Document:

Exhibit 10.6

 

EXECUTIVE COMPENSATION PLAN

Plan Year 2005

George Ellis

 

I.              Annual Base Salary $360,000

 

II.      Performance Incentive Bonus (IB): $250,000
annually.  Your 2005 Incentive Bonus will
be payable only after completion of the 2005 fiscal year (not in quarterly
advance payments) and only if EBITDA, after payment of the bonus, equals or exceeds
the 2005 budgeted EBITDA annual target and each of the milestones set forth
below is satisfied.  If the EBITDA target
is not met, no bonus shall be payable regardless of satisfaction of the
performance milestones.

 

•      If
SoftBrands files a Registration under Section 12(g) of the Securities Exchange
Act of 1934 (the “34 Act”) with the Securities and Exchange Commission, and
such registration becomes effective during fiscal 2005 without notification
from the Securities and Exchange Commission (the “Commission”) that the filing,
as it may be amended, is deficient or not in compliance with the rules and
regulations of the Commission under the 34 Act.

•      If
Management provides in a timely filed annual report on from 10-K for the year
ended September 30, 2005, (i) management’s report on the Company’s internal
controls over financial reporting conformity with Item 308(a) of Regulations
S-K of the Commission that contains no qualification as to any material
weaknesses and (ii) is accompanied by a registered public accounting firm’s
attestation report on management’s assessment of the registrant’s internal
controls over financial reporting that contains no qualification as to material
weaknesses.  (i.e.
completion of establishment of an internal control framework in accordance with
Section 404 of the Sarbanes Oxley Act of 2002).

•      If the
Company’s Common Stock becomes listed on a National Securities Exchange (the
NYSE or the AMEX) or on the Nasdaq National Market or Nasdaq Small Cap.

 

Note:  SoftBrands must be in
compliance with all debt covenants for any period in which a bonus is paid.

 

III.           Should
you leave the company for any reason; any bonus “not yet received” will be paid
per your employment agreement

 

1Exhibit 10.7

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT, dated as of the             
day of              ,
                  
(this “Agreement”), is made by and between SoftBrands, Inc., a Delaware
corporation (the “Company”), and                          
(“Indemnitee”).

 

RECITALS

 

A.                                   It
is important to the Company to attract and retain as directors and officers the
most capable persons reasonably available.

 

B.                                     Indemnitee
has agreed to serve as an officer of the Company.

 

C.                                     Both
the Company and Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of companies in today’s
environment.

 

D.                                    The
Company’s Certificate of Incorporation and/or By-laws (the “Constituent
Documents”) provide that the Company will indemnify its directors and officers
and will advance expenses in connection therewith, and Indemnitee’s willingness
to serve as a director and/or officer of the Company is based in part on
Indemnitee’s reliance on such provisions.

 

E.                                      In
recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service to the Company in
an effective manner, and Indemnitee’s reliance on the aforesaid provisions of
the Constituent Documents, and to provide Indemnitee with express contractual
indemnification (regardless of, among other things, any amendment to or
revocation of such provisions or any change in the composition of the Company’s
Board of Directors (the “Board”) or any acquisition or business combination
transaction relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of and the advancement of Expenses (as
defined in Section 1(c)) to Indemnitee as set forth in this Agreement and,
to the extent insurance is maintained, for the continued coverage of Indemnitee
under the Company’s directors’ and officers’ liability insurance policies.

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.                                      Certain
Definitions.  In addition to terms defined elsewhere herein, the following terms have
the following meanings when used in this Agreement with initial capital
letters:

 

(a)                                  “Affiliate” has the meaning given to that
term in Rule 405 under the Securities Act of 1933, provided, however, that for
purposes of this Agreement the Company and its subsidiaries will not be deemed
to constitute Affiliates of Indemnitee .

