Exhibit 10.38


 


NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE ASSIGNED (I)
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN
A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
IN THIS NOTE, THIS NOTE, AND THE OBLIGATIONS OF THE COMPANY HEREUNDER, SHALL BE
SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO ALL INDEBTEDNESS OF THE COMPANY
CONSTITUTING “SENIOR INDEBTEDNESS” (AS DEFINED IN SECTIONS 1 AND 9 OF ANNEX A
ATTACHED HERETO) ON THE TERMS AND CONDITIONS SET FORTH IN ANNEX A ATTACHED
HERETO, WHICH ANNEX A IS HEREIN INCORPORATED BY REFERENCE AND MADE A PART
HEREOF AS IF SET FORTH HEREIN IN ITS ENTIRETY.


 


SUBORDINATED CONVERTIBLE NOTE


 


	
  Issuance Date: June 4, 2004

  	
   

  	
  Principal: U.S. $628,816.44

  



 


FOR VALUE
RECEIVED, SSA GLOBAL TECHNOLOGIES INC., a Delaware
corporation (the “Company”),
hereby promises to pay VENROCK ASSOCIATES (“Holder”),
or its order, the amount set out above as the Principal (as reduced pursuant to
the terms hereof pursuant to redemption, conversion or otherwise in accordance
with the terms hereof, the “Principal”)
when due, whether upon the Maturity Date (as defined below), acceleration,
redemption or otherwise (in each case in accordance with the terms hereof) and
to pay interest (“Interest”) on any
outstanding Principal at the rate of 5.00% per annum (the “Interest Rate”), from the date set out
above as the Issuance Date (the “Issuance
Date”) until the same becomes due and payable, on the earlier to
occur of (i) with respect to the payment of any Principal, on the Maturity Date
(as defined below) and, with respect to the payment of any Interest, on each
Interest Date (as defined below), or (ii) upon acceleration, conversion,
redemption or otherwise (in each case in accordance with the terms hereof).  This Subordinated Convertible Note (including
all Subordinated Convertible Notes issued in exchange, transfer or replacement
hereof, this “Note”) is being
issued on the Issuance Date pursuant to the Asset Purchase Agreement (as
defined below).  Certain capitalized
terms are defined in Section 20 of this Note.  For the purposes of this Note, “Common Stock” means the Company’s common
stock, par value $0.01 per share.


 
















 


(1)           MATURITY; PREPAYMENT.  On the Maturity Date, the Holder shall
surrender this Note to the Company and the Company shall pay to the Holder an
amount in cash representing all outstanding Principal plus accrued and unpaid
Interest.  The “Maturity Date” shall be June 4, 2007; provided, however,
that the Maturity Date may be extended pursuant to
Section 10(d)(iii).  Notwithstanding
anything to the contrary contained herein, at any time after the Conversion
Date (as defined below) and from time to time thereafter, the Company may,
without any premium or penalty, prepay the Principal and accrued and unpaid
Interest on this Note that remains outstanding after giving effect to any
conversion subject to a timely delivered Conversion Notice (as defined below),
in whole or in part, by paying to the Holder an amount in cash representing
some or all of such outstanding Principal plus accrued and unpaid Interest
thereon; provided, however, that all Notes issued pursuant to the Asset
Purchase Agreement shall be prepaid on a pro
rata basis.


 


(2)           INTEREST; INTEREST RATE.  Interest on this Note shall commence accruing
on the Issuance Date and shall be computed on the basis of a 365-day year and
actual days elapsed and shall be payable in arrears on the first day of each
Calendar Quarter during the period beginning on the Issuance Date and ending
on, and including, the Maturity Date, the earlier conversion date, or, if all
amounts of Principal or Interest due hereunder are prepaid pursuant to
Section (1) above, such prepayment date (each, an “Interest Date”), with the first Interest
Date being July 1, 2004.  Interest
shall be payable on each Interest Date in cash.


 


(3)           CONVERSION OF NOTES.  This Note shall be convertible into shares of
the Company’s Common Stock, on the terms and conditions set forth in this
Section 3.  Certain capitalized
terms used in this Section 3 are defined in Section 3(b) hereof.


 


(a)           Conversion
Right.  At any time on or after (i)
the date that the Company or a successor corporation in a Change of Control
Transaction (as defined below) whose stock is not then listed on NASDAQ or
traded on a national exchange (“Publicly
Traded”) gives the Holder notice that it plans to conduct its
initial public offering of common stock pursuant to a registration statement
filed pursuant to the 1933 Act (an “IPO”),
which notice shall be delivered at least twenty (20) Business Days prior to the
IPO Closing Date or (ii) the date that the Company gives the Holder notice that
it plans to complete a Change of Control Transaction with a Publicly-Traded
successor corporation, which notice shall be delivered at least twenty (20)
Business Days prior to the Change of Control Closing Date, and on or prior to
the Business Day immediately preceding the IPO Closing Date or Change of
Control Closing Date, as applicable, pursuant to the mechanics of conversion
set forth in Section 3(c) below, the Holder shall be entitled to give
notice of its intention to convert any portion of the outstanding and unpaid
Conversion Amount into fully paid and nonassessable shares of the Company’s
Common Stock in accordance with Section 3(c), at the Conversion Rate
effective as of, and contingent upon the occurrence of, the IPO or the Change
of Control Transaction, as applicable. 
If the Company or a successor corporation, as applicable, fails to give
proper notice prior to an IPO or a Change of Control Transaction with a
Publicly Traded successor corporation as provided above, the Holder shall be
entitled to give notice of its intention to convert any portion of the
outstanding and unpaid Conversion Amount into (i) fully paid and nonassessable
shares of the Company’s Common Stock in the case of the Company’s IPO or (ii)
the securities and other property the Holder is entitled to receive as a result
of the Change of Control Transaction, in each case within 5 Business Days of
the date such notice is given.  For the
avoidance of doubt,


 


2
















 


this Note shall not be converted unless and until a notice of
conversion is provided by the Holder pursuant to this Section 3.  The Company shall not issue any fraction of a
share of Common Stock upon any conversion. 
In lieu of any fractional share to which the Holder would otherwise be
entitled upon any conversion, the Company or the successor corporation, as the
case may be, in the case of the IPO of the Company or such successor
corporation, or the Publicly Traded successor corporation in the case of
conversion pursuant to a Change of Control Transaction will pay to the Holder
in cash the amount of the unconverted Principal and Interest balance of this
Note that would otherwise be converted into such fractional share.


