Right Certificate - Front Side

Certificate No. R-_______________

_______________ Rights

NOT EXERCISABLE AFTER AUGUST 18, 2013, OR EARLIER REDEMPTION OR EXCHANGE.  THE
RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS, ASSOCIATES OR AFFILIATES OF ACQUIRING
PERSONS (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) (OR NOMINEE OF ANY
OF THEM) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.  [THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (OR A
NOMINEE OF ONE OF THEM).  THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT.]1

The portion of the legend in brackets shall be inserted only if applicable.

Right Certificate

ARI NETWORK SERVICES, INC.

This certifies that _______________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of August 7, 2003 (the “Rights Agreement”), between ARI
Network Services, Inc., a Wisconsin corporation (the “Company”), and American
Stock Transfer & Trust Company (the “Rights Agent”), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., Milwaukee, Wisconsin time, on August
18, 2013, at the office of the Rights Agent designated for such purpose, or at
the office of its successor as Rights Agent, one one-thousandth of a fully paid
non-assessable (except as provided by Section 180.0622(2)(b) of the Wisconsin
Business Corporation Law, or any successor provision, and judicial
interpretations thereof) share of Series B Junior Preferred Stock, $.001 par
value (the “Preferred Shares”), of the Company, at a purchase price of $10.00
per one one-thousandth of a Preferred Share (the “Purchase Price”), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed.

The number of Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) and the Purchase Price set forth above are the number and Purchase Price
as of August 7, 2003, based on the Preferred Shares as constituted at such date.
 As provided in the Rights Agreement, the Purchase Price and the number of one
one-thousandths of a Preferred Share which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.

This Right Certificate is subject to all of the terms, provisions and conditions
of the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and reference is hereby
made to the Rights Agreement for a full description of the rights, limitations
of rights, obligations, duties and immunities of the Rights Agent, the Company,
and the holders of the Right Certificates.  Copies of the Rights Agreement are
on file at the principal executive offices of the Company and the
above-mentioned offices of the Rights Agent.

This Right Certificate, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Right Certificate of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right
Certificate.  If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $0.01
per Right or (ii) may be exchanged in whole or in part for shares of the
Company’s Common Stock, par value $.001 per share, or Preferred Shares.

No fractional Preferred Shares shall be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of
one one-thousandth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment shall be made or the number of shares to be issued may be rounded, as
provided in the Rights Agreement.

No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.

This Right Certificate shall not be valid or obligatory for any purpose until it
has been countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Company, dated as
of __________________________, ______.

ATTEST:

ARI NETWORK SERVICES, INC.

By:

By:

Secretary

Countersigned (for purposes of authentication):

AMERICAN STOCK TRANSFER & TRUST COMPANY

By:

Authorized Signature

Form of Right Certificate - Reverse Side

NOTICE

The signature in the Form of Assignment or Form of Election to Purchase, as the
case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

In the event the certification set forth below in the Form of Assignment or the
Form of Election to Purchase, as the case may be, is not completed, the Company
and the Rights Agent will deem the beneficial owner of the Rights evidenced by
this Right Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such Assignment or Election to
Purchase will not be honored.

FORM OF ASSIGNMENT

(To be executed by the registered holder to transfer the Right Certificate.)

FOR VALUE RECEIVED, __________________, hereby sells, assigns and transfers unto

(Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint
                                         Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of
substitution.

Signature:

Dated:

Signature Guaranteed:

Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.

The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

Signature:

FORM OF ELECTION TO PURCHASE

(To be executed by registered holder to exercise Rights

represented by the Right Certificate.)

To:  ARI NETWORK SERVICES, INC.

The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:

(Please print name and address)

Social security or taxpayer identification number:

If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:

(Please print name and address)

Social security or taxpayer identification number:

Signature:

Dated:

Signature Guaranteed:

Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.

The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

Signature:

Exhibit C

Summary of Rights to Purchase Preferred Shares

Introduction.  On August 7, 2003 the Board of Directors of ARI Network Services,
Inc. (the “Company”) declared a dividend of one preferred share purchase right
(a “Right”) for each outstanding share of common stock, par value $.001 per
share, of the Company.  The dividend was paid to the stockholders of record as
of the close of business on August 18, 2003.  A Right represents the ability of
the holder to purchase one one-thousandth of a share of Series B Junior
Preferred Stock, $.001 par value (“Preferred Stock”), of the Company at a price
of $10.00 (as the same may be adjusted, the “Purchase Price”).  The description
and terms of the Rights are set forth in a Rights Agreement (as the same may be
amended from time to time, the “Rights Agreement”) dated as of August 7, 2003,
between the Company and American Stock Transfer & Trust Company, as Rights Agent
(the “Rights Agent”).

