S-1 Ex 10.15 THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT


		
			THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
		

		
			AND OTHER LOAN DOCUMENTS
		

		
			 
		

		
			This Third Amendment to Loan and Security Agreement and Other Loan Documents
		

		
			(this "Amendment") is made as of March 8, 2013, by and between ARI NETWORK
		

		
			SERVICES, INC., a Wisconsin corporation (-Borrower"), and FIFTH THIRD BANK, an Ohio
		

		
			banking corporation ("Lender").
		

		
			WITNESSETH:
		

		
			WHEREAS, Borrower and Lender are parties to that certain Loan and Security
		

		
			Agreement dated as of July 27, 2011, as amended from time to time (as amended, and as it may
		

		
			be further amended, restated, modified or supplemented and in effect from time to time, the
		

		
			-Loan Agreement"); and
		

		
			 
		

		
			WHEREAS, Borrower has requested that Lender amend the Loan Agreement and the
		

		
			other Loan Documents in certain respects, and Lender is agreeable to such request, on and
		

		
			subject to the terms and conditions set forth herein;
		

		
			 
		

		
			NOW, THEREFORE, the parties hereto hereby agree as follows:
		

		
			 
		

		
			I. Definitions. Capitalized terms used herein and defined in the Loan Agreement
		

		
			and not otherwise defined herein are used with the meanings given such terms in the Loan
		

		
			Agreement.
		

		
			 
		

		
			2. Amendments to Loan Agreement. The Loan Agreement is hereby amended as
		

		
			follows:
		

		
			(a) by inserting each of the following definitions to Section 1.1 in their
		

		
			respective proper alphabetical order:
		

		
			 
		

		
			“Adjusted EBITDA" shall mean, for any period, (a) the sum for
		

		
			such period of: (i) consolidated Net Income, plus (ii) Interest Charges,
		

		
			plus (iii) federal and state income taxes, plus (iv) depreciation and
		

		
			amortization, plus (v) non-cash expenses limited to bonuses and board
		

		
			director fees paid in stock (provided, however, any and all conversion of
		

		
			non-cash expenses into cash payments shall not be permitted unless
		

		
			Borrower has received express prior written consent from Lender), plus
		

		
			(vi) actual transaction expenses ("Transaction Expenses") in an amount
		

		
			not to exceed the amounts set forth below for the corresponding periods
		

		
			set forth below incurred by Borrower in connection with closing the
		

		
			Purchase Transaction and the 50 Below Purchase Transaction, provided
		

		
			that all such transaction expenses are verified by Lender and consented to
		

		
			by Lender in its sole discretion (which consent shall not be unreasonably
		

		

		

		 

 

		withheld), plus (vii) actual fees and expenses (-Third Amendment Fees
		

		
			and Expenses") in an amount not to exceed the amounts set forth below
		

		
			for the corresponding periods set forth below incurred by Borrower in
		

		
			connection with the Third Amendment, provided that all such fees and
		

		
			expenses are verified by Lender and consented to by Lender in its sole
		

		
			discretion (which consent shall not be unreasonably withheld), in each
		

		
			case to the extent included in determining Net Income for such period:
		

		
			 
		

		
			                                                                                       Maximum Third
		

		
			                                                  Maximum Transaction               Amendment Fees
		

		
			                                                Expenses Permitted           and Exenses Permitted
		

		
			                                                to be added back to                to be added back to
		

		
			Quarter Ended                                    EBIDTA                                       EBITDA     
		

		
			July 31, 2012                                    $     50,000                             $            0.00
		

		
			October 31, 2012                             200,000                                    0.00
		

		
			January 31, 2013                             400,000                                    0.00
		

		
			April 30, 2013                                                     0                                   65,000            
		

		
			July 31, 2013 and thereafter                             0                                    0.00
		

		
			 
		

		
			"Equity Raise Transaction" shall have the meaning set forth in the
		

		
			Third Amendment.
		

		
			 
		

		
			“Fundamental Transaction" shall mean (i) any merger or
		

		
			consolidation of Borrower with or into another Person, or (ii) any sale,
		

		
			lease, license, assignment, transfer, conveyance or other disposition of all
		

		
			or substantially all of Borrower's assets in one or a series of related
		

		
			transactions, or (iii) any purchase offer, tender offer or exchange offer
		

		
			(whether by Borrower or another Person) that is completed pursuant to
		

		
			which holders of Borrower's common stock are permitted to sell, tender or
		

		
			exchange their shares for other securities, cash or property and which has
		

		
			been accepted by the holders of 50% or more of the outstanding
		

		
			Borrower's common stock, or (iv) Borrower effects any reclassification,
		

		
			reorganization or recapitalization of its common stock or any compulsory
		

		
			share exchange pursuant to which any of its common stock is effectively
		

		
			converted into or exchanged for other securities, cash or property, or (v)
		

		
			Borrower consummates a stock or share purchase agreement or other
		

		
			business combination (including, without limitation, a reorganization,
		

		
			recapitalization, spin-off or scheme of arrangement) with any other Person
		

		
			or group of Persons whereby such other Person or group acquires more
		

		
			than 50% of the outstanding shares of the Borrower's common stock (not
		

		
			including any shares of common stock held by the other Person or other
		

		

		

		 

 

		Persons making or party to, or associated or affiliated with the other
		

		
			Persons making or party to, such stock or share purchase agreement or
		

		
			other business combination), or (vi) any other transaction or occurrence
		

		
			which is a "Fundamental Transaction" for purposes of section 3 of any of
		

		
			the warrants issued or to be issued by Borrower in connection with the
		

		
			Equity Raise Transaction.
		

