Document:

Exhibit
4.15

 

AMENDMENT
NO. 1 TO INVESTOR AGREEMENT

 

This Amendment No. 1 is made and entered into
as of the 26th day of November, 2002 by and between SoftBrands,
Inc., a Delaware Corporation (“SoftBrands”) and Info-Quest SA, a corporation
formed under the laws of Greece (“Info-Quest”).

 

WHEREAS, SoftBrands and Info-Quest are
parties to that certain Investor Agreement by and between SoftBrands, Inc. and
Info-Quest SA dated as of May 15, 2002 (the “Info-Quest Agreement”) which
provides to Info-Quest, among other things, certain registration rights and
purchase participation rights relative to shares of the Common Stock of
SoftBrands;

 

WHEREAS, SoftBrands has negotiated the sale
to Capital Resource Partners IV, L.P., a Delaware limited partnership and CRP
Investment Partners IV, LLC, a Delaware limited liability company (together, “CRP”)
of $20,000,000 of its Senior Subordinated Secured Notes, due 2009 (the CRP “Notes”)
together with warrants to purchase 6,956,715 shares of common stock of
SoftBrands at a price of 57 cents (the “CRP Warrants”) pursuant to a Senior
Subordinated Secured Note and Warrant Purchase Agreement dated as of the date
hereof (the “Purchase Agreement”) (see attached appendix A) by and among
SoftBrands and CRP;

 

WHEREAS, CRP will receive, upon purchase of
the Notes and Warrants, certain registration rights relative to the shares of
common stock of SoftBrands issuable upon exercise of the Warrants pursuant to
an Investors Rights Agreement by and between SoftBrands and CRP (the “CRP
Registration Agreement”);

 

WHEREAS, CRP has conditioned its investment
in the Notes and Warrants on the execution of this Amendment;

 

NOW THEREFORE, in consideration of the
foregoing recitals, and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as
follows:

 

1.             Waiver
of Purchase Participation Right. 
Pursuant to Section 6.10 of the Info-Quest Agreement. Info-Quest
hereby expressly waives its right pursuant to Article 4 of the Info-Quest
Agreement to purchase Notes, Warrants or any shares of Common Stock of the
Company issued or issuable upon any conversion or exercise of the CRP Warrants
in connection with this offering.  This
waiver is one time only and applies to the specific offering as described in
the Purchase Agreement in appendix A (Purchase Agreement among Softbrands Inc.
and Capital Resource Partners IV L.P. – TH. & T Draft 11/1/2002). Nothing
in this Section 1 shall be construed as a change in the Info-Quest
Agreement or a waiver by Info-Quest to participate in any future offerings
according to the Info-Quest Agreement.

 

2.             Pro
Rata Piggy Back Registration Right. 
Sections 3.2(a)(i) and 3.2(a)(ii) of the Info-Quest Agreement are hereby
amended to provide that, in the event a recognized independent investment
banker determines, in such firm’s opinion, that the number of Registrable
Securities (as defined in the Info-Quest Agreement) proposed to be included in
a registration under Section 3.2 is greater than the

 

 

number of securities which can be offered without adversely affecting
the offering, the number of such Registrable Securities may be reduced, pro
rata, with any reduction in the number of Warrant Shares (as defined in the CRP
Registration Agreement) included in such registration. The Registrable
Securities held by Info-Quest shall be deemed to have the contractual
incidental registration rights or “piggyback” rights that rank on par with (not
subordinate to) the contractual incidental registration rights or “piggyback”
rights held by CRP.

 

IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be signed as of the date first written above.

 

 

	
   

  	
   

  	
   

  	
  SOFTBRANDS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ David G. Latzke

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: David
  G. Latzke

  
	
   

  	
   

  	
   

  	
   

  	
  Title: CFO

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  INFO-QUEST SA

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ J. Tsakalakos

  	
  and

  	
  /s/ D. Rovatsos

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  J. Tsakalakos

  	
  and

  	
  D. Rovatsos

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  CFO

  	
   

  	
  TreasurerExhibit 10.1

 

EMPLOYMENT
AGREEMENT

BETWEEN

SOFTBRANDS, INC. AND

GEORGE H. ELLIS

 

THIS
EMPLOYMENT AGREEMENT (the “Agreement”), is made effective as of January 1, 2002
(“Effective Date”), is entered into by and between SoftBrands, Inc., a Delaware
corporation (the “Company”) and George H. Ellis (the “Executive”), collectively
referred to herein as the “parties.”

