Exhibit 10.19
THIRD AMENDMENT TO
CREDIT AGREEMENT
     This Third Amendment to Credit Agreement (this “Amendment”), dated as of
February 11, 2008, is by and among SOFTBRANDS, INC., a Delaware corporation (the
“Parent”), the subsidiaries of Parent identified on the signature pages hereto
(collectively, with the Parent, the “Borrowers” and individually, a “Borrower”),
WELLS FARGO FOOTHILL, INC., a California corporation, as Administrative Agent
(the “Agent”) and each of the lenders parties hereto (the “Lenders”).
R E C I T A L S
     A. The Borrowers, the Agent and the Lenders are parties to that certain
Credit Agreement dated as of August 14, 2006, as amended by that certain First
Amendment to the Credit Agreement dated as of October 5, 2006, as amended by
that certain Second Amendment to the Credit Agreement dated as of March 15, 2007
(the “Original Credit Agreement”).
     B. The parties hereto desire to further amend the Original Credit Agreement
(as the Original Credit Agreement is amended by this Amendment, and as the
Original Credit Agreement may be further amended, modified or restated from
time, collectively the “Credit Agreement”) as provided herein.
     NOW, THEREFORE, in consideration of the premises herein contained, and for
other good and valuable consideration (the receipt, sufficiency and adequacy of
which are hereby acknowledged), the parties hereto (intending to be legally
bound) hereby agree as follows:
     1. Definitions. Terms capitalized herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement.
     2. Amendments to Credit Agreement. Subject to the terms and conditions
contained herein, the parties hereto hereby amend the Credit Agreement as
follows:
     (a) The definition of “Permitted Investments” in Schedule 1.1 to the Credit
Agreement is amended and restated as follows:
     “Permitted Investments” means (a) Investments in cash and Cash Equivalents;
(b) Investments in negotiable instruments for collection; (c) advances made in
connection with purchases of goods or services in the ordinary course of
business; (d) Investments received in settlement of amounts due to a Borrower or
any Subsidiary of a Borrower effected in the ordinary course of business or
owing to a Borrower or any Subsidiary of a Borrower as a result of Insolvency
Proceedings involving an Account Debtor or upon the foreclosure or enforcement
of any Lien in favor of a Borrower or any Subsidiary of a Borrower;
(e) Permitted Acquisitions; (f) subject to Section 6.12, amounts incurred by a
Borrower or any Subsidiary of a Borrower for operational costs of doing business
in a location outside of the United States or China so long as the aggregate
amount of such amount does not exceed $350,000 at any one time; (g) Investments
identified on Schedule P-2 to the Agreement; (h) Investments by Borrowers in the
Stock of their Subsidiaries; (i) loans, advances or capital contributions made
by any Borrower to any Subsidiary and made by any Subsidiary to any Borrower or
any other Subsidiary in an aggregate

 

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amount not to exceed $2,500,000; (j) Guarantees and other Investments
constituting Indebtedness permitted by Section 6.1; (k) promissory notes
acquired in connection with dispositions of assets permitted under Section 6.4;
(l) loans and advances to employees of Borrowers and their Subsidiaries in the
ordinary course of business generally consistent with past practice; (m)
Accounts and bank deposits made in the ordinary course of business subject in
all cases to Control Agreements; (n) Permitted Acquisitions; (o) other
Investments by Borrowers and their Subsidiaries in or to Persons other than
their Subsidiaries in an aggregate amount not to exceed $500,000, and (p) the
purchase of Indebtedness as permitted in Section 6.7; provided such Indebtedness
is promptly retired.
     (b) Section 6.12 of the Credit Agreement is hereby amended and restated as
follows:
     6.12 Investments. Except for Permitted Investments, directly or indirectly,
make or acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
(a) Administrative Borrower and its U.S. Subsidiaries shall not have Permitted
Investments (other than in the Cash Management Accounts) in Deposit Accounts or
Securities Accounts in an aggregate amount in excess of $500,000 at any one time
unless Administrative Borrower or its U.S. Subsidiary, as applicable, and the
applicable securities intermediary or bank have entered into Control Agreements
governing such Permitted Investments in order to perfect (and further establish)
the Agent’s Liens in such Permitted Investments; (b) Administrative Borrower and
its Subsidiaries shall not have any Investments, Cash Equivalents, cash or any
other funds in China in an aggregate amount in excess of $4,000,000 at any one
time (and if at any time such amount referenced in this clause (b) exceeds
$4,000,000 at any one time, then such excess amount shall be as soon as
reasonably practicable and in no event more than 7 Business Days after the
occurrence of such event, transferred into a Deposit Account that is subject to
a Control Agreement); and (c) Administrative Borrower and its Subsidiaries shall
not have any Investments, Cash Equivalents, cash or any other funds in any
location outside of the United States or China in an aggregate amount in excess
of $5,000,000 at any one time (and if at any time such amount referenced in this
clause (b) exceeds $5,000,000 at any one time, then such excess amount shall be
as soon as reasonably practicable and in no event more than 7 Business Days
after the occurrence of such event, transferred into a Deposit Account that is
subject to a Control Agreement). Subject to the foregoing proviso, Borrowers
shall not and shall not permit their Subsidiaries to establish or maintain any
Deposit Account or Securities Account unless Agent shall have received a Control
Agreement in respect of such Deposit Account or Securities Account.
     (c) Section 6.16(a) of the Credit Agreement is hereby amended and restated
as follows:
     (a) Minimum EBITDA. Fail to achieve EBITDA, measured on a quarter-end
basis, of at least the required amount set forth in the following table for the
applicable period set forth opposite thereto:

