SHALL BECOME FULLY
VESTED AND SHALL BE EXERCISABLE FOR THE BALANCE OF THE TERM OF SUCH OPTIONS, AND
(III) LUMP SUM CASH PAYMENT EQUAL TO FOUR HUNDRED THOUSAND DOLLARS ($400,000)
MINUS THE AGGREGATE AMOUNT OF BASE SALARY PAYMENTS PAID BY SOFTBRANDS TO
EXECUTIVE FOR THE EXECUTIVE TERM AND LESS THE AMOUNT OF ANY PAYMENT PREVIOUSLY
MADE PURSUANT TO SECTION 4.3(III).
THIS SECTION 4.6 WILL NOT LIMIT THE
ENTITLEMENT OF THE EXECUTIVE'S ESTATE OR BENEFICIARIES TO ANY DEATH OR OTHER
BENEFITS THEN AVAILABLE TO THE EXECUTIVE UNDER ANY LIFE INSURANCE, STOCK
OWNERSHIP, STOCK OPTIONS, OR OTHER BENEFIT PLAN OR POLICY THAT IS MAINTAINED BY
SOFTBRANDS FOR THE EXECUTIVE'S BENEFIT.
4.7
EFFECT OF TERMINATION.
EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS
TRANSITION AGREEMENT, THE TERMINATION OF EMPLOYMENT SHALL NOT IMPAIR ANY
OBLIGATION THAT ACCRUED PRIOR TO TERMINATION, OR SHALL IT EXCUSE THE PERFORMANCE
OF ANY OBLIGATION WHICH IS REQUIRED OR CONTEMPLATED HEREUNDER TO BE PERFORMED
AFTER TERMINATION, AND ANY SUCH OBLIGATION SHALL SURVIVE THE TERMINATION OF
EMPLOYMENT AND THIS TRANSITION AGREEMENT.
ARTICLE V
COVENANTS AND REPRESENTATIONS OF EMPLOYEE
5.1
NONCOMPETITION.
THE EXECUTIVE ACKNOWLEDGES THAT HE HAS HAD AND
WILL HAVE ACCESS AT THE HIGHEST LEVEL TO, AND THE OPPORTUNITY TO ACQUIRE
KNOWLEDGE OF, SOFTBRANDS' CUSTOMER LISTS, CUSTOMER NEEDS, BUSINESS PLANS, TRADE
SECRETS AND OTHER CONFIDENTIAL AND PROPRIETARY INFORMATION FROM WHICH SOFTBRANDS
MAY DERIVE ECONOMIC OR COMPETITIVE ADVANTAGE, AND THAT HE IS ENTERING INTO THE
COVENANTS AND REPRESENTATIONS IN THIS ARTICLE V IN ORDER TO PRESERVE THE
GOODWILL AND GOING CONCERN VALUE OF SOFTBRANDS, AND TO INDUCE SOFTBRANDS TO
ENTER INTO THIS TRANSITION AGREEMENT.
THE EXECUTIVE AGREES NOT TO COMPETE WITH
SOFTBRANDS OR ITS DIRECT OR INDIRECT SUBSIDIARIES (A "COMPANY ENTITY") OR TO
ENGAGE IN ANY UNFAIR COMPETITION WITH SOFTBRANDS THROUGH DECEMBER 31, 2007.
FOR
PURPOSES OF THIS TRANSITION AGREEMENT, THE PHRASE "COMPETE WITH SOFTBRANDS," OR
THE SUBSTANTIAL EQUIVALENT THEREOF, MEANS, SUBJECT TO THE EXCEPTIONS SET FORTH
BELOW, THAT EXECUTIVE, EITHER ALONE OR AS A PARTNER, MEMBER, DIRECTOR, EMPLOYEE,
SHAREHOLDER OR AGENT OF ANY OTHER BUSINESS, OR IN ANY OTHER INDIVIDUAL OR
REPRESENTATIVE CAPACITY, DIRECTLY OR INDIRECTLY OWNS, MANAGES, OPERATES,
CONTROLS, OR PARTICIPATES IN THE OWNERSHIP, MANAGEMENT, OPERATION OR CONTROL OF,
OR WORKS FOR OR PROVIDES CONSULTING SERVICES TO, OR PERMITS THE USE OF HIS NAME
BY OR LENDS MONEY TO, ANY BUSINESS OR ACTIVITY WHICH IS OR WHICH BECOMES, AT THE
TIME OF THE ACTS OR CONDUCT IN QUESTION, DIRECTLY OR INDIRECTLY COMPETITIVE WITH
THE DEVELOPMENT, FINANCING AND/OR MARKETING OF THE PRODUCTS, PROPOSED PRODUCTS
OR SERVICES OF ANY COMPANY ENTITY.
THROUGH DECEMBER 31, 2007, EXECUTIVE SHALL
NOT DIRECTLY OR INDIRECTLY ACQUIRE ANY STOCK OR INTEREST IN ANY CORPORATION,
PARTNERSHIP, OR OTHER BUSINESS ENTITY THAT COMPETES, DIRECTLY OR INDIRECTLY,
WITH THE BUSINESS OF A COMPANY ENTITY WITHOUT OBTAINING THE PRIOR WRITTEN
CONSENT OF SOFTBRANDS.
7
NOTWITHSTANDING THE FOREGOING, THIS SECTION 5.1 SHALL NOT APPLY TO THE OWNERSHIP
OR ACQUISITION OF STOCK OR AN INTEREST REPRESENTING LESS THAN A 5% BENEFICIAL
INTEREST IN A CORPORATION THAT IS OBLIGATED TO FILE REPORTS WITH THE