Document:

Exhibit 4.7

 

AMENDMENT NO. 3 TO

 

SENIOR SUBORDINATED SECURED NOTE AND 

WARRANT PURCHASE AGREEMENT

 

This
Amendment No. 3 effective as of September 30, 2004 (this “Amendment No.
3”) amends that certain Senior Subordinated Secured Note and Warrant
Purchase Agreement dated as of November 26, 2002 (as so amended and in
effect from time to time, the “Purchase Agreement”), by and among
SoftBrands, Inc., a Delaware corporation (the “Company”), its
Significant Subsidiaries (as defined in the Purchase Agreement) (collectively,
the “Borrowers”) and Capital Resource Partners IV, L.P. (the “Purchaser”).

 

1.             Amendment
of the Purchase Agreement.

 

1.01.       Section 7.01(o)(i)
and Section 7.01(o)(ii) of the Purchase Agreement shall be amended such
that they shall read in their entirety as follows:

 

“(i)          Minimum
EBITDA.  Commencing with and
including the fiscal quarter ending December 31, 2004, the Company will
maintain, on a consolidated basis, measured
at the end of each fiscal quarter, EBITDA for the previous twelve (12)
months of not less than those amounts set forth next to the corresponding
fiscal quarters set forth on Schedule 7.01(o)(i) attached hereto;
provided, that (a) for the quarter ending December 31, 2004 EBITDA
for the previous (3) months shall be measured; (b) for the quarter ending March 31,
2005 EBITDA for the previous six (6) months shall be measured and (c) for the
quarter ending June 30, 2005 EBITDA for the previous nine (9) months shall
be measured.

 

(ii)           Fixed
Charge Coverage Ratio.  Commencing on
and including the fiscal quarter ending December 31, 2004, the Company
will maintain, on a consolidated basis, measured at the end of each fiscal
quarter, a Fixed Charge Coverage Ratio for the previous twelve (12) months of
not less than the amounts set forth next to the corresponding fiscal quarters
set forth on Schedule 7.01(o)(ii) attached hereto; provided, that
(a) for the quarter ending December 31, 2004 Fixed Charge Coverage Ratio
for the previous three (3) months shall be measured; (b) for the quarter ending
March 31, 2005 Fixed Charge Coverage Ratio for the previous six (6) months
shall be measured and (c) for the quarter ending June 30, 2005 Fixed
Charge Coverage Ratio for the previous nine (9) months shall be measured.”

 

1.02.       Schedule 7.01(o)(i)
to the Purchase Agreement shall be replaced with Schedule 7.01(o)(i)
attached as Exhibit A hereto.

 

1.03.       Schedule 7.01(o)(ii)
to the Purchase Agreement shall be replaced with Schedule 7.01(o)(ii)
attached as Exhibit B hereto.

 

1.04.       Section 7.02(m)
of the Purchase Agreement shall be amended such that it shall read in its
entirety as follows:

 

 

“(m)        Capital
Expenditures.  Make, or permit any
Subsidiary to make, Capital Expenditures during any fiscal quarter of the
Company which, when added to the Capital Expenditures for the Company and its
Subsidiaries for the previous nine (9) months, exceed the amount set forth next
to the corresponding quarter set forth on Schedule 7.02(m) ;
provided, that (a) for the quarter ending December 31, 2004 Capital
Expenditures for the previous three (3) months shall be measured; (b) for the
quarter ending March 31, 2005 Capital Expenditures for the previous six
(6) months shall be measured and (c) for the quarter ending June 30, 2005
Capital Expenditures for the previous nine (9) months shall be measured.”

 

1.05.       Schedule 7.02(m)
to the Purchase Agreement shall be replaced with Schedule 7.02(m)
attached as Exhibit C hereto.

 

2.             INTENTIONALLY
OMITTED.

 

3.             Miscellaneous.

 

3.01.       Effect.  Except as amended hereby, the Purchase
Agreement shall remain in full force and effect.

 

3.02.       Waiver.  This Amendment No. 3 is effective only in the
specific instance and for the specific purpose for which it is executed and
shall not be considered a waiver or agreement to amend as to any provision of
the Purchase Agreement in the future.

 

3.03.       Defined
Terms.  All capitalized terms used
but not specifically defined herein shall have the same meanings given such
terms in the Purchase Agreement unless the context clearly indicates or
dictates a contrary meaning.