 

(b)                                 “Change of Control” shall mean any of the
following events:  (i) Unless approved by
the affirmative vote of at least two-thirds of those members of the Board who
are in office immediately prior to the event(s) and who are not employees of
the Company: (A) the merger or consolidation of the Company with, or the sale
of all or substantially all of the assets of the Company to, any person or
entity or group of associated persons or entities; or (B) the acquisition of
direct or indirect beneficial ownership in the aggregate of securities of the

 

 

Company representing 20% or more of the total combined voting power of
the Company’s then issued and outstanding securities by any person or entity,
or group of associated persons or entities acting in concert, not affiliated
(within the meaning of the Securities Act of 1933) with the Company as of the
date of this Agreement; or (C) approval by the stockholders of the Company of
any plan or proposal for the liquidation or dissolution of the Company; or (ii)
A change in the composition of the Board at any time during any consecutive
24-month period such that the “Continuing Directors” cease for any reason to
constitute at least a 70% majority of the Board.  For purposes of this clause (ii), “Continuing
Directors” means those members of the Board who either: (A) were members of the
Board at the beginning of such consecutive 24-month period; or (B) were elected
by, or on the nomination or recommendation of, at least a two-thirds majority
(consisting of at least five directors) of the then-existing Board.

 

(c)                                  “Expenses” include attorney’s and experts’
fees, expenses and charges and all other costs, expenses and obligations paid
or incurred in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a witness in
or participate in, any Proceeding.

 

(d)                                 “Indemnifiable Losses” means any and all
Expenses, damages, losses, liabilities, judgments, fines, liens, costs,
assessments, penalties, and amounts paid in settlement (including without
limitation all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing), and any federal, state
or local taxes and/or penalties imposed as a result of the actual or deemed
receipt of payments under this Agreement (collectively, “Losses”) relating to,
resulting from or arising out of any act or failure to act by Indemnitee, or
his or her status as any person referred to in clause (A) of this sentence, (A)
in his or her capacity as a director, officer, employee or agent of the
Company, any of its Affiliates or any other entity as to which Indemnitee is or
was serving at the request of the Company as a director, officer, employee,
member, manager, trustee or agent of another corporation, limited liability
company, partnership, joint venture, trust or other entity or enterprise,
whether or not for profit, or (B) in respect of any business, transaction or
other activity of an emit referred to in clause (A) of this sentence.

 

(e)                                  “Proceeding” means any threatened, pending
or completed action, suit or proceeding, whether civil or criminal, administrative,
arbitral or investigative, or any claim, demand, inquiry, hearing or
investigation, whether instituted, made or conducted by the Company or any
other party, including without limitation any governmental entity, that
Indemnitee determines might lead to the institution of any such action, suit or
proceeding, whether civil, criminal, administrative, arbitral, investigative or
other.

 

2.                                      Term
of Agreement.  This Agreement shall continue until and terminate upon the later
of:  (a) 10 years after the date that
Indemnitee has ceased to serve as a director, officer, employee, agent or
fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which Indemnitee
served at the express written request of the Company or (b) the final
termination of all pending Proceedings in respect of which Indemnitee is
granted rights of indemnification or advancement of expenses hereunder and of
any proceeding commenced by Indemnitee pursuant to Section 8 of this
Agreement relating thereto.

 

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3.                                      Notice
of Proceedings.  Indemnitee agrees to promptly notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter that may be subject to indemnification or advancement of Expenses
covered hereunder.

 

4.                                      Basic
Indemnification arrangement.

 

(a)                                  The
Company will indemnify and hold harmless Indemnitee, as provided in this
Agreement and to the fullest extent permitted by the laws of the State of
Delaware in effect on the date hereof or as such laws may from time to time
hereafter be amended to increase the scope of such permitted indemnification,
against all Indemnifiable Losses relating to, resulting from or arising out of
any Proceeding.

 

(b)                                 Without
limiting the generality of the foregoing, the Company shall indemnify
Indemnitee when he was or is a party or is threatened to be made a party to any
Proceeding (other than an action or suit by or in the name of the Company), by
reason of the fact that he is or was or had agreed to become a director or
officer of the Company, or is or was serving or had agreed to serve at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or by
reason of any action alleged to have been taken or omitted in such capacity,
against any and all Indemnifiable Losses incurred by Indemnitee in connection
therewith if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.  The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that Indemnitee did not satisfy the foregoing standard
of conduct to the extent applicable thereto.

 

(c)                                  The
Company shall indemnify Indemnitee when he was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Company to procure a judgment in its favor by reason of the
fact that he is or was or had agreed to become a director or officer of the
Company, or is or was serving or had agreed to serve at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against Indemnifiable
Losses incurred by Indemnitee in connection with the defense or settlement
thereof or any appeal therefrom if Indemnitee acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company and except that no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company unless and only to the extent that the Delaware Court of
Chancery or the court in which such action, suit or proceeding was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper.

 

(d)                                 To
the extent that Indemnitee has been successful on the merits or otherwise,
including without limitation the dismissal of an action without prejudice, in
defense of any action, suit or proceeding referred to in Sections 2(b) or 2(c)
hereof or in defense of any

 

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claim, issue or matter therein, he shall be indemnified against all
Losses actually and reasonably incurred by Indemnitee in connection therewith.

 

(e)                                  The
failure by Indemnitee to notify the Company of such Proceeding will not relieve
the Company from any liability hereunder unless, and only to the extent that,
the Company did not otherwise learn of the Proceeding and such failure results
in forfeiture by the Company of substantial defenses, rights or insurance
coverage.  Except as provided in Section 18,
however, Indemnitee will not be entitled to indemnification pursuant to this
Agreement in connection with any Proceeding initiated by Indemnitee against the
Company or any director or officer of the Company unless the Company has joined
in or consented to the initiation of such Proceeding.

 

(f)                                    If
so requested by Indemnitee, the Company will advance within twenty business
days of such request and in the manner provided in Section 5 hereof, any
and all Expenses to Indemnitee which Indemnitee determines reasonably likely to
be payable.

 

5.                                      Advance
Payment of Expenses.  Without limiting the generality or effect of the
foregoing, the Company will indemnify Indemnitee against and, if requested by
Indemnitee, will within twenty business days of such request advance to
Indemnitee, any and all attorneys’ fees and other Expenses paid or incurred by
Indemnitee in connection with any Proceeding asserted or brought by Indemnitee
for (i) indemnification or advance payment of Expenses by the Company under
this Agreement or any other agreement or under any provision of the Company’s
Constituent Documents now or hereafter in effect relating to Proceedings for
Indemnifiable Losses and/or (ii) recovery under any directors’ and officers’
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be; provided,
however, that Indemnitee will return, without interest, any such advance
which remains unspent at the final conclusion of the Proceeding to which the
advance related.  The Board shall require
Indemnitee to submit a written statement of request for advancement of Expenses
and an undertaking to repay without interest any amounts advanced if it shall
ultimately be determined that Indemnitee is not entitled to be indemnified by
the Company under this Agreement or otherwise. 
No security shall be required in connection with any such undertaking
and any undertaking shall be accepted without reference to Indemnitee’s ability
to make repayment.  Any advance and
undertakings to repay pursuant to this Section 5 shall be unsecured and
interest free.

 

6.                                      Partial
Indemnity, Etc.  If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
any Indemnifiable Loss but not for all of the total amount thereof, the Company
will nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.  Moreover,
notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in defense of any or
all Proceedings relating in whole or in part to an Indemnifiable Loss or in
defense of any issue or matter therein, including without limitation dismissal
without prejudice, Indemnitee will be indemnified against all Expenses incurred
in connection therewith.  In connection
with any determination as to whether Indemnitee is entitled to be indemnified
under any provision of this Agreement, there will be a presumption that
Indemnitee is so entitled,

 

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which presumption the Company may overcome only by
its adducing clear and convincing evidence to the contrary.

 

7.                                      Procedures
for Determination of Entitlement to Indemnification.

 

(a)                                  Initial
Request.  To obtain indemnification under
this Agreement, Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification.  The Secretary of the Company shall promptly
advise the Board in writing that Indemnitee has requested indemnification.

 

(b)                                 Method
of Determination.  A determination (if
required by applicable law) with respect to Indemnitee’s entitlement to
indemnification shall be made as follows:

 

i.                                          if
a Change in Control has occurred, unless Indemnitee shall request in writing
that such determination be made in accordance with clause (ii) of this Section 7(b),
the determination shall be made by Independent Counsel in a written opinion to
the Board, a copy of which shall be delivered to Indemnitee;

 

ii.                                       if
a Change of Control has not occurred, unless otherwise required by law, the
determination shall be made by the Board by a majority vote of Disinterested
Directors, even though less than a quorum. 
In the event that there are no Disinterested Directors or if such
Disinterested Directors so direct, the determination shall be made by
Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee.