 


(b)           Conversion
Rate.  The number of shares of common
stock of the Company or a successor corporation, as applicable, issuable, or
deemed issuable, upon conversion of any Conversion Amount pursuant to
Section 3(a) shall be determined by dividing (x) such Conversion Amount by
(y) the Conversion Price (as defined below) (the “Conversion Rate”).


 


(i)            “Change of Control Closing Date” means the
date of consummation of a Change of Control Transaction with a successor
corporation that is Publicly Traded as of such date.


 


(ii)           “Conversion Amount” means the sum of (A)
the portion of the Principal to be converted, redeemed or otherwise with
respect to which this determination is being made and (B) accrued and unpaid
Interest with respect to such Principal.


 


(iii)          “Conversion Price” means $284.80.


 


(iv)          “IPO Closing Date” means the earlier to
occur of (A) the date of consummation of the Company’s IPO or (B) if prior to
the Company’s IPO, a Change of Control Transaction is completed with a
successor corporation that is not then Publicly Traded, the date of
consummation of such successor corporation’s IPO.


 


(c)           Mechanics
of Conversion.  To convert any
Conversion Amount pursuant to this Section 3, or have any Conversion
Amount deemed converted pursuant to this Section 3, into shares of Common
Stock effective as of the IPO Closing Date or the Change of Control Closing
Date, as applicable (a “Conversion Date”),
(A) the Company shall, subject to the Company’s or a successor corporation’s
compliance with the notice obligations set forth in Section 3(a), have
received from the Holder by facsimile (or otherwise), at or prior to 11:59
p.m., New York Time, on the Business Day immediately preceding to the IPO
Closing Date or the Change of Control Closing Date, as applicable, a copy of an
executed notice of conversion in the form attached hereto as Exhibit I
(the “Conversion Notice”), which
shall become effective as of, and contingent upon the occurrence of, the
consummation of the IPO or the Change of Control Transaction, as applicable,
and (B) the Holder shall have surrendered this Note to the Company or the
successor corporation, as applicable; provided, however, that the Conversion
Notice shall be revoked and the Note shall be returned to the Holder in the
event the IPO or Change of Control Transaction, as applicable, has not occurred
within 30 days of the Holder’s delivery of the Conversion Notice.  On or before the third Business Day following
the IPO Closing Date or the Change of Control Closing Date, as applicable (the “Share Delivery Date”), the Company shall
issue and deliver to the Holder at the address specified in the


 


3
















 


Conversion Notice, either (x) (A) in the case of the Company’s IPO, a
certificate, registered in the name of the Holder or its designee, representing
the number of shares of Common Stock to which the Holder shall be entitled or
(B) in the case a Change of Control Transaction is completed with a successor corporation
that is not then Publicly Traded prior to the Company’s IPO, a replacement note
substantially similar to this Note issued in the name of the successor
corporation, or (y) in the case of a Change of Control Transaction with a
successor corporation whose stock is Publicly Traded, the securities and other
property the Holder is entitled to receive as a result of such Change of
Control Transaction after giving effect to the deemed conversion contemplated
in the Conversion Notice.  The Person or
Persons entitled to receive the shares of Common Stock (or shares of capital
stock or other securities and property of a successor corporation) issuable
upon a conversion of this Note shall be treated for all purposes as the record
holder or holders of such shares of Common Stock (or shares of capital stock or
other securities and property of a successor corporation) on the Conversion
Date.


 


(4)           REPRESENTATIONS AND WARRANTIES OF THE
HOLDER.


 


(a)           No
Public Sale or Distribution.  Holder
(i) is acquiring the Note and, upon conversion of the Note, will acquire the
shares of Common Stock of Company (the “Shares”
and together with this Note, the “Securities”)
issuable upon conversion thereof in the ordinary course of business for its own
account and not with a view towards, or for resale to third parties in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted from registration under the Securities Act and
applicable state securities laws and (ii) does not have any present arrangement
to effect any distribution of the Securities to or through any person or
entity.


 


(b)           Accredited
Investor Status.  The Holder is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D.


 


(c)           Reliance
on Exemptions.  The Holder
understands that the Securities are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and the Holder’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Holder set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Holder to acquire the Securities.


 


(d)           Information.  The Holder and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by the Holder.  Holder and its advisors, if any, have been
afforded the opportunity to ask questions of the management of Company
regarding the Company’s business and operations and such other matters as
Holder has deemed appropriate.  The Holder
understands that its investment in the Securities thereof involves a high
degree of risk and the Holder is able to afford a complete loss of such
investment.  Holder has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Securities.


 


4
















 


(e)           No
Governmental Review.  The Holder
understands that no United States federal or state agency or any other government
or governmental agency has passed on or made any recommendation or endorsement
of the Securities or the fairness or suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the
offering of the Securities.


