Document:

Ex 10.2 Summary of Exec Bonus

		
			Management Incentive Bonus Plan
		

		
			FY12
		

		
			The Management Incentive Bonus Plan (“MIBP”) is the executive bonus plan for all executives . The plan includes two key performance targets for ARI, Adjusted EBITDA and Recurring Revenue (“RR”), each worth 50% of the total on target bonus potential.  Based on the company’s performance in those two areas, the following Grids dictate the ultimate payout of the MBO bonus as a percentage: 
		

		
			Management Bonus Grid            
		

		
			FY 2012            
		

		
			 
		

		
			Recurring Revenue Growth            
		

		
			% of plan            payout %            incremental increase
		

		
			1st break53%                        25.0%
		

		
			2nd break55%                        30.0%                         2.50 
		

		
			3rd break60%                        35.0%                         1.00 
		

		
			4th break65%                        42.5%                         1.50 
		

		
			5th break70%                        50.0%                         1.50 
		

		
			6th break75%                        55.0%                         1.00 
		

		
			7th break80%                        60.0%                         1.00 
		

		
			8th break85%                        67.5%                         1.50 
		

		
			9th break90%                        75.0%                         1.50 
		

		
			10th break95%                        85.0%                         2.00 
		

		
			100% of plan100%                        100.0%                         3.00 
		

		
			> 100%+ 1%                        + 3%
		

		
			Cap116%                        150%
		

		
			 
		

		
			Adjusted EBITDA Growth                        
		

		
			                                                            % of plan            payout %            incremental increase
		

		
			1st break                                                80.0%                        50.0%
		

		
			2nd break                                                82.5%                        55.0%                         2.00 
		

		
			3rd break                                                85.0%                        60.0%                         2.00 
		

		
			4th break                                                87.5%                        66.0%                         2.40 
		

		
			5th break                                                90.0%                        72.0%                         2.40 
		

		
			6th break                                                92.5%                        79.0%                         2.80 
		

		
			7th break                                                95.0%                        86.0%                         2.80 
		

		
			8th break                                                97.5%                        93.0%                         2.80 
		

		
			100% of plan                                                100.0%                        100.0%                         2.80 
		

		
			> 100%                                                            + 1%                        + 2%
		

		
			Cap                                                            125%                        150%
		

		
			 
		

		
			The VP of Sales also has a commission element to his plan in addition to the partition of his compensation that falls under the MIBP.  All final bonus payments, and MBO attainment, will be reviewed and approved by the President/CEO.Ex 10.29 EMPLOYMENT AGREEMENT

		
			EMPLOYMENT AGREEMENT
		

		
			 
		

		
			THIS EMPLOYMENT AGREEMENT ("Agreement") is executed as of this 14th day of
		

		
			August, 2012, by and between Marvin A Berg III ("Executive") and ARI Network Services, Inc,
		

		
			("Company"),
		

		
			 
		

		
			RECITALS
		

		
			 
		

		
			The Company desires to employ Executive in the position of Vice President of
		

		
			Operations, and Executive desires to be so employed by the Company, on the terms and
		

		
			conditions set forth herein,
		

		
			 
		

		
			As a result of Executive's employment with the Company as Vice President of
		

		
			Operations, Executive will have access to and be entrusted with valuable information about the
		

		
			Company's business and customers, including trade secrets and confidential information,
		

		
			 
		

		
			The Parties believe it is in their best interests to make provision for certain aspects of
		

		
			their relationship during and after the period in which Executive is employed by the Company,
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the promises and the mutual agreements and
		

		
			covenants contained herein, and for other good and valuable consideration, the receipt and
		

		
			sufficiency of which is hereby acknowledged by the Company and Executive (collectively,
		

		
			"Parties" and individually, "Party"), the Parties agree as follows:
		

		
			 
		

		
			ARTICLE I
		

		
			EMPLOYMENT
		

		
			 
		

		
			1.1 Position and Duties, During the term of Executive's employment under this
		

		
			Agreement, Executive shall hold the position of Vice President of Operations of the Company
		

		
			and shall be subject to the authority of, and shall report to, the President and Chief Executive
		

		
			Officer ("CEO") of the Company, Executive's duties and responsibilities as Vice President of
		

		
			Operations shall include all those customarily attendant to such position and other duties and
		

		
			responsibilities as may be assigned from time to time by the Company's President and/or CEO,
		

		
			At all times, Executive shall devote Executive's entire business time, attention and energies
		

		
			exclusively to the business interests of the Company while employed by the Company, except as
		

		
			otherwise specifically approved in writing by or on behalf of the President and/or CEO,
		

		
			 
		

		
			1.2 At-Will Employment. The term of Executive's employment under this
		

		
			Agreement shall commence on August 1, 2012 and be for an indefinite period and may be
		

		
			terminated by either Party at any time and for any reason or no reason upon written notice to the
		

		
			other Party,
		

		
			ARTICLE II
		

		
			COMPENSATION AND OTHER BENEFITS
		

		
			 
		

		
			2.1 Base Salary. During the term of Executive's employment under this Agreement,
		

		
			the Company shall pay Executive an annual salary of One Hundred Eighty Thousand Dollars
		

