-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FZw/CT6lUN+CJmRNhXyTFPW3+EempJEkDJApSQ0UB8GkirJQ0aVLBbvatWecjnya WU3w7iI5bhtCiPUy96SBIw== 0000927087-96-000018.txt : 19960614 0000927087-96-000018.hdr.sgml : 19960614 ACCESSION NUMBER: 0000927087-96-000018 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19960613 SROS: NASD GROUP MEMBERS: PAUL ALLEN GROUP MEMBERS: VULCAN VENTURES INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ARI NETWORK SERVICES INC /WI CENTRAL INDEX KEY: 0000879796 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 391388360 STATE OF INCORPORATION: WI FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42176 FILM NUMBER: 96580643 BUSINESS ADDRESS: STREET 1: 330 EAST KILBOURN AVE STREET 2: SUITE 200 CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 4142787676 MAIL ADDRESS: STREET 1: 330 E KILBOURN AVENUE STREET 2: SUITE 200 CITY: MILWAUKEE STATE: WI ZIP: 53202-3166 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: VULCAN VENTURES INC CENTRAL INDEX KEY: 0001014931 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 911374788 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 110 110TH AVE N E STREET 2: STE 550 CITY: BELLEVUE STATE: WA ZIP: 98004 MAIL ADDRESS: STREET 1: 110 110TH AVE NE STREET 2: STE 550 CITY: BELLEVUE STATE: WA ZIP: 98004 SC 13D/A 1 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* ARI NETWORK SERVICES, INC. (Name of Issuer) COMMON STOCK, $0.001 PAR VALUE PER SHARE (Title of Class of Securities) 001930106 (CUSIP Number) MAY 20, 1996 (Date of Event which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. / / Check the following box if a fee is being paid with the statement / /. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent of less of such class.) (See Rule 13d-7.) NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 001930106 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON VULCAN VENTURES INCORPORATED 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(E) 6. CITIZENSHIP OR PLACE OF ORGANIZATION State of Washington NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER -0- shares 8. SHARED VOTING POWER 2,040,144 shares 9. SOLE DISPOSITIVE POWER -0- shares 10. SHARED DISPOSITIVE POWER 2,040,144 shares 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,040,144 shares 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.9% 14. TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. 001930106 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON PAUL G. ALLEN 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(E) 6. CITIZENSHIP OR PLACE OF ORGANIZATION Mr. Allen is a U.S. citizen NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER -0- shares 8. SHARED VOTING POWER 2,040,144 shares 9. SOLE DISPOSITIVE POWER -0- shares 10. SHARED DISPOSITIVE POWER 2,040,144 shares 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,040,144 shares 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.9% 14. TYPE OF REPORTING PERSON* IN *SEE INSTRUCTIONS BEFORE FILLING OUT! ITEM 1. SECURITY AND ISSUER Title of Class of Equity Securities: Common Stock, $.001 par value per share, of ARI Network Services, Inc. (the "Issuer"). Name and Address of Principal Executive Offices of the Issuer: ARI Network Services, Inc. 330 East Kilbourn Avenue Milwaukee, Wisconsin 53202 ITEM 2. IDENTITY AND BACKGROUND (a) Name of Person Filing: Vulcan Ventures Incorporated ("Vulcan Ventures") State of Organization: Washington (b) Principal Business: Investments in various companies (c) Address of Principal Business: 110-110th Avenue N. E., Suite 550 Bellevue, Washington 98004 Address of Principal Office: 110-110th Avenue N. E., Suite 550 Bellevue, Washington 98004 (d) Conviction in a Criminal Proceeding (excluding traffic violations or similar misdemeanors) during the Last Five Years: No (e) Party in a Civil Proceeding during the last five years and as a result was or is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws: No The names, business address, present principal occupation and citizenship of each executive officer, director and controlling person of Vulcan Ventures is as follows: Paul G. Allen (See Page 8 of 10) William D. Savoy, Vulcan Northwest Inc., 110-110th Avenue N.E., Suite 550, Bellevue, WA 98004. Mr. Savoy is Vice President and Director of Vulcan Ventures and Vice President of Vulcan Northwest Inc. Citizenship is U.S. Bert E. Kolde, Asymetrix Corporation, 110-110th Avenue N.E., Suite 550, Bellevue, Washington 98007. Principal occupation is President of Asymetrix Corporation and Vice President, Secretary, Treasurer and Director of Vulcan Ventures. Citizenship is U.S. Jo Allen Patton, Vulcan Northwest Inc., 110-110th Avenue N.E., Suite 550, Bellevue, WA 98004. Ms. Patton is Director of Vulcan Ventures. Citizenship is U.S. To the best knowledge of Vulcan Ventures, during the last five years none of these people have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or a party to a civil proceeding as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws. ITEM 