On November 28, 2012 (the "Closing Date"), ARI Network Services, Inc. ("ARI"), through its wholly-owned subsidiary, Project Viking II Acquisition, Inc., a wholly-owned subsidiary of ARI (the "Acquisition Sub" and, together with ARI, the "Company"), completed the acquisition of substantially all of the assets of the Retail Services Division (the "Fifty Below Assets") of Fifty Below Sales & Marketing, Inc. ("Fifty Below"), pursuant to Section 363 and 365 of the United States Bankruptcy Code, for a purchase price of $5.0 million (the "Asset Purchase"). The consummation of the Asset Purchase was effected pursuant to a Bill of Sale and an Assumption and Assignment and Transition Services Agreement, each dated as of the Closing Date (respectively, the "Bill of Sale" and the "Assumption and Assignment Agreement") and executed by the Chapter 11 Operating Trustee (the "Trustee") of Fifty Below and the Acquisition Sub.

Pursuant to the Bill of Sale, Fifty Below transferred all of its right, title and interest in the Fifty Below Assets to the Acquisition Sub free and clear of all liens, claims, encumbrances, liabilities and interests, and the Acquisition Sub agreed to purchase and take possession of such assets. Under the Assumption and Assignment Agreement, the Trustee assigned to the Acquisition Sub certain executory contracts to which Fifty Below and/or its affiliates were a party, and the Acquisition Sub agreed to reimburse any unpaid expense reimbursements to any current or former employee, director or independent contractor or agent of Fifty Below, subject to a cap of $17,000, and to release any potential claims against Fifty Below for alleged infringement of certain intellectual property rights.
The Trustee also agreed under the Assumption and Assignment Agreement to provide to the Acquisition Sub certain transition services and, to the extent that the Acquisition Sub identifies any executory contracts or leases that the Acquisition Sub desires to have assigned to the Acquisition Sub after the Closing Date, the Trustee is obligated to use good faith, reasonable best efforts to obtain a final non-appealable order of the Bankruptcy Court to consummate such assignment.

The foregoing descriptions of the Bill of Sale and the Assumption and Assignment Agreement are qualified in their entirety by reference to copies of each document, which are attached hereto as Exhibits 2.1 and 2.2, respectively, and which are incorporated herein by reference.

The Company funded $1.5 million of the purchase price through a combination of the Company's operating cash flows and availability under its existing line of credit with Fifth Third Bank ("Fifth Third"), including a $900,000 earnest money payment made on November 14, 2012.

The balance of the purchase price was funded through a Secured Non-Negotiable Subordinated Promissory Note dated as of the Closing Date (the "Note") issued to Michael D. Sifen, Inc. (the "Holder"), an affiliate of an existing shareholder of the Company, in aggregate principal amount of $3.5 million, the final $300,000 of which was advanced on December 4, 2012 (the "Final Advance").
Interest accrues on the outstanding unpaid principal under the Note from and after November 7, 2012 until November 28, 2013 at a rate per annum equal to 10.0%, and at a rate per annum equal to 14.0% thereafter. Accrued interest only will be payable

quarterly commencing on February 28, 2013 and continuing on each May 31st, August 31st, November 30th and February 28th thereafter until May 28, 2016, at which time all accrued interest and outstanding principal will be due and payable in full. The Note may be prepaid in part or in full at any time without premium or penalty. The Note contains negative covenants relating to, among other things, the Company's incurrence of future indebtedness and liens and the . . .

As described above under Item 1.01, on November 28, 2012, the Company completed the Asset Purchase. The information set forth under Item 1.01 is incorporated by reference into this Item 2.01.

The description of the Note set forth above under Item 1.01 is incorporated by reference into this Item 2.03.

As partial consideration for the Note described above under Item 1.01, the Company agreed under the Note to issue 440,000 shares of the Company's common stock to the Holder effective as of the date of the Final Advance. The Company believes that this issuance was exempt from registration requirements pursuant to Section 4(2) of the Securities Act of 1933, as amended. The Holder represented its intention to acquire the securities for investment only and not with a view toward their distribution, and appropriate legends will be affixed to the share certificates.

In connection with the Asset Purchase and the Note, on the Closing Date, the Company amended the Rights Agreement dated August 7, 2003, between the Company and American Stock Transfer & Trust Company, LLC (the "Rights Agreement") and thereby also amended the related preferred share purchase rights. The amendment provides that the Holder will not become an "Acquiring Person," as defined in the Rights Agreement, in connection with its acquisition of shares of the Company's common stock as partial consideration for the Note and for so long as the Holder and its affiliates do not acquire an additional 1.0% of the Company's outstanding shares, and confirms that no rights were triggered under other provisions of the Rights Agreement in connection with the transactions described herein. The amendment was not in response to any takeover proposal for the Company. A copy of the Second Amendment to Rights Agreement is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

On November 29, 2012, the Company issued a press release announcing the completion of the Asset Purchase. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Pursuant to Item 9.01(a)(4) and Item 9.01(b) of Form 8-K, the Company will amend this report not later than 71 calendar days after August 23, 2012 to file the financial statements and pro forma financial information required by Rules 8-04 and 8-05 of Regulation S-X.

(d) Exhibits

    Exhibit No                    Description
       2.1     Bill of Sale dated as of November 28, 2012*
       2.2     Assumption and Assignment and Transition Services
               Agreement dated as of November 28, 2012*
       4.1     Secured Non-Negotiable Subordinated Promissory
               Note dated November 28, 2012 issued to Michael D.
               Sifen, Inc.
       10.1    Second Amendment to Loan and Security Agreement
               and Other Loan Documents, dated as of November
               28, 2012, by and between ARI Network Services,
               Inc. and Fifth Third Bank
       10.2    Second Amendment to Rights Agreement, dated as of
               November 28, 2012, between ARI Network Services,
               Inc. and American Stock Transfer & Trust
               Company, LLC
       99.1    Press Release dated November 29, 2012

* The Company agrees to furnish supplementally a copy of omitted schedules to the Securities and Exchange Commission upon request.