		
			 
		

		
			“Third Amendment" shall mean that certain Third Amendment to
		

		
			Loan and Security Agreement and Other Loan Documents dated as of
		

		
			March 8, 2013 by and between Borrower and Lender, together with each
		

		
			Consent and Reaffirmation of Guaranty by the applicable Guarantor
		

		
			attached thereto.
		

		
			 
		

		
			(b) by amending and restating each of the following definitions in Section 1.1
		

		
			as follows:
		

		
			 
		

		
			"EBITDA" shall mean, for any period, (a) the sum for such period
		

		
			of (i) consolidated Net Income, plus (ii) Interest Charges, plus (iii) federal
		

		
			and state income taxes, plus (iv) depreciation and amortization, plus actual
		

		
			transaction expenses in an amount not to exceed the amounts set forth
		

		
			below for the corresponding periods set forth below incurred by Borrower
		

		
			in connection with closing the Purchase Transaction and the 50 Below
		

		
			Purchase Transaction, provided that all such transaction expenses are
		

		
			verified by Lender and consented to by Lender in its sole discretion
		

		
			(which consent shall not be unreasonably withheld), in each case to the
		

		
			extent included in determining Net Income for such period.
		

		
			 
		

		
			                                                            Maximum Transaction 
		

		
			                                                            Expenses Permitted to be
		

		
			Quarter Ended                                                Added back to EBITDA
		

		
			July 31, 2012                                                $    50,000
		

		
			October 31, 2012                                    $  200,000
		

		
			January 31, 2013                                    $  400,000 
		

		
			April 30, 2013 and thereafter                        $         0.00
		

		
			 
		

		
			 
		

		
			"Pledge Agreement" shall mean that certain Membership Interests
		

		
			Security Agreement dated as of July 27, 2011 made by Borrower in favor
		

		
			of Lender, and acknowledged to by ARE Europe B.V., in form and
		

		
			substance acceptable to Lender, as it may be amended, restated, modified
		

		
			or supplemented and in effect from time to time.
		

		

		

		 

 

		 
		

		
			(c) by inserting the following as Section 2.2(f):
		

		
			 
		

		
			(f) Additional Term Loan Mandatory Prepayments. In
		

		
			addition to the foregoing, Borrower shall make a mandatory prepayment
		

		
			of the outstanding principal amount of the Term Loan concurrently with
		

		
			the receipt by Borrower or by any Subsidiary of any net cash proceeds
		

		
			generated from the Equity Raise Transaction in an amount equal to one
		

		
			hundred percent (100%) of the first $1,500,000.00 of such net cash
		

		
			proceeds. Such prepayment of the Term Loan shall be applied to the
		

		
			scheduled installments of the Term Loan in inverse order of maturity.
		

		
			 
		

		
			(d) by amending and restating Section 6.2 in its entirety to read as follows:
		

		
			 
		

		
			6.2 Other Collateral. In addition, the Obligations are also
		

		
			secured by the Pledge Agreement, the Guaranties, the Securities Pledge
		

		
			Agreement and the Security Agreement.
		

		
			 
		

		
			(e) by inserting the following as Section 8.22:
		

		
			 
		

		
			8.22 Personal Financial Statements. Borrower shall deliver or
		

		
			cause to be delivered, within one hundred twenty (120) days after the end
		

		
			of each calendar year, a personal financial statement of Roy W. Olivier for
		

		
			such year, in form and substance acceptable to Lender and certified by
		

		
			Roy W. Olivier as true, correct and complete in all respects.
		

		
			 
		

		
			(f) by amending and restating Section 9.4 in its entirety to read as follows:
		

		
			 
		

		
			9.4 Transfer; Merger; Sales. Borrower shall not and not permit
		

		
			any Subsidiary to, whether in one transaction or a series of related
		

		
			transactions, (a) be a party to any Fundamental Transaction or any merger
		

		
			or consolidation, or purchase or otherwise acquire all or substantially all of
		

		
			the assets or any Capital Securities of any class of, or any partnership or
		

		
			joint venture interest in, any other Person, except for (i) any such merger,
		

		
			consolidation, sale, transfer, conveyance, lease or assignment of or by any
		

		
			Wholly-Owned Subsidiary into Borrower or into any other domestic
		

		
			Wholly-Owned Subsidiary; (ii) any such purchase or other acquisition by
		

		
			Borrower or any domestic Wholly-Owned Subsidiary of the assets or
		

		
			equity interests of any Wholly-Owned Subsidiary, (b) sell, transfer,
		

		
			convey or lease all or any substantial part of its assets or Capital Securities
		

		
			(including the sale of Capital Securities of any Subsidiary), except for
		

		
			sales of Inventory in the ordinary course of business, or (c) sell or assign,
		

		

		

		 

 

		with or without recourse, any receivables other than receivables deemed
		

		
			uncollectable by Borrower and transferred to third party collection
		

		
			agencies.
		