 


(f)            Transfer
or Resale.  The Holder understands
that: (i) the Securities have not been and are not being registered under the
Securities Act or any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless (A) subsequently registered for resale
thereunder, (B) the Holder shall have delivered to the Company an opinion of
counsel, in a form reasonably acceptable to the Company, to the effect that
such Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) the Holder
provides the Company with reasonable assurance that such Securities can be
sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the Securities Act, as amended, (or a successor rule thereto)
(collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on
Rule 144 may be made only in accordance with the terms of Rule 144 and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the Holder (or the Person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the Securities Act) may
require compliance with some other exemption under the Securities Act or the
rules and regulations of the Securities and Exchange Commission thereunder;
(iii) neither the Company nor any other Person is under any obligation to
register the Securities under the Securities Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder; and
(iv) it has agreed, and that any subsequent transferees shall be required to
agree, to the lock-up provisions set forth in Section 10(d) relating to
the Shares.


 


(g)           Legends.  The Holder understands that the certificates
or other instruments representing the Securities until such time as the resale
of the Securities have been registered under the Securities Act, except as set
forth below, shall bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such stock
certificates) as well as an additional legend, as may be required by applicable
“blue sky” or state securities laws:


 


NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE
BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE
COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.


 


(h)           Corporate
Securities Law.  THE SALE OF THE
SECURITIES THAT IS THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE


 


5
















 


COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA.  THE HOLDER UNDERSTANDS THAT THE TRANSFER OF
THE SECURITIES AS CONTEMPLATED BY THIS AGREEMENT ARE EXEMPT FROM REGISTRATION
UNDER THE CALIFORNIA CORPORATIONS CODE AND THAT HOLDER SHALL NOT BE ELIGIBLE
FOR ANY RECISION RIGHTS PURSUANT THERETO.


 


(5)           RIGHTS UPON EVENT OF DEFAULT.


 


(a)           Event
of Default.  Each of the following
events shall constitute an “Event of Default”:


 


(i)            the
Company’s failure to pay to the Holder any amount of Principal, Interest or
other amounts when due under this Note except, in the case of a failure to pay
Interest when and as due, in which case only if such failure continues for a
period of at least five (5) Business Days;


 


(ii)           the
Company, pursuant to or within the meaning of Title 11, U.S. Code, or any
similar Federal or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a
voluntary case, (B) consents to the entry of an order for relief against it in
an involuntary case, (C) consents to the appointment of a receiver, trustee,
assignee, liquidator or similar official (a “Custodian”),
(D) makes a general assignment for the benefit of its creditors or (E) admits
in writing that it is generally unable to pay its debts as they become due;


 


(iii)          a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (A) is for relief against the Company in an involuntary case, (B)
appoints a Custodian of the Company or (C) orders the liquidation of the
Company; or


 


(iv)          the
Company materially breaches any representation, warranty, covenant or other
term or condition of this Note, except, in the case of a breach of a covenant
which is curable, only if such breach continues for a period of at least
fifteen (15) consecutive Business Days.


 


(b)           Remedies.  Upon the occurrence and during the
continuance of an Event of Default as described above, all indebtedness under
this Note shall automatically be immediately due and payable.


 


(6)           RIGHTS UPON ISSUANCE OF CERTAIN OTHER
SECURITIES.


 


(a)           Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock.  If the Company at any time subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or more classes
of its outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced.  If the Company
at any time combines (by combination, reverse stock split or otherwise) one or
more classes of its outstanding shares of Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior to such combination
will be proportionately increased.


 


(b)           Abandoned
Dividend or Distribution.  If the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend


 


6
















 


or other distribution (which results in an adjustment to the Note under
the terms of Section 5(a) of this Note) and shall, thereafter, and before
such dividend or distribution is paid or delivered to stockholders entitled
thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Note by reason of the taking of
such record shall be reversed, and any subsequent adjustments, based thereon,
shall be recomputed.


 


(c)           Other
Events.  If any event occurs of the
type contemplated by the provisions of this Section 4 but not expressly
provided for by such provisions, then the Company’s Board of Directors will
make an appropriate adjustment in the Conversion Price so as to protect the
rights of the Holder under this Note.


 


(d)           Noncircumvention.  The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Note, and will at all times in good faith carry out all of the provisions of
this Note and take all action as may be required to protect the rights of the
Holder of this Note.


 


(7)           RESERVATION OF AUTHORIZED SHARES.  The Company covenants that during the term
that this Note is outstanding, the Company will reserve out of its authorized
and unissued Common Stock a sufficient number of shares of Common Stock to
effect the full conversion of this Note.


 


(8)           VOTING RIGHTS.  The Holder shall have no voting rights as the
holder of this Note, except as required by law.


 


(9)           SUBORDINATION COVENANT.  Notwithstanding anything to the contrary
contained in this Note, this Note, and the obligations of the Company
hereunder, shall be subordinate and junior in right of payment to all
indebtedness of the Company constituting “Senior
Indebtedness” (as defined in Sections 1 and 9 of Annex A attached
hereto) on the terms and conditions set forth in Annex A attached hereto, which
Annex A is herein incorporated by reference and made a part hereof as if set
forth herein in its entirety.


 


(10)         AMENDMENT.  Subject to the provisions contained in Annex
A, any term, condition or provision of this Note may be amended or waived with
the written consent of the Company and the Holder.  Any amendment effected in accordance with
this provision shall be binding upon the Holder, the Company and their
respective successors and assigns.


 


(11)         RESTRICTIONS ON TRANSFER.


 


(a)           Note.  This Note may not be offered for sale, sold,
transferred, pledged, hypothecated, encumbered or otherwise assigned in any
transaction that would constitute a sale thereof within the meaning of the
Securities Act of 1933, as amended (the “1933
Act”), unless (i) this Note has been registered for sale under the
1933 Act and registered or qualified upon applicable state securities laws
relating to the offer and sale of securities; or (ii) exemption from the
registration requirements of the 1933 Act and the registration or qualification
requirements of all such state securities laws are available and the Company
shall have received an opinion of counsel reasonably satisfactory to the
Company that the proposed


 


7
















 


sale or other disposition of this Note may be effected without
registration under the 1933 Act and would not result in any violation of any
applicable state securities laws relating to the registration or qualification
of securities for sale.