 

(c)                                  Selection,
Payment, Discharge, of Independent Counsel. 
In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 7(b) of this Agreement,
the Independent Counsel shall be selected, paid and discharged in the following
manner:

 

i.                                          If
a Change of Control has not occurred, the Independent Counsel shall be selected
by the Board, and the Company shall give written notice to Indemnitee advising
Indemnitee of the identity of the Independent Counsel so selected.

 

ii.                                       If
a Change of Control has occurred, the Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by the
Board, in which event clause (i) of this Section 7(c) shall apply), and
Indemnitee shall give written notice to the Company advising it of the identity
of the Independent Counsel so selected.

 

iii.                                    Following
the initial selection described in clauses (i) and (ii) of this Section 7(c),
Indemnitee or the Company, as the case may be, may, within seven days after
such written notice of selection has been given, deliver to the other party a
written objection to such

 

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selection.  Such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of “Independent Counsel” as defined in this Agreement, and the objection shall
set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the
person so selected shall act as Independent Counsel.  If such written objection is made, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until a court has determined that such objection is without merit.

 

iv.                                   Either
the Company or Indemnitee may petition any court of competent jurisdiction if
the parties have been unable to agree on the selection of Independent Counsel
within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7(a) of this Agreement.  Such petition may request a determination
whether an objection to the party’s selection is without merit and/or seek the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate. 
A person so appointed shall act as Independent Counsel under Section 7(b)
of this Agreement.

 

v.                                      The
Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant
to this Agreement, and the Company shall pay all reasonable fees and expenses
incident to the procedures of this Section 7(c), regardless of the manner
in which such Independent Counsel was selected or appointed.

 

vi.                                   Upon
the due commencement of any judicial proceeding or arbitration pursuant to Section 8(b)
of this Agreement, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

(d)                                 Cooperation.  Indemnitee shall cooperate with the person,
persons or entity making the determination with respect to Indemnitee’s
entitlement to indemnification under this Agreement, including providing to
such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination.  Any
costs or expenses (including attorneys’ fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee’s entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.

 

6

 

(e)                                  Payment.  If it is determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within 10 days
after such determination.

 

8.                                      Remedies
of Indemnitee.

 

(a)                                  Application.  This Section 8 shall apply in the event
of a Dispute.  For purposes of this
article, “Dispute” shall mean any of the following events:

 

i.                                          a
determination is made pursuant to Section 7 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement;

 

ii.                                       advancement
of Expenses is not timely made pursuant to Section 5 of this Agreement;

 

iii.                                    if
the determination of entitlement to be made pursuant to Section 7(b) of
this Agreement is to be made by the Board and the Board has not made such
determination within 60 days after receipt by the Company of the request for
indemnification;

 

iv.                                   if
the determination of entitlement to be made pursuant to Section 7(b) of
this Agreement is to be made by Independent Counsel and Independent Counsel has
not made such determination within 90 days after receipt by the Company of the
request for indemnification;

 

v.                                      payment
of indemnification is not made within 10 days after a determination has been
made that Indemnitee is entitled to indemnification or such determination is
deemed to have been made pursuant to Section 7 of this Agreement.

 

(b)                                 Adjudication.  In the event of a Dispute, Indemnitee shall
be entitled to an adjudication in an appropriate court in the State of
Delaware, or in any other court of competent jurisdiction, of Indemnitee’s
entitlement to such indemnification or advancement of Expenses.  Alternatively, Indemnitee, at Indemnitee’s
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association.  Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days following
the date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 8(b).  The
Company shall not oppose Indemnitee’s right to seek any such adjudication or
award in arbitration.

 

(c)                                  De
Novo Review.  In the event that a
determination shall have been made pursuant to Section 7 of this Agreement
that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 8 shall be conducted in all respects as
a de novo trial, or arbitration,
on the merits and Indemnitee shall not be prejudiced by reason of that adverse
determination.  In any such proceeding or
arbitration, the Company shall have the burden of proving that Indemnitee is
not entitled to indemnification or advancement of Expenses, as the case may be.

 

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(d)                                 Company
Bound.  If a determination shall have
been made or deemed to have been made pursuant to Section 7 of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification or (ii) a
prohibition of such indemnification under applicable law.

 

(e)                                  Procedures
Valid.  The Company shall be precluded
from asserting in any judicial proceeding or arbitration commenced pursuant to
this Section 8 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or
before any such arbitrator that the Company is bound by all of the provisions
of this Agreement.