		
			 
		

		
			(g) by amending and restating Section 9.5 in its entirety to read as follows:
		

		
			 
		

		
			9.5 Issuance of Capital Securities. Borrower shall not and shall
		

		
			not permit any Subsidiary to issue any Capital Securities other than (a) any
		

		
			issuance of shares of Borrower's common Capital Securities pursuant to
		

		
			any option program, (b) the issuance of preferred stock pursuant to the
		

		
			Rights Plan dated as of August 7, 2003 between Borrower and American
		

		
			Stock Transfer & Trust Company, (c) any issuance of Capital Securities
		

		
			by a Subsidiary to Borrower or another Subsidiary in accordance with
		

		
			Section 9.6, (d) the issuance of common Capital Securities to Sifen in
		

		
			connection with the Sifen Subordinated Loan Transaction, or (e) the
		

		
			issuance of Capital Securities in connection with the Equity Raise
		

		
			Transaction.
		

		
			 
		

		
			 (h) by amending and restating the last sentence of Section 9.6 in its entirety to
		

		
			read as follows:
		

		
			 
		

		
			Notwithstanding the foregoing, (i) any Subsidiary may pay dividends or
		

		
			make other distributions to Borrower or to a domestic Wholly-Owned
		

		
			Subsidiary; (ii) Borrower may make Earn-Out Payments and Holdback
		

		
			Payments to the extent permitted under the Subordination Agreement; and
		

		
			(iii) Borrower may (A) make regularly scheduled payments of interest to
		

		
			Sifen under the Sifen Subordinated Loan Documents to the extent
		

		
			permitted under the Sifen Subordination Agreement, and (B) if, upon
		

		
			making the prepayment of the Term Loan as required under Section 2.2(f)
		

		
			hereof, there shall be net cash proceeds of the Equity Raise Transaction in
		

		
			excess of $1,500,000.00, then Borrower may use any or all of the
		

		
			remainder of such excess net cash proceeds (and only such funds) to make
		

		
			a principal prepayment of the Sifen Subordinated Loan or for working
		

		
			capital.
		

		
			 
		

			
			
				 (i)
			

			
			
			by amending and restating Section 10.1 in its entirety to read as follows:




		
			 
		

		
			10.1 Fixed Charge Coverage Ratio. As of the end of each of its
		

		
			fiscal quarters for the four fiscal quarter period then ending, Borrower and
		

		
			its Subsidiaries shall maintain a ratio of (a) consolidated Adjusted
		

		
			EB1TDA plus rent and operating lease payments, minus cash taxes paid,
		

		
			distributions, dividends and Capital Expenditures (other than Capital
		

		

		

		 

 

		Expenditures financed with the proceeds of purchase money Debt or
		

		
			Capitalized Lease Obligations to the extent permitted under this
		

		
			Agreement) and other non-cash extraordinary items (excluding
		

		
			extraordinary gains related to the Meppel sale in the amount of $70,000
		

		
			and the Life Insurance sale in the amount of $123,000). to (b) the
		

		
			consolidated sum of (i) Interest Charges of Borrower and its Subsidiaries
		

		
			for such period paid in cash, plus (ii) all scheduled principal payments for
		

		
			such period with respect to all Debt that were paid or were due and
		

		
			payable by Borrower and its Subsidiaries during such period plus rent and
		

		
			operating lease expense incurred in the same such period (the "Fixed
		

		
			Charge Coverage Ratio"), of not less than the ratio set forth below for the
		

		
			corresponding period set forth below:
		

		
			 
		

		
			Period                                                                                                Ratio
		

		
			For the four fiscal quarter period ending on 
		

		
			     January 31, 2013                                                                         0.90 to 1.00
		

		
			For the four fiscal quarter period ending on 
		

		
			     April 30, 2013                                                                                            1.00 to 1.00
		

		
			For the four fiscal quarter period ending on 
		

		
			     July 31, 2013.                                                                                      1.15 to 1.00
		

		
			For the four fiscal quarter period ending on 
		

		
			                      October 31, 2013 and on the last day of
		

		
			      each fiscal quarter ending thereafter          1.20 to 1.00
		

		
			 
		

		
			3. Second Amended and Restated Revolving Note. That certain Amended and
		

		
			Restated Revolving Note dated as of August 17, 2012 executed by Borrower and made payable
		

		
			to the order of Lender in the maximum principal amount of $1.500,000.00 (the "Existing
		

		
			Revolving Note") is hereby replaced with that certain Second Amended and Restated Revolving
		

		
			Note dated as of even date herewith executed by Borrower and made payable to the order of
		

		
			Lender in the maximum principal amount of $1,500,000.00 (the "Second Amended and Restated
		

		
			Revolving Note"). The Second Amended and Restated Revolving Note amends and restates in
		

		
			its entirety the Existing Revolving Note. Nothing contained in the Second Amended and
		

		
			Restated Revolving Note shall be deemed to be payment and satisfaction or a novation of the
		

		
			indebtedness evidenced by the Existing Revolving Note. All references in the Loan Agreement
		

		
			and the other Loan Documents to "Revolving Note" shall, on and after the date hereof upon the
		

		
			effectiveness of this Amendment, be deemed to mean the Second Amended and Restated
		

		
			Revolving Note.
		

