**EXHIBIT 10.1****CHANGE OF CONTROL AGREEMENT**     THIS CHANGE OF CONTROL AGREEMENT, dated as of April 1, 2006, is between ARI Network Services,Inc. (the “Company”) and Brian E. Dearing (the “Employee”).WITNESSETH:     WHEREAS, the Employee has been employed by the Company since 1995 and currently serves as itsChairman and Chief Executive Officer; and     WHEREAS, the Board of Directors of the Company has determined that it wishes to assure thecontinued availability of the Employee as the Chairman and Chief Executive Officer of the Companyby entering into this Change of Control Agreement (the “Agreement”); and     WHEREAS, the Board of Directors of the Company wants to assure that, in the event of a Changeof Control (as hereinafter defined), the Employee’s service to the Company will be recognized.     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, theCompany and the Employee hereby agree as follows:     **1. ****Definitions****.**For Purposes of this Agreement:          (a) Cause. “Cause” means (i) the willful and continued failure by the Employee tosubstantially perform the Employee’s duties with the Company (other than any such failure resultingfrom the Employee’s incapacity due to physical or mental illness) for a period of at least ten daysafter a written demand for substantial performance is delivered to the Employee which specificallyidentifies the manner in which the Employee has not substantially performed his duties, or (ii) thewillful engaging by the Employee in misconduct which is demonstrably and materially injurious tothe Company, monetarily or otherwise. For purposes of this Agreement, no act or failure to act onthe Employee’s part shall be considered “willful” unless done or omitted to be done by the Employeenot in good faith and without reasonable belief that such action or omission was in the bestinterest of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to havebeen terminated for Cause unless and until there shall have been delivered to the Employee a copyof a resolution, duly adopted by the affirmative vote of not less than a majority of the Board ofDirectors of the Company at a meeting of the Board called and held for such purposes (afterreasonable notice to the Employee and an opportunity for the Employee, together with the Employee’scounsel, to be heard before the Board), stating that in the good faith opinion of the Board theEmployee was guilty of conduct constituting Cause as set forth above and specifying the particularsthereof in detail.
 

 
          (b) Change in Control. A “Change in Control” shall mean the first to occur of thefollowing:          (i) the acquisition by an individual, entity or group, acting individually or inconcert (a “Person”) of beneficial ownership of more than 50% of the then outstandingshares of common stock of the Company (the “Outstanding Common Stock”); provided,however, that for purposes of this Subsection 1(b)(i), the following acquisitionsshall not constitute a Change in Control: (A) any acquisition directly from the Company,(B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (orrelated trust) sponsored or maintained by the Company or any corporation controlled by theCompany, or (D) any acquisition by any corporation pursuant to a transaction which complieswith clauses (A), (B) and (C) of Subsection 1(b)(ii) below; or          (ii) consummation of a reorganization, merger or consolidation, share exchange, orsale or other disposition of all or substantially all of the assets of the Company (a“Business Combination”), in each case, unless, immediately following such BusinessCombination, (A) all or substantially all of the individuals and entities who were thebeneficial owners of the Outstanding Common Stock immediately prior to such BusinessCombination beneficially own, directly or indirectly, more than 50% of, respectively, thethen outstanding shares of common stock and the combined voting power of the thenoutstanding voting securities entitled to vote generally in the election of directors, asthe case may be, of the corporation resulting from such Business Combination (including,without limitation, a corporation which as a result of such transaction owns the Company orall or substantially all of the Company’s assets either directly or through one or moresubsidiaries) in substantially the same proportions as their ownership, immediately priorto such Business Combination of the Outstanding Common Stock, (B) no Person (excluding anyemployee benefit plan (or related trust) of the Company or such corporation resulting fromsuch Business Combination) beneficially owns, directly or indirectly, more than 50% of,respectively, the then outstanding common stock of the corporation resulting from suchBusiness Combination or the combined voting power of the then outstanding voting securitiesof such corporation except to the extent that such ownership existed prior to the BusinessCombination, and (C) at least a majority of the members of the Board of the corporationresulting from such Business Combination were members of the Board of the Company at thetime of the execution of the initial agreement providing for such Business Combination; or          (iii) approval by the shareholders of the Company of a complete liquidation ordissolution of the Company.          (c) Date of Termination. “Date of Termination” means the date specified in the Noticeof Termination where required (which date shall be on or after the date of the Notice ofTermination) or in any other case during the Term, upon the Employee’s ceasing to perform servicesfor the Company.