 

WHEREAS,
the Executive has been employed as the Chief Executive Officer and Chairman of
the Board of AremisSoft Corporation (“AremisSoft”), the Company’s Parent
corporation, since October 1, 2001, and Executive has an employment agreement
dated as of October 1, 2001 (the “AremisSoft Employment Agreement”) with
AremisSoft that is substantially similar to this Agreement;

 

WHEREAS,
the Company wishes to employ the Executive to serve as its Chief Executive
Officer and Chairman of the Board of Directors of the Company (the “Board”) as
well as to perform other duties on behalf of the Company, as determined by the
Board.

 

NOW,
THEREFORE, for and in consideration of the mutual promises and conditions made
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

ARTICLE
I

EMPLOYMENT
AND TERM OF EMPLOYMENT

 

1.1                               Employment and Term.  The Company hereby employees Executive to
render full-time services to the Company, subject to Section 2.2 of the
Agreement, and except during vacation periods and reasonable periods of absence
due to sickness, personal injury or other disability, upon the terms and
conditions set forth below, from the date of this Agreement until the
employment relationship is terminated in accordance with the provisions of this
Agreement.  This Agreement is for a term
of one (1) year (the “Stated Term”) unless renewed or terminated earlier as
provided for herein (the “Employment Term”).

 

1.2                               Renewal.  This Agreement will be automatically renewed
for an additional one (1) year period (without any action by either party) at
the end of the Stated Term and on each anniversary thereof (“Renewal Period”),
unless one party gives to the other written notice sixty (60) days in advance
of the beginning of any of the Renewal Period that this Agreement is to be
terminated.

 

1.3                               Acceptance.  Executive hereby accepts employment with the
Company and agrees to devote his full-time attention and best efforts to
rendering the services described below. 
The Executive shall accept and follow the direction and authority of the
Board in the performance of his duties, and shall comply with all existing and
future regulations applicable to employees of the Company and to the Company’s
business.

 

 

1.4                               Termination of Prior Agreements.  Upon execution of this Agreement all prior
employment and/or consultant agreements between Executive, AremisSoft, the
Company or its subsidiaries, including the AremisSoft Employment Agreement,
shall be deemed terminated and there shall be no right to severance or other
related benefits thereunder; provided, however, that the foregoing will not
apply to any obligation of the Company or any of its subsidiaries to indemnify
Executive against any losses, costs, damages or expenses.

 

ARTICLE
II

DUTIES
OF EMPLOYEE

 

2.1                               General Duties.  Executive shall serve as Chief Executive
Officer and Chairman of the Board.  In
such capacities, Executive shall do and perform all services, acts, or other
things necessary or advisable to manage and conduct the business of the
Company, including, but not limited to, the supervision, direction and control
of the business and other employees of the Company, subject to the policies and
direction of the Board.  To the extent
consistent with the Company’s Certificate of Incorporation (“articles”) and
Bylaws (“bylaws”), Executive shall have all powers, duties and responsibilities
necessary to carry out his duties, and such other powers and duties and
responsibilities necessary to carry out his duties, and such other powers and
duties as the Board may prescribe consistent with the Company’s articles and
bylaws. Throughout the Executive Term, the Company will (i) use its best
efforts to cause the Executive to be elected as a member of the Board and will
use its best efforts to cause him to be included in the management slate for
election as a director at every stockholders’ meeting at which his term as a
director would otherwise expire, and (ii) at the Executive discretion, cause
the Executive to be elected as a member of the Board of Directors of the
Company subsidiaries.

 

2.2                               Exclusive Services.                                        Except
as set forth on Exhibit A thereto, it is understood and agreed that the
Executive may not engage in any other business activity during the Employment
Term, whether or not for profit or other remuneration, without the prior
written consent of the Company; provided, however, that the
Executive may (i) manage personal and family investments (ii) engage in
charitable, philanthropic, educational, religious, civic and similar types of
activities to the extent that such activities do not materially hinder or
otherwise interfere with the business of the Company or any affiliate or
subsidiary of the Company, or the performance of the Executive’s duties under
this Agreement and (iii) subject to the approval of the Board, serve as a
director or as a member of an advisory board of another business enterprise.

 

2.3                               Reporting Obligations.  In connection with the performance of his
duties hereunder, the Executive shall report directly to the Board.

