Document:

Exhibit 10.31

 

SECOND AMENDED AND RESTATED PROMISSORY NOTE

 

	
  $43,901.05

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  July 18, 2003,

  
	
   

  	
   

  	
  as Amended and Restated on October 15,
  2003,

  
	
   

  	
   

  	
  and as further Amended and Restated on
  February 26, 2004

  

 

FOR VALUE RECEIVED, the undersigned, SSA GLOBAL TECHNOLOGIES,
INC., a Delaware corporation (the “Borrower”), HEREBY PROMISES TO PAY to the
order of GAPCO GmbH & Co. KG, a German limited partnership (the “Lender”),
the principal amount of Forty Three Thousand Nine Hundred One and 05/100 Dollars
($43,901.05) plus interest on any and all principal amounts remaining unpaid
hereunder from time to time outstanding from the date hereof until such
principal amount becomes due, at an interest rate per annum equal to 1.23%, all
of which shall be due and payable on November 15, 2005.

 

On July 18, 2003, the Borrower made identical promissory notes
(including the Original Note) (as defined below) (all of such notes, the “Original
Notes”) in the aggregate principal amount of $130,077,173.41 to Madeleine,
L.L.C., General Atlantic Partners 76, L.P., GAP Coinvestment Partners II, L.P.,
GapStar, LLC and GAPCO GmbH & Co. KG. 
On October 15, 2003, Borrower amended and restated each of the
Original Notes (all of such Original Notes, including this promissory note, each
as amended and restated on October 15, 2003, the “First Amended and
Restated Notes”).  On the date
hereof, Borrower amended and restated each of the First Amended and Restated
Notes (all of such First Amended and Restated Notes, as amended and restated on
the date hereof, the “Second Amended and Restated Notes”).

 

If any amount payable hereunder shall be due on a day on which banks
are required or authorized to close in New York City (any other day being a “Business
Day”), such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest payable hereon.

 

All interest shall be computed on the basis of a year of 365 days for
the actual number of days elapsed. 
Notwithstanding any other provision of this Second Amended and Restated
Promissory Note, interest paid or becoming due hereunder shall in no event
exceed the maximum rate permitted by applicable law.  Both principal and interest are payable in
lawful money of the United States and in immediately available funds at the
offices of the Lender, at 450 Park Avenue, New York, New York  10022, or at such other place as the Lender
shall designate in writing to the Borrower.

 

The Borrower may, at its option, prepay this Second Amended and
Restated Promissory Note, in whole at any time or in part from time to time,
without penalty or premium, each such prepayment to be accompanied by the
payment of accrued interest to the date of each prepayment on the amount
prepaid.  Notwithstanding the foregoing
or anything to the contrary contained herein, the Borrower may not prepay the
other Second Amended and Restated

 

 

Promissory Notes, in whole or in part, unless
it simultaneously prepays the same pro rata portion of this Second Amended and
Restated Promissory Note.

 

The execution, delivery and performance by the Borrower of this Second
Amended and Restated Promissory Note have been duly authorized by all necessary
corporate action of the Borrower, do not contravene the terms of its certificate
of incorporation or by-laws, as the same may have been amended, and do not
violate, conflict with or result in any breach of, or the creation of any lien
under, any contractual obligation of, or law or regulation applicable to, the
Borrower.

 

The Borrower agrees that all notices or other communications provided
for hereunder shall be in writing (including telecommunications) and shall be
mailed, telecopied, or delivered to the Borrower at the address of the Borrower
set forth next to its signature, or at such other address as may hereafter be
specified by the Borrower to the Lender (at its address set forth herein) in
writing.  All notices and communications
shall be effective (i) if mailed, when received or three days after mailing,
whichever is earlier, (ii) if telecopied, when transmitted, and (iii) if
delivered, upon delivery.

 

No failure on the part of the Lender to exercise, and no delay in
exercising, any right, power, privilege or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof by the Lender
preclude any other or further exercise thereof or the exercise of any other
right, power, privilege or remedy of the Lender.  No amendment or waiver of any provision of
this Second Amended and Restated Promissory Note or any of the other Second
Amended and Restated Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

 

Any provision hereof which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

 

The Borrower acknowledges that this Second Amended and Restated
Promissory Note may be transferred and assigned, and that (i) such transfer and
assignment shall in no way affect the Borrower’s obligations under this Second
Amended and Restated Promissory Note, which will remain in full force and
effect, and (ii) any such transferee or assignee shall not be subject to (and
the Borrower hereby expressly waives as against any such transferee, assignee
or holder of this Second Amended and Restated Promissory Note) any defenses,
set-offs, counterclaims or other objections to the payment of this Second Amended
and Restated Promissory Note.