 

3.04.       Costs,
Expenses, Taxes.  The Company agrees
to pay a restructuring fee of $50,000 to Capital Resource Management, Inc. and
all costs and expenses of the Purchaser in connection with the preparation,
execution and delivery of this Amendment No. 3 and other instruments and
documents to be delivered hereunder, including the reasonable fees and
out-of-pocket expenses of the Purchaser and the fees of Testa, Hurwitz &
Thibeault, LLP, special counsel for the Purchaser, with respect thereto.

 

3.05.       Governing
Law.  This Amendment No. 3 shall be
governed by, and construed and enforced in accordance with, the internal laws
of the Commonwealth of Massachusetts, without regard to conflicts of laws
principles.

 

3.06.       Seal.  This Amendment No. 3 is executed as an
instrument under seal.

 

3.07.       Counterparts.  This Amendment No. 3 may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and each of the parties hereto may execute this Amendment
No. 3 by signing any of such counterparts.

 

2

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 as of
the date first above written.

 

	
   

  	
  SOFTBRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David G.
  Latzke

  	
   

  
	
   

  	
  Name
  (Printed): David G. Latzke

  
	
   

  	
  Title:
  Senior Vice President, Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SOFTBRANDS
  MANUFACTURING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David G. Latzke

  	
   

  
	
   

  	
  Name
  (Printed): David G. Latzke

  
	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SOFTBRANDS
  INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David G. Latzke

  	
   

  
	
   

  	
  Name (Printed):David G. Latzke

  
	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SOFTBRANDS
  LICENSING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David G. Latzke

  	
   

  
	
   

  	
  Name
  (Printed):David G. Latzke

  
	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SOFTBRANDS EUROPE
  LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David G. Latzke

  	
   

  
	
   

  	
  Name
  (Printed): David G. Latzke

  
	
   

  	
  Title:
  Director

  

 

3

 

	
   

  	
  PURCHASERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  CAPITAL RESOURCE
  PARTNERS IV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  CRP Partners IV,
  LLC

  
	
   

  	
   

  	
  Its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Ammerman

  	
   

  
	
   

  	
  Name:
  

  
	
   

  	
  Title:
  Managing Member

  

 

4

 

Exhibit A

 

SCHEDULE 7.01(o)(i)

 

Minimum EBITDA

 

	
  Fiscal Quarter Ended

  	
   

  	
  Minimum EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  1,400,000

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  3,100,000

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  5,100,000

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  7,200,000

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  8,000,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  8,600,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  9,800,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  10,800,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  11,200,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  11,500,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  12,000,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  12,500,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  13,300,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  16,000,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  16,000,000

  	
   

  

 

5

 

Exhibit B

 

SCHEDULE 7.01(o)(ii)

 

Fixed Charge Coverage Ratio

 

	
  Fiscal Quarter Ended

  	
   

  	
  Fixed
  Charge Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  0.30

  	
   

  
	
  March 31, 2005

  	
   

  	
  0.45

  	
   

  
	
  June 30, 2005

  	
   

  	
  0.60

  	
   

  
	
  September 30, 2005

  	
   

  	
  0.75

  	
   

  
	
  December 31, 2005

  	
   

  	
  0.75

  	
   

  
	
  March 31, 2006

  	
   

  	
  0.75

  	
   

  
	
  June 30, 2006

  	
   

  	
  0.80

  	
   

  
	
  September 30, 2006

  	
   

  	
  1.00

  	
   

  
	
  December 31, 2006

  	
   

  	
  0.75

  	
   

  
	
  March 31, 2007

  	
   

  	
  0.75

  	
   

  
	
  June 30, 2007

  	
   

  	
  0.75

  	
   

  
	
  September 30, 2007

  	
   

  	
  0.75

  	
   

  
	
  December 31, 2007

  	
   

  	
  1.00

  	
   

  
	
  March 31, 2008

  	
   

  	
  1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  1.00

  	
   

  

 

6

 

Exhibit C

 

SCHEDULE 7.02(m)

 

Capital Expenditures

 

	
  Fiscal Quarter Ended

  	
   

  	
  Capital Expenditures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  400,000

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  800,000

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  1,600,000

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  1,700,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  1,800,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  1,900,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  2,100,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  2,300,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  2,400,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  

 

7Exhibit 4.8

 

THIS PROMISSORY NOTE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

 

SOFTBRANDS,
INC.

