SECOND AMENDMENT TO CREDIT AGREEMENT
Exhibit
10.14
SECOND AMENDMENT TO
This Second Amendment to Credit Agreement (this “Amendment”), dated as of March 15, 2007, is
by and among SOFTBRANDS, INC., a Delaware corporation (the “Parent”), the subsidiaries of Parent
identified on the signature pages hereto (collectively, with the Parent, the “Borrowers” and
individually, a “Borrower”), XXXXX FARGO FOOTHILL, INC., a California corporation, as
Administrative Agent (the “Agent”) and each of the lenders parties hereto (the “Lenders”).
R E C I T A L S
A. The Borrowers, the Agent and the Lenders are parties to that certain Credit Agreement dated
as of August 14, 2006, as amended by that certain First Amendment to the Credit Agreement dated as
of October 5, 2006 (the “Original Credit Agreement”).
B. The parties hereto desire to further amend the Original Credit Agreement (as the Original
Credit Agreement is amended by this Amendment, and as the Original Credit Agreement may be further
amended, modified or restated from time, collectively the “Credit Agreement”) as provided herein.
NOW, THEREFORE, in consideration of the premises herein contained, and for other good and
valuable consideration (the receipt, sufficiency and adequacy of which are hereby acknowledged),
the parties hereto (intending to be legally bound) hereby agree as follows:
1. Definitions. Terms capitalized herein and not otherwise defined herein shall have
the meanings ascribed to such terms in the Credit Agreement.
2. Amendment to Credit Agreement. Subject to the terms and conditions contained
herein, the parties hereto hereby amend the Credit Agreement as follows:
(a) Section (a) of Schedule 5.3 of the Credit Agreement is hereby amended by deleting
the phrase “as soon as available, but in any event within 30 days after the end of each
month during each of the Parent’s fiscal years” and replacing such phrase with “as soon as
available, but in any event within 30 days after the end of each month (or within 45 days
with respect to any month ending on the last day of a fiscal quarter) during each of the
Parent’s fiscal years”.
3. Acknowledgement and Waiver. The Agent hereby acknowledges its agreement to amend
the provisions of the Original Credit Agreement. The Agent further waives the Borrower’s
non-compliance (a) with the definition of Permitted Investments in Schedule 1.1 requiring that
Investments by Subsidiaries other than U.S. Subsidiaries be in Securities Accounts, Deposit
Accounts or other similar investments outside the United States so long as the aggregate amount of
such Investments outside the United States does not constitute more than (1) 75% of all Investments
by Parent and its Subsidiaries from the period commencing on the Closing Date and ending on
December 31, 2006 and (2) 50% of all Investments by Parent and its Subsidiaries for any
period on
or after January 1, 2007 (excluding from such percentage any Investments held in China) and 35% of
all Investments by Parent and its Subsidiaries for any period on or after January 1, 2007
(including in such percentage any Investments held in China) so long as the Borrower is in
compliance with such requirements on and after March 31, 2007, and (b) the requirement in section
(e) of Schedule 5.3 providing that copies of Parent’s Projections, in form and substance (including
as to scope and underlying assumptions) satisfactory to Agent, in its Permitted Discretion, be
delivered to the Agent for the forthcoming year, and for the forthcoming fiscal year, month by
month, certified by the chief financial officer of Parent as being such officer’s good faith
estimate of the financial performance of Parent during the period covered thereby so long as the
Borrower is in compliance with such requirement on and after September 30, 2007.
4. Conditions Precedent. The amendment contained in Section 2 above is
subject to, and contingent upon, the prior or contemporaneous satisfaction of each of the following
conditions precedent, each in form and substance satisfactory to the Agent:
(a) The Borrowers, the Agent and the Lenders shall have executed and delivered to each
other this Amendment; and
(b) The Borrowers shall have satisfied any other conditions of the Agent required in
connection with this Amendment.
5. Reference to and Effect on the Credit Agreement. Except as expressly provided
herein, the Credit Agreement and all of the Loan Documents shall remain unmodified and continue in
full force and effect and are hereby ratified and confirmed. Except as set forth in Section
4 above, the execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of: (a) any right, power or remedy of the Agent or the Lenders under the Credit Agreement or
any of the Loan Documents, or (b) any Default or Event of Default under the Credit Agreement or any
of the Loan Documents.
6. Representations and Warranties of the Borrowers. Each of the Borrowers hereby
represents and warrants to the Agent and the Lenders, which representations and warranties shall
survive the execution and delivery of this Amendment, that on and as of the date hereof and after
giving effect to this Amendment:
(a) As to each Borrower, the execution, delivery, and performance by such Borrower of
this Amendment have been duly authorized by all necessary action on the part of such
Borrower.
(b) As to each Borrower, the execution, delivery, and performance by such Borrower of
this Amendment does not and will not (i) violate any provision of federal, state, or local
law or regulation applicable to any Borrower, the Governing Documents of any Borrower, or
any order, judgment, or decree of any court or other Governmental Authority binding on any
Borrower, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse
of time or both) a default under any material contractual obligation
of any Borrower, (iii)
result in or require the creation or imposition of any Lien of any nature whatsoever upon
any properties or assets of Borrower, other than Permitted Liens, or (iv) require any
approval of any Borrower’s interest holders or any approval or consent of any Person under
any material contractual obligation of any
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Borrower, other than consents or approvals that
have been obtained and that are still in force and effect.
(c) As to each Borrower, this Amendment and all other documents contemplated hereby,
when executed and delivered by such Borrower will be the legally valid and binding
obligations of such Borrower, enforceable against such Borrower in accordance with their
respective terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally.