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          Applicable Amount   Applicable Period  
$1,273,000
  For the 3 month period
 
  ending December 31, 2006
 
     
$2,930,000
  For the 6 month period
 
  ending March 31, 2007
 
     
$5,117,000
  For the 9 month period
 
  ending June 30, 2007
 
     
$8,027,000
  For the 12 month period
 
  ending September 30, 2007
 
     
$7,400,000
  For the 12 month period
 
  ending December 31, 2007
 
     
$8,000,000
  For the 12 month period
 
  ending March 31, 2008
 
     
$11,200,000
  For the 12 month period
 
  ending June 30, 2008
 
     
$11,750,000
  For the 12 month period
 
  ending September 30, 2008
 
     
$12,000,000
  For the 12 month period
 
  ending each quarter thereafter
 
     

     3. Conditions Precedent. The amendments contained in Section 2 above are
subject to, and contingent upon, the prior or contemporaneous satisfaction of
each of the following conditions precedent, each in form and substance
satisfactory to the Agent:
     (a) The Borrowers, the Agent and the Lenders shall have executed and
delivered to each other this Amendment;
     (b) The Agent shall have received a fully-earned non-refundable amendment
fee in the amount of $25,000; and
     (c) The Borrowers shall have satisfied any other conditions of the Agent
required in connection with this Amendment.
     4. Reference to and Effect on the Credit Agreement. Except as expressly
provided herein, the Credit Agreement and all of the Loan Documents shall remain
unmodified and continue in full force and effect and are hereby ratified and
confirmed. The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of: (a) any right, power or remedy of the Agent or the
Lenders under the Credit Agreement or any of the Loan

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Documents, or (b) any Default or Event of Default under the Credit Agreement or
any of the Loan Documents.
     5. Representations and Warranties of the Borrowers. Each of the Borrowers
hereby represents and warrants to the Agent and the Lenders, which
representations and warranties shall survive the execution and delivery of this
Amendment, that on and as of the date hereof and after giving effect to this
Amendment:
     (a) As to each Borrower, the execution, delivery, and performance by such
Borrower of this Amendment have been duly authorized by all necessary action on
the part of such Borrower.
     (b) As to each Borrower, the execution, delivery, and performance by such
Borrower of this Amendment does not and will not (i) violate any provision of
federal, state, or local law or regulation applicable to any Borrower, the
Governing Documents of any Borrower, or any order, judgment, or decree of any
court or other Governmental Authority binding on any Borrower, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation of any Borrower, (iii)
result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of Borrower, other than Permitted
Liens, or (iv) require any approval of any Borrower’s interest holders or any
approval or consent of any Person under any material contractual obligation of
any Borrower, other than consents or approvals that have been obtained and that
are still in force and effect.
     (c) As to each Borrower, this Amendment and all other documents
contemplated hereby, when executed and delivered by such Borrower will be the
legally valid and binding obligations of such Borrower, enforceable against such
Borrower in accordance with their respective terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors’ rights generally.
     (d) The representations and warranties of each of the Borrowers set forth
in the Credit Agreement and in the Loan Documents to which it is a party are
true, correct and complete on and as of the date hereof; provided that the
references to the Credit Agreement therein shall be deemed to include the Credit
Agreement as amended by this Amendment.
     (e) Each of the Borrowers acknowledges that the Agent and each Lender is
specifically relying upon the representations, warranties and agreements
contained in this Amendment and that such representations, warranties and
agreements constitute a material inducement to the Agent and each Lender in
entering into this Amendment.
     6. Reference to Credit Agreement; No Waiver.
     6.1 Upon the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Credit Agreement,” “hereunder,” “hereof,” “herein” or