 

SENIOR SUBORDINATED SECURED NOTE
DUE 2008

 

	
  $20,000,000.00

  	
  October 1, 2003

  

 

FOR VALUE RECEIVED, SoftBrands, Inc., a Delaware
corporation (the “Company”), hereby promises to pay to Capital Resource
Partners IV, L.P. or assigns (hereinafter referred to as the “Payee”), on or
before December 31, 2008, the principal sum of Twenty Million Dollars
(S20,000,000.00) or such part thereof as then remains unpaid, and to pay interest
from October 1, 2003 until the whole amount of the principal hereof remaining
unpaid shall become due and payable at the rate of fourteen percent (14%) per
annum on the whole amount of said principal sum remaining from time to time
unpaid, such interest to be payable quarterly in arrears on the last Business
Day of March, June, September and December in each year, the first such payment
to be due and payable on December 31, 2003. 
Except as set forth in the Agreement and the preceding sentence, principal,
premium, if any, and interest shall be payable in lawful money of the United
States of America, in immediately available funds, by wire transfer of funds to
the account or accounts designated in writing by the Payee or in such other
manner as the Payee may designate from time to time in writing to the
Company.  Interest shall be computed on
the basis of a 360-day year for the actual number of days elapsed.  Nothing in this Note shall require the
Company to pay interest at a rate in excess of the maximum rate permitted by
applicable law.  Any interest payable
hereunder or under any other instrument relating to the indebtedness evidenced
hereby that is in excess of the maximum rate permitted by applicable law shall,
in the event of acceleration of maturity, late payment, prepayment, or
otherwise, be applied to a reduction of the unrepaid indebtedness evidenced
hereby and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of such unrepaid indebtedness, such excess shall be
refunded to the Company.  To the extent
not prohibited by applicable law, determination of the maximum rate permitted
by applicable law shall at all times be made by amortizing, prorating,
allocating and spreading in equal parts during the full term of the
indebtedness evidenced hereby, all interest at any time contracted for, charged
or received from the Company in connection with the indebtedness evidenced
hereby, so that the actual rate of interest on account of such indebtedness is
uniform throughout the term thereof.

 

If an Event of Default, as defined in the Agreement
(as defined below), has occurred and is continuing, any outstanding unpaid
principal hereof and any unpaid interest thereon shall bear interest, payable
on demand, (i) should the Event of Default be pursuant to Section 8.01 (a) or
(b) of the Agreement, at the rate of nineteen percent (19%) per annum, or such
lower rate as then may be the maximum rate permitted by applicable law, or (ii)
otherwise, at the rate of seventeen percent (17%) per annum, or such lower rate
as then may be the maximum rate permitted by

 

 

applicable law; provided,
however, that upon the cessation or cure of such Event of Default, if no other
Event of Default is then continuing, this Note shall again resume bearing
interest at the rate of fourteen percent (14%) per annum from the date such
Events of Default are cured.

 

This Note is issued pursuant to and is entitled to the
benefits of a certain Senior Subordinated Secured Note and Warrant Purchase
Agreement, dated as of November 26, 2002, by and among the Company, its
Significant Subsidiaries (as defined therein) and Capital Resource Partners IV,
L.P. (as the same may be amended from time to time, referred to herein as the “Agreement”),
and each holder of this Note, its acceptance hereof, agrees to be bound by the
provisions of the Agreement.  The Company
and the Payee further acknowledge and agree that (i) this Note is subject to
prepayment, in whole or in part, and to certain mandatory redemption payments,
as specified in the Agreement and (ii) in case of an Event of Default, as
defined in the Agreement, the principal of this Note may become or may be
declared due and payable in the manner and with the effect provided in the
Agreement.

 

As further provided in the Agreement, upon surrender
of this Note for transfer or exchange, a new Note or new Notes of the same
tenor dated the date to which interest has been paid on the surrendered Note
and in an aggregate principal amount equal to the unpaid principal amount of
the Note so surrendered will be issued to the transferee or transferees.

 

In case any payment herein provided for shall not be
paid when due, the Company promises to pay all costs of collection, including
all reasonable attorney’s fees.

 

Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Agreement.  This Note shall be governed by, and construed
in accordance with, the internal laws of the Commonwealth of Massachusetts.

 

The Company and all endorsers and guarantors of this
Note hereby waive presentment, demand, notice of nonpayment, protest and all
other demands and notices in connection with the delivery, acceptance,
performance or enforcement of this Note.

 

2

 

IN WITNESS WHEREOF, the Company has executed this Note
under seal as of the date first written above.

 

	
   

  	
  SOFTBRANDS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  David G. Latzke

  	
   

  
	
   

  	
   

  	
  Name (Printed):
  David G. Latzke

  
	
   

  	
   

  	
  Title: SVP &
  CFO

  
	
   

  	
   

  	
   

  
	
  [Corporate Seal]

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Craig Thompson

  	
   

  	
   

  
	
  Title: VP, Finance & Accounting

  	
   

  
						

 

3

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