(d) The representations and warranties of each of the Borrowers set forth in the Credit
Agreement and in the Loan Documents to which it is a party are true, correct and complete on
and as of the date hereof; provided that the references to the Credit Agreement therein
shall be deemed to include the Credit Agreement as amended by this Amendment.
(e) Each of the Borrowers acknowledges that the Agent and each Lender is specifically
relying upon the representations, warranties and agreements contained in this Amendment and
that such representations, warranties and agreements constitute a material inducement to the
Agent and each Lender in entering into this Amendment.
7. Intentionally Omitted.
8. Reference to Credit Agreement; No Waiver.
8.1 Upon the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Credit Agreement,” “hereunder,” “hereof,” “herein” or words of
like import shall mean and be a reference to the Credit Agreement as amended hereby.
The term “Loan Documents” as defined in Schedule 1.1 of the Credit
Agreement shall include (in addition to the Loan Documents described in the Credit
Agreement) this Amendment and any other agreements, instruments or other documents
executed in connection herewith.
8.2 The Agent’s and a Lender’s failure, at any time or times hereafter, to
require strict performance by the Borrowers of any provision or term of the Credit
Agreement, this Amendment or the other Loan Documents shall not waive, affect or
diminish any right of the Agent or a Lender thereafter to demand strict compliance
and performance therewith. Any suspension or waiver by the Agent or a Lender of a
breach of this Amendment or any Event of Default under the Credit Agreement shall
not, except as expressly set forth herein, suspend, waive or affect any other breach
of this Amendment or any Event of Default under the Credit Agreement, whether the
same is prior or subsequent thereto and whether of the same or of a different kind
or character. None of the undertakings, agreements, warranties, covenants and
representations of any Borrower contained in this Amendment, shall be deemed to have
been suspended or waived by the Agent or a Lender unless such suspension or waiver
is: (i) in writing and signed
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by the Agent and each Lender and (ii) delivered to the
Borrower. In no event shall the Agent’s and each Lender’s execution and delivery of
this Amendment establish a course of dealing among the Agent, each Lender, the
Borrowers, or any other obligor or in any other way obligate the Agent or each
Lender to hereafter provide any amendments or waivers with respect to the Credit
Agreement. The terms and provisions of this Amendment shall be limited precisely as
written and shall not be deemed: (A) to be a consent to a modification, amendment or
waiver of any other term or condition of the Credit Agreement or of any other Loan
Documents, or (B) to prejudice any right or remedy that the Agent or each Lender may
now have under or in connection with the Credit Agreement or any of the other Loan
Documents.
9. Successors and Assigns; Amendment. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns; provided,
however, no Borrower may assign this Amendment or any of its respective rights hereunder
without the Agent’s and each Lender’s prior written consent. Any prohibited assignment of this
Amendment shall be absolutely null and void. This Amendment may only be amended or modified by a
writing signed by the Agent, each Lender and the Borrowers.
10. Severability; Construction. Wherever possible, each provision of this Amendment
shall be interpreted in such a manner so as to be effective and valid under applicable law, but if
any provision of this Amendment is held to be prohibited by or invalid under applicable law, such
provision or provisions shall be ineffective only to the extent of such provision and invalidity,
without invalidating the remainder of this Amendment. Neither this Amendment nor any uncertainty or
ambiguity herein shall be construed or resolved against Agent or each Lender, whether under any
rule of construction or otherwise. On the contrary, this Amendment has been reviewed by all
parties hereto and shall be construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of the parties hereto.
11. Counterparts; Facsimile. This Amendment may be executed in one or more
counterparts, each of which taken together shall constitute one and the same instrument. Delivery
of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as
delivery of a manually executed counterpart of this Amendment. Any party delivering an executed
counterpart of this Amendment by telefacsimile shall also deliver a manually executed counterpart
of this Amendment, but the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability or binding effect of this Amendment.
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS.
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(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AMENDMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF XXXX, STATE OF ILLINOIS, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY BORROWER COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH BORROWERS
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER, AGENT AND THE LENDERS WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 11(b).
(c) BORROWERS, AGENT AND THE LENDERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AMENDMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWERS, AGENT AND THE LENDERS
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AMENDMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
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IN WITNESS WHEREOF, the undersigned have caused this Second Amendment to be duly
executed and delivered as of the date first above written.
| SoftBrands, Inc. | ||||||
| a Delaware corporation, as a Borrower | ||||||
| By: | ||||||
| Title: | ||||||
| SoftBrands Manufacturing, Inc. | ||||||
| a Minnesota corporation, as a Borrower | ||||||
| By: | ||||||
| Title: | ||||||
| SoftBrands International, Inc. | ||||||
| a Delaware corporation, as a Borrower | ||||||
| By: | ||||||
| Title: | ||||||
| SoftBrands Licensing, Inc. | ||||||
| a Delaware corporation, as a Borrower | ||||||
| By: | ||||||
| Its: | ||||||
| MAI Systems Corporation | ||||||
| a Delaware corporation, as a Borrower | ||||||
| By: | ||||||
| Its: | ||||||
| Hotel Information Systems, Inc. | ||||||
| a Delaware corporation, as a Borrower | ||||||
| By: | ||||||
| Its: | ||||||
| CLS Software International, Inc. | ||||||
| a California corporation, as a Borrower | ||||||
| By: | ||||||
| Its: | ||||||
| Xxxxx Fargo Foothill, Inc. | ||||||
| a California corporation, as Agent and a Lender | ||||||
| By: | ||||||
| Its: | ||||||
