EXHIBIT 10.6

EXECUTION COPY

GUARANTY

This GUARANTY (together with all amendments, if any, from time to time hereto,
this "Guaranty"), dated as of December 31, 2003, is made by and among COMMERCE
ONE OPERATIONS, INC. (the "Guarantor"), a Delaware corporation and wholly-owned
subsidiary of Commerce One, Inc. (the "Seller"), COMVEST INVESTMENT PARTNERS II
, a Delaware limited liability company ("ComVest") and DCC VENTURES, LLC, a
Nevada limited liability company ("DCC" and together with ComVest, the
"Purchasers"). Any capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Purchase Agreement.

W I T N E S S E T H:

WHEREAS, the Seller has offered for sale to the Purchasers, and the Purchasers
have purchased from the Seller, (i) Senior Secured Non-Convertible Promissory
Notes of the Seller in the aggregate principal amount of Five Million Dollars
($5,000,000) (the "Notes") and (ii) Warrants to purchase shares of common stock,
par value $.0001 per share, of the Seller (the "Warrants") under the terms of
the Purchase Agreement;

WHEREAS, under the terms and conditions of the Purchase Agreement, the
Purchasers have purchased the Notes and Warrants dated the date hereof and as
set forth in Exhibits A and B, respectively, annexed hereto and made a part
hereof, with payment of the Notes and any other obligations of Seller to the
Purchasers, and each of them, to be secured as provided for in the Purchase
Agreement;

WHEREAS, under the terms and conditions of the Purchase Agreement, in order to
induce the Purchasers to purchase the Notes and Warrants, the Guarantor agreed
to execute and deliver to the Purchasers (i) this Guaranty, pursuant to which
the Guarantor shall agreed to guarantee the full repayment of the Notes and all
other obligations of the Seller under the Purchase Agreement and other Closing
Documents (the "Guaranteed Obligations"), and (ii) a Security Agreement granting
the Purchasers a first perfected priority lien and security interest in the
Collateral (as defined therein) to secure all of the Guarantor's and the
Seller's respective obligations under the Purchase Agreement, the Notes and
other Closing Documents, as set forth in more detail in the Security Agreement
(collectively, the "Obligations").

WHEREAS, Guarantor will derive actual, direct and indirect economic benefits
from the sale of the Notes and Warrants; and

WHEREAS, in order to induce the Purchasers to purchase the Notes and Warrant and
enter into the Purchase Agreement and other Closing Documents, the Guarantor has
agreed to guarantee payment of the Guaranteed Obligations;

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained, it is agreed as follows:

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1. Definitions. Capitalized terms used herein (including terms used in the
Recitals) shall have the meanings assigned to them in the Purchase Agreement,
unless otherwise defined herein.

References to this "Guaranty" shall mean this Guaranty, including all
amendments, modifications and supplements and any annexes, exhibits and
schedules to any of the foregoing, and shall refer to this Guaranty as the same
may be in effect at the time such reference becomes operative.

2. The Guaranty.

2.1 Guaranty of Obligations. The Guarantor hereby unconditionally guarantees to
Purchasers and its successors, endorsees, transferees and assigns, the prompt
payment (whether at stated maturity, by acceleration or otherwise) and
performance of the Guaranteed Obligations. Guarantor agrees that this Guaranty
is a guaranty of payment and performance and not of collection, and that their
obligations under this Guaranty shall be primary, absolute and unconditional,
irrespective of, and unaffected by:

(a) the genuineness, validity, regularity, enforceability or any future
amendment of, or change in this Guaranty, any other Closing Document or any
other agreement, document or instrument to which Guarantor is or may become a
party;

(b) the absence of any action to enforce this Guaranty or any other Closing
Document or the waiver or consent by Purchasers with respect to any of the
provisions thereof;

(c) the existence, value or condition of, or failure to perfect the lien and
security interest granted by Guarantor and Seller under the Security Agreement,
any Collateral for the Guaranteed Obligations or any action, or the absence of
any action, by Purchasers in respect thereof (including, without limitation, the
release of any such security);