		
			($180,000) ("Base Salary"), payable in accordance with the normal payroll practices and
		

		
			schedule of the Company. Notwithstanding the foregoing, the Base Salary shall be subject to
		

		
			annual review by the President and/or CEO and shall be subject to increase, but not decrease,
		

		

		

		 

 

		based on the recommendation of the President and/or CEO as approved by the Board of
		

		
			Directors of the Company ("Board"); provided, however, that the Company may reduce
		

		
			Executive's Base Salary if (a) Executive's Base Salary is reduced as part of a general reduction
		

		
			in the base salaries for all executive officers of the Company or (b) Executive's Base Salary is
		

		
			reduced for Cause (defined below), and Executive acknowledges and agrees that any reduction in
		

		
			Base Salary due to the circumstances specified in Section 2. I (a) or (b), above, shall not
		

		
			constitute Good Reason (as defined in Section 3.1(f), below).
		

		
			 
		

		
			2.2 Bonuses. During the term of Executive's employment under this Agreement,
		

		
			Executive will be eligible to participate in the Company's Management Incentive Bonus Plan
		

		
			("Bonus Plan"), the specifics of which are determined from time to time by the Compensation
		

		
			Committee of the Board ("Compensation Committee") and approved by the Board. The Parties
		

		
			acknowledge and agree that, under the Company's current Bonus Plan, the annualized bonus
		

		
			amount which Executive would be eligible to receive if one hundred percent (100%) of such
		

		
			Bonus Plan targets were met would be Thirty Thousand Dollars ($30,000). Executive
		

		
			acknowledges and agrees that the Bonus Plan may be changed from time to time at the discretion
		

		
			of the Compensation Committee as approved by the Board.
		

		
			 
		

		
			2.3 Equity. During the term of Executive's employment under this Agreement,
		

		
			Executive shall be eligible to participate in stock option and equity plans and grants, if any, that
		

		
			are offered to senior executive/officer employees of the Company, as determined by the
		

		
			Compensation Committee and approved by the Board from time to time.
		

		
			 
		

		
			2.4 Perquisites, Benefits and Other Compensation. During the term of Executive's
		

		
			employment under this Agreement, and subject to the express provisions of this Article II,
		

		
			Executive will be entitled to receive perquisites and benefits provided by the Company to its
		

		
			senior executive employees, subject to the eligibility criteria related to such perquisites and
		

		
			benefits, and to such changes, additions, or deletions to such perquisites and benefits as the
		

		
			Company may make from time to time, as well as such other perquisites or benefits as may be
		

		
			specified from time to time at the sole discretion of the Board.
		

		
			 
		

		
			3.2 Rights Upon Termination Not In Connection With A Change In Control.
		

		
			 
		

		
			(a) Section 3.ICa), Section 3.ICc) and Section 3.1(f) Termination. If
		

		
			Executive's employment is terminated pursuant to Section 3.1 (a), Section
		

		
			3.I(c), or Section 3.I(f), above, Executive or Executive's estate shall have
		

		
			no further rights against the Company hereunder, except for the right to
		

		
			receive the following: (1) any unpaid Base Salary with respect to the
		

		
			period prior to the effective date of termination and (2) any earned but
		

		
			unpaid bonus due to Executive as of the effective date of termination.
		

		
			With respect to a termination pursuant to Section 3.I(a) or Section 3.I(f),
		

		
			above, Executive shall also receive (1) Executive's Base Salary, at the rate
		

		
			in effect at the time of termination, for nine (9) months following the
		

		
			effective date of termination; (2) a bonus for the fiscal year of the Company
		

		
			in which such termination occurs, which bonus shall be equal to (A) the
		

		
			product of (i) the average of Executive's annual bonus received pursuant to
		

		
			the Company's Bonus Plan for the three fiscal years of the Company ending
		

		
			prior to the effective date of termination, multiplied by (ii) a fraction, the
		

		
			numerator of which is the actual number of days Executive was employed by
		

		

		

		 

 

		the Company during the fiscal year of the Company in which the termination
		

		
			occurs and the denominator of which is 365, less (B) any payment
		

		
			previously made by the Company, if any, with respect to the current fiscal
		

		
			year's Bonus Plan; and (3) acceleration of all outstanding unvested options
		

		
			held by Executive as of the effective date of termination. Payment of the
		

		
			amounts specified in subsections (1) and (2) of the immediately preceding
		

		
			sentence shall be made in nine (9) equal monthly installments following
		

		
			the effective date of termination; provided, however, that if such
		

		
			installment payments would continue beyond the later of: (x) the first
		

		
			September 15 following the Company's fiscal year which included the
		

		
			effective date of termination or (y) the first March IS following the
		

		
			calendar year which included the effective date of termination (the "Latest
		

		
			Date"), all remaining monthly installments shall be paid to Executive in a
		

		
			lump sum on the Latest Date. Notwithstanding the foregoing, the payment
		

		
			and receipt of the benefits specified in subsections (1), (2) and (3), of that
		

		
			same sentence are contingent upon Executive's execution of a written
		

		
			severance agreement (in a form satisfactory to the Company) containing,
		

		
			among other things, a general release of claims against the Company, and
		

		
			the rescission period of such agreement must expire, without revocation of
		

		
			such release, within sixty (60) days following the effective date of
		

		
			termination. To the extent that payments would otherwise be paid to
		

		
			Executive within the sixty (60) day period following the effective date of
		

		
			termination, such payment(s) shall be made following Executive's
		

		
			execution of such general release and the expiration of the applicable
		

		
			rescission period, except where the sixty (60) day period following the
		

		
			effective date of termination spans two different calendar years, in which
		

		
			case such payment(s) or benefit(s) will not be paid until the later calendar
		

		
			year during the sixty (60) day period.
		