3: SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION THE SOLE SOURCE OF THE FUNDS IS WORKING CAPITAL OF THE REPORTING PERSON. THE AMOUNT OF FUNDS USED IN MAKING THE PURCHASES DESCRIBED IN ITEM 5 WAS $1,000,000. REGARDING Paul G. Allen (See Page 8 of 10) ITEM 4. PURPOSE OF TRANSACTION The purpose of the acquisition of securities of the Issuer is for investment purposes. Vulcan Ventures may purchase additional shares of common stock of the Issuer from time to time. Any decision to make such additional purchase will depend, however, on various factors, including, without limitation, the price of the common stock, stock market conditions and the business prospects of the Issuer. Vulcan Ventures does not presently intend to dispose of any shares of common stock of the Issuer. In addition, Vulcan Ventures owns a presently exercisable warrant to purchase an additional 125,000 shares of common stock of the Issuer at the exercise price of $4.00 per share (as described in Item 5 below). Except as set forth herein, Vulcan Ventures does not have any plans or proposals that relate to or would result in any of the matters specified in Item 4. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) Aggregate Number of Shares of Common Stock of the Issuer. Beneficially Owned: 2,040,144 shares. This amount is comprised of (i) 1,915,144 shares of common stock and (ii) a warrant to purchase an additional 125,000 shares of common stock at an exercise price of $4.00 per share. Percentage of Common Stock of the Issuer. Owned (based on 12,701,815 shares of common stock outstanding as of March 14, 1996, and includes the 125,000 shares that will be outstanding upon the exercise of the warrant owned by Vulcan Ventures): 15.9% (b) Sole Voting Power: -0- Sole Dispositive Power: -0- Shared Voting Power: 2,040,144 Shared Dispositive Power: 2,040,144 (c) The following transactions in common stock of the Issuer were effected by Vulcan Ventures: On December 27, 1994, Vulcan Ventures purchased 250,000 shares of common stock from the Issuer and a warrant to purchase an additional 125,000 shares of common stock for an aggregate purchase price of $1,000,000. The per share price for the 250,000 shares of common stock purchased (assuming no allocation of the purchase price to the warrant) was $4.00. The exercise price for the warrant, subject to adjustment under certain circumstances, is $4.00 per share. This transaction was effected by Vulcan Ventures making a wire transfer of $1,000,000 to the Issuer. In addition, Vulcan Venture's warrant to purchase an additional 300,000 shares of common stock of the Issuer, which warrant Vulcan Ventures acquired pursuant to the terms of a purchase agreement with the Issuer dated May 19, 1994, expired on May 20, 1996, by the terms of the warrant. (d) Not applicable (e) Not applicable To the best knowledge of Vulcan Ventures, its directors, executive officers and controlling persons beneficially own the following shares of the Issuer: Paul G. Allen, Director, President and sole shareholder of Vulcan Ventures beneficially owns 2,040,144 shares (which is the 2,040,144 shares owned by Vulcan Ventures). ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. All of these contracts, arrangements and understandings with respect to the securities of the Issuer are in the Purchase Agreement attached hereto as an exhibit. From May 20, 1994 to May 20, 1997, Vulcan Ventures has agreed that it and its affiliates and associates (as such terms are defined in Rule 12b-2 of the Securities Exchange Act of 1934) will not, directly or indirectly, unless specifically requested by the Issuer's Board of Directors: (i) acquire or agree, seek or propose to acquire ownership (including, but not limited to, beneficial ownership as defined in Rule 13d-3 under the Exchange Act) of any of the Issuer's assets or business or any securities issued by it or any rights or options to acquire such ownership (including from a third party), (ii) seek or propose to control the Issuer's management or its policies, (iii) enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing, or (iv) assist any other person with respect to any of the foregoing. Notwithstanding the foregoing, Vulcan Ventures may acquire ownership of the Issuer's securities such that Vulcan Ventures would own, directly or indirectly, not more than 30% of the Issuer's then outstanding securities having the right to vote in the election of directors (or options, warrants or other derivative securities upon conversion or exercise having such rights) ("Voting Securities"). The restrictions in this paragraph shall cease if (i) any person or group makes a bona fide offer to purchase more than 50% of the Issuer's then outstanding Voting Securities or (ii) the closing price of the Issuer's common stock on NASDAQ or any National Securities exchange on which the Issuer's stock is traded has exceeded $17.50 per share for a period of 30 consecutive trading