 

ARTICLE
III

COMPENSATION
AND BENEFITS OF EMPLOYEE

 

3.1                               Annual Base Salary.  The Company shall pay the Executive salary
for the services to be rendered by him during the Employment Term at the rate
of two hundred and sixty thousand dollars ($260,000) annually (prorated for any
portion of a year), subject to increases, if any, as the Company’s Compensation
Committee may determine in its sole discretion after periodic review of the
Executive’s performance of his duties hereunder not less frequently than
annually.  Such base salary shall be
payable in periodic installments in accordance with the terms

 

2

 

of the Company’s regular payroll practices in effect from time to time
during the term of this Agreement, but in no event less frequently than once
each month.  Such base salary cannot be
decreased.

 

3.2                               Bonuses.  In addition to the base salary and other
benefits provided to Executive hereunder, Executive is eligible to receive
bonuses based on performance and Executive’s attainment of objectives
established by the Board as Compensation Committee periodically.

 

3.3                               Expenses.  The Company shall pay or reimburse the
Executive for all reasonable, ordinary and necessary business expenses actually
incurred or paid by the Executive in the performance of Executive’s services
under this Agreement in accordance with the expense reimbursement policies of
the Company in effect from time to time during the Employment Term, upon
presentation of proper expense statements or vouchers or such other written
supporting documents as the Company may reasonably require.

 

3.4                               Vacation.  The Executive shall be entitled to four (4)
weeks paid vacation for each calendar year (prorated for any portion of a year,
as applicable).  Notwithstanding anything
to the contrary in this Agreement, vacation time shall cease to accrue beyond
eight weeks at any given time during the Employment Term.

 

3.5                               Indemnification.  Consistent with the terms of the Company’s
articles and bylaws, the Company shall indemnify Executive against any losses,
costs, damages or expenses incurred as a direct consequence of the discharge of
his duties or by reason of his status as an agent of the Company and hold
Executive harmless for any actions taken or decisions made by him in good faith
while performing services in his capacity as an officer of the Company during
the Employment Term.  In concurrence with
the execution of this Agreement, the Company shall enter into a specific
indemnification agreement with the Executive, which terms shall not reduce the
Executive’s rights as set forth in this Section 3.5.  The Company has in effect and will continue
in full force and effect at all times during the Employment Term an officer’s
and director’s liability insurance policy covering the Executive on terms no
less favorable than those in effect on the Effective Date in all respects, including
coverage and amounts.

 

3.6                               Unreimbursed Medical Expense and Tax Planning
Expense.  The Company will
reimburse Executive, upon presentation of bills incurred by Executive, for (a)
up to $5,000 per year of medical expense incurred by Executive that is not
otherwise paid under the benefit plans provided in accordance with Section 3.7
(including the deductible portion of any health benefit reimbursement), and (b)
for up to an additional $5,000 of expense incurred by Executive for tax and
financial planning advice

 

3.7                               General Employment Benefits.  Except where expressly provide for herein,
the Executive shall be entitled to participate in, and to receive the benefits
under, any pension, health, life, accident and disability insurance plans or
programs and any other employee benefit or fringe benefit plans that the
Company makes available generally to its employees, as the same may be in
effect from time to time during the Employment Term.

 

3

 

3.8                               Office  Space.  The Company
shall reimburse the Executive for seventy-five percent (75%) of the actual cost
paid by the Executive for maintaining an office at 8401 North Central
Expressway, Suite 840, Dallas, Texas.

 

3.9                               Personal Secretary.  The Company shall provide a personal
secretary at the Executive’s choice.  The
Executive agrees to reimburse the Company for twenty-five percent (25%) of the
compensation costs, including salary and benefits, for the personal secretary.

 

3.10                        Location; Travel.  In connection with his employment during the
Employment Term, unless otherwise agreed by the Executive, the Executive will
be based in the Dallas metropolitan area. 
Executive will undertake normal business travel on behalf of the Company,
the reasonable expenses of which will be paid by the Company pursuant to
Section 3.3 of this Agreement.

 

ARTICLE
IV

TERMINATION OF EMPLOYMENT

 

4.1                               Termination.  This Agreement may be terminated earlier as
provided for in this Article IV, or extended as set forth herein.