		
			Disability under this Section 3 .1 (c) is not intended to alter any benefits
		

		
			any Party may be entitled to receive under any long-term disability
		

		
			insurance policy carried by either the Company or Executive with respect
		

		
			to Executive, which benefits shall be governed solely by the terms of any
		

		
			such insurance policy.
		

		
			 
		

		
			(d) Termination by Retirement. Subject to Section 3.2, below, Executive's
		

		
			employment and all of the Company's obligations under this Agreement
		

		
			(except as provided in Section 10.5, below, and as required by law) shall
		

		
			terminate automatically, effective upon Executive's retirement in
		

		
			accordance with the Company's retirement plan or policy should a
		

		
			retirement plan or policy for senior executives of the Company be
		

		
			adopted.
		

		
			 
		

		
			(e) Termination by Resignation. Subject to Paragraph 3.2, below, Executive's
		

		
			employment and all of the Company's obligations under this Agreement
		

		
			(except as provided in Section 10.5, below, and as required by law) shall
		

		
			terminate automatically, effective immediately upon Executive's provision
		

		
			of thirty (30) days' prior written notice to the President and/or CEO of
		

		
			resignation from employment with the Company or at such other time as
		

		
			may be mutually agreed between the Parties following the provision of
		

		

		

		 

 

		such notice.
		

		
			 
		

		
			(f) Termination for Good Reason. Subject to Section 3.2, below, Executive
		

		
			may terminate his employment and all of the Company's obligations under
		

		
			this Agreement (except as provided in Section 10.5, below, and as
		

		
			required by law) for Good Reason (defined below). A termination shall
		

		
			only be for Good Reason if: (I) within ninety (90) calendar days of the
		

		
			initial existence of Good Reason, Executive provides written notice of
		

		
			Good Reason to the President and/or CEO; (2) the Company does not
		

		
			remedy said Good Reason within thirty (30) calendar days of its receipt of
		

		
			such notice; and (3) Executive terminates his employment effective any
		

		
			time after the expiration of such 30-day remedy period prior to the date
		

		
			that is two (2) years after the initial existence of Good Reason. "Good
		

		
			Reason" shall mean the occurrence of any of the following without the
		

		
			written consent of Executive: (a) the Company has breached this
		

		
			Agreement in a material way, which breach remains uncured, if subject to
		

		
			cure, for thirty (30) calendar days after the President and/or CEO receives
		

		
			written notice thereof from Executive; (b) a material diminution in
		

		
			Executive's Base Salary; or (c) a material change in the geographic
		

		
			location at which Executive must perform his services, provided such new
		

		
			location is more than fifty (50) miles from the location where Executive is
		

		
			required to perform services prior to the change.
		

		
			 
		

		
			ARTICLE III
		

		
			TERMINATION
		

		
			 
		

		
			3.1 Termination Not In Connection With A Change In Control.
		

		
			 
		

		
			(a) Termination Without Cause. Subject to Section 3.2, below, the President
		

		
			and/or CEO may terminate Executive's employment and all of the
		

		
			Company's obligations under this Agreement (except as provided in
		

		
			Section 10.5, below, and as required by law) at any time without Cause
		

		
			(defined below).
		

		
			 
		

		
			(b) Termination For Cause. Subject to Section 3.2, below, the President and/or
		

		
			CEO may terminate Executive's employment and all of the Company's
		

		
			obligations under this Agreement (except as provided in Section 10.5,
		

		
			below, and as required by law) at any time for Cause (defined below)
		

		
			by giving written notice to Executive stating the basis for such
		

		
			termination, effective immediately upon giving such notice or at such
		

		
			other time thereafter as the President and/or CEO may designate. For
		

		
			purposes of this Agreement, "Cause" shall mean, with respect to
		

		
			Executive, the occurrence of one or more of the following events, as
		

		
			determined by the Company: (1) breach of this Agreement or violation of
		

		
			one or more policies of the Company; (2) act of dishonesty; (3)
		

		
			insubordination; (4) failure to follow the reasonable directions of the
		

		
			President, CEO and/or the Board; (5) failure to satisfactorily perform
		

		
			Employee's employment duties and responsibilities; (6) conviction of a
		

		

		

		 

 

		crime the circumstances of which substantially relate to Executive's
		

		
			position with the Company; and (7) any attempt to obtain a personal profit
		

		
			from any transaction in which the Company has an interest or which is
		

		
			adverse to the interests of the Company.
		