 


(b)           Convertible
Securities.  The shares of the Company’s
Common Stock issuable upon the exercise of the conversion feature of
Section 3 hereof shall be “restricted
securities” as that term is defined under rule 144 of the 1933 Act
and, as a consequence, may not be sold or otherwise transferred unless (i) such
shares have been registered for sale under the 1933 Act and registered or
qualified upon applicable state securities laws relating to the offer and sale
of securities; or (ii) exemption from the registration requirements of the 1933
Act and the registration or qualification requirements of all such state
securities laws are available and the Company shall have received an opinion of
counsel reasonably satisfactory to the Company that the proposed sale or other
disposition of this Note may be effected without registration under the 1933
Act and would not result in any violation of any applicable state securities
laws relating to the registration or qualification of securities for sale.  The conversion price of this Note may be
subject to adjustment in the manner provided in Section 5 hereof.


 


(c)           Lock-Up
Period.  Without the prior written
consent of the Company, for a period of one year after the date on which any
Common Stock is issued upon conversion of this Note in accordance herewith,
Holder will not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any such Common Stock or securities convertible into or
exchangeable or exercisable for any such Common Stock, enter into any
transaction that would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such aforementioned
transaction is to be settled by delivery of the Common Stock or such other
securities, in cash or otherwise, or publicly disclose the intention to make
any such offer, sale, pledge or disposition, or to enter into any such
transaction, swap, hedge or other arrangement, without, in each case, the prior
written consent of Company.  In addition
to any transfer restrictions contained herein, Holder shall not transfer this
Note or any portion thereof or interest therein to any Person unless such
Person agrees in writing to be subject to a substantially similar lock-up
provision.


 


(d)           No
Transfer Without Consent.  Without
the written consent of the issuer, no Holder of this Note shall, directly or
indirectly, offer for sale, sell, transfer, pledge, hypothecate, encumber or
otherwise assign or dispose of all or any portion of this Note, or any interest
herein, to any person or other entity. 
Any transferee of this Note permitted under this Section 10 shall
be subject to all of the terms and conditions of this Note, including, without
limitation, the transfer restrictions, subordination and conversion provisions
hereof.  Any attempt by the Holder to
effect a transfer or disposition in violation of this Section 11 shall be
void and ineffective for all purposes. 
As used in this Section 11, the words “transfer” and “dispose”
include the making of any sale, exchange, assignment, participation, gift,
security interest, pledge or other encumbrance, or any contract therefor, the
creation of any other claim thereto or any other transfer or disposition
whatsoever, whether voluntary or involuntary, affecting the right, title,
interest or possession in or to the Company’s Common Stock.


 


8
















 


(12)         REISSUANCE OF THIS NOTE.


 


(a)           Transfer.  If this Note is transferred, subject to the
restrictions on transfer contained herein, upon surrender of this Note to the
Company, the Company will forthwith issue and deliver upon the order of the
Holder a new Note (in accordance with Section 12(c)), registered as the
Holder may request, representing the outstanding Principal transferred by the
Holder and, if less than the entire outstanding Principal is transferred, a new
Note (in accordance with Section 12(d)) to the Holder representing the
outstanding Principal not being transferred. 
The Holder and any assignee, by acceptance of this Note, acknowledge and
agree that, by reason of the provisions of this Section 12(a), following
conversion of any portion of this Note, the outstanding Principal represented
by this Note may be less than the Principal stated on the face of this Note.


 


(b)           Lost,
Stolen or Mutilated Note.  Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Note, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary form and, in the case of mutilation, upon surrender
and cancellation of this Note, the Company shall execute and deliver to the
Holder a new Note (in accordance with Section 12(c)) representing the
outstanding Principal.


 


(c)           Issuance
of New Notes.  Whenever the Company
is required to issue a new Note pursuant to the terms of this Note, such new
Note (i) shall be of like tenor with this Note, (ii) shall represent, as
indicated on the face of such new Note, the Principal remaining outstanding (or
in the case of a new Note being issued pursuant to Section 12(a), the
Principal designated by the Holder which, when added to the principal
represented by the other new Notes issued in connection with such issuance,
does not exceed the Principal remaining outstanding under this Note immediately
prior to such issuance of new Notes), (iii) shall have an issuance date, as
indicated on the face of such new Note, which is the same as the Issuance Date
of this Note, (iv) shall have the same rights and conditions as this Note, and
(v) shall represent accrued Interest on the Principal and Interest of this
Note, from the Issuance Date.


 


(13)         REORGANIZATION, MERGER OR SALE OF ASSETS.  If at any time while this Note, or any
portion hereof, is outstanding there shall be (i) a reorganization (other than
a combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), (ii) a merger or consolidation with or into another
corporation in which the Company is not the surviving entity, or a reverse
triangular merger in which the Company is the surviving entity but the shares
of the Company’s capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, or (iii) a sale or transfer of the Company’s
properties and assets as, or substantially as, an entirety to any other person
or other entity (each of the transactions described in clauses (i), (ii) and
(iii) being, a “Change of Control Transaction”),
then, as part of such Change of Control Transaction, lawful provision
(including, without limitation, assumption of this Note by the successor
corporation) shall be made so that the Holder of this Note shall thereafter
either (i) receive a replacement note substantially similar to this Note issued
in the name of the successor corporation if the Change of Control Transaction
is completed with a successor corporation that is not then Publicly Traded, or
(ii) if the change of Control Transaction is with a Publicly Traded successor
corporation, be entitled to receive upon conversion of this Note the number of
shares