 

4.2                               Termination For Cause.  The Company reserves the right to terminate
this Agreement for cause upon: (a) Executive’s willful and continued failure to
substantially perform his duties with the Company (other than such failure
resulting from his incapacity due to physical or mental illness) (b) Executive’s
willful engagement in gross misconduct, as determined by the Board in good
faith, which is materially and demonstrably injurious to the Company; or (c)
Executive’s commission of a felony, or an act of fraud against the Company or
its affiliates.  Any act or failure to
act that is done or omitted to be done by Executive in good faith for the
Company will be conclusively presumed not to be willful for purposes of this
Section 4.2.  The Company may not
terminate the Executive’s employment for cause under this Section 4.2 unless,
in the case of Section 4.2(a), the Company has first provided Executive with
written notice, specifying in detail the act or acts alleged to constitute
cause, and provided the Executive with a period of not less than 30 calendar
days to cure the failure in the manner specified in such notice.  The Executive’s employment may be terminated
for cause only upon the adoption of a resolution by the affirmative vote of at
least a majority of the Board (excluding the Executive, if the Executive is
then a member of the Board) finding cause and terminating Executive’s
employment for cause.

 

Executive
shall not be entitled to any severance benefits and all stock options of the
Company granted to Executive which have not vested shall be canceled upon
termination for cause.

 

4.3                               Termination Without Cause.  Notwithstanding anything to the contrary in
this Agreement, the Company reserves the right to terminate this Agreement at
any time upon thirty (30) days’ written notice to Executive, without cause,
subject to the express terms and provisions set forth in Sections 4.5 and 4.6.

 

4

 

4.4                               Voluntary Termination by Executive.  Notwithstanding anything to the contrary in
this Agreement, Executive may terminate this Agreement at any time upon thirty
(30) days’ written notice to the Company, subject to the terms and provisions
below.

 

Except in the case of a termination for “good reason”,
as set forth in Section 4.7 of this Agreement, the Company shall not be
obligated to pay any severance benefit to Executive if Executive terminates
this Agreement pursuant to this Section 4.4.

 

4.5                               Severance.  In the event that during the Employment Term
the Executive is terminated by the Company “without cause” (as set forth in
Section 4.3), the Executive terminates his employment for “good reason” (as set
forth in Section 4.7), the Executive shall be provided or promptly be paid (i)
any accrued but unpaid salary, accrued but unused vacation time, un-reimbursed
expenses which otherwise would be reimbursed in the normal course and vested
benefits under any of the Company’s benefit plan in which the Executive is a
participant, (ii) any bonus previously declared but not yet paid, and (iii) a
lump sum cash payment equal to four hundred thousand dollars ($400,000).  In addition, upon a termination under this
Section 4.5, any portion of any of stock options of the Company(“Options”)
granted to the Executive that is not then vested shall become fully vested and
all options shall be exercisable until the fifth anniversary of the grant date
for the applicable Options.

 

4.6                               Change of Control.  In the event that during the Employment Term
the Executive is terminated by the Company or the Executive terminates his employment
for “good reason,” as set forth in Section 4.7 of this Agreement, within twelve
(12) months following a “change of control” (as defined below) (a “Change of
Control Termination”), the Executive shall promptly be paid (i) any accrued but
unpaid salary, accrued but unused vacation time, un-reimbursed expenses which
otherwise would be reimbursed in the normal course and vested benefits under
any of the Company’s benefit plan in which the Executive is a participant, (ii)
any bonus previously declared but not yet paid, and (iii) a lump sum cash
payment equal to three (3) times the greatest of the annual base salary of the
Executive, as contained in Section 3.1 of this Agreement, or Executive’s then
current rate of compensation.  In
addition, upon a Change of Control Termination, any portion of any of the
Options granted to the Executive that is not then vested shall become fully
vested and all options shall be exercisable until the fifth anniversary of the
grant date for the applicable Options.  A
“Change in Control Termination” will also include a termination of the
Executive by the Company without cause or a termination by the Executive of his
employment for “good reason,” as set forth in Section 4.7 of this Agreement, in
either case, following the commencement of any discussion with a third person
that ultimately results in a “change in control” (as defined below).

 

For
purposes of this Section 4.6, a “change of control” shall mean an event
involving one transaction or a series of related transactions in which (i) the
Company issues securities representing more than fifty percent (50%) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (“the “Exchange Act”), or any
successor provision) of the outstanding voting power of the then outstanding
securities entitled to vote generally in the election of directors (“Voting
Stock”) of the Company to any individual, firm, partnership, or other entity,
including a “group” within the meaning of Section 13(d)(3) of the Exchange Act
(ii) the Company issues securities representing more than fifty percent (50%)
voting stock of the Company in connection with a merger,

 