		
			 
		

		
			(c) Termination by Death or Disability. Subject to Section 3.2, below,
		

		
			Executive's employment and all of the Company's obligations under this
		

		
			Agreement (except as provided in Section 10.5, below, and as required by
		

		
			law) shall terminate automatically, effective immediately and without any
		

		
			notice being necessary, upon Executive's death or a determination
		

		
			of Disability of Executive. For purposes of this Agreement, "Disability"
		

		
			means the inability of Executive, due to a physical or mental impairment,
		

		
			to perform the essential functions of Executive's job with the Company,
		

		
			with or without a reasonable accommodation, for ninety (90) consecutive
		

		
			business days or one hundred twenty (120) business days in the aggregate
		

		
			during any 365-day period. A determination of Disability shall be made
		

		
			by the President and/or CEO and/or the Board, which may, at their sole
		

		
			discretion, consult with a physician or physicians satisfactory to the
		

		
			President and/or CEO and/or the Board, and Executive shall cooperate
		

		
			with any effort to make such determination. Any such determination
		

		
			shall be conclusive and binding on the Parties. Any determination of
		

		
			 
		

		
			(b) Section 3.1(b) and Section 3.1Ce) Terminations. If Executive's employment
		

		
			is terminated pursuant to Section 3 .1 (b), above, or if Executive resigns
		

		
			pursuant to Section 3 .1 (e), above, Executive shall have no further rights
		

		
			against the Company hereunder, except for the right to receive: (1) any
		

		
			unpaid Base Salary with respect to the period prior to the effective date of
		

		
			termination; and (2) any earned but unpaid bonus due to Executive as of the
		

		
			effective date of termination.
		

		
			 
		

		
			(c) Section 3.1 (d) Termination. If Executive retires pursuant to Section 3.1 (d),
		

		
			above, Executive shall have no further rights against the Company
		

		
			hereunder, except for the right to receive: (1) any unpaid Base Salary with
		

		
			respect to the period prior to the effective date of termination; (2) any
		

		
			earned but unpaid bonus due to Executive as of the effective date of
		

		
			termination; and (3) any additional benefits provided for under the
		

		
			Company's retirement plan or policy for senior executives, if any.
		

		
			 
		

		
			3.3 Termination In Connection With A Change In Control. Should Executive's
		

		
			employment be terminated upon the occurrence of or within two (2) years of a "Change in
		

		
			Control," as defined in Executive's Change of Control Agreement ("COC Agreement"), the
		

		
			terms of such termination shall be governed exclusively by the COC Agreement and Executive
		

		
			shall not be entitled to receive any of the benefits provided for under this Article III.
		

		
			 
		

		
			ARTICLE IV
		

		
			CONFIDENTIALITY
		

		
			 
		

		
			4.1 Confidentiality Obligations. Executive will not, during his employment with the
		

		
			Company, directly or indirectly, use or disclose any Confidential Information or Trade Secrets
		

		

		

		 

 

		(defined below) except in the interest and for the benefit of the Company. After the end, for
		

		
			whatever reason, of Executive's employment with the Company, Executive will not, directly or
		

		
			indirectly, use or disclose any Trade Secrets. For a period of two (2) years following the end, for
		

		
			whatever reason, of Executive's employment with the Company, Executive will not, directly or
		

		
			indirectly, use or disclose any Confidential Information. Executive further agrees not to, directly
		

		
			or indirectly, use or disclose at any time information received by the Company from others
		

		
			except in accordance with the Company's contractual or other legal obligations; the Company's
		

		
			customers are third patty beneficiaries of this promise.
		

		
			 
		

		
			4.2 Definitions.
		

		
			 
		

		
			(a) Trade Secret. The term "Trade Secret" has that meaning set forth under
		

		
			applicable law. The term includes, but is not limited to, all computer
		

		
			source, object or other code created by or for the Company.
		

		
			 
		

		
			(b) Confidential Information. The term "Confidential Information" means all
		

		
			non-Trade Secret or proprietary information of the Company which has
		

		
			value to the Company and which is not known to the public or the
		

		
			Company's competitors, generally. Confidential Information includes, but
		

		
			is not limited to: (i) inventions, product specifications, information about
		

		
			products under development, research, development or business plans,
		

		
			production know-how and processes, manufacturing techniques,
		

		
			operational methods, equipment design and layout, test results, financial
		

		
			information, customer lists, information about orders and transactions with
		

		
			customers, sales and marketing strategies, plans and techniques, pricing
		

		
			strategies, information relating to sources of materials and production
		

		
			costs, purchasing and accounting information, personnel information and
		

		
			all business records; (ii) information which is marked or otherwise
		

		
			designated or treated as confidential or proprietary by the Company; and
		

		
			(iii) information received by the Company from others which the
		

		
			Company has an obligation to treat as confidential.
		

		
			 
		

		
			(c) Exclusions. Notwithstanding the foregoing, the terms "Trade Secret" and
		

		
			"Confidential Information" shall not include, and the obligations set forth
		

		
			in this Agreement shall not apply to, any information which: (i) can be
		

		
			demonstrated by Executive to have been known by him prior to his
		

		
			employment by the Company; (ii) is or becomes generally available to the
		

		
			public through no act or omission of Executive; (iii) is obtained by
		

		
			Executive in good faith from a third party who discloses such information
		

		
			to Executive on a non-confidential basis without violating any obligation
		

		
			of confidentiality or secrecy relating to the information disclosed; or (iv) is
		

		
			independently developed by Executive outside the scope of his
		

		
			employment without use of Confidential Information or Trade Secrets.
		

		
			 
		

		
			ARTICLE V
		

		
			NON-COMPETITION
		

		
			 
		

		
			5.1 Restrictions on Competition During Employment. During Executive's
		

		
			employment by the Company, Executive shall not, directly or indirectly, compete against the
		

		

		

		 

 

		Company, or, directly or indirectly, divert or attempt to divert business from the Company
		

		
			anywhere the Company does business.
		

		
			5.2 Post-Employment Restricted Services Obligation. For two (2) years following
		

		
			termination of Executive's employment with the Company, for whatever reason, Executive
		

		
			agrees not to, directly or indirectly, provide Restricted Services to any Competitor in the United
		

		
			States.
		

		
			 
		

		
			5.3 Definitions.
		

		
			 
		

		
			(a) Restricted Services. The term "Restricted Services" means employment
		

		
			duties and functions of the type provided by Executive to the Company
		

		
			during the twelve (12) month period prior to the termination, for whatever
		

		
			reason, of Executive's employment with the Company, as described in
		

		
			Executive's job description with the Company.
		

		
			 
		

		
			(b) Competitor. For purposes of this Article V, the term "Competitor"
		

		
			means any entity, including a sole proprietorship, that sells or services, or
		

		
			attempts to sell or service, (i) distribution-side electronic commerce and
		

		
			marketing products or services (including, without limitation, electronic
		

		
			parts catalogs, search engine marketing, lead generation and management,
		

		
			and web site provision) of the type sold or serviced by the Company
		

		
			during the twelve (12) month period prior to the termination, for whatever
		

		
			reason, of Executive's employment with the Company (ii) in vertical
		

		
			markets in which the Company sold or serviced its products or services
		

		
			during the twelve (12) month period prior to the termination, for whatever
		

		
			reason, of Executive's employment with the Company; provided,
		

		
			however, that the term "Competitor" shall not include a subsidiary or other
		

		
			corporate division of such an entity which subsidiary or division does not
		

		
			sell or service, or attempt to sell or service, such aforementioned
		

		
			distribution-side electronic commerce and marketing products or services
		

		
			in such vertical markets. To the extent that the following entities, or their
		

		
			subsidiaries or corporate divisions, meet the aforementioned definition,
		

		
			such entities, or their subsidiaries or corporate divisions as the case may
		

		
			be, shall be deemed competitors of the Company: Snap-On Business
		

		
			Solutions, Dominion Enterprises, 50 Below, Enigma, HLSM and ADP
		

		
			Lightspeed and any successor of such entities; provided, however, that the
		

		
			foregoing list of entities is included for the sole purpose of providing
		

		
			examples of possible Competitors and shall not affect the aforementioned
		

		
			definition. Examples of vertical markets in which the Company sells or
		

		
			services its products or services may include, without limitation, the
		

		
			following: powersports, outdoor power equipment, marine and
		

		
			recreational vehicle and home appliances.
		

		
			 
		

		
			ARTICLE VI
		

		
			CUSTOMER NON-SOLICITATION
		

		
			 
		

		
			6.1 Post-Employment Non-Solicitation of Restricted Customers. For two (2) years
		

		
			following termination of Executive's employment with the Company, for whatever reason,
		

		
			Executive agrees not to, directly or indirectly, solicit or attempt to solicit any business from any
		

		

		

		 

 

		Restricted Customer in any manner which competes with the services or products offered by the
		

		
			Company in the twelve (12) months preceding termination of Executive's employment with the
		

		
			Company, or to, directly or indirectly, divert or attempt to divert any Restricted Customer's
		

		
			business from the Company.
		

		
			 
		

		
			6.2 Restricted Customer. The term "Restricted Customer" means any
		

		
			individual or entity (a) for whom/which the Company provided services or
		

		
			products, and (b) with whom/which Executive had contact on behalf of the
		

		
			Company, or about whom/which Executive acquired non-public
		

		
			information in connection with his employment by the Company, during
		

		
			the twenty-four (24) month period preceding the end, for whatever reason,
		

		
			of Executive's employment with the Company; provided, however, that
		

		
			the term "Restricted Customer" shall not include any individual or entity
		

		
			whom/which, through no direct or indirect act or omission of Executive,
		

		
			terminated its business relationship with the Company more than six (6)
		

		
			months prior to the end of Executive's employment with the Company.
		

		
			 
		

		
			ARTICLE VII
		

		
			RESTRICTION RELATING TO PRODUCTS OR SERVICES UNDER DEVELOPMENT
		

		
			BY THE COMPANY
		

		
			 
		

		
			7.1 Restriction Relating to Products or Services Under Development by the
		

		
			Company. For two (2) years following termination of Executive' s employment with the
		

		
			Company, for whatever reason, Executive agrees not to, directly or indirectly, develop, market or
		

		
			sell, or attempt to develop, market or sell, on behalf of any Competitor (defined below) in the
		

		
			United States any product or service that is under development by the Company during the
		

		
			twelve (12) month period prior to the termination, for whatever reason, of Executive's
		

		
			employment with the Company; provided, however, that this Article VII shall not apply to any
		

		
			product or service which the Company has not taken steps to market or sell within the twelve
		

		
			(12) month period following the termination, for whatever reason, of Executive's employment
		

		
			with the Company.
		