 

(f)                                    Expenses
of Adjudication.  In the event that
Indemnitee, pursuant to this Section 8, seeks a judicial adjudication of
or an award in arbitration to enforce Indemnitee’s rights under, or to recover
damages for breach of, this Agreement, Indemnitee shall be entitled to recover
from the Company, and shall be indemnified by the Company against, any and all
expenses (of the types described in the definition of Expenses in this
Agreement) actually and reasonably incurred by Indemnitee in such adjudication
or arbitration, but only if Indemnitee prevails therein.  If it shall be determined in such
adjudication or arbitration that Indemnitee is entitled to receive part but not
all of the indemnification or advancement of expenses sought, the expenses
incurred by Indemnitee in connection with such adjudication or arbitration
shall be appropriately prorated.

 

9.                                      Presumptions
and Effect of Certain Proceedings.

 

(a)                                  Burden
of Proof.  In making a determination with
respect to entitlement to Indemnification hereunder, the person or persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 7(a), and the Company shall
have the burden of proof to overcome that presumption in connection with the
making by any person, persons or entity of any determination contrary to that
presumption.

 

(b)                                 Termination
of Proceedings.  For purposes of this
Agreement, the termination of any Proceeding by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo
contendere or its equivalent, will not create a presumption that Indemnitee did
not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law.

 

(c)                                  Reliance
as Safe Harbor.  For purposes of any determination
of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee’s action is based on the records or books of account of the Company,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company in the course of their duties, or on the advice of
legal counsel for the Company or on information or records given or reports
made to the Company by an independent certified public accountant or by an
appraiser or other expert

 

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selected with reasonable care by the Company.  The provisions of this Section 9(c)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.

 

10.                               Non-Exclusivity,
Etc.  The rights of Indemnitee hereunder will be in
addition to any other rights Indemnitee may have under the Constituent
Documents, or the substantive laws of the Company’s jurisdiction of
incorporation, any other contract or otherwise (collectively, “Other Indemnity
Provisions”); provided, however, that (i) to the extent that
Indemnitee otherwise would have any greater right to indemnification under any
Other Indemnity Provision, Indemnitee will be deemed to have such greater right
hereunder and (ii) to the extent that any change is made to any Other Indemnity
Provision which permits any greater right to indemnification than that provided
under this Agreement as of the date hereof, Indemnitee will be deemed to have
such greater right hereunder.  The
Company will not adopt any amendment to any of the Constituent Documents the
effect of which would be to deny, diminish or encumber Indemnitee’s right to
indemnification under this Agreement or any Other Indemnity Provision.  The Company shall have no right to set off
the amount of any Expenses or Indemnified Losses to which Indemnitee may be
entitled against any obligation that may be owed by Indemnitee to the Company.

 

11.                               Liability
Insurance and Funding.  To the extent the Company
maintains an insurance policy or policies providing directors’ and officers’
liability insurance, Indemnitee will be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any director or officer of the Company.  The Company may, but will not be required to,
create a trust fund, grant a security interest or use other means, including
without limitation a letter of credit, to ensure the payment of such amounts as
may be necessary to satisfy its obligations to indemnify and advance expenses
pursuant to this Agreement.

 

12.                               Subrogation.  In the event of payment under this Agreement,
the Company will be subrogated to the extent of such payment to all of the
related rights of recovery of Indemnitee against other persons or entities
(other than Indemnitee’s successors). 
Indemnitee will execute all papers reasonably required to evidence such
rights (all of Indemnitee’s reasonable Expenses, including attorneys’ fees and
charges, related thereto to be reimbursed by or, at the option of Indemnitee,
advanced by the Company).

 

13.                               No
Duplication of Payments.  The Company will not be liable
under this Agreement to make any payment in connection with any Indemnifiable
Loss made against Indemnitee to the extent Indemnitee has otherwise actually
received payment (net of Expenses incurred in connection therewith) under any
insurance policy, the Constituent Documents and Other Indemnity Provisions or otherwise
of the amounts otherwise indemnifiable hereunder.