		
			 
		

		
			4. Second Amended and Restated Term Note. That certain Amended and Restated
		

		
			Term Note dated as of August 17, 2012 executed by Borrower and made payable to the order of
		

		
			Lender in the principal amount of $4,889,000.04 (the "Existing Term Note") is hereby replaced
		

		
			with that certain Second Amended and Restated Term Note dated as of even date herewith
		

		

		

		 

 

		executed by Borrower and made payable to the order of Lender in the principal amount of
		

		
			$4,305,666.73 (the "Second Amended and Restated Term Note”). The Second Amended and
		

		
			Restated Term Note amends and restates in its entirety the Existing Term Note. Nothing
		

		
			contained in the Second Amended and Restated Term Note shall be deemed to be payment and
		

		
			satisfaction or a novation of the indebtedness evidenced by the Existing Term Note. All
		

		
			references in the Loan Agreement and the other Loan Documents to "Term Note" shall, on and
		

		
			after the date hereof upon the effectiveness of this Amendment, be deemed to mean the Second
		

		
			Amended and Restated Term Note.
		

		
			 
		

		
			5. Amendment to the Other Loan Documents. The other Loan Documents are
		

		
			hereby amended to the extent necessary to be consistent with the foregoing amendments to the
		

		
			Loan Agreement and the amendment and restatement of the Revolving Note and the Term Note.
		

		
			 
		

		
			6. Consent to Equity Raise Transaction. Borrower has informed Lender that
		

		
			Borrower intends to issue and sell to certain purchasers common stock and warrants to purchase
		

		
			common stock of Borrower for a net purchase price of not less than $1,500,000.00 on or before
		

		
			May 15, 2013 on and subject to the terms of a Securities Purchase Agreement, Registration
		

		
			Rights Agreement and Common Stock Purchase Warrant by and between Borrower and each of
		

		
			the purchasers, the forms of which have been provided to Lender, and, in connection therewith,
		

		
			issue warrants to purchase common stock to Borrower's placement agent on terms identical in all
		

		
			material respects to such form of Common Stock Purchase Warrant, for fair consideration as
		

		
			approved by Borrower's Board of Directors (the "Equity Raise Transaction"). Certain
		

		
			provisions of the Loan Agreement prohibit or can be construed to prohibit. the Equity Raise
		

		
			Transaction, and Borrower has requested that Lender consent to the Equity Raise Transaction
		

		
			and waive any provisions of the Loan Agreement which would otherwise prohibit the Equity
		

		
			Raise Transaction. Subject to the terms and conditions hereof Lender hereby consents to the
		

		
			Equity Raise Transaction and waives any Events of Default otherwise created thereby. The
		

		
			consent and waiver set forth herein shall be effective only in the specific instances and for the
		

		
			specific purposes set forth herein and shall neither extend to any other violations under, or
		

		
			default of, the Loan Agreement, nor shall this consent and waiver prejudice any rights or
		

		
			remedies of Lender under the Loan Agreement with respect to matters not specifically addressed
		

		
			hereby. Notwithstanding anything to the contrary contained herein, Borrower hereby agrees that
		

		
			(i) in the event that the Equity Raise Transaction does not generate at least $250,000.00 of
		

		
			aggregate net cash proceeds on or before May 15, 2013 or any portion of the first $1,500,000.00
		

		
			of such net cash proceeds are not used to prepay the outstanding principal balance of the Term
		

		
			Loan as required under Section 2.2(f), an Event of Default shall be deemed to have occurred, (ii)
		

		
			in the event that the Equity Raise Transaction does not generate at least $1,500,000.00 of
		

		
			aggregate net cash proceeds on or before May 15, 2013 or any portion of such $1,500,000.00
		

		
			amount is not used to prepay the outstanding principal amount of the Term Loan as required
		

		
			under Section 2.2(f), Borrower shall pay to Lender a nonrefundable fee in the amount of
		

		
			$100,000.00 on or before May 16, 2013, and (iii) in any event, one hundred percent (100%) of
		

		
			the first $1,500,000.00 of the aggregate net cash proceeds generated from the Equity Raise
		

		

		

		 

 

		Transaction shall be used to prepay the outstanding principal amount of the Term Loan as
		

		
			required under Section 2.2(f).
		