 

The Borrower agrees to pay all costs, including reasonable attorneys’
fees, incurred by the Lender in enforcing payment hereof or of its other rights
hereunder and in respect hereof, and hereby waives, to the full extent
permitted by applicable law, all rights to plead any statute of limitations as
a defense to any action hereunder.

 

2

 

The Borrower hereby waives presentment, demand, protest and notice of
any kind in connection with the delivery, acceptance, performance, default or
enforcement of this Second Amended and Restated Promissory Note.  The Borrower hereby waives any right of
setoff, offset, counterclaim or abatement with respect to, and any other
defense or similar right with respect to, payment of its obligations under this
Second Amended and Restated Promissory Note.

 

This Second Amended and Restated Promissory Note amends and restates in
its entirety the Promissory Note, dated July 18, 2003, made by the Borrower
to the order of the Lender (the “Original Note”), as amended and
restated on October 15, 2003 (the “Existing Note”).  This Second Amended and Restated Promissory
Note shall not in any way constitute (i) an extinguishment of the indebtedness
of the Borrower under the Existing Note, (ii) a release of the Borrower from
such obligations, or (iii) a novation of the Existing Note.

 

3

 

The Borrower hereby (i) irrevocably submits
to the jurisdiction of any New York State or Federal court sitting in New York
City in any action or proceeding arising out of or relating to this Second
Amended and Restated Promissory Note, (ii) waives any defense based on
doctrines of venue or forum  non  conveniens, or similar
rules or doctrines, and (iii) irrevocably agrees that all claims in respect of
such an action or proceeding may be heard and determined in such New York State
or Federal court.  The Borrower (by its
acceptance hereof) hereby waives any right to trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Second Amended
and Restated Promissory Note.

 

This Second Amended and Restated Promissory Note shall be governed by,
and construed in accordance with, the laws of the State of New York.

 

 

	
   

  	
  SSA GLOBAL TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steve Earhart

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Steve Earhart

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  & Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  500 W. Madison, Suite 1600

  
	
   

  	
  Chicago, Illinois  60661

  
	
   

  	
  Attention:

  	
  Steve Earhart

  
	
   

  	
  Telephone:

  	
  312-258-6000

  
	
   

  	
  Telecopier:

  	
  312-474-7500

  
						

 

4Exhibit
10.32

 

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. $1,400,000

  
	
  Replacement
  Note issued as of July 26, 2004

  	
   

  	
   

  

 

FOR VALUE RECEIVED, SSA GLOBAL TECHNOLOGIES INC., a Delaware
corporation (the “Company”),  hereby promises to pay the After
Corporation Liquidating Trust (“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 with interest accruing thereon after July 1, 2004, to Holder.
Certain

 

 

capitalized
terms are defined in Section 19 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) 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.

 

4

 

(5) RIGHTS
UPON ISSUANCE OF CERTAIN OTHER SECURITIES.

 

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

 

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

 

(6) 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.

 

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

 

(8) 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.

 

5

 

(9) 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.

 

(10)                            RESTRICTIONS
ON TRANSFER.

 

(a) Note.  This Note may not be offered for sale, sold,
transferred, pledged, hypothecated, encumbered or otherwise assigned in any
transaction that would constitute a sale thereof within the meaning of the
Securities Act of 1933, as amended (the “1933
Act”), unless (i) this Note has been registered for sale under the
1933 Act and registered or qualified upon applicable state securities laws
relating to the offer and sale of securities; or (ii) exemption from the
registration requirements of the 1933 Act and the registration or qualification
requirements of all such state securities laws are available and the Company
shall have received an opinion of counsel reasonably satisfactory to the
Company that the proposed 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) Holder’s
Representation.  The Holder, by
acceptance hereof, acknowledges that this Note and the shares of Common Stock
to be issued upon conversion hereof are being acquired solely for the Holder’s
own account and not as nominee for any other party, and for investment, and
that the Holder will not offer, sell or otherwise dispose of this Note or any
shares of Common Stock to be issued upon conversion hereof except under
circumstances that will not result in a violation of applicable federal and
state securities laws. Upon exercise of this Note, the Holder shall, if requested
by the Company, confirm in writing, in a form reasonably satisfactory to the
Company, that the shares of Common Stock so purchased are being acquired solely
for the Holder’s own account (or the account of its liquidating trust) and not
as a nominee for any other party, for investment, and not with a view toward
distribution or resale to third parties.