(d) the insolvency of Purchasers; or

(e) any other action or circumstances which might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor,

it being agreed by the Guarantor that its obligations under this Guaranty shall
not be discharged until the Satisfaction Date (as defined in the Pledge
Agreement). The Guarantor shall be regarded, and shall be in the same position,
as principal debtor with respect to the Guaranteed Obligations. The Guarantor
agrees that any notice or directive given at any time to Purchasers which is
inconsistent with the waiver in the immediately preceding sentence shall be null
and void and may be ignored by Purchasers, and, in addition, may not be pleaded
or introduced as evidence in any litigation relating to this Guaranty for the
reason that such pleading or introduction would be at variance with the written
terms of this Guaranty, unless Purchasers have specifically agreed otherwise in
writing. It is agreed among the Guarantor and Purchasers that the foregoing
waivers are of the essence of the transactions contemplated by the Closing

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Documents and that, but for this Guaranty and such waivers, Purchaser would
decline to enter into the Purchase Agreement and other Closing Documents.

2.2 Demand by Purchasers. In addition to the terms of the Guaranty set forth in
Section 2.1 hereof, and in no manner imposing any limitation on such terms, it
is expressly understood and agreed that, if, at any time, the outstanding
principal amount of the Guaranteed Obligations (including all accrued interest
thereon) is declared to be immediately due and payable, then Guarantor shall,
without demand, pay to the Purchasers the entire outstanding Guaranteed
Obligations due and owing to such holders. Payment by Guarantor shall be made to
Purchasers in immediately available Federal funds to an account designated by
Purchasers for the giving of notice to Purchasers or at any other address that
may be specified in writing from time to time by Purchasers, and shall be
credited and applied to the Guaranteed Obligations.

2.3 Enforcement of Guaranty. In no event shall Purchasers have any obligation
(although it is entitled, at its option) to proceed against the Seller or any
Collateral pledged to secure Guaranteed Obligations before seeking satisfaction
from the Guarantor, and Purchasers may proceed, prior or subsequent to, or
simultaneously with, the enforcement of Purchasers' rights hereunder, to
exercise any right or remedy which it may have against any Collateral, as a
result of any lien it may have as security for all or any portion of the
Guaranteed Obligations.

2.4 Waiver. In addition to the waivers contained in Section 2.1 hereof,
Guarantor waives, and agrees that it shall not at any time insist upon, plead or
in any manner whatever claim or take the benefit or advantage of, any appraisal,
valuation, stay, extension, marshaling of assets or redemption laws, or
exemption, whether now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance by Guarantor of its Guaranteed
Obligations under, or the enforcement by Purchasers of, this Guaranty. Guarantor
hereby waives diligence, presentment and demand (whether for non-payment or
protest or of acceptance, maturity, extension of time, change in nature or form
of the Guaranteed Obligations, acceptance of further security, release of
further security, composition or agreement arrived at as to the amount of, or
the terms of, the Guaranteed Obligations, notice of adverse change in Seller's
financial condition or any other fact which might increase the risk to
Guarantor) with respect to any of the Guaranteed Obligations or all other
demands whatsoever and waives the benefit of all provisions of law which are or
might be in conflict with the terms of this Guaranty. Guarantor represents,
warrants and agrees that, as of the date of this Guaranty, its obligations under
this Guaranty are not subject to any offsets or defenses against Purchasers,
Seller or Guarantor of any kind. Guarantor further agrees that its obligations
under this Guaranty shall not be subject to any counterclaims, offsets or
defenses against Purchasers, Seller or Guarantor of any kind which may arise in
the future.

2.5 Benefit of Guaranty. The provisions of this Guaranty are for the benefit of
Purchasers and their respective successors, transferees, endorsees and assigns,
and nothing herein contained shall impair the obligations of Seller or the
Guarantor under the Purchase Agreement and the other Closing Documents. In the
event all or any part of the Guaranteed Obligations are transferred, indorsed or
assigned by Purchasers to any Person or Persons, any reference to "Purchasers "
herein shall be deemed to refer equally to such Person or Persons.