5

 

consolidation or other business combination (other
than for purposes of reincorporation), (iii) the Company is acquired in a
merger or other business combination transaction in which the Company is not
the surviving corporation (other than a reincorporation), (iv) more than fifty
percent (50%) of the Company’s consolidated assets or earning power are sold or
transferred, or (v) the Board of the Company determines, in its sole and
absolute discretion, that there has been a change in control of the Company;
provided, however, that clauses (ii), (iii) and (iv), above, will constitute a “change
in control” only if all or substantially all of the individuals and entities
who were the beneficial owners of Voting Stock of the Company immediately prior
to such merger, consolidation or other business combination or sale or transfer
of earning power or assets (each, a “Business Combination”) beneficially own
less than 50% of the combined voting power of the then outstanding shares of
Voting Stock of the entity resulting from such Business Combination (including,
without limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company’s earning power or assets
either directly or through one or more subsidiaries).

 

4.7                               Good Reason.  The Executive may terminate his employment
for “good reason” after giving the Company detailed written notice thereof, if
the Company shall have failed to cure the event or circumstances constituting “good
reason” within ten business days after receiving such notice.  Good reason shall mean the occurrence of any
of the following without the written consent of the Executive or his approval
in his capacity as the Chairman of the Board: (i) the assignment to the
Executive of duties inconsistent with this Agreement or change in his reporting
obligations, positions, titles or authority; (ii) any failure by the Company to
comply with Article III hereof in any material way; (iii) the failure of the
Company to comply with and satisfy Section 6.2 of this Agreement; (iv) the failure
to elect, reelect or otherwise to maintain the Executive as a director of the
Company or as Chairman of the Board; (v) the relocation of the principal place
where the Executive regularly performs services for the Company outside of the
Dallas metropolitan area; (vi) at any time after the Company has notified the
Executive pursuant to Section 1,2 of this Agreement that the Company does not
intend to renew the Agreement and the Executive’s employment at the end of the
Employment Term, including any previous renewals, rather than to allow the
Agreement automatically to renew; or (vii) any material breach of this
Agreement by the Company.  The executive’s
continued employment shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting “good reason”
hereunder.

 

4.8                               Mitigation.  The Executive shall not be required to
mitigate damages with respect to the termination of this employment under this
Agreement by seeking other employment or otherwise, and there shall be no
offset by any claims the Company may have against the Executive, and the
Company’s obligation to make the payments provided for in this Agreement, and
otherwise to perform its obligations hereunder, shall not be affected by any
other circumstances, including, without limitation, any counterclaim,
recoupment, defense or other right which the Company may have against the
Executive or others.

 

4.9                               Gross-up Payment.  If the Executive becomes subject to the
excise tax imposed by Section 4999 of the Code on “excess parachute payments”
as defined in Section 280G of the Code by reason of any payments in the nature
of compensation by the Company or any affiliate or any acquiring entity, or the
Executive incurs any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest or penalties, being
hereinafter

 

6

 

collectively referred to as the “Excise Tax”), the Company shall be
obligated to promptly pay to the Executive that amount that is necessary to
place the Executive in the same after-tax (taking into account all federal,
state, local, and other taxes) financial position that the Employee would have
been in if he had not incurred any tax liability under Section 4999 of the Code
or otherwise relating to the Excise Tax.

 

4.10                        Disability.  If Executive becomes permanently and totally
disables, this Agreement shall be terminated. Executive shall be deemed
permanently and totally disabled if he is unable to engage in the activities
required by this Agreement by reason of any medically determined physical or
mental impairment, as confirmed by three independent physicians, which can be
expected to result in death or which has lasted or can be expected to last for
a continuous period of not less than 12 months. 
Upon termination due to disability, the Executive shall promptly be paid
(i) any accrued but unpaid salary, accrued by unused vacation time,
unreimbursed expenses which otherwise would be reimbursed in the normal course
and vested benefits under any of the Company’s benefit plans in which the
Executive is a participant, (ii) any bonus previously declared but not yet
paid, and (iii) a lump sum payment equal to his annual base salary, as
contained in Section 3.1 of this Agreement, or Executive’s then current rate of
compensation, whichever is greater.  In
addition, upon termination due to disability, any portion of any of the Options
granted to the Executive that is not then vested shall become fully vested and
all Options shall be exercisable until the fifth anniversary of the grant date
for the applicable Option.  This Section
4.10 will not limit the entitlement of the Executive to any other benefits then
available to the Executive under any plan or program of the Company.