 


9
















 


of capital stock or other securities or property of the successor
corporation resulting from such Change of Control Transaction that a holder of
the shares of Common Stock deliverable upon conversion of this Note would have
been entitled to receive in such Change of Control Transaction if this Note had
been converted or deemed converted pursuant to Section 3, in whole or in
part, immediately before such Change of Control Transaction.  The foregoing provisions of this
Section 13 shall similarly apply to successive Change of Control
Transactions and to the stock or securities of any other corporation that are
at the time receivable upon the conversion of this Note.  If the per share consideration payable to the
Holder for shares in connection with any such Change of Control Transaction is
in a form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company’s Board of
Directors.  In all events, appropriate
adjustment (as determined in good faith by the Company’s Board of Directors)
shall be made in the application of the provisions of this Note with respect to
the rights and interest of the Holder after a Change of Control Transaction, to
the end that the provisions of this Note shall be applicable after that event,
as near as reasonably may be, in relation to any shares or other property
deliverable after that event upon conversion of this Note.


 


(14)         CONSTRUCTION; HEADINGS.  This Note shall be deemed to be jointly
drafted by the Company and the Holder and shall not be construed against any
person as the drafter hereof.  The
headings of this Note are for convenience of reference and shall not form part
of, or affect the interpretation of, this Note.


 


(15)         DISPUTE RESOLUTION.  In the case of a dispute as to the
determination of the Conversion Rate or any other dispute, the Company shall
submit its determination of such dispute via facsimile within five Business
Days of receipt of the Conversion Notice or other event giving rise to such
dispute, as the case may be, to the Holder. 
If the Holder and the Company are unable to agree upon such dispute
within three Business Days of such dispute being submitted to the Holder, then
the Company shall, within three Business Days submit via facsimile the dispute
(a) to an independent, reputable investment bank selected by the Company and
approved by the Holder or (b) to an independent, reputable accounting firm
selected by the Company and reasonably approved by the Holder, as
appropriate.  The Company, shall cause
the investment bank or the accountant, as the case may be, to perform the
determinations or calculations necessary to settle the dispute and notify the
Company and the Holder of the results as soon as practicable.  Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error. 
Expenses for such investment bank or accountant shall be borne by the
party whose proposed resolution of the dispute is further from the investment
bank’s or accountant’s final determination or calculation.


 


(16)         NOTICES; PAYMENTS.


 


(a)           Notices.  Whenever notice is required to be given under
this Note, unless otherwise provided herein, such notice shall be given in
accordance with Section 8.12 of the Asset Purchase Agreement.  The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Note, including in
reasonable detail a description of such action and the reason therefore.  Without limiting the generality of the
foregoing, the Company will give written notice to the Holder (i) immediately
upon any adjustment of the Conversion Price, setting forth in reasonable
detail, and certifying, the calculation of such adjustment and (ii) at least
twenty days prior to the date on which the Company closes its books


 


10
















 


or takes a record (A) with respect to any dividend or distribution upon
the Common Stock, (B) with respect to any pro rata subscription offer to
holders of Common Stock or (C) for determining rights to vote with respect to
any Change of Control, dissolution or liquidation.


 


(b)           Payments.  Whenever any payment of cash is to be made by
the Company to any Person pursuant to this Note, such payment shall be made in
lawful money of the United States of America by a check drawn on the account of
the Company and sent via overnight courier service to such Person at such
address as previously provided to the Company in writing (which address, in the
case of the Holder, shall initially be as set forth in Section 8.12 of the
Asset Purchase Agreement); provided that the Holder may elect to receive a
payment of cash via wire transfer of immediately available funds by providing
the Company with prior written notice setting out such request and the Holder’s
wire transfer instructions.  Whenever any
amount expressed to be due by the terms of this Note is due on any day which is
not a Business Day, the same shall instead be due on the next succeeding day
which is a Business Day and, in the case of any Interest Date which is not the
date on which this Note is paid in full, the extension of the due date thereof
shall not be taken into account for purposes of determining the amount of
Interest due on such date.


 


(17)         CANCELLATION.  After all Principal, accrued Interest and
other amounts at any time owed on this Note have been paid in full, this Note
shall automatically be deemed canceled, shall be surrendered to the Company for
cancellation and shall not be reissued.


 


(18)         WAIVER OF NOTICE.  To the extent permitted by law, the Company
hereby waives demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement
of this Note.


 


(19)         GOVERNING LAW.  This Note shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.


 


(20)         CERTAIN DEFINITIONS.  For purposes of this Note, the following
terms shall have the following meanings:


 


(a)           “Asset Purchase Agreement” means that
certain asset purchase agreement dated as of June 4, 2004, between the
Company and Arzoon, Inc., a Delaware corporation.


 


(b)           “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.


 


(c)           “Calendar Quarter” means each of: the
period beginning on and including January 1 and ending on and including
March 31; the period beginning on and including April 1 and ending on
and including June 30; the period beginning on and including


 


11
















 


July 1 and ending on and including September 30; and the
period beginning on and including October 1 and ending on and including
December 31.


 


(d)           “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and a government or any
department or agency thereof.


 


[Signature Page Follows]


 


12
















 


IN WITNESS
WHEREOF, the Company has caused this Note to be duly
executed as of the Issuance Date set out above.