 

14.                               Defense
of Proceedings.  The Company will be entitled to participate
in the defense of any Proceeding or to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee, provided that in the event that
(a) the use of counsel chosen by the Company to represent Indemnitee would
prevent such counsel with an actual or potential conflict, (b) the named
parties in any such Proceeding (including any impleaded parties) include both
the Company and Indemnitee and Indemnitee shall conclude that there may be one
or more legal

 

9

 

defenses available to him or her that are different
from or in addition to those available to the Company, or (c) any such
representation by the Company would be precluded under the applicable standards
of professional conduct then prevailing, then Indemnitee will be entitled to
retain separate counsel (but not more than one law firm plus, if applicable,
local counsel in respect of any particular Proceeding) at the Company’s
expense.  The Company will not, without
the prior written consent of Indemnitee, effect any settlement of any
threatened or pending Proceeding which Indemnitee is or could have been a party
unless such settlement solely involves the payment of money and includes an
unconditional release of Indemnitee from all liability on any claims that are
the subject matter of such Proceeding.

 

15.                               Successors
and Binding Agreement.

 

(a)                                  The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or substantially all
of the business or assets of the Company, by agreement in form and substance
satisfactory to Indemnitee and his or her counsel, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent the
Company would be required to perform if no such succession had taken
place.  This Agreement will be binding
upon and inure to the benefit of the Company and any successor to the Company,
including without limitation any person acquiring directly or indirectly all or
substantially all of the business or assets of the Company whether by purchase,
merger, consolidation, reorganization or otherwise (and such successor will
thereafter be deemed the “Company” for purposes of this Agreement), but will
not otherwise be assignable or delegatable by the Company.

 

(b)                                 This
Agreement will inure to the benefit of and be enforceable by Indemnitee’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, legatees and other successors.

 

(c)                                  This
Agreement is personal in nature and neither of the parties hereto will, without
the consent of the other, assign or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections 15(a) and 15(b).

 

16.                               Notices.  For all purposes of this Agreement, all communications, including without
limitation notices, consents, requests or approvals, required or permitted to
be given hereunder will be in writing and will be deemed to have been duly
given when hand delivered or dispatched by electronic facsimile transmission
(with receipt thereof orally confirmed), or five business days after having
been mailed by United States registered or certified mail, return receipt
requested, postage prepaid or one business day after having been sent for next
day delivery by a nationally recognized overnight courier service, addressed to
the Company (to the attention of the Secretary of the Company) and to
Indemnitee at the addresses shown on the signature page hereto, or to such
other address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of changes of address will be effective
only upon receipt.

 

17.                               Governing
Law.  The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of the State of Delaware, without giving effect to
the principles of conflict of laws of such State.  Each

 

10

 

party consents to non-exclusive jurisdiction of any
Delaware state or federal court or any court in any other jurisdiction in which
a Proceeding is commenced by a third person for purposes of any action, suit or
proceeding hereunder, waives any objection to venue therein or any defense
based on forum non conveniens or similar theories and agrees that service of
process may be effected in any such action, suit or proceeding by notice given
in accordance with Section 16.

 

18.                               Severability.  If any provision of this Agreement or the application of any provision
hereof to any person or circumstance is held invalid, unenforceable or
otherwise illegal, the remainder of this Agreement and the application of such
provision to any other person or circumstance will not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal will be
reformed to the extent, and only to the extent, necessary to make it
enforceable, valid or legal.

 

19.                               Miscellaneous.  No provision of this Agreement may be waived, modified or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
Indemnitee and the Company.  No waiver by
either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or
otherwise, expressed or implied with respect to the subject matter hereof have
been made by either party that are not set forth expressly in this
Agreement.  References to Sections are to
references to Sections of this Agreement.

 

20.                               Counterparts.  This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original but all of which together will constitute one
and the same agreement.

 

21.                               Certain
Interpretive Matters.  No provision of this
Agreement will be interpreted in favor of, or against, either of the parties
hereto by reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or thereof.

 

11

 

IN WITNESS WHEREOF, Indemnitee has executed and the
Company has caused its duly authorized representative to execute this Agreement
as of the date first above written.

 

	
   

  	
  SOFTBRANDS,
  INC.

  
	
   

  	
  Two
  Meridian Crossings

  
	
   

  	
  Suite,
  800

  
	
   

  	
  Minneapolis,
  MN 55423

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name
  and Title:

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
  [Address]

  
	
   

  	
  [City,
  State and ZipCode]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name],
  an individual

  

 

12

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