 

4.11                        Death.  If Executive dies during the term of this
Agreement, this Agreement shall be terminated on the last day of the calendar
month of his death subject to the express terms and provisions below.  Upon termination due to death, the designated
beneficiary, as provided in Section 6.8 below, or the estate or representative
of Executive, shall promptly be paid (i) any accrued but unpaid salary, accrued
but unused vacation time, unreimbursed expenses which otherwise would be
reimbursed in the normal course and vested benefits under any of the Company’s
benefit plans in which the Executive is a participant, (ii) any bonus
previously declared but not yet paid, and (iii) a lump sum payment equal to
Executive’s annual base salary, as contained in Section 3.1 of this Agreement,
or Executive’s then current rate of compensation, whichever is greater.  In addition, upon termination due to death,
any portion of the Options granted to the Executive that is not then vested
shall become fully vested and all Options shall be exercisable until the fifth
anniversary of the grant date for the applicable Option.  This Section 4.11 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
the Company for the Executive’s benefit.

 

4.12                        Effect of Termination.  Except as expressly provided for in this
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 Agreement.

 

7

 

ARTICLE
V

COVENANTS AND REPRESENTATIONS OF EMPLOYEE

 

5.1                               Unfair and Non-Compensation.  The Executive acknowledges that he will have
access at the highest level to, and the opportunity to acquire knowledge of,
the Company’s customer lists, customer needs, business plans, trade secrets and
other confidential and proprietary information from which the Company 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 the Company, and to induce the Company to
enter into this Agreement.  The Executive
agrees not to compete with the Company or to engage in any unfair competition
with the Company during the Employment Term. 
For purposes of this Agreement, the phrase “compete with the Company,”
or the substantial equivalent thereof, means 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 the
Company.  During the Employment Term,
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 the Company without obtaining the prior
written consent of the Company. 
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
Securities and Exchange Commission pursuant to the Exchange Act.

 

5.2                               Confidential Information.  During the Employment Term, Executive agrees
to keep secret and to retain in the strictest confidence all material
confidential matters which relate to the Company or its “affiliate” (as that
term is defined in the Exchange Act), including, without limitation customer
lists, client lists, trade secrets, pricing lists, business plans, financial
projections and reports, business strategies, internal operating procedures,
and other confidential business information from which the Company derives an
economic or competitive advantage, or from which the Company might derive such
advantage in its business, labeled “secret” or “confidential” or some similar
term, and not to intentionally disclose any such information to anyone outside
of the Company, whether during or after the Employment Term, except in
connection with pursuing in good faith the interests and business of the
Company.  The foregoing restrictions and
obligations under this Section 5.2 will not apply (i) to any confidential
information that is or becomes generally available to the public or generally
known to persons engaged in businesses similar to or related to that of the
Company, other than as a result of a disclosure by Executive, (ii) if the
Executive is required by law to make disclosure, or (iii) to disclose to any
director of the Company.  The Company may
waive application of the foregoing restrictions and obligations in its
discretion from time to time.

 

5.3                               Non-Solicitation of Customers.  During
the Employment Term, the Executive will have access to confidential records and
data pertaining to the Company’s customers, their needs, and the relationship
between the Company and its customers. 
Such information is

 

8

 

considered secret and is disclosed during the Employment Term in
confidence.  Accordingly, during the
Employment Term, Executive and any entity controlled by him or with which he is
associated (as the terms “control” and “associate” are defined in the Exchange
Act) shall not, directly or indirectly (i) solicit for a competitive purpose,
interfere with, induce or entice away any person or entity that is or was a
client, customer or agent of the Company or its affiliates (as the term “affiliate”
is defined in the Exchange Act) or (ii) in any manner persuade or attempt to
persuade any such person or entity (A) to discontinue its business relationship
with the Company or its affiliates, or (B) to enter into a business
relationship with any entity or person the loss of which the Executive should
reasonably anticipate would be detrimental to the Company or its affiliates in
any respect.

 

5.4                               Non-Solicitation of Employees.  The Executive and any entity controlled by
him or with which he is associated (as the terms “control” and “associate” are
defined in the Exchange Act) shall not, during the Employment Term, directly or
indirectly solicit, interfere with, offer to hire or induce any person who is
or was an officer or employee of the Company or any affiliate (as the term “affiliate”
is defined in the Exchange Act) (other than secretarial personnel) to
discontinue his or her relationship with the Company or an affiliate of the
Company, in order to accept employment by, or enter into a business
relationship with, any other entity or person. 
(These acts are hereinafter referred to as the “prohibited acts of
solicitation.”)  The foregoing
restriction, however, shall not apply to any business with which Executive may
become associated after the Employment Term.