 

(d) No
Transfer Without Consent.  (i) Except
as expressly permitted by this Section 10, without the written consent of
the Company, no Holder of this Note shall, directly or indirectly, offer for
sale, sell, transfer, pledge, hypothecate, encumber or otherwise

 

6

 

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 10 shall be void and
ineffective for all purposes. As used in this Section 10, 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.

 

(ii)                                  Upon the Holder’s surrender of this Note to
the Company at any time on or following the first anniversary of the Closing
Date (as defined in the Asset Purchase Agreement), the Company shall promptly
issue to the Holder the Initial Unrestricted Note and the New Restricted Note
(in each case as defined below).  Upon
the Holder’s surrender of the New Restricted Note to the Company at any time on
or following the first business day after the third anniversary of the Closing
Date, the Company shall promptly issue to the Holder the Additional
Unrestricted Note and, to the extent there are any timely submitted
indemnification claims that then remain unresolved, the Final Restricted Note
(in each case as such capitalized terms are defined below).  Neither this Note nor any of the Replacement
Notes shall be subject to any repayment offset except as expressly set forth in
Section 8.1(e) of the Asset Purchase Agreement. In the event any of this
Note, the New Restricted Note or, prior to final resolution of all timely
submitted indemnification claims that remain unresolved, the Final Restricted
Note is converted into capital stock in accordance with its terms, such capital
stock shall remain subject to the same rights (including, without limitation,
rights relating to the release of transfer restrictions) and the same
restrictions on transfer applicable to such note prior to its conversion, in
each case to the same extent as would apply had none of such notes been converted
and assuming for this purpose that each of such notes had been surrendered for
exchange and the applicable Replacement Note had been issued in accordance with
this Section 10(d)(ii) effective as of the earliest time permitted by this
Section 10(d)(ii); provided, however, that such capital
stock shall be valued based on the fair market value of such capital stock
determined in good faith by the Company’s Board of Directors for purposes of
any repayment forgiveness, offset or release from transfer restrictions in
connection with indemnification claims finally determined to be valid pursuant
to Section 8.1 of the Asset Purchase Agreement or in connection with any
release of assets from repayment forgiveness, offset provisions or transfer
restrictions (the aggregate value of all such capital stock being, the “Indemnification Value”); provided, further,
that the Holder of any such note may, in its sole discretion, sell such capital
stock and retain any proceeds thereof in excess of (A) the Indemnification Value,
in the case of sales occurring prior to the first anniversary of the Closing
Date, or (B) the greater of (i) the Indemnification Value or (ii) $1,000,000
plus the aggregate amount necessary, in the reasonable judgment of the Company,
to satisfy any timely submitted but unresolved indemnification claims, in the
case of sales occurring after the first anniversary of the Closing Date but on
or prior to the first business day after the third anniversary of the Closing
Date, in each case free of any restrictions or risk of offset; provided,
further, that, upon the request of the Company, the holder thereof shall
execute and deliver such pledge or escrow agreements as the Company may
reasonably request to ensure the capital stock (or cash equal to the Indemnification
Value) remains available for offset against any

 

7

 

indemnification
claims that are timely submitted pursuant to Section 8.1 of the Asset
Purchase Agreement for the same period as such notes would have remained
available for offset had none of such notes been converted and assuming for
this purpose that each of such notes had been surrendered for exchange and the
applicable Replacement Note had been issued in accordance with this
Section 10(d)(ii) effective as of the earliest time permitted by this
Section 10(d)(ii).

 

(iii)                               To the extent that Seller shall grant any
taxing authority (including, without limitation, in the State of California)
any extension of the statute of limitations relating to any Sales Tax Claims
beyond the three year statute of limitations, the Maturity Date of the Note and
any references to the “first business day after the third anniversary of the
Closing Date” used herein shall be extended until the expiration of such
extension.

 

(iv)                              For purposes of this Note, the following
terms shall have the meanings set forth below:

 

(1) “Additional Unrestricted Note” means a note
in the principal amount equal to the principal amount of the New Restricted
Note less  the amount
necessary, in the reasonable judgment of the Company, to satisfy any timely
submitted indemnification claims that remain unresolved as of the date the New
Restricted Note is surrendered for exchange, which note shall otherwise be
substantially identical to this Note, except that it may be transferred or
disposed of by the holder thereof without restriction to any Affiliate of the
Holder so long as such transferee is an “accredited investor” as such term is
defined under Regulation D of the Securities Act of 1933, as amended (an “Accredited Investor Affiliate”),  other than the restrictions set forth in
Section 10(a) hereof, and without the consent of the issuer thereof; provided,
that such transferee shall make representations to the Company substantially
similar to those set forth in Sections 3.21 through 3.28, inclusive, of the
Asset Purchase Agreement (the “Investor
Representations”).