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          (d) Effective Date. “Effective Date” means the date on which the Change of Controloccurs.          (e) Good Reason. “Good Reason” means, without the Employee’s written consent, theoccurrence of one or more of the following during the Term:          (i) a material diminution of or interference with the Employee’s duties andresponsibilities as Chairman and Chief Executive Officer of the Company, including, but notlimited to a material demotion of the Employee, a material reduction in the number orseniority of other Company personnel reporting to the Employee, or a material reduction inthe frequency with which, or in the nature of the matters with respect to which, suchpersonnel are to report to the Employee;          (ii) a change in the principal workplace of the Employee to a location outside of a50-mile radius from Milwaukee, Wisconsin;          (iii) a reduction or adverse change in the salary, bonus, perquisites, benefits,contingent benefits or vacation time which had theretofore been provided to the Employee; or          (iv) an unreasonable increase in the workload of the Employee.     For purposes hereof, any good faith determination made by the Employee that he has Good Reasonto terminate his employment with the Company shall be conclusive. The Employee’s continuedemployment or failure to give Notice of Termination will not constitute consent to, or a waiver ofrights with respect to, any circumstance constituting Good Reason hereunder.          (f) Notice of Termination. Any termination of the Employee’s employment by theCompany without Cause, or termination by the Employee for Good Reason, during the Term will becommunicated by a Notice of Termination to the other party hereto. A “Notice of Termination” meansa written notice which specifies a Date of Termination (which date shall be on or after the date ofthe Notice of Termination), indicates the provision in this Agreement applying to the terminationand, if applicable, sets forth in reasonable detail the facts and circumstances claimed to providea basis for termination of the Employee’s employment under the provision so indicated.          (g) Term. The “Term” means a period beginning on the Effective Date and ending on thedate two years after the occurrence of a Change of Control.     **2. ****Termination of Employment During the Term****.**          (a) Termination by the Company Without Cause or by the Employee for Good Reason. Ifthe Employee’s employment is terminated during the Term by the Company without Cause or by theEmployee for Good Reason, the Employee shall be entitled to the following:
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          (i) the Company shall pay the Employee his full base salary and commissions (ifapplicable) through the Date of Termination at the rate in effect at the time the Notice ofTermination is given;          (ii) as the annual current year bonus for the year in which the Date of Terminationoccurs, the Company will pay the Employee an amount (not less than zero) equal to (A) theproduct of (i) the average of the Employee’s annual current year bonus for the three fiscalyears of the Company ending prior to the Date of Termination and (ii) a fraction, thenumerator of which is the actual number of days the Employee was employed by the Companyduring the fiscal year in which the Date of Termination occurs and the denominator of whichis 365, minus (B) the aggregate payments previously made by the Company, if any, withrespect to the current year annual bonus;          (iii) the Company shall pay to the Employee as a severance benefit a lump-sum amountequal to two (2) times the sum of (a) the Employee’s annual base salary as in effecton the Effective Date or Date of Termination, whichever is greater, without reduction forany mandatory or voluntary deferrals, (b) 100% of the targeted commissions, if any,for the year in which the Effective Date or Date of Termination occurs, whichever isgreater, and (c) 100% of the targeted short-term annual bonus and long-term bonus for theyear in which the Effective Date or Date of Termination occurs, whichever is greater, or,where the targeted short-term annual bonus or long-term bonus amounts have not been set asof the Effective Date or Date of Termination, 100% of the average of the Employee’s targetedannual short-term and long-term bonus for the three fiscal years of the Company ending priorto the Date of Termination, without reduction for any amounts that would otherwise bedeferred to future fiscal years, within thirty days after the Date of Termination;          (iv) any unpaid annual installments of long-term bonuses from prior fiscal years, whichinstallments shall become immediately vested as if the targeted performance levels forfuture years were met; and          (v) for a 24-month period after the Date of Termination starting with the monthimmediately after the month in which the Date of Termination occurs, the Company willarrange to provide the Employee and the Employee’s eligible dependents, at the Company’sexpense, with benefits under the medical and dental plans of the Company, or, if suchbenefits are not available, benefits substantially similar to the benefits the Employee wasreceiving during the 90-day period immediately prior to the Date of Termination;provided, however, that benefits otherwise receivable by the Employeepursuant to this Subsection 2(a)(iv) will be reduced to the extent other comparable benefitsare actually received by the Employee from subsequent employment during the 24-month periodfollowing the Date of Termination, and any such benefits actually received by the Employeewill be reported to the Company; and provided, further that any access toinsurance continuation coverage that the Employee may be entitled to receive under theConsolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) will commence on the Dateof Termination.