		
			 
		

		
			7. Waiver. Section 9(d) of the Second Amendment required that Borrower deliver
		

		
			to Lender an original of a Collateral Access Agreement with respect to the leased property
		

		
			located in Duluth, Minnesota (or such other Minnesota location or any other locations for the 50
		

		
			Below business), in form and substance acceptable to Lender, together with a fully-executed
		

		
			copy of the lease, on or before December 28, 2012. Borrower delivered to Lender a Collateral
		

		
			Access Agreement and a copy of the lease subsequent to that date. Lender hereby waives
		

		
			Borrower's violation of Section 9(d) of the Second Amendment and the Event of Default created
		

		
			thereby. The waiver set forth herein shall be effective only in the specific instance and for the
		

		
			specific purpose set forth herein and shall neither extend to any other violations under, or default
		

		
			of this Amendment, the Loan Agreement or any of the other Loan Documents, nor shall this
		

		
			waiver prejudice any rights or remedies of Lender under this Amendment, the Loan Agreement
		

		
			and the other Loan Documents with respect to matters not specifically addressed hereby.
		

		
			 
		

		
			8. Reaffirmation and Confirmation of Security Interests. Borrower hereby confirms
		

		
			to Lender that Borrower has granted to Lender a security interest in or Lien upon substantially all
		

		
			of the property of Borrower, including, without limitation, the Collateral, to secure the
		

		
			Obligations. Borrower hereby reaffirms its grant of such security interest and Lien to Lender for
		

		
			such purpose in all respects.
		

		
			 
		

		
			9. Representations and Warranties. Borrower hereby represents, warrants and
		

		
			covenants to Lender that:
		

		
			 
		

		
			(a) Authorization. Borrower is duly authorized to execute and deliver this
		

		
			Amendment and all deliveries required hereunder, and is and will continue to be duly authorized
		

		
			to borrow monies under the Loan Agreement, as amended hereby, and to perform its obligations
		

		
			under the Loan Agreement and the other Loan Documents.
		

		
			 
		

		
			 (b) No Conflicts. The execution and delivery of this Amendment, the Second
		

		
			Amended and Restated Revolving Note, the Second Amended and Restated Term Note and all
		

		
			other deliveries required hereunder, and the performance by Borrower of its obligations under
		

		
			the Loan Agreement and the other Loan Documents do not and will not conflict with any
		

		
			provision of law or of the charter or by-laws of Borrower or of any agreement binding upon
		

		
			Borrower.
		

		
			 
		

		
			(c) Validity and Binding Effect. This Amendment, the Loan Agreement and
		

		
			the other Loan Documents are a legal, valid and binding obligation of Borrower, enforceable
		

		
			against Borrower in accordance with their respective terms, except as enforceability may be
		

		
			limited by bankruptcy, insolvency or other similar laws of general application affecting the
		

		
			enforcement of creditors' rights or by general principles of equity limiting the availability of
		

		

		

		 

 

		equitable remedies.
		

		
			 
		

		
			(d) No Events of Default. As of the date hereof and after giving effect to the
		

		
			amendments set forth herein and the waiver set forth in Section 7 hereof, no Unmatured Default
		

		
			or Event of Default under the Loan Agreement or any of the other Loan Documents has occurred
		

		
			or is continuing.
		

		
			 
		

		
			(e) Warranties. As of the date hereof, the representations and warranties in
		

		
			the Loan Agreement and the other Loan Documents are true and correct as though made on such
		

		
			date, except where a different date is specifically indicated.
		

		
			 
		

		
			10. Conditions to Effectiveness. This Amendment shall be deemed to be effective as
		

		
			of the date hereof (the "Amendment Effective Date"), and the effectiveness of this Amendment
		

		
			shall be subject to, the satisfaction of all of the following conditions:
		

		
			 
		

		
			(a) A pdf of this Amendment, duly authorized and fully executed by Borrower
		

		
			and Lender, and a pdf of each Consent and Reaffirmation of Guaranty attached hereto and made
		

		
			a part hereof, duly authorized and fully executed by the applicable Guarantor, shall have been
		

		
			delivered to Lender; provided, however, Borrower agrees that it shall deliver or cause to be
		

		
			delivered a fully-executed original of each of the foregoing within three (3) Business Days of the
		

		
			date hereof.
		

		
			 
		

		
			(b) A pdf of the Second Amended and Restated Revolving Note, duly
		

		
			authorized and fully executed by Borrower, shall have been delivered to Lender; provided,
		

		
			however, Borrower agrees that it shall deliver a fully-executed original of the Second Amended
		

		
			and Restated Revolving Note within three (3) Business Days of the date hereof.
		

		
			 
		

		
			(c) A pdf of the Second Amended and Restated Term Note, duly authorized
		

		
			and fully executed by Borrower, shall have been delivered to Lender; provided, however,
		

		
			Borrower agrees that it shall deliver a fully-executed original of the Second Amended and
		

		
			Restated Term Note within three (3) Business Days of the date hereof.
		

		
			 
		

		
			(d) Payment by Borrower to Lender of a $30,000.00 amendment fee, which
		

		
			amendment fee shall be fully earned and due and payable on the date hereof.
		

		
			 
		

		
			 (e) Such other documents, instruments, agreements, certificates and opinions
		

		
			as Lender may reasonably request in order to effectuate fully the transactions contemplated
		

		
			herein shall have been duly executed and delivered to Lender.
		

		
			 
		

		
			11. Costs and Expenses. Borrower shall pay all costs and expenses in connection
		

		
			with the preparation of this Amendment and other related Loan Documents, including, without
		

		
			limitation, reasonable attorneys' fees and expenses.
		