 

5.5                               Return of Property.  Upon termination of employment, and at the
request of the Company, the Executive agrees to promptly deliver to the Company
all Company or affiliate memoranda, notes, records, reports manuals, drawings,
designs, computer files in any media, and other documents (including extracts
and copies thereof) relating to the Company or its affiliates, and all other property
of the Company.

 

5.6                               Inventions.  All processes, inventions, patents,
copyrights, trademarks and other intangible rights that may be conceived or
developed by the Executive, either alone or with others, during the Employment
Term, whether or not conceived or developed during Executive’s working hours,
and with respect to which the equipment, supplies, facilities or trade secret
information of the Company was used, or that relate at the time of conception
or reduction to practice of the invention to the business of the Company, or to
the Company’s actual or demonstrably anticipated research or development, or
that result from any work performed by Executive for the Company, shall be the
sole property of the Company.  Upon the
request of the Company, Executive shall disclose to the Company all inventions
or ideas conceived during the Employment Term, whether or not the property of
the Company under the terms of this provision, provided that such disclosure
shall be received by the Company in confidence. 
Upon the request of the Company, Executive shall execute all documents,
including patent applications and assignments, required by the Company to
establish the Company’s rights under this provision.

 

5.7                               Representations.  The Executive represents and warrants to the
Company that he has full power to enter into this Agreement and perform his
duties hereunder, and that his execution and delivery of this Agreement and the
performance of his duties shall not result in a breach of, or constitute a
default under, any agreement or understanding, whether oral or written,

 

9

 

including, without limitation, any restrictive covenant or
confidentiality agreement, to which he is a party or by which he may be bound.

 

5.8                               Non-Payment Upon Non-Compliance.  Should Executive breach any one of the
covenants set forth in this Article V, the Company shall have no obligation to
make the payments or to provide Executive the benefits described in Sections
4.5 and 4.6 above, in addition to all other rights and remedies the Company may
have available t law or in equity.  The
Company shall provide written notice to Executive, ten (10) days prior to an
expected payment, of the breach of a covenant and the ensuing non-payment
thereof; provided, however, that if the Company learns of the breach without
sufficient time to provide ten (10) days notice, the Company shall provide
written notice as soon thereafter as practicable.

 

ARTICLE
VIARTICLE VI

MISCELLANEOUS PROVISIONS

 

6.1                               Notices.  All notices to be given by either party to
the other shall be in writing and may be transmitted by personal delivery,
facsimile transmission, overnight courier or mail, registered or certified,
postage prepaid with return receipt requested; provided, however,
that notices of change or address or telex or facsimile number shall be
effective only upon actual receipt by the other party.  Notices shall be delivered at the following
addresses, unless changed as provided for herein.

 

	
   

  	
  To the Executive:

  	
  George H. Ellis

  
	
   

  	
   

  	
  8401 North Central Expressway

  
	
   

  	
   

  	
  Suite 840

  
	
   

  	
   

  	
  Dallas, TX 75225

  
	
   

  	
   

  	
  Facsimile: (214) 363-4396

  
	
   

  	
   

  	
   

  
	
   

  	
  To the Company:

  	
  Board of Directors

  
	
   

  	
   

  	
  SoftBrands, Inc.

  
	
   

  	
   

  	
  Two Meridian Crossings, Suite 800

  
	
   

  	
   

  	
  Minneapolis, MN 55423

  
	
   

  	
   

  	
  Facsimile: (612) 851-1584

  
	
   

  	
   

  	
   

  
	
   

  	
  With Copy to:

  	
  Thomas Martin

  
	
   

  	
   

  	
  Dorsey & Whitney LLP

  
	
   

  	
   

  	
  50 South Sixth Street

  
	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
  Facsimile: (612) 340-7800

  

 

6.2                               No Assignment, In General.  Except as provided below, this Agreement and
the rights and obligations of the parties, may not be assigned by either party
without the prior written consent of the other party.

 

6.3                               Entire Agreement.  This Agreement and the documents delivered
pursuant hereto supersedes any and all other agreements or understandings of
the parties, either oral or written, with respect to the employment of the
Executive by the Company, and contains the complete and final agreement and
understanding of the parties with respect thereto.  The

 

10

 

Executive acknowledges that no representation, inducements, promises or
agreements, oral or otherwise, have been made by the Company or any of its
officers, directors, employees, or agents, which are not expressed herein, and
that no other agreement shall be valid or binding on the Company.

 

6.4                               Amendments and Modifications.  This Agreement may be amended or modified
only by a writing signed by both parties hereto.