days. Notwithstanding any of the foregoing restrictions, if any person or group has acquired, directly or indirectly, more than 30% of the Issuer's then outstanding Voting Securities, Vulcan Ventures may acquire more than 30% of the then outstanding Voting Securities up to an amount of additional Voting Securities that when added to the Voting Securities then owned by Vulcan Ventures would not exceed the percentage of Voting Securities owned by such other person or group. The Issuer has agreed with Vulcan Ventures to file with the Securities and Exchange Commission upon demand by Vulcan Ventures at any time between May 20, 1996, and May 20, 1998, a Registration Statement on Form S-3 available for sale of (i) the 300,000 shares of common stock acquired under the purchase agreement dated May 19, 1994, (ii) the 250,000 shares of common stock acquired under the purchase agreement dated December 22, 1994, and (iii) up to 125,000 shares of common stock that may be acquired upon exercise of the warrant. Vulcan Ventures agreed with the Issuer that it will not effect any sale of the shares or warrants acquired under the purchase agreements, except as contemplated therein. Vulcan Ventures has agreed not to sell or otherwise transfer any shares of common stock or other securities during the 180 day period following the effective date of a registration statement of the Issuer filed under the Securities Act of 1933 if requested by the Issuer and underwriter thereof provided that: (i) all officers and directors and holders of 5% or more of the Issuer's common stock enter into similar agreements and (ii) such 180 day period may be waived or reduced by the underwriter of such offering. Vulcan Ventures has the right to designate one director to the Issuer's Board of Directors as long as Vulcan Ventures (together with its affiliates) holds not fewer than ten (10) percent, calculated on a fully diluted basis (the "Minimum Amount"). The director designated by Vulcan Ventures is subject to the approval of the Issuer's Board of Directors, such approval not to be unreasonably withheld. Upon the request of Vulcan Ventures, the number of directors on the Board of Directors shall be increased by one and the director appointed by Vulcan Ventures shall fill the newly created vacancy. So long as Vulcan Ventures holds the Minimum Amount, the Issuer's Board of Directors has agreed to nominate the director designated by Vulcan Ventures for election to the Board of Directors. The foregoing rights of Vulcan Ventures set forth in the 2nd and 4th paragraphs of this Item 6 are not assignable. Except as set forth above, neither Vulcan Ventures nor any of the executive officers, directors or controlling persons of Vulcan Ventures, has any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, finder's fees, joint ventures, loan or option agreements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Purchase Agreement between ARI Network Services, Inc. and Vulcan Ventures, dated December 22, 1994. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. June 10, 1996 VULCAN VENTURES INCORPORATED (Date) /s/ Paul G. Allen By: ------------------------------------------- Paul G. Allen, President ITEM 1. SECURITY AND ISSUER Title of Class of Equity Securities: Common Stock, $.001 par value per share, of the Issuer Name and Address of Principal Executive Offices of the Issuer: ARI Network Services, Inc. 330 East Kilbourn Avenue Milwaukee, Wisconsin 53202 ITEM 2. IDENTITY AND BACKGROUND (a) Name of Person Filing: Paul G. Allen, President and sole shareholder of Vulcan Ventures Incorporated (b) Business Address: 110-110th Avenue N. E. Suite 550 Bellevue, Washington 98004 (c) Principal Occupation and the Name of Principal Business and Address of any corporation in which such employment is conducted: Chairman Asymetrix Corporation 110 - 110th Ave. N.E., Suite 550 Bellevue, WA 98007 (d) Conviction of a Criminal Proceeding (excluding traffic violations or similar misdemeanors) during the last five years: No (e) Party in a Civil Proceeding during the last five years and as a result was or is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws: No (f) Citizenship: Mr. Allen is a U.S. citizen ITEM 3: SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The sole source of the funds is working capital of Vulcan Ventures. The amount of funds used in making the purchases described in Item 5 is $1,000,000. ITEM 4. PURPOSE OF TRANSACTION The purpose of the acquisition of securities of the Issuer is for investment purposes. Vulcan Ventures and/or Paul Allen may purchase additional shares of common stock of the Issuer from time to time. Any decision to make such additional purchase will depend, however, on various factors, including, without limitation, the price of the common stock, stock market conditions and the business prospects of the Issuer. Vulcan Ventures does not presently intend to dispose of any shares of common stock of the Issuer. In addition, Vulcan Ventures owns a presently exercisable warrant to purchase an additional 125,000 shares of common stock of the Issuer at the exercise price of $4.00 per share (as described in Item 5 below). Except as set forth herein, Paul G. Allen does not have any plans or proposals that relate to or would result in any of the matters specified in Item 4. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) Aggregate Number of Shares of Common Stock of the Issuer. Beneficially Owned: 2,040,144 shares. This amount is comprised of (i) 1,915,144 shares of common stock and (ii) the warrant to purchase an additional 125,000 shares of common stock at $4.00 per share. Percentage of Common Stock of the Issuer. Owned (based on 12,701,815 shares of common stock outstanding as of March 14, 1996, and includes the 125,000 shares that will be outstanding upon the exercise of the warrant owned by Vulcan Ventures): 15.9% (b) Sole Voting Power: -0- Sole Dispositive Power: -0- Shared Voting Power: 2,040,144 Shared Dispositive Power: 2,040,144 (c) The following transactions in common stock of the Issuer were effected by Vulcan Ventures: On December 27, 1994, Vulcan Ventures purchased 250,000 shares of common stock from the Issuer and a warrant to purchase an additional 125,000 shares of common stock for an aggregate purchase price of $1,000,000. The per share price for the 250,000 shares of common stock purchased (assuming no allocation of the purchase price to the warrant) was $4.00. The exercise price for the warrant, subject to adjustment under certain circumstances, is $4.00 per share. This transaction was effected by Vulcan Ventures making a wire transfer of $1,000,000 to the Issuer. In addition, Vulcan Venture's warrant to purchase an additional 300,000 shares of common stock of the Issuer, which warrant Vulcan Ventures acquired pursuant to the terms of a purchase agreement with the Issuer dated May 19, 1994, expired on May 20, 1996, by the terms of the warrant. (d) Not applicable (e) Not applicable ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. See the description of the contracts, arrangements, understandings or relationships with respect to the securities of the Issuer between Vulcan Ventures and the Issuer under Item 6 of this Amendment No. 1 to Schedule 13D regarding Vulcan Ventures (page 6 of 10). Except as set forth above, Paul G. Allen does not have any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, finder's fees, joint ventures, loan or option agreements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Purchase Agreement between the Issuer and Vulcan Ventures, dated December 22, 1994. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. /s/ Paul G. Allen June 10, 1996 _________________________________________ (Date) Paul G. Allen EX-99 2 PURCHASE AGREEMENT THIS AGREEMENT is made as of the 22nd day of December, 1994, between ARI NETWORK SERVICES, INC. (the "COMPANY"), a corporation organized under the laws of the State of Wisconsin, with its principal place of offices at 330 East Kilbourn Avenue, Milwaukee, Wisconsin 53202, and the purchaser whose name and address are set forth on the signature page hereof (the "PURCHASER"). IN CONSIDERATION of the mutual covenants contained in this Agreement, the Company and the Purchaser agree as follows: Section 1. AUTHORIZATION OF SALE OF THE SECURITIES. Subject to the terms and conditions of this Agreement, the Company has authorized the sale of 250,000 shares of the Common Stock, par value $.001 per share (the "Shares"), and a warrant to purchase up to 125,000 shares of Common Stock (the "Warrant") in the form attached as Exhibit 1 hereto, of the Company. Section 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES. At the Closing (as defined in Section 3), the Company will sell to the Purchaser, and the Purchaser will buy from the Company, upon the terms and conditions hereinafter set forth, the Securities at the purchase price shown below: SECURITIES TO BE PURCHASED AGGREGATE PRICE 250,000 Shares $1,000,000 Warrant for 125,000 Shares The Warrant entitles the holder thereof to purchase up to 125,000 shares of the Company's Common Stock at an exercise price of $4.00 per share. The shares of Common Stock to be acquired upon exercise of the Warrant are referred to herein as the "Warrant Shares." The Shares, the Warrant and the Warrant Shares are collectively referred to herein as the "Securities." The Securities are part of an offering of 500,000 Shares and Warrants to purchase 250,000 Shares (the "Private Offering"). Section 3. DELIVERY OF THE SHARES AND WARRANT AT THE CLOSING. The completion of the purchase and sale of the Shares and the Warrant (the "Closing") shall occur at 11:00 a.m. (Central Daylight Time) on December 27, 1994 (the "Closing Date"), at the offices of Godfrey & Kahn, 780 North Water Street, Milwaukee, Wisconsin 53202, or at such other time and place as the Company and Purchaser may agree. At the Closing, the Company shall deliver to the Purchaser one or more stock