		

		

		 

 

		 
		

		
			12. Acknowledgment; Release.
		

		
			 
		

		
			(A) BORROWER HEREBY ACQUITS, AND FOREVER DISCHARGES,
		

		
			LENDER AND EACH AND EVERY PAST AND PRESENT SUBSIDIARY, AFFILIATE,
		

		
			STOCKHOLDER, OFFICER, DIRECTOR, AGENT, SERVANT, EMPLOYEE,
		

		
			REPRESENTATIVE, AND ATTORNEY OF LENDER FROM ANY AND ALL CLAIMS,
		

		
			CAUSES OF ACTION, SUITS, DEBTS, LIENS, OBLIGATIONS, LIABILITIES,
		

		
			DEMANDS, LOSSES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES) OF
		

		
			ANY KIND, CHARACTER, OR NATURE WHATSOEVER, KNOWN OR UNKNOWN,
		

		
			FIXED OR CONTINGENT, WHICH BORROWER MAY HAVE OR CLAIM TO HAVE
		

		
			NOW OR WHICH MAY HEREAFTER ARISE OUT OF OR BE CONNECTED WITH
		

		
			ANY ACT OF COMMISSION OR OMISSION OF LENDER EXISTING OR
		

		
			OCCURRING PRIOR TO THE DATE OF THIS AMENDMENT, OR ANY
		

		
			INSTRUMENT EXECUTED PRIOR TO THE DATE OF THIS AMENDMENT,
		

		
			ARISING WITH RESPECT TO THIS AMENDMENT, THE LOAN AGREEMENT, THE
		

		
			OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
		

		
			HEREIN AND THEREIN.
		

		
			 
		

		
			13. Miscellaneous.
		

		
			 
		

		
			(a) Captions. Section captions and headings used in this Amendment are for
		

		
			convenience only and are not part of and shall not affect the construction of this Amendment.
		

		
			 
		

		
			(b) Governing Law. This Amendment shall be a contract made under and
		

		
			governed by the laws of the State of Illinois, without regard to conflict of laws principles.
		

		
			Whenever possible, each provision of this Amendment shall be interpreted in such a manner as
		

		
			to be effective and valid under applicable law, but if any provision of this Amendment shall be
		

		
			prohibited by or invalid under such law, such provision shall be ineffective to the extent of such
		

		
			prohibition or invalidity, without invalidating the remainder of such provision or the remaining
		

		
			provisions of this Amendment.
		

		
			 
		

		
			(c) Counterparts. This Amendment may be executed in one or more
		

		
			counterparts, each of which shall be deemed to be an original, but all of which shall together
		

		
			constitute but one and the same document.
		

		
			 
		

		
			(d) Successors and Assigns. This Amendment shall be binding upon and
		

		
			inure to the benefit of the parties hereto and their respective successors and assigns.
		

		
			 
		

		
			(e) References. From and after the Amendment Effective Date, any reference
		

		
			to the Loan Agreement or the other Loan Documents contained in any notice, request, certificate
		

		
			or other instrument, document or agreement executed concurrently with or after the execution
		

		

		

		 

 

		and delivery of this Amendment shall be deemed to include this Amendment unless the context
		

		
			shall otherwise require.
		

		
			 
		

		
			(f) Continued Effectiveness. Notwithstanding anything contained herein, the
		

		
			terms of this Amendment are not intended to and do not serve to effect a novation as to the Loan
		

		
			Agreement. The parties hereto expressly do not intend to extinguish the Loan Agreement.
		

		
			Instead, it is the express intention of the parties hereto to reaffirm the indebtedness created under
		

		
			the Loan Agreement which is evidenced by the Notes provided for therein and secured by the
		

		
			Collateral. The Loan Agreement and each of the other Loan Documents, except as modified
		

		
			hereby, remain in full force and effect and are hereby reaffirmed in all respects.
		

		
			 
		

		
			(g) Customer Identification - USA Patriot Act Notice; OFAC and Bank
		

		
			Secrecy Act. Lender hereby notifies Borrower that pursuant to the requirements of the USA
		

		
			Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the "Act"), and
		

		
			Lender's policies and practices, Lender is required to obtain, verify and record certain
		

		
			information and documentation that identifies Borrower, which information includes the name
		

		
			and address of Borrower and such other information that will allow Lender to identify Borrower
		

		
			in accordance with the Act. In addition, Borrower shall (a) ensure that no person who owns a
		

		
			controlling interest in or otherwise controls Borrower or any subsidiary of Borrower is or shall
		

		
			be listed on the Specially Designated Nationals and Blocked Person List or other similar lists
		

		
			maintained by the Office of Foreign Assets Control (-0FAC-), the Department of the Treasury
		

		
			or included in any Executive Orders, (b) not use or permit the use of the proceeds of the Loan to
		

		
			violate any of the foreign asset control regulations of OFAC or any enabling statute or Executive
		

		
			Order relating thereto, and (c) comply, and cause any of its subsidiaries to comply, with all
		

		
			applicable Bank Secrecy Act (-BSA") laws and regulations, as amended.
		