 


 


	
   

  	
  SSA GLOBAL TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kirk J. Isaacson

  	
   

  
	
   

  	
   

  	
  Name: Kirk J. Isaacson

  
	
   

  	
   

  	
  Title: Executive Vice President & General

  Counsel

  



 
















 


ANNEX A


 


SUBORDINATION PROVISIONS


 


(1)           Definitions.  All terms used herein which are defined in
the Subordinated Convertible Note to which this Annex A is attached (the “Note”) and not otherwise defined herein
shall have the meaning herein as set forth therein.  In addition, the following terms shall have
the following meanings:


 


“Obligations” shall
mean any principal, interest, premium, penalties, fees, expenses, indemnities,
reimbursement obligations under letters of credit, bankers acceptances and
similar arrangements and other liabilities and obligations (including
guaranties in respect thereof) payable under any agreement, instrument or other
document governing or otherwise executed in connection with any Senior
Indebtedness, whether direct or indirect, whether contingent or of any other
nature, character, or description (including interest accruing after the
commencement of any bankruptcy, insolvency, receivership or similar proceeding
at the rate provided for in the respective documentation for any such Senior
Indebtedness, whether or not such interest is an allowed claim against the
debtor in any such proceeding).


 


“Senior Indebtedness”
shall mean any and all presently existing or hereafter arising (i) obligations
of the Company described in Section 9 below, and (ii) other indebtedness
which provides by its terms that it is to constitute “Senior Indebtedness” for
purposes of the Note, in each case, including without limitation, any
amendments, modifications, refinancing, renewals, refunding, replacements,
exchanges or extensions of such amounts in whole or in part.(1)


 


“Subordinated Indebtedness”
shall mean obligations of the Company now or hereafter arising under the Note,
including without limitation, all interest thereon and all fees, premiums and
other amounts payable in accordance with the terms thereof.


 


“Termination Date” shall
mean the date 90 days following the date on which all of the commitments under
the Senior Indebtedness have been terminated and all of the Obligations have
been irrevocably paid to the holders of the Senior Indebtedness in full in
cash.


 


(2)           Subordination of Liabilities.  The Company, for itself and its successors
and assigns, covenants and agrees, and each holder of the Note to which this
Annex A is attached by its acceptance thereof likewise covenants and agrees,
that the payment of the principal of, interest on, and all other amounts owing
in respect of, the Subordinated Indebtedness is hereby expressly subordinated,
to the extent and in the manner hereinafter set forth, to the prior payment in
full in cash of all Senior Indebtedness.


 


(3)           Company not to Make Payments with Respect
to Subordinated Indebtedness, etc.


 










(1) Note that this definition is intended to include a senior credit
facility which will refinance the promissory notes and provide a new revolving
credit facility, which will close after the date of this Note.


 
















 


(a)           Until
the Termination Date, (i) the Company may not, directly or indirectly (and no
person or other entity on behalf of the Company may), make any payment of any
kind or character of any Subordinated Indebtedness and may not acquire any
Subordinated Indebtedness for cash or property, in each case except to the
extent that any such payment or acquisition is expressly permitted to be made
at such time by the terms of the Senior Indebtedness; provided, however
that (A) the subordination provisions in this subsection (a) shall not
prevent or restrict the conversion or deemed conversion of the Note into shares
of Common Stock of the Company in accordance with its terms, and (B) the holder
of the Note may receive, and the Company may pay principal and interest on the
Subordinated Indebtedness payable on the dates set forth in the Note if
immediately prior to and after giving effect to such payment, no Event of
Default has occurred and is continuing under any agreement, instrument or other
document relating to the Senior Indebtedness; and (ii) except as provided in clause
(i), to the extent that any payment under the Note would otherwise be required
pursuant to the terms thereof such payment shall be deferred until such time as
such payment or acquisition may be so made under the terms of this Annex A and
the failure to make any such payment or acquisition shall not give rise to any
Event of Default under the Note.  In
addition, except as otherwise provided in this Section 3, each holder of
the Note hereby agrees that, prior to the Termination Date, it will not ask for,
demand, take or receive, sue for, or otherwise take any action to enforce the
Company’s obligations to pay, amounts owing in respect of the Note.  Nothing herein shall be deemed to prevent the
payment by the Company of amounts then due and owing in respect of the
Subordinated Indebtedness at any time after the Termination Date.


 


(b)           In
the event that, notwithstanding the provisions of the preceding
subsection (a) of this Section 3, the Company (or any person or other
entity on behalf of the Company) shall make any payment of any kind or
character (other than a conversion of the Note into shares of Common Stock of
the Company in accordance with its terms) to the holder of the Note on account
of the Subordinated Indebtedness at a time when payment is not permitted by
said subsection (a), such payment shall be held by the holder of the Note,
in trust for the benefit of, and shall forthwith be paid over and delivered to,
the holders of Senior Indebtedness or their representative or the trustee under
any indenture or other agreement pursuant to which any instruments evidencing
any such Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent of such payment necessary to irrevocably pay all
such Senior Indebtedness in full in cash in accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.


 


(4)           Subordination to Prior Payment of all
Senior Indebtedness on Dissolution, Liquidation or Reorganization of Company.


 


(a)           Upon
any distribution of assets of the Company upon dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise and whether voluntary or involuntary):


 
















 


(i)            the
holders of all Senior Indebtedness shall first be entitled to receive payment
in full in cash of all Senior Indebtedness (including, without limitation,
post-petition interest at the rate (including the default rate) provided in the
documentation with respect to the Senior Indebtedness, whether or not such
post-petition interest is an allowed claim against the debtor in any bankruptcy
or similar proceeding) before the holder of the Note is entitled to receive any
payment of any kind or character on account of the Subordinated Indebtedness;


 


(ii)           any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property, securities or otherwise, to which the holder of the
Note would be entitled except for the provisions hereof, shall be paid by the
liquidating trustee or agent or other person or other entity making such
payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or other trustee or agent, directly to the holders of
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture under which any instruments evidencing
any such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to make payment in full in cash
of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness;


 


(iii)          in
the event that, notwithstanding the foregoing provisions of this
Section 4, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property, securities or otherwise, shall be
received by the holder of the Note on account of Subordinated Indebtedness
before all Senior Indebtedness is paid in full in cash, such payment or
distribution shall be received and held in trust by the holder of the Note for
the benefit of, and shall forthwith be paid over and delivered to, the holders
of the Senior Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture or other agreement pursuant to
which any instruments evidencing any such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
irrevocably pay all such Senior Indebtedness in full in cash in accordance with
the terms of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and


 


(b)           in
any such proceeding referred to in Section 4(a) commenced by or against
the Company,


 


(i)            the
holders of the Senior Indebtedness may, and are hereby irrevocably authorized
and empowered (in its own name or in the name of the holder of the Note or
otherwise), but shall have no obligation, to, (A) demand, sue for, collect
and receive every payment or distribution referred to in subsection (a) of
this Section 4 and give acquittance therefor and (B) file claims and
proofs of claim in respect of the Subordinated Indebtedness and take such other
action (including, without limitation, voting the Subordinated Indebtedness) as
the holders of the Senior Indebtedness may deem necessary or advisable for the
exercise or enforcement of any of the rights or interests of the holders of the
Senior Indebtedness hereunder; and


 
















 


(ii)           the
holder of the Note will duly and promptly take such action as the holders of
the Senior Indebtedness may request (A) to collect the Subordinated
Indebtedness for the account of the holders of the Senior Indebtedness and to
file appropriate claims or proofs of claim with respect thereto, (B) to
execute and deliver to the holders of the Senior Indebtedness such powers of
attorney, assignments or other instruments as the holders of the Senior
Indebtedness may request in order to enable them to enforce any and all claims
with respect to, the Subordinated Indebtedness, and (C) to collect and
receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the Subordinated Indebtedness.


 


Without in any way modifying the provisions hereof or affecting the
subordination effected hereby if notice is not given, the Company shall give
prompt written notice to the holder of the Note of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon assignment for the benefit of creditors or
otherwise).


 


(5)           Negative Covenants of the Subordinated
Creditor.  So long as any of the
Senior Indebtedness shall remain outstanding, the holders of the Subordinated
Indebtedness will not, without the prior written consent of the holders of the
Senior Indebtedness:


 


(a)           (i)
cancel or otherwise discharge any Subordinated Indebtedness (except for
payments permitted pursuant to Section 3), or (ii) subordinate any
Subordinated Indebtedness to any indebtedness of the Company other than the
Senior Indebtedness;


 


(b)           sell,
assign, pledge, encumber or otherwise dispose of any Subordinated Indebtedness
unless such sale, assignment, pledge, encumbrance or disposition is made
expressly subject to this Annex A;


 


(c)           agree
to change the terms of any Subordinated Indebtedness in any manner;


 


(d)           except
as permitted pursuant to Section 3 of this Annex A, declare any or all of
the Subordinated Indebtedness due and payable prior to the date fixed therefor
or exercise any remedy with respect to the Subordinated Indebtedness;


 


(e)           commence,
or join with any creditor other than the holders of the Senior Indebtedness in
commencing, any proceeding referred to in Section 4 hereof; or


 


(f)            obtain
any lien or security interest in any property or asset of the Company or any of
its subsidiaries or affiliates.


 


(6)           Subrogation.  Subject to the prior irrevocable payment in
full in cash of all Senior Indebtedness, the holder of the Note shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to the Senior
Indebtedness until all amounts owing on the Note shall be paid in full, and for
the purpose of such subrogation no payments or distributions to the holders of
the Senior Indebtedness by or on behalf of the Company or by or on behalf of
the holder of the Note by


 
















 


virtue hereof which otherwise would have been made to the holder of the
Note shall, as between the Company, its creditors other than the holders of
Senior Indebtedness, and the holder of the Note, be deemed to be payment by the
Company to or on account of the Senior Indebtedness, it being understood that
the provisions hereof are and are intended solely for the purpose of defining
the relative rights of the holder of the Note, on the one hand, and the holders
of the Senior Indebtedness, on the other hand.


 


(7)           Obligations of the Company Unconditional.


 


(a)           Nothing
contained herein or in the Note is intended to or shall impair, as between the
Company and the holder of the Note, the obligation of the Company, which is
absolute and unconditional, to pay to the holder of the Note the principal of
and interest on the Note as and when the same shall become due and payable in
accordance with its terms, or is intended to or shall affect the relative
rights of the holder of the Note and creditors of the Company other than the
holders of the Senior Indebtedness, nor, except as specifically provided
herein, shall anything herein or therein prevent the holder of the Note from
exercising all remedies otherwise permitted by applicable law upon an event of
default under the Note, subject to the rights, if any, herein of the holders of
Senior Indebtedness in respect of cash, property, securities or other assets of
the Company received upon the exercise of any such remedy.  Upon any distribution of assets of the
Company referred to herein, the holder of the Note shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other person
or entity making any distribution to the holder of the Note, for the purpose of
ascertaining the persons or other entities entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or hereof.


 


(b)           All
rights and interests of the holders of the Senior Indebtedness hereunder, and
all agreements and obligations of the holder of the Note and the Company hereunder,
shall remain in full force and effect irrespective of:  (i) any lack of validity or enforceability of
any agreement, instrument or other document relating thereto, (ii) any change
in the time, manner or place of payment of, or in any other term in respect of,
all or any of the Obligations, or any other amendment or waiver of or any
consent to departure from any agreement, instrument or other document relating
thereto, (iii) any exchange or release of, or non-perfection of any lien on or
security interest in, any collateral, or any release or amendment or waiver of
or consent to departure from any guaranty, for all or any of the Obligations,
or (iv) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Company in respect of the Obligations or
the holders of the Subordinated Indebtedness or the Company in respect of this
Annex A.


 


(8)           Subordination Rights not Impaired by Acts
or Omissions of Company or Holders of Senior Indebtedness.  No right of any present or future holders of
any Senior Indebtedness to enforce the rights of subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act by any
such holder, or by any noncompliance by the Company with the terms and
provisions of the Note, regardless of any knowledge thereof which any such
holder may


 
















 


have or be otherwise charged with. 
The holders of the Senior Indebtedness may, without in any way affecting
the obligations of the holder of the Note with respect hereto, at any time or
from time to time and in their absolute discretion, change the manner, place or
terms of payment of, change or extend the time of payment of, or renew, alter
or increase, any Senior Indebtedness or amend, modify or supplement any
agreement or instrument governing or evidencing such Senior Indebtedness or any
other document referred to therein, or exercise or refrain from exercising any
other of their rights under the Senior Indebtedness including, without
limitation, the waiver of any default or event of default thereunder and the
release of any collateral securing such Senior Indebtedness, all without notice
to or assent from the holder of the Note.


 


(9)           Senior Indebtedness.  Any and all existing and future contractual
indebtedness or other obligations of the Company to Madeleine, L.L.C., General
Atlantic Partners 76, L.P., GAP Coinvestment Partners II, L.P., GapStar, LLC,
GAPCO GmbH & Co. KG or any of their affiliates, and any other indebtedness
or other obligations not expressly subordinated or pari passu in right of
payment to the Subordinated Indebtedness shall constitute Senior Indebtedness.


 


(10)         Miscellaneous.


 


(a)           The
provisions of this Annex A shall constitute a continuing offer to all persons
or other entities who, in reliance upon such provisions, become holders of, or
continue to hold, Senior Indebtedness, and such provisions are made for the
benefit of the holders of Senior Indebtedness, and such holders are hereby made
obligees hereunder the same as if their names were written herein as such, and
they and/or each of them may proceed to enforce such provisions.  To the extent that the provisions of this
Annex A conflict with, or are inconsistent with, the other terms of the Note,
the provisions of this Annex A shall control.


 


(b)           The
holders of the Senior Indebtedness are hereby authorized to demand specific
performance of this Annex A at any time when the holder of the Note shall have
failed to comply with any of the provisions of this Annex A applicable to such
holders whether or not the Company shall have complied with any of the
provisions hereof applicable to the Company, and the holder of the Note hereby
irrevocably waives any defense based on the adequacy of a remedy at law which
might be asserted as a bar to such remedy of specific performance.


 


(c)           The
holder of the Note and the Company will mark their books or account in such a
manner as shall be effective to give proper notice of the effect of this Annex
A.  The holders of the Note and the
Company will, at their expense and at any time and from time to time, promptly
execute and deliver all further instruments and other documents, and take all
further action, that may be necessary or, in the opinion of the holders of the
Senior Indebtedness, desirable, or that such holders may request, in order to
protect any right or interest granted or purported to be granted hereby or to
enable the holders of such Senior Indebtedness to exercise and enforce their rights
and remedies hereunder.


 


(d)           This
Annex A shall continue to be effective or shall be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the holders of the Senior Indebtedness upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, all as
though such payment had not been made.


 
















 


(e)           No
amendment of any provision of this Annex A shall be effective unless it is in
writing and signed by the holder of the Note, the Company and the holders of
the Senior Indebtedness, and no waiver of any provision of this Annex A, and no
consent to any departure therefrom, shall be effective unless it is in writing
and signed by the holders of the Senior Indebtedness, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.


 


(f)            No
failure on the part of the holders of the Senior Indebtedness to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right.


 


(g)           This
Annex A shall (i) be binding on the holder of the Note and the Company and, to
the extent permitted under the Note, their respective successors and assigns
and (ii) inure, together with all rights and remedies of the holders of the
Senior Indebtedness hereunder, to the benefit of the holders of the Senior
Indebtedness and their respective successors, transferees and assigns.


 
















 


EXHIBIT I


 


SSA GLOBAL
TECHNOLOGIES, INC.

CONVERSION NOTICE


 


Reference is made to the Convertible Note (the “Note”) issued to the undersigned by SSA GLOBAL TECHNOLOGIES, INC. (the “Company”). 
In accordance with and pursuant to the Note, the undersigned hereby
elects to convert the Conversion Amount (as defined in the Note) of the Note
indicated below into shares of Common Stock, par value $0.01 per share, of the
Company, in the case of the Company’s IPO, or, pursuant to the Note, shares of
common stock of the Company’s successor corporation, in the case of a Change of
Control Transaction consummated with a Publicly Traded successor corporation,
effective as of, and contingent upon the occurrence of, the IPO or the Change
of Control Transaction on which the conversion rights under the Note are first
triggered, provided that this Conversion Note shall be automatically revoked
and the Note, if surrendered, shall be promptly returned to the undersigned if the
applicable IPO or Change of Control Transaction has not been completed within
30 days of the date hereof.


 


Aggregate Conversion Amount to be converted:


 


Please confirm the following information:


 


Conversion Price:


 


Number of shares of common stock to be issued:


 


Please issue the common stock into which the Note is being converted in
the following name and to the following address:


 


	
   

  	
  Issue to:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Facsimile Number:

  	
   

  
	
   

  	
   

  
	
   

  	
  Authorization:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  Account Number:

  	
   

  
	
   

  	
   (if electronic book entry transfer)

  
	
   

  	
   

  
	
   

  	
  Transaction Code Number:

  	
   

  
	
   

  	
   (if electronic book entry transfer)