 

(2) “Final Restricted Note” means a note in the
principal amount equal to the amount necessary, in the reasonable judgment of
the Company, to satisfy any timely submitted indemnification claims that remain
unresolved as of the date the New Restricted Note is surrendered for exchange,
which note shall otherwise be substantially similar to this Note except that it
may be transferred or disposed of by the holder thereof without restriction to
any Accredited Investor Affiliate, other than the restrictions set forth in
Section 10(a) hereof, and without the consent of the issuer thereof upon
final resolution of all such timely submitted but unresolved indemnification
claims; provided, that such transferee shall make the Investor
Representations.

 

(3) “Initial Unrestricted Note” means a note in
the principal amount equal to the greater of (A) zero or (B) $400,000 less  (i) any portion of the Principal
of this Note offset or forgiven prior to the date this Note is surrendered for
exchange in satisfaction of valid indemnification claims pursuant to
Section 8.1 of the Asset Purchase Agreement less  (ii) the amount necessary, in the reasonable
judgment of the Company, to satisfy any timely submitted indemnification claims
that remain unresolved as of the date this Note is surrendered for exchange,
which note shall otherwise be substantially similar to this Note, except that
it may be transferred or disposed of by the holder thereof without restriction
to any Accredited Investor

 

8

 

Affiliate,
other than the restrictions set forth in Section 10(a) hereof, and without
the consent of the issuer thereof; provided, that such transferee shall
make the Investor Representations.

 

(4) “New Restricted Note” means a note in the
principal amount equal to the Principal of this Note less  the principal amount of the
Initial Unrestricted Note, which note shall otherwise be substantially similar
to this Note; provided, that such transferee shall make the Investor
Representations.

 

(5) “Replacement Notes” means the Initial
Unrestricted Note, the New Restricted Note, the Additional Unrestricted Note
and the Final Restricted Note.

 

(6) “Sales Tax Claims” means any claims for
indemnification submitted by the Company on or prior to the first business day
after the third anniversary of the Closing Date relating to Transfer Taxes (as
defined in Section 5.6 of the Asset Purchase Agreement).

 

(7) “Tax/Employee Benefits Claims” means any
claims for indemnification submitted by the Company on or prior to the second
anniversary of the Closing Date relating to the representations of each Seller
(as defined in the Asset Purchase Agreement) in the Asset Purchase Agreement
pertaining to tax matters and employee benefit matters governed by ERISA.

 

(8) “timely submitted” or “timely submitted
indemnification claims” means (a) Sales Tax Claims submitted by the
Company to Seller on or prior to the first business day following the third
anniversary of the Closing Date, (b) Tax/Employee Benefits Claims submitted by
the Company to Seller on or prior to the second anniversary of the Closing Date
and (c) any other indemnification claims submitted by the Company to Seller on
or prior to the first anniversary of the Closing Date pursuant to
Section 8.1 of the Asset Purchase Agreement, in each case pursuant to a
written notice specifying in reasonable detail the nature, basis and amount of
the claim.

 

(11)                            REISSUANCE
OF THIS NOTE.

 

(a) Transfer.  If this Note is transferred, subject to the
restrictions on transfer contained herein, upon surrender 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 11(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 11(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 11(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

 

9

 

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 11(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 11(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.

 

(12)                            REORGANIZATION,
MERGER OR SALE OF ASSETS.  If at any
time while this Note, or any portion hereof, is outstanding there shall be (i)
a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation with or into another corporation in which the Company is not the
surviving entity, or a reverse triangular merger in which the Company is the
surviving entity but the shares of the Company’s capital stock outstanding
immediately prior to the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise, or (iii)
a sale or transfer of the Company’s properties and assets as, or substantially
as, an entirety to any other person or other entity (each of the transactions
described in clauses (i), (ii) and (iii) being, a “Change of Control Transaction”),  then, as part of such Change of Control Transaction, lawful
provision (including, without limitation, assumption of this Note by the
successor corporation) shall be made so that the Holder of this Note shall
thereafter either (i) receive a replacement note substantially similar to this
Note issued in the name of the successor corporation if the Change of Control
Transaction is completed with a successor corporation that is not then Publicly
Traded, or (ii) if the change of Control Transaction is with a Publicly Traded
successor corporation, be entitled to receive upon conversion of this Note the
number of shares 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 12 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.

 

10

 

(13)                            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.

 

(14)                            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.