certificates and a warrant registered in the name of the Purchaser, and Purchaser shall pay for the Shares and the Warrant in cash or by wire transfer. The Company's obligation to complete the purchase and sale of the Shares and the Warrant and deliver such stock certificates and Warrant to the Purchaser at the Closing shall be subject to the following conditions, any one or more of which may be waived by the Company: (a) receipt by the Company of immediately available funds in the full amount of the purchase price for the Shares and the Warrant being purchased hereunder; and (b) the accuracy of the representations and warranties made by the Purchaser and the fulfillment of those undertakings of the Purchaser to be fulfilled prior to the Closing; and (c) approval by the NASDAQ Stock Market of the listing of the Shares. The Purchaser's obligation to accept delivery of such stock certificates and Warrant and to pay for the Securities evidenced thereby shall be subject to the following conditions: (a) the accuracy of the representations and warranties made by the Company herein and the fulfillment in all material respects of those undertakings of the Company to be fulfilled prior to Closing; and (b) approval by the NASDAQ Stock Market of the listing of the Shares. Section 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company hereby represents and warrants to, and covenants with, the Purchaser as follows: 4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Wisconsin, has all requisite corporate power and authority to conduct its business as currently conducted and is duly qualified in each jurisdiction in which the failure to be so qualified would have a material effect on its business or properties. 4.2 DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENTS. The Company's execution, delivery and performance of the Agreements and the transactions contemplated thereby (a) have been duly authorized under Wisconsin law by all requisite corporate action by the Company, and (b) will not violate any law or the Amended and Restated Articles of Incorporation or By-laws of the Company or any provision of any material indenture, mortgage, agreement, contract or other material instrument to which the Company or any subsidiary is a party or by which the Company or any subsidiary or any of their respective properties or assets is bound as of the date hereof, or result in a breach of or constitute (upon notice or lapse of time or both) a default under any such indenture, mortgage, agreement, contract or other material instrument or result in the creation or imposition of any lien, security interest, mortgage, pledge, charge or other encumbrance, of any material nature whatsoever, upon any properties or assets of the Company or any subsidiary. Upon its execution and delivery, and assuming the valid execution hereof by the Purchaser, this Agreement will constitute a valid and binding obligation of the Company, enforceable in accordance with its terms. 4.3 ISSUANCE, SALE AND DELIVERY OF THE SHARES; RESERVATION OF WARRANT SHARES. When issued and paid for, the Shares to be sold hereunder by the Company will be validly issued and outstanding, fully paid and non-assessable (other than as provided in Section 180.0622(2)(b) of the Wisconsin Statutes and case law interpreting such statute). The Company has reserved sufficient shares of Common Stock for issuance upon exercise of the Warrant. 4.4 ADDITIONAL INFORMATION. The Company represents and warrants that the information contained in the documents listed below, which the Company has furnished to the Purchaser, or will furnish prior to Closing, is or will be true and correct in all material respects as of their respective final dates, and that no such document omits or will omit to make any statement required to make the statements therein not misleading, as of such dates; provided, however, that the Company makes no representation or warranty with respect to the accuracy of projections and/or forecasts included therein: (a) the Company's 1994 Annual Report to Shareholders; (b) the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1994 (without exhibits); (c) the Company's Quarterly Reports on Form 10-Q for the three-month period ended October 31, 1994; (d) Notice of Annual Meeting of Shareholders and Proxy Statement for its Annual Meeting of Shareholders held December 2, 1994; and (e) all other documents, if any, filed by the Company with the Securities and Exchange Commission since July 31, 1994 pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended. 4.5 NO MATERIAL CHANGE. As of the date hereof, other than continuing operating losses not materially inconsistent with past operating results, and other than as disclosed in the Company's public documents referred to in Section 4.4 above, or otherwise disclosed to Purchaser, there has been no material adverse change in the financial condition or results of operations of the Company since October 31, 1994. Section 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. 