		
			 
		

		
			IN WITNESS WHEREOF, the parties have executed this Third Amendment to Loan and
		

		
			Security Agreement and Other Loan Documents as of the date first set forth above.
		

		
			 
		

		
			BORROWER:
		

		
			ARI NETWORK SERVICES, INC., a Wisconsin  Corporation
		

		
			By: /s/ Darin R. Janecek
		

		
			Darin R. Janecek
		

		
			V.P. of Finance and CFO
		

		
			 
		

		
			 
		

		
			LENDER:
		

		
			FIFTH THIRD BANK, an Ohio Banking Corporation
		

		
			By: /s/ Gayne M. Underwood
		

		
			Gayne M. Underwood
		

		
			Vice President
		

		
			 
		

		

		

		 

 

		CONSENT AND REAFFIRMATION OF GUARANTY
		

		
			 
		

		
			Project Viking II Acquisition, Inc., a Wisconsin corporation ("Project Viking"), is a
		

		
			guarantor of Borrower to Lender under the terms of that certain Continuing Unconditional
		

		
			Guaranty dated as of November 28, 2012 made by Project Viking in favor of Lender (as
		

		
			amended, restated, modified or supplemented and in effect from time to time, the "Project
		

		
			Viking Guaranty").
		

		
			 
		

		
			Project Viking hereby expressly: (a) consents to the execution by Borrower and Lender
		

		
			of the above Third Amendment to Loan and Security Agreement and Other Loan Documents
		

		
			(the "Third Amendment"), the Second Amended and Restated Revolving Note and the Second
		

		
			Amended and Restated Term Note; (b) acknowledges that the "Borrower's Liabilities- (as
		

		
			defined in the Project Viking Guaranty) includes all of the obligations and liabilities owing from
		

		
			time to time by Borrower to Lender, including, but not limited to, the obligations and liabilities
		

		
			of Borrower to Lender under and pursuant to the Loan Agreement, as amended from time to
		

		
			ti me; (c) acknowledges that Project Viking does not have any set-off, defense or counterclaim to
		

		
			the payment or performance of any of the obligations of Borrower under the Loan Agreement or
		

		
			Project Viking under the Project Viking Guaranty; (d) reaffirms, assumes and binds itself in all
		

		
			respects to all of the obligations, liabilities, duties, covenants, terms and conditions that are
		

		
			contained in the Project Viking Guaranty; (e) agrees that all such obligations and liabilities under
		

		
			the Project Viking Guaranty shall continue in full force and that the execution and delivery of the
		

		
			Third Amendment to, and its acceptance by, Lender shall not in any manner whatsoever (i)
		

		
			impair or affect the liability of Project Viking to Lender under the Project Viking Guaranty, (ii)
		

		
			prejudice, waive, or be construed to impair, affect, prejudice or waive the rights and abilities of
		

		
			Lender at law, in equity or by statute, against Project Viking pursuant to the Project Viking
		

		
			Guaranty, and/or (iii) release or discharge, nor be construed to release or discharge, any of the
		

		
			obligations and liabilities owing to Lender by Project Viking under the Project Viking Guaranty;
		

		
			(f) represents and warrants that each of the representations and warranties made by Project
		

		
			Viking in any of the documents executed in connection with the Loans remain true and correct as
		

		
			of the date hereof; and (g) acknowledges and agrees that the Project Viking Guaranty is
		

		
			continuing and unconditional and shall not terminate until the indefeasible payment in full to
		

		
			Lender of Borrower's Liabilities.
		

		
			 
		

		
			PROJECT VIKING HEREBY ACQUITS, AND FOREVER DISCHARGES,
		

		
			LENDER AND EACH AND EVERY PAST AND PRESENT SUBSIDIARY, AFFILIATE,
		

		
			STOCKHOLDER, OFFICER, DIRECTOR, AGENT, SERVANT, EMPLOYEE,
		

		
			REPRESENTATIVE, AND ATTORNEY OF LENDER FROM ANY AND ALL CLAIMS,
		

		
			CAUSES OF ACTION, SUITS, DEBTS, LIENS, OBLIGATIONS, LIABILITIES,
		

		
			DEMANDS, LOSSES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES) OF
		

		
			ANY KIND, CHARACTER, OR NATURE WHATSOEVER, KNOWN OR UNKNOWN,
		

		
			FIXED OR CONTINGENT, WHICH PROJECT VIKING MAY HAVE OR CLAIM TO
		

		
			HAVE NOW OR WHICH MAY HEREAFTER ARISE OUT OF OR BE CONNECTED
		

		

		

		 

 

		WITH ANY ACT OF COMMISSION OR OMISSION OF LENDER EXISTING OR
		

		
			OCCURRING PRIOR TO THE DATE OF THE THIRD AMENDMENT OR ANY
		

		
			INSTRUMENT EXECUTED PRIOR TO THE DATE OF THE THIRD AMENDMENT
		

		
			ARISING WITH RESPECT TO THE PROJECT VIKING GUARANTY, THE THIRD
		

		
			AMENDMENT, THE LOAN AGREEMENT, THE OTHER LOAN DOCUMENTS AND
		

		
			THE TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN.
		