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          (b) Termination for Any Other Reason. If the Employee’s employment with the Companyis terminated during the Term for any reason not specified in Subsection 2(a) above, the Employeewill be entitled to the following:          (i) the Company will pay the Employee his full base salary and commissions (ifapplicable) through the Date of Termination at the rate in effect on the Date ofTermination; and          (ii) as the annual current year bonus for the year in which the Date of Terminationoccurs, the Company will pay the Employee an amount (not less than zero) equal to (A) theproduct of (i) the average of the Employee’s annual current year bonus for the three fiscalyears of the Company ending prior to the Date of Termination and (ii) a fraction, thenumerator of which is the actual number of days the Employee was employed by the Companyduring the fiscal year in which the Date of Termination occurs and the denominator of whichis 365, minus (B) the aggregate payments previously made by the Company, if any, withrespect to the current year annual bonus. Notwithstanding the foregoing, no bonus will bepaid to the Employee under this Subsection 2(b)(ii) if the Employee’s employment isterminated for Cause.          (c) Timing of Payments. Where a payment of benefits under any of Subsections2(a)(ii), (iii) and (iv) or Subsection 2(b)(ii) is required to be delayed for six months after theDate of Termination under Internal Revenue Code Section 409A, the Company shall make payment ofsuch amounts to the Employee on the date that is six months after the Date of Termination. Where apayment of benefits under Subsections 2(a)(ii), (iii) and (iv) and Subsection 2(b)(ii) is notrequired to be delayed for six months after the Date of Termination under Internal Revenue CodeSection 409A, the Company shall make payment of such amounts to the Employee within thirty (30)days after the Date of Termination.     **3. ****Restrictions****.**As of the Effective Date, all restrictions limiting the exercise,transferability or other incidents of ownership of any outstanding award, including but not limitedto restricted stock, options, stock appreciation rights, or other property or rights of the Companygranted to the Employee shall lapse, and such awards shall become fully vested and be held by theEmployee free and clear of all such restrictions. Notwithstanding the foregoing, the term duringwhich any vested option held by an Employee is permitted to be exercised shall not be extended.This provision shall apply to all such property or rights notwithstanding the provisions of anyother plan or agreement to the contrary.     **4. ****Limitation on Payments****.**Subsections 2(a)(iii), (iv) and (v) and Section 3, above,provide for certain payments to be made or benefits to be given to the Employee if the Employee’semployment with the Company terminates during the Term (the “Change of Control Payments”).Notwithstanding such subsections, the Change of Control Payments will be reduced such that thepresent value of the payments to the Employee or for the Employee’s benefit, receipt of which isdeemed to be contingent on a change of control under Section 280G(b)(2) of the Internal RevenueCode of 1986, as amended (the “Code”), shall not exceed an amount equal to the maximum which theCompany may pay without loss of deduction under Section 280G(a) of the Code (the “Golden ParachuteThreshold”). If the Golden Parachute Threshold is
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exceeded, the payments made pursuant to Subsections 2(a)(iii) and (iv) will be reduced, butnot below zero, so that the total amount paid to the Employee or for the Employee’s benefit is notin excess of the Golden Parachute Threshold. Notwithstanding the foregoing, if not reducing theChange of Control Payments would result in a greater after-tax amount to the Employee, suchpayments shall not be reduced. All calculations required pursuant to this Section 4 shall be madein accordance with proposed, temporary or final regulations promulgated under Section 280G of theCode or other applicable authority by the Company’s public accountants, the Company’s lawyers orsuch other third party as is mutually agreed between the Employee and the Company. In the eventthat the provisions of Sections 280G and 4999 of the Code or any successor provision are repealedwithout succession this Section 4 shall be of no further force or effect.     **5. ****No Mitigation****.**The Employee shall not be required to mitigate the amount of anysalary or other payment or benefit provided for in this Agreement by seeking other employment orotherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reducedby any compensation earned by the Employee as a result of employment by another employer other thanas provided in subsection 2(a)(v), above, by retirement benefits distributed after the Date ofTermination, or otherwise.     **6. ****No Assignments****.**          (a) Successors and Assigns. This Agreement is personal to the Employee, and theEmployee may not assign or delegate any of the Employee’s rights or obligations hereunder withoutfirst obtaining the written consent of Company. The Company will require any successor or assign(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all orsubstantially all of the business and/or assets of the Company, by an assumption agreement in formand substance satisfactory to the Employee, to expressly assume and agree to perform this Agreementin the same manner and to the same extent that the Company would be required to perform it if nosuch succession or assignment had taken place. If such succession or assignment does not takeplace, and if this Agreement is not otherwise binding on the Company’s successors or assigns byoperation of law, the Employee is entitled to compensation from the Company in the same amount andon the same terms as the compensation pursuant to Subsection 2(a) hereof.          (b) Inurement. This Agreement and all rights of the Employee hereunder shall inure tothe benefit of and be enforceable by the Employee’s personal and legal representatives, executors,administrators, successors, heirs, distributees, devisees and legatees. If the Employee should diewhile any amount would still be payable to the Employee hereunder if the Employee had continued tolive, all such amounts, unless otherwise provided herein, shall be paid in accordance with theterms of this Agreement to the Employee’s devisee, legatee or other designee or if there is no suchdesignee, to the Employee’s estate.     **7. ****Notice****.**For the purposes of this Agreement, notices and all other communicationprovided for in the Agreement shall be in writing and shall be deemed to have been duly given whenpersonally delivered or sent by fax with confirmation printed on the sending fax machine, or fivedays after mailing certified mail, return receipt requested, postage prepaid, addressed to therespective addresses set forth opposite the parties’ signatures to this Agreement (provided
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that all notices to the Company shall be directed to the attention of the Board of Directorsof the Company with a copy to the Secretary of the Company), or to such other address as eitherparty may have furnished to the other in writing in accordance herewith.     **8. ****Prior Agreements****.**This Agreement shall replace and supersede all prior agreementsbetween the Company and the Employee relating to the subject matter hereof.     **9. ****Amendments****.**No amendments or additions to this Agreement shall be binding unlessin writing and signed by both parties hereto.     **10. ****Severability****.**The provisions of this Agreement shall be deemed severable and theinvalidity or unenforceability of any provision shall not affect the validity or enforceability ofthe other provisions hereof.     **11. ****Governing Law****.**This Agreement shall be governed by the laws of the State ofWisconsin, without giving effect to its principles of conflicts of laws.     **12. ****Arbitration****.**Any dispute or controversy arising under or in connection with thisAgreement shall be settled exclusively by arbitration by a single arbitrator mutually agreed to bythe disputing parties in accordance with the rules of the American Arbitration Association then ineffect. Such arbitration shall be held in Milwaukee, Wisconsin, or such other place as is mutuallyagreeable to the parties hereto. Judgment may be entered on the Arbitrator’s award in any courthaving jurisdiction.
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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year firstabove written.      ARI NETWORK SERVICES, INC.   11425 West Lake Park Drive, Suite 900