Exhibit 10.39


 


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. $189,225.76

  
	
  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 - Cayman Investors 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 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” 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 - Cayman Investors 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.(3)


 


“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.


 










(3) 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)