 

(15)                            NOTICES;
PAYMENTS.

 

(a) Notices.  Whenever notice is required to be given under
this Note, unless otherwise provided herein, such notice shall be given to
Robert Todd, RedRock Ventures, 180 Lytton Avenue, Palo Alto, CA 94301, 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 take? 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 above); 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

 

11

 

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.

 

(16)                            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.

 

(17)                            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.

 

(18)                            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.

 

(19)                            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 Original Holder.

 

(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:

  
	
   

  	
   

  	
  Title:

  

 

 

ANNEX A

 

SUBORDINATION PROVISIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

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

 

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

 

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

 

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

 

(i)                                     the
holders of all Senior Indebtedness shall first be entitled to receive payment
in full in cash of all Senior Indebtedness (including, without limitation,
post-petition interest at the rate (including the default rate) provided in the
documentation with respect

 

 

to
the Senior Indebtedness, whether or not such post-petition interest is an
allowed claim against the debtor in any bankruptcy or similar proceeding)
before the holder of the Note is entitled to receive any payment of any kind or
character on account of the Subordinated Indebtedness;

 

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

 

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

 

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

 

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

 

(ii)                                  the
holder of the Note will duly and promptly take such action as the holders of
the Senior Indebtedness may request (A) to collect the Subordinated
Indebtedness for the account of the holders of the Senior Indebtedness and to
file appropriate claims or proofs of claim with respect thereto, (B) to execute
and deliver to the holders of the

 

 

Senior
Indebtedness such powers of attorney, assignments or other instruments as the
holders of the Senior Indebtedness may request in order to enable them to
enforce any and all claims with respect to, the Subordinated Indebtedness, and
(C) to collect and receive any and all payments or distributions which may be
payable or deliverable upon or with respect to the Subordinated Indebtedness.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(6) Subrogation.  Subject to the prior irrevocable payment in
full in cash of all Senior Indebtedness, the holder of the Note shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to the Senior
Indebtedness until all amounts owing on the Note shall be paid in full, and for
the purpose of such subrogation no payments or distributions to the holders of
the Senior Indebtedness by or on behalf of the Company or by or on behalf of
the holder of the Note by virtue hereof which otherwise would have been made to
the holder of the Note shall, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the holder of the Note, be deemed to be
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions hereof are and are intended solely for the
purpose of

 

 

defining
the relative rights of the holder of the Note, on the one hand, and the holders
of the Senior Indebtedness, on the other hand.

 

(7) Obligations
of the Company Unconditional.

 

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

 

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

 

(8) Subordination
Rights not Impaired by Acts or Omissions of Company or Holders of Senior
Indebtedness.  No right of any
present or future holders of any Senior Indebtedness to enforce the rights of
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act by any such holder, or by any noncompliance by the Company
with the terms and provisions of the Note, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with. The holders of the
Senior Indebtedness may, without in any way affecting the obligations of the
holder of the Note with respect hereto, at any time or from time to time and in
their absolute discretion, change the manner, place or terms of payment of,
change or extend the time of payment of, or renew, alter or increase, any
Senior Indebtedness or

 

 

amend,
modify or supplement any agreement or instrument governing or evidencing such
Senior Indebtedness or any other document referred to therein, or exercise or
refrain from exercising any other of their rights under the Senior Indebtedness
including, without limitation, the waiver of any default or event of default
thereunder and the release of any collateral securing such Senior Indebtedness,
all without notice to or assent from the holder of the Note.

 

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

 

(10)                            Miscellaneous.

 

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

 

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

 

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

 

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

 

(e) No
amendment of any provision of this Annex A shall be effective unless it is in
writing and signed by the holder of the Note, the Company and the holders of
the Senior Indebtedness, and no waiver of any provision of this Annex A, and no
consent to any

 

 

departure
therefrom, shall be effective unless it is in writing and signed by the holders
of the Senior Indebtedness, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

 

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

 

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

 

 

EXHIBIT I

 

SSA GLOBAL
TECHNOLOGIES, INC.

CONVERSION NOTICE

 

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

 

Aggregate Conversion Amount to be
converted:                                                                              

 

Please
confirm the following information:

 

Conversion
Price:                                                                                                                               

 

Number of shares of common stock to be
issued:                                                                              

 

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

 

Issue to:

 

 

 

Facsimile Number:                                                                                                                             

 

Authorization:                                                                                                                                    

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
  Dated:

  	
   

  
						

 

Account
Number:                                                                 

(if electronic book entry transfer)

 

Transaction Code
Number:                                                    

(if electronic book entry transfer)

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