5.1 INVESTMENT REPRESENTATIONS. The Purchaser represents and warrants to, and covenants with, the Company that: (1) the Purchaser, taking into account the personnel and resources it can practically bring to bear on the purchaser of the Securities contemplated hereby, is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in shares presenting an investment decision like that involved in the purchaser of the Securities, including investments in securities issued by the Company, and has requested, received, reviewed and considered all information it deems relevant in making an informed decision to purchase the Securities, (ii) the Purchaser is acquiring the Securities in the ordinary course of its business and for its own account for investment only and with no present intention of distributing any of such Securities or any arrangement or understanding with any other persons regarding the distribution of such Securities; (iii) the Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of any of the Securities except in compliance with the Securities Act, the rules and regulations promulgated thereunder and the terms and conditions hereof; (iv) the Purchaser has, in connection with its decision to purchase the Securities, relied solely upon the documents referenced in Section 4.4 hereof and the representations and warranties of the Company contained herein; and (v) the Purchaser is an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated under the Securities Act. 5.2 DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENTS. The Purchaser further represents and warrants to, and covenants with, the Company that (i) the Purchaser has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and (ii) upon the execution and delivery of this Agreement, this Agreement shall constitute a valid and binding obligation of the Purchaser enforceable in accordance with its terms, except as enforceability may be limited to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Section 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company and the Purchaser herein and in the certificates for the Shares and the Warrant delivered pursuant hereto shall survive the execution of this Agreement, the delivery to the Purchaser of the Shares and the Warrant being purchased and the payment therefor. Section 7. COORDINATION WITH PRIOR AGREEMENT. In accordance with Section 7.1(a) of the Purchase Agreement dated May 19, 1994 between Purchaser and the Company (the "Prior Agreement"), the Shares and the Warrant Shares shall be subject to the provisions of the Prior Agreement, including Sections 5.1(b) and 7 thereof, and references in the Prior Agreement to the "Shares" shall be deemed to include the Shares and the Warrant Shares subject to this Agreement. The Shares and the Warrant Shares shall bear the legend set forth in Section 7.8 of the Prior Agreement. Purchaser hereby waives compliance with Section 4.9 of the Prior Agreement with respect to the Private Offering. Section 8. BROKER'S FEE. Each of the parties hereto hereby represents that, on the basis of any actions and agreements by it, there are no other brokers or finders entitled to compensation in connection with the sale of the Securities to the Purchaser. Section 9. NOTICES. All notices, requests, consents or other communications hereunder shall be in writing, shall be mailed by first-class registered or certified airmail, or nationally recognized overnight express courier postage prepaid, and shall be deemed given when so mailed and shall be delivered as follows: (a) if to the company, to: ARI Network Services, Inc. 330 East Kilbourn Avenue Milwaukee, Wisconsin 53202 Attention: Mark L. Koczela with a copy so mailed to: Godfrey & Kahn 780 North Water Street Milwaukee, Wisconsin 53202 Attention: Larry D. Lieberman or to such other person at such other place as the Company shall designate to the Purchaser in writing; and (b) if to the Purchaser, at its address as set forth at the end of the Agreement, or at such other address or addresses as may have been furnished to the Company in writing. Section 10. CHANGES. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Purchaser. Section 11. HEADINGS. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement. Section 12. SEVERABILITY. In cash any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. Section 13. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin without regard to the choice of law provisions thereof, except to the extent the federal law of the United States of America applies. Section 14. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written. PURCHASER VULCAN VENTURES INCORPORATED ARI NETWORK SERVICES, INC. /s/William Savoy /s/Don Knudsen By:---------------------- By: --------------------------- William Savoy, Don Knudsen, President and Vice President CEO 110 110th Avenue N.E., Suite 550 Bellevue, Washington 98005 Attention: William Savoy -----END PRIVACY-ENHANCED MESSAGE-----