		
			 
		

		
			7.2 Competitor. For purposes of this Article VII, the term "Competitor" means any
		

		
			entity, including a sole proprietorship, that sells or services, or attempts to sell or service, (i)
		

		
			distribution-side electronic commerce and marketing products or services (including, without
		

		
			limitation, electronic parts catalogs, search engine marketing, lead generation and management,
		

		
			and web site provision) of the type sold or serviced by the Company during the twelve (12)
		

		
			month period prior to the termination, for whatever reason, of Executive's employment with the
		

		
			Company (ii) in vertical markets in which the Company sold or serviced its products or services
		

		
			during the twelve (12) month period prior to the termination, for whatever reason, of Executive's
		

		
			employment with the Company; provided, however, that the term "Competitor" shall not include
		

		
			a subsidiary or other corporate division of such an entity which subsidiary or division does not
		

		
			sell or service, or attempt to sell or service, such aforementioned distribution-side electronic
		

		
			commerce and marketing products or services in such vertical markets. To the extent that the
		

		
			following entities, or their subsidiaries or corporate divisions, meet the aforementioned
		

		
			definition, such entities, or their subsidiaries or corporate divisions as the case may be, shall be
		

		
			deemed competitors of the Company: Snap-On Business Solutions, Dominion Enterprises, 50
		

		
			Below, Enigma, HLSM and ADP Lightspeed and any successor of such entities; provided,
		

		

		

		 

 

		however, that the foregoing list of entities is included for the sole purpose of providing examples
		

		
			of possible Competitors and shall not affect the aforementioned definition. Examples of vertical
		

		
			markets in which the Company sells or services its products or services may include, without
		

		
			limitation, the following: powersports, outdoor power equipment, marine and recreational
		

		
			vehicle and home appliances.
		

		
			 
		

		
			ARTICLE VIII
		

		
			BUSINESS IDEA RIGHTS
		

		
			 
		

		
			8.1 Assignment. The Company will own, and Executive hereby assigns to the
		

		
			Company and agrees to assign to the Company, all rights in all Business Ideas. All Business
		

		
			Ideas which are or form the basis for copyrightable works are hereby assigned to the Company
		

		
			and/or shall be assigned to the Company or shall be considered "works for hire" as that term is
		

		
			defined by United States copyright law.
		

		
			 
		

		
			8.2 Definition of Business Ideas. The term "Business Ideas" means all ideas, designs,
		

		
			modifications, formulations, specifications, concepts, know-how, trade secrets, discoveries,
		

		
			inventions, data, software, developments and copyrightable works, whether or not patentable or
		

		
			registrable, which Executive originates or develops, either alone or jointly with others, while
		

		
			Executive is employed by the Company and which are: (a) related to any business known to
		

		
			Executive to be engaged in or contemplated by the Company; (b) originated or developed during
		

		
			Executive's working hours; or (c) originated or developed in whole or in part using materials,
		

		
			labor, facilities or equipment furnished by the Company.
		

		
			 
		

		
			8.3 Disclosure. While employed by the Company, Executive will promptly disclose
		

		
			all Business Ideas to the Company.
		

		
			 
		

		
			8.4 Execution of Documentation. Executive, at any time during or after his
		

		
			employment by the Company, will promptly execute all documents which the Company may
		

		
			reasonably require to perfect its patent, copyright and other rights to such Business Ideas
		

		
			throughout the world.
		

		
			 
		

		
			ARTICLE IX
		

		
			NON-SOLICITATION OF EMPLOYEES
		

		
			 
		

		
			During Executive's employment by the Company and for twelve (12) months thereafter,
		

		
			Executive shall not, directly or indirectly, encourage any Company employee to terminate his/her
		

		
			employment with the Company or solicit such an individual for employment outside the
		

		
			Company in any manner which would end or diminish that employee's services to the Company;
		

		
			provided, however, that this Article IX shall not prohibit use of general classified advertising to
		

		
			solicit for employment positions.
		

		
			 
		

		
			ARTICLE X
		

		
			EXECUTIVE DISCLOSURES AND ACKNOWLEDGMENTS
		

		
			 
		

		
			10.1 Confidential Information of Others. Executive warrants and represents to the
		

		
			Company that he is not subject to any employment, consulting or services agreement, or any
		

		
			restrictive covenants or agreements of any type, which would conflict with, or prohibit Executive
		

		

		

		 

 

		from fully carrying out, his duties as described under the terms of this Agreement. Further,
		

		
			Executive warrants and represents to the Company that he has not and will not retain or use, for
		

		
			the benefit of the Company, any confidential information, records, trade secrets, or other
		

		
			property of a former employer.
		