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words of like import shall mean and be a reference to the Credit Agreement as
amended hereby. The term “Loan Documents” as defined in Schedule 1.1 of the
Credit Agreement shall include (in addition to the Loan Documents described in
the Credit Agreement) this Amendment and any other agreements, instruments or
other documents executed in connection herewith.
     6.2 The Agent’s and a Lender’s failure, at any time or times hereafter, to
require strict performance by the Borrowers of any provision or term of the
Credit Agreement, this Amendment or the other Loan Documents shall not waive,
affect or diminish any right of the Agent or a Lender thereafter to demand
strict compliance and performance therewith. Any suspension or waiver by the
Agent or a Lender of a breach of this Amendment or any Event of Default under
the Credit Agreement shall not, except as expressly set forth herein, suspend,
waive or affect any other breach of this Amendment or any Event of Default under
the Credit Agreement, whether the same is prior or subsequent thereto and
whether of the same or of a different kind or character. None of the
undertakings, agreements, warranties, covenants and representations of any
Borrower contained in this Amendment, shall be deemed to have been suspended or
waived by the Agent or a Lender unless such suspension or waiver is: (i) in
writing and signed by the Agent and each Lender and (ii) delivered to the
Borrower. In no event shall the Agent’s and each Lender’s execution and delivery
of this Amendment establish a course of dealing among the Agent, each Lender,
the Borrowers, or any other obligor or in any other way obligate the Agent or
each Lender to hereafter provide any amendments or waivers with respect to the
Credit Agreement. The terms and provisions of this Amendment shall be limited
precisely as written and shall not be deemed: (A) to be a consent to a
modification, amendment or waiver of any other term or condition of the Credit
Agreement or of any other Loan Documents, or (B) to prejudice any right or
remedy that the Agent or each Lender may now have under or in connection with
the Credit Agreement or any of the other Loan Documents.
     7. Successors and Assigns; Amendment. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, no Borrower may assign this Amendment or any of
its respective rights hereunder without the Agent’s and each Lender’s prior
written consent. Any prohibited assignment of this Amendment shall be absolutely
null and void. This Amendment may only be amended or modified by a writing
signed by the Agent, each Lender and the Borrowers.
     8. Severability; Construction. Wherever possible, each provision of this
Amendment shall be interpreted in such a manner so as to be effective and valid
under applicable law, but if any provision of this Amendment is held to be
prohibited by or invalid under applicable law, such provision or provisions
shall be ineffective only to the extent of such provision and invalidity,
without invalidating the remainder of this Amendment. Neither this Amendment nor
any uncertainty or ambiguity herein shall be construed or resolved against Agent
or each Lender, whether under any rule of construction or otherwise. On the
contrary, this Amendment has been reviewed by all parties hereto and shall be
construed and interpreted

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according to the ordinary meaning of the words used so as to fairly accomplish
the purposes and intentions of the parties hereto.
     9. Counterparts; Facsimile. This Amendment may be executed in one or more
counterparts, each of which taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile shall also deliver a manually executed
counterpart of this Amendment, but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability or binding effect of
this Amendment.
     10. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
     (a) THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
     (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AMENDMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND TO THE
EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF
COOK, STATE OF ILLINOIS, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY BORROWER COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH BORROWERS COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
BORROWER, AGENT AND THE LENDERS WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 11(b).
     (c) BORROWERS, AGENT AND THE LENDERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWERS, AGENT AND THE LENDERS REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AMENDMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

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     IN WITNESS WHEREOF, the undersigned have caused this Third Amendment to be
duly executed and delivered as of the date first above written.

            SoftBrands, Inc.
a Delaware corporation, as a Borrower
      By:           Title:              

            SoftBrands Manufacturing, Inc.
a Minnesota corporation, as a Borrower
      By:           Title:              

            SoftBrands International, Inc.
a Delaware corporation, as a Borrower
      By:           Title:              

            SoftBrands Licensing, Inc.
a Delaware corporation, as a Borrower
      By:           Its:             

            MAI Systems Corporation
a Delaware corporation, as a Borrower
      By:           Its:             

            Hotel Information Systems, Inc.
a Delaware corporation, as a Borrower
      By:           Its:             

            CLS Software International, Inc.
a California corporation, as a Borrower
      By:           Its:             

            Wells Fargo Foothill, Inc.
a California corporation, as Agent and a Lender
      By:           Its: