Exhibit
10.35


 


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. $1,005,622.03

  
	
  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 Venrock Associates
II, 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 1l(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” of 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 apart 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):


 


Venrock Associates II, L.P.


30 Rockefeller Plaza, Room 5508


New York, NY 10112


Attn: 
Ray Rothrock


 


(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.(5)


 


“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.


 










(5)   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
the 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)