Exhibit
10.41


 


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. $1,515,218.36

  
	
  Replacement Note issued as
  of July 26, 2004

  	
   

  	
   

  



 


FOR VALUE RECEIVED, SSA GLOBAL TECHNOLOGIES INC., a Delaware corporation (the “Company”), hereby promises to pay to Red Rock Ventures - SBIC III, L.P.  (“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”) was
originally issued to Arzoon, Inc. (now known as “After Corporation,” the “Original Holder”) pursuant to the Asset
Purchase Agreement (as defined below). This Note is being issued as of July 26,
2004 to reflect the Original Holder’s transfer of this Note, together interest
accruing thereon after July 1, 2004, to Holder. 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, provided that the interest payment
for July 1, 2004 was made to the Original Holder. 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


 


2
















 


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, 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


 


3
















 


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 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.  The
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 (or the account of its liquidating trust) 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. The 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


 


4
















 


of such investment. The
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.


 


(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 11(d)
relating to the Shares.


 


(g)          Legends. 
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


 


5
















 


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 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


 


6
















 


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 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


 


7
















 


“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 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)         [Reserved.]


 


(d)        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.


 


(e)         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


 


8
















 


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.


 


(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


 


9
















 


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 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


 


10
















 


the Asset Purchase Agreement to the Holder’s
address for payments (below), with a copy to Don Keller, Heller Ehrman White
& McAuliffe, 275 Middlefield Road, Menlo Park, CA 94025-3506. 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 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 below);
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.


 


Holder’s
Address for Payments (and Notices):


 


Red
Rock Ventures - SBIC III, L.P.


180
Lytton Avenue


Palo
Alto, CA 94301


Attn:
Bob Todd and Carol Pereira


 


(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.


 


11
















 


(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 the Arzoon, Inc..


 


(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 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 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.(2)


 


“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.


 










(2) 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)