Our Board has adopted the Rights Agreement providing for these rights in order
to protect stockholders from coercive or otherwise unfair takeover tactics.  In
general terms, it works by imposing a significant penalty upon any person or
group which acquires 10% or more of our outstanding common stock without the
approval of our Board.  The Rights Agreement should not interfere with any
merger or other business combination approved by our Board.  The Rights
Agreement does not apply to shareholders who currently hold over 10% of our
outstanding common stock unless they increase their holdings by 1% or more
without the approval of our Board.

For those interested in the specific terms of the Rights Agreement we provide
the following summary description.  Please note, however, that this description
is only a summary, and is not complete, and should be read together with the
entire Rights Agreement, which has been filed with the Securities and Exchange
Commission as an exhibit to a Registration Statement on Form 8-A dated August
18, 2003.  A copy of the agreement is available free of charge from our Company.

The Rights.  The Rights trade with, and are inseparable from, the common stock.
 The Rights are evidenced only by certificates that represent shares of common
stock.  New Rights will accompany any new shares of common stock we issue until
the Distribution Date described below.

Exercise Price.  Each Right will allow its holder to purchase from our Company
one one-thousandth of a share of Preferred Stock for $10.00, once the Rights
become exercisable. This portion of the share of Preferred Stock will give the
shareholder approximately the same dividend, voting, and liquidation rights as
would one share of common stock.  Prior to exercise, the Right does not give its
holder any dividend, voting, or liquidation rights.

Exercisability. The Rights will not be exercisable until

•

ten days after the public announcement that a person or group has become an
“Acquiring Person” by obtaining beneficial ownership of 10% or more of our
outstanding common stock, or, if earlier,

•

10 business days (or a later date determined by our Board before any person or
group becomes an Acquiring Person) after a person or group begins a tender or
exchange offer which, if completed, would result in that person or group
becoming an Acquiring Person.

We refer to the date when the Rights become exercisable as the “Distribution
Date.”  Until that date, the common stock certificates will also evidence the
Rights, and any transfer of shares of common stock will constitute a transfer of
Rights.  After that date, the Rights will separate from the common stock and be
evidenced by book-entry credits or by Rights certificates that we will mail to
all eligible holders of common stock.  Any Rights held by an Acquiring Person
are void and may not be exercised.

Consequences of A Person or Group Becoming an Acquiring Person.  If a person or
group becomes an Acquiring Person, all holders of Rights except the Acquiring
Person may, for $10.00, purchase shares of our common stock with a market value
of $20.00, based on the market price of the common stock prior to such
acquisition.

If our Company is later acquired in a merger or similar transaction after the
Rights Distribution Date, all holders of Rights except the Acquiring Person may,
for $10.00, purchase shares of the acquiring corporation with a market value of
$20.00 based on the market price of the acquiring corporation’s stock, prior to
such merger.

Preferred Share Provisions.  Each one one-thousandth of a share of Preferred
Stock, if issued:

•

will not be redeemable;

•

will entitle holders to quarterly dividend payments of $.01 per fractional
share, or an amount equal to the dividend paid on one share of common stock,
whichever is greater;

•

will entitle holders upon liquidation either to receive $10.00 per fractional
share or an amount equal to the payment made on one share of common stock,
whichever is greater.

•

will be entitled to one vote on all matters submitted to a vote of shareholders.

•

if shares of our common stock are exchanged via merger, consolidation, or a
similar transaction, will entitle holders to a per share payment equal to the
payment made on one share of common stock.

Expiration.  The Rights will expire on August 18, 2013.

Redemption.  Our Board may redeem the Rights for $0.01 per Right at any time
before any person or group becomes an Acquiring Person.  If our Board redeems
any Rights, it must redeem all of the Rights.  Once the Rights are redeemed, the
only right of the holders of Rights will be to receive the redemption price of
$0.01 per Right.  The redemption price will be adjusted if we have a stock split
or stock dividends of our common stock.

Exchange.  After a person or group becomes an Acquiring Person our Board may
extinguish the Rights by exchanging common shares or equivalent securities with
a market value of $10.00 for each Right, other than Rights held by the Acquiring
Person.

Anti Dilution Provisions.  Our Board may adjust the purchase price of the
Preferred Stock, the number of shares of Preferred Stock issuable and the number
of outstanding Rights to prevent dilution that may occur from a stock dividend,
a stock split, a reclassification of the Preferred Stock or common stock.  

Amendments.  The terms of the Rights Agreement may be amended by our Board
without the consent of the holders of the Rights.  After a person or group
becomes an Acquiring Person, our Board may not amend the agreement in a way that
adversely affects holders of the Rights.