		
			 
		

		
			10.2 Scope of Restrictions. Executive acknowledges that during the course of his
		

		
			employment with the Company, he will gain knowledge of Confidential Information and Trade
		

		
			Secrets of the Company. Executive acknowledges that the Confidential Information and Trade
		

		
			Secrets of the Company are necessarily shared with Executive on a routine basis in the course of
		

		
			performing his job duties and that the Company has a legitimate protectable interest in such
		

		
			Confidential Information and Trade Secrets, and in the goodwill and business prospects
		

		
			associated therewith. Accordingly, Executive acknowledges that the scope of the restrictions
		

		
			contained in this Agreement are appropriate, necessary and reasonable for the protection of the
		

		
			Company's business, goodwill and property rights, and that the restrictions imposed will not
		

		
			prevent him from earning a living in the event of, and after, the end, for whatever reason, of his
		

		
			employment with the Company.
		

		
			 
		

		
			10.3 Prospective Employers. Executive agrees, during the term of any restriction
		

		
			contained in Articles IV, V, VI, VII, VIII, IX and X of this Agreement, to disclose this
		

		
			Agreement to any entity which offers employment to Executive. Executive further agrees that
		

		
			the Company may send a copy of this Agreement to, or otherwise make the provisions hereof
		

		
			known to, any of Executive's potential or future employers.
		

		
			 
		

		
			10.4 Third Patty Beneficiaries. Any Company affiliates are third party beneficiaries
		

		
			with respect to Executive's performance of his duties under this Agreement and the undertakings
		

		
			and covenants contained in this Agreement, and the Company and any of its affiliates enjoying
		

		
			the benefits thereof, may enforce this Agreement directly against Executive. The terms Trade
		

		
			Secret and Confidential Information shall include materials and information of the Company's
		

		
			affiliates to which Executive has access.
		

		
			 
		

		
			10.5 Survival. The covenants set forth in Articles III, IV, V, VI, VII, VIII, IX, X, XI,
		

		
			XII and XIII of this Agreement shall survive the termination of Executive's employment
		

		
			hereunder.
		

		
			 
		

		
			ARTICLE XI
		

		
			RETURN OF RECORDS
		

		
			 
		

		
			Upon the end, for whatever reason, of his employment with the Company, or upon
		

		
			request by the Company at any time, Executive shall immediately return to the Company all
		

		
			documents, records and materials belonging and/or relating to the Company (except Executive's
		

		
			own personnel and wage and benefit materials relating solely to Executive), and all copies of all
		

		
			such materials. Upon the end, for whatever reason, of Executive's employment with the
		

		
			Company, or upon request of the Company at any time, Executive further agrees to destroy such
		

		
			records maintained by him on his own computer equipment. Upon mutual agreement between
		

		
			Executive and the Company, Executive may retain documents, records and materials belonging
		

		
			and/or relating to the Company following the end, for whatever reason, of Executive's
		

		
			employment with the Company.
		

		
			 
		

		
			ARTICLE XII
		

		

		

		 

 

		INDEMNITY
		

		
			 
		

		
			12.1 Indemnification By Company. To the extent permitted by applicable law, the
		

		
			Company shall indemnify Executive if Executive is, or is threatened to be, made a party to an
		

		
			action, suit or proceeding (other than by the Company) by reason of the fact that Executive is or
		

		
			was a director or officer of the Company, unless liability was incurred because Executive
		

		
			breached or failed to perform a duty that Executive owes to the Company and such breach or
		

		
			failure constitutes: (a) a willful failure to deal fairly with the Company or its shareholders in
		

		
			connection with a matter in which Executive has a material conflict of interest; (b) a violation of
		

		
			the criminal law, unless Executive had reasonable cause to believe that his conduct was lawful
		

		
			and Executive had no reasonable cause to believe such conduct was unlawful; (c) a transaction
		

		
			from which Executive derived an improper personal profit; or (d) willful misconduct.
		

		
			 
		

		
			12.2 Indemnification By Executive. Executive agrees to indemnify and hold harmless
		

		
			the Company against any and all losses, claims, damages, liabilities, costs, expenses (including
		

		
			reasonable attorneys' fees and costs), judgments and settlements of amounts paid in connection
		

		
			with any threatened, pending or completed action, suit, claim, proceeding or investigation arising
		

		
			out of or pertaining to: (a) unlawful intentional acts committed by Executive in the conduct of
		

		
			the Company's business; (b) any willful gross negligence committed by Executive other than in
		

		
			the conduct of the Company's business; and (c) any tax deductions Executive may claim for
		

		
			expenses incurred or claim to have been incU1l'ed in connection with Executive's duties
		

		
			hereunder.
		

		
			 
		

		
			12.3 Insurance. Notwithstanding the foregoing, the indemnification provided for in
		

		
			this Article XII shall only apply to any costs or expenses incurred by indemnities which are not
		

		
			covered by applicable liability insurance. If this Article XII is interpreted to reduce insurance
		

		
			coverage to which an indemnity would otherwise be entitled in the absence of this provision,
		

		
			this provision shall be deemed inoperative and not part of this Agreement. This Article XII shall
		

		
			survive the termination of this Agreement.
		

		
			 
		

		
			ARTICLE XIII
		

		
			MISCELLANEOUS
		

		
			 
		

		
			13.1 Notice. All notices required or permitted under this Agreement shall be in writing
		

		
			and shall be deemed effectively given (a) upon personal delivery to the party to be notified; (b)
		

		
			when sent by facsimile or electronic transmission (e-mail) if sent during normal business hours
		

		
			of the recipient and confirmed by facsimile or electronic confirmation receipt; (c) five (5) days
		

		
			after having been sent by registered or certified mail, return receipt requested, postage prepaid;
		

		
			or (d) one (I) day after deposit with a nationally recognized overnight courier, specifying next
		

		
			day delivery, with written verification of receipt, and such notices are addressed as follows or to
		

		
			such other address as the addressed Patty may have substituted by notice pursuant to this Section
		

		
			13.1:
		

		
			 
		

		
			To the Company:
		

		
			ARI Network Services, Inc.
		

		
			President and CEO
		

		
			11425 West Lake Park Drive
		

		
			Milwaukee, WI 53224-3025
		

		

		

		 

 

		Fax: +1 (414) 973-4618
		

		
			Email: olivier@arinet.com
		

		
			To Executive:
		

		
			Marvin A. Berg III
		

		
			N76 W17085 Kolbrook Ct.
		

		
			Menomonee Falls, WI 53051
		

		
			Fax: 
		

		
			Email: berg@arinet.com
		

		
			 
		

		
			13.2 Entire Agreement; Amendment; Waiver. This Agreement sets forth the entire
		

		
			understanding of the Parties hereto with respect to the subject matter contemplated hereby. Any
		

		
			and all previous agreements and understandings between or among the Parties regarding the
		

		
			subject matter hereof, whether written or oral, are superseded by this Agreement; provided,
		

		
			however, that the COC Agreement shall survive and remain in full force and effect. This
		

		
			Agreement shall not be amended or modified except by a written instrument duly executed by
		

		
			each of the Parties hereto. Any extension or waiver by any Party of any provision hereto shall be
		

		
			valid only if set forth in an instrument in writing signed on behalf of such Party. For purposes of
		

		
			the foregoing two (2) sentences, the Parties acknowledge and agree that any such written
		

		
			instrument to be signed by the Company shall require the signature of a representative of the
		

		
			Company duly authorized by the Board to bind the Company to the terms of such written
		

		
			instrument.
		

		
			 
		

		
			13.3 Headings. The headings of sections and paragraphs of this Agreement are for
		

		
			convenience of reference only and shall not control or affect the meaning or construction of any
		

		
			of its provisions.
		

		
			 
		

		
			13.4 Assignability. This Agreement is personal to Executive, and Executive may not
		

		
			assign or delegate any of Executive's rights or obligations hereunder without first obtaining the
		

		
			written consent of the Board. The Company will require any successor or assign (whether direct
		

		
			or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
		

		
			business and/or assets of the Company, by an assumption agreement in form and substance
		

		
			satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same
		

		
			manner and to the same extent that the Company would be required to perform it if no such
		

		
			succession or assignment had taken place. If such succession or assignment does not take place,
		

		
			and if this Agreement is not otherwise binding on Executive's successors or assigns by operation
		

		
			of law, Executive is entitled to compensation from the Company in the same amount and on the
		

		
			same terms as provided for in this Agreement. This Agreement shall be binding on and inure to
		

		
			the benefit of each Party and such Party's respective heirs, legal representatives, successors and
		

		
			assigns.
		

		
			 
		

		
			13.5 Mitigation. Executive shall not be required to mitigate the amount of any
		

		
			payment or benefit provided for in this Agreement by seeking other employment or otherwise.
		

		
			 
		

		
			13.6 Injunctive Relief. The Parties agree that damages will be an inadequate remedy
		

		
			for breaches of this Agreement and in addition to damages and any other available relief, a court
		

		
			shall be empowered to grant injunctive relief (without the necessity of posting bond or other
		

		
			security).
		

		
			 
		

		
			13.7 Waiver of Breach. The waiver by either Party of the breach of any provision of this
		

		

		

		 

 

		Agreement shall not operate or be construed as a waiver of any subsequent breach by either Party.
		

		
			 
		

		
			13.8 Severability. The obligations imposed by, and the provisions of, this Agreement
		

		
			are severable and should be construed independently of each other. The invalidity of one
		

		
			provision shall not affect the validity of any other provision.
		

		
			 
		

		
			13.9 Consideration. Execution of this Agreement is a condition of Executive's
		

		
			employment with the Company and Executive's employment and other benefits provided for
		

		
			herein by the Company constitutes the consideration for Executive's undertakings hereunder.
		

		
			 
		

		
			13.10 Governing Law. This Agreement shall in all respects be construed according to
		

		
			the laws of Wisconsin, without regard to its conflict of laws principles.
		

		
			 
		

		
			13.11 Authority to Bind the Company. The Company represents and warrants that the
		

		
			undersigned representative of the Company has the authority of the Board to bind the Company
		

		
			to the terms of this Agreement.
		

		
			 
		

		
			IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
		

		
			executed as of the date first written above.
		

		
			 
		

		
			EXECUTIVE:
		

		
			 
		

		
			By:  \s\ Marvin A. Berg III
		

		
			Marvin A. Berg III
		

		
			 
		

		
			NETWORK SERVICES, INC.
		

		
			 
		

		
			By: \s\ Roy W. Olivier
		

		
			Roy W. Olivier, President and Chief
		

		
			Executive Officer

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