		
			PROJECT VIKING II ACQUISITION, INC., a Wisconsin corporation
		

		
			 
		

		
			By: /s/ Darin R. Janecek
		

		
			Name:  Darin R. Janecek
		

		
			Title: VP of Finance and CFO
		

		
			 
		

		
			CONSENT AND REAFFIRMATION OF GUARANTY
		

		
			 
		

		
			Roy W. Olivier, an individual (-Olivier"), is a guarantor of Borrower to Lender under the
		

		
			terms of that certain Continuing Unconditional Limited Guaranty dated as of November 28, 2012
		

		
			made by Olivier in favor of Lender (as amended, restated, modified or supplemented and in
		

		
			effect from time to time, the "Olivier Guaranty").
		

		
			 
		

		
			Olivier hereby expressly: (a) consents to the execution by Borrower and Lender of the
		

		
			above Third Amendment to Loan and Security Agreement and Other Loan Documents (the
		

		
			"Third Amendment"), the Second Amended and Restated Revolving Note and the Second
		

		
			Amended and Restated Term Note; (b) acknowledges that the "Borrower's Liabilities - (as
		

		
			defined in the Olivier Guaranty) includes all of the obligations and liabilities owing from time to
		

		
			ti me by Borrower to Lender, including, but not limited to, the obligations and liabilities of
		

		
			Borrower to Lender under and pursuant to the Loan Agreement, as amended from time to time;
		

		
			(c) acknowledges that Olivier does not have any set-off, defense or counterclaim to the payment
		

		
			or performance of any of the obligations of Borrower under the Loan Agreement or Olivier
		

		
			under the Olivier Guaranty; (d) reaffirms, assumes and binds himself in all respects to all of the
		

		
			obligations, liabilities, duties, covenants, terms and conditions that are contained in the Olivier
		

		
			Guaranty; (e) agrees that all such obligations and liabilities under the Olivier Guaranty shall
		

		
			continue in full force and that the execution and delivery of the Third Amendment to, and its
		

		
			acceptance by, Lender shall not in any manner whatsoever (i) impair or affect the liability of
		

		
			Olivier to Lender under the Olivier Guaranty. (ii) prejudice, waive, or be construed to impair,
		

		
			affect, prejudice or waive the rights and abilities of Lender at law, in equity or by statute, against
		

		
			Olivier pursuant to the Olivier Guaranty. and/or (iii) release or discharge, nor be construed to
		

		
			release or discharge, any of the obligations and liabilities owing to Lender by Olivier under the
		

		
			Olivier Guaranty; (t) represents and warrants that each of the representations and warranties
		

		
			made by Olivier in any of the documents executed in connection with the Loans remain true and
		

		
			correct as of the date hereof; and (g) acknowledges and agrees that the Olivier Guaranty is
		

		
			continuing and unconditional and shall not terminate until the indefeasible payment in full to
		

		
			Lender of Borrower's Liabilities, except as provided in the Olivier Guaranty.
		

		

		

		 

 

		 
		

		
			In addition the foregoing, Olivier hereby covenants and agrees that he shall furnish to
		

		
			Lender within one hundred twenty (120) days after the end of each calendar year, a personal
		

		
			financial statement for Olivier for such year, in form and substance acceptable to Lender and
		

		
			certified by Olivier as true, correct and complete in all respects.
		

		
			 
		

		
			OLIVIER HEREBY ACQUITS, AND FOREVER DISCHARGES, LENDER AND
		

		
			EACH AND EVERY PAST AND PRESENT SUBSIDIARY, AFFILIATE,
		

		
			STOCKHOLDER, OFFICER, DIRECTOR, AGENT, SERVANT, EMPLOYEE,
		

		
			REPRESENTATIVE, AND ATTORNEY OF LENDER FROM ANY AND ALL CLAIMS,
		

		
			CAUSES OF ACTION, SUITS, DEBTS, LIENS, OBLIGATIONS, LIABILITIES,
		

		
			DEMANDS, LOSSES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES) OF
		

		
			ANY KIND, CHARACTER, OR NATURE WHATSOEVER, KNOWN OR UNKNOWN,
		

		
			FIXED OR CONTINGENT, WHICH OLIVIER MAY HAVE OR CLAIM TO HAVE
		

		
			NOW OR WHICH MAY HEREAFTER ARISE OUT OF OR BE CONNECTED WITH
		

		
			ANY ACT OF COMMISSION OR OMISSION OF LENDER EXISTING OR
		

		
			OCCURRING PRIOR TO THE DATE OF THE THIRD AMENDMENT OR ANY
		

		
			INSTRUMENT EXECUTED PRIOR TO THE DATE OF THE THIRD AMENDMENT
		

		
			ARISING WITH RESPECT TO THE OLIVIER GUARANTY, THE THIRD
		

		
			AMENDMENT, THE LOAN AGREEMENT, THE OTHER LOAN DOCUMENTS AND
		

		
			THE TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN.
		

		
			                                                                        
		

		
			                                                                                                By: /s/ Roy W. Olivier
		

		
			                                                                                                Roy W. Olivier
		

		
			                                                                                                CEO