 

6.5                               Withholding Taxes.  All amounts payable under this Agreement,
whether such payment is to be made in cash or other property, including without
limitation stock of the Company, shall be subject to withholding for Federal,
state and local income taxes, employment and payroll taxes and other legally
required withholding taxes and contributions to the extent appropriate in the
determination of the Company, and the Executive agrees to report all such
amounts as ordinary income on his personal income tax returns and for all other
purposes, as called for.

 

6.6                               Severability.  If any provision of this Agreement is held to
be invalid or unenforceable by any judgment of a tribunal of competent
jurisdiction, the remaining provisions and terms of this Agreement shall not be
affected by such judgment, and this Agreement shall be carried out as nearly as
possible according to its original terms and intent and, to the full extent
permitted by law, any provision or restrictions found to be invalid shall be
amended with such modifications as may be necessary to cure such invalidity,
and such restrictions shall apply as so modified, or if such provisions cannot
be amended, they shall be deemed severable from the remaining provisions and
the remaining provisions shall be fully enforceable in accordance with law.

 

6.7                               Effect of Waiver.  The failure of either party to insist on
strict compliance with any provision of this Agreement by the other party shall
not be deemed a waiver of such provision, or a relinquishment of any right
thereunder, or to affect either the validity of this Agreement, and shall not
prevent enforcement of such provision, or any similar provision, at any time.

 

6.8                               Designation of Beneficiary.  If the Executive shall die before receipt of
all payments and benefits to which he is entitled under this Agreement, payment
of such amounts or benefits in the manner provided herein shall be made to such
beneficiary as he shall have designated in writing filed with the Secretary of
the Company or, in the absence of such designation, to his estate or personal
representative.

 

11

 

6.9                               Attorneys Fees.

 

(i)                                     Without
regard to whether the Executive prevails, in whole or in part, in connection
therewith, the Company will pay and be financially responsible for 100% of any
and all attorneys’ and related fees and expenses incurred by the Executive in
connection with any dispute associated with the interpretation, enforcement or
defense of the Executive’s rights under this Agreement by litigation or
otherwise.  All such fees and expenses
will be paid by the Company as incurred by the Executive on a monthly basis.

 

(ii)                                  The
Company will reimburse the Executive for all legal fees and expenses incurred
by the Executive in connection with the preparation, review and negotiation of
this Agreement and any document, agreement or arrangement contemplated by this
Agreement or otherwise entered into by Executive in connection with the
commencement of his employment with the Company.

 

6.10                        Governing Law.  This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to its conflict of laws principles.

 

6.11                        Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.  For the purpose of proving the authenticity
of this Agreement, facsimile signature shall be treated the same as original
signatures.

 

6.12                        Company Representations.  The Company represents and warrants to the
Executive that this Agreement will be duly authorized and approved by the Board
not later than the Effective Date. 
Copies of the resolutions of the Board evidencing such action will be
provided to the Executive not later than the Effective Date.

 

6.13                        Holding Company and Subsidiary Guaranty.  As of the Effective Date, AremisSoft holds all of the outstanding capital
stock of the Company and AremisSoft Manufacturing (US), Inc. (Subsidiary”) is a
subsidiary of the Company.  In order to
induce the Executive to enter into this Agreement, Parent and Subsidiary hereby
agree to cause the Company to perform its obligations under the Agreement, and
Parent and Subsidiary unconditionally guarantee the performance by the Company
of its obligations under the Agreement including those obligations under
Articles III and IV of the Agreement.

 

12

 

IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above written.

 

	
   

  	
  COMPANY:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SOFTBRANDS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ David G. Latzke

  	
   

  
	
   

  	
   

  	
  David G. Latzke, Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AREMISSOFT MANUFACTURING (US), INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David G. Latzke

  	
   

  
	
   

  	
   

  	
  David G. Latzke

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
  (as to Section 6.13 of this Agreement)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AREMISSOFT CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David G. Latzke

  	
   

  
	
   

  	
   

  	
  David G. Latzke

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
  (as to Section 6.13 of this Agreement)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ George H. Ellis

  	
   

  
	
   

  	
  George H. Ellis

  	
   

  
						

 

13

 

Exhibit
A

 

List of boards of
directors on which Executive currently serves.

 

a.                                       Neon
Systems, Inc.

 

b.                                      Elagent
Corporation

 

c.                                       Future
Three Software, Inc.

 

d.                                      Trintel,
Inc.

 

e.                                       TaxReclaims.com

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