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2.6 Modification of Guaranteed Obligations, Etc. The Guarantor hereby
acknowledges and agrees that Purchasers may at any time or from time to time,
with or without the consent of, or notice to, Guarantor:

(a) change or extend the manner, place or terms of payment of, or renew or alter
all or any portion of, the Guaranteed Obligations;

(b) take any action under or in respect of the Note or Warrantin the exercise of
any remedy, power or privilege contained therein or available to it at law,
equity or otherwise, or waive or refrain from exercising any such remedies,
powers or privileges;

(c) amend or modify, in any manner whatsoever, the Note or Warrant;

(d) extend or waive the time for Seller's or Guarantor's performance of, or
compliance with, any term, covenant or agreement on its part to be performed or
observed under the Purchase Agreement or any other Closing Documents, or waive
such performance or compliance or consent to a failure of, or departure from,
such performance or compliance;

(e) take and hold Collateral of the Seller for the payment of the Guaranteed
Obligations guaranteed hereby or sell, exchange, release, dispose of, or
otherwise deal with, any property pledged, mortgaged or conveyed, or in which
Purchasers have been granted a lien, to secure any Guaranteed Obligations;

(f) modify or terminate the terms of any intercreditor or subordination
agreement pursuant to which claims of other creditors of Guarantor or Seller are
subordinated to the claims of Purchasers; and/or

(g) apply any sums by whomever paid or however realized to any amounts owing by
Guarantor or Seller to Purchasers in such manner as Purchasers shall reasonably
determine in its discretion;

and Purchasers shall not incur any liability to Guarantor as a result thereof,
and no such action shall impair or release the Guaranteed Obligations of
Guarantor under this Guaranty.

2.7 Reinstatement. Until the Satisfaction Date, this Guaranty shall remain in
full force and effect and continue to be effective should any petition be filed
by or against Seller or Guarantor for liquidation or reorganization, should
Seller or Guarantor become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any
significant part of Seller's or Guarantor's, as the case may be, assets, and
shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Guaranteed Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by Purchasers, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Guaranteed Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

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2.8 Deferral of Subrogation, Etc. Notwithstanding anything to the contrary in
this Guaranty, or in any other Closing Document, the Guarantor hereby:

(a) expressly and irrevocably waives, on behalf of itself and its successors and
assigns (including any surety) until the Satisfaction Date, any and all rights
at law or in equity to subrogation, to reimbursement, to exoneration, to
contribution, to indemnification, to set off or to any other rights that could
accrue to a surety against a principal, to a guarantor against a principal, to a
guarantor against a maker or obligor, to an accommodation party against the
party accommodated, to a holder or transferee against a maker, or to the holder
of any claim against any Person, and which Guarantor may have or hereafter
acquire against Seller in connection with or as a result of Guarantor's
execution, delivery and/or performance of this Guaranty, or any other documents
to which Guarantor is a party or otherwise; and

(b) acknowledges and agrees (i) that this waiver is intended to benefit
Purchasers and shall not limit or otherwise effect any Guarantor's liability
hereunder or the enforceability of this Guaranty, and (ii) that Purchasers and
its successors and assigns are intended third-party beneficiaries of the waivers
and agreements set forth in this Section 2.8 and their rights under this Section
2.8 shall survive payment in full of the Guaranteed Obligations.

2.9 Election of Remedies. If Purchasers may, under applicable law, proceed to
realize benefits under any of the Closing Documents giving Purchasers a lien
upon any Collateral owned by Guarantor or Seller, either by judicial foreclosure
or by non-judicial sale or enforcement, Purchasers may, at their sole option,
determine which of such remedies or rights it may pursue without affecting any
of such rights and remedies under this Guaranty. If, in the exercise of any of
its rights and remedies, Purchasers shall forfeit any of their respective rights
or remedies, including its right to enter a deficiency judgment against Seller
or Guarantor, whether because of any applicable laws pertaining to "election of
remedies" or the like, Guarantor hereby consents to such action by Purchasers
and waives any claim based upon such action, even if such action by Purchasers
shall result in a full or partial loss of any rights of subrogation which
Guarantor might otherwise have had but for such action by Purchasers. Any
election of remedies which results in the denial or impairment of the right of
Purchasers to seek a deficiency judgment against Guarantor or Seller shall not
impair Guarantor's obligation to pay the full amount of the Guaranteed
Obligations. In the event Purchasers shall bid at any foreclosure or trustee's
sale or at any private sale permitted by law or the Closing Documents,
Purchasers may bid all or less than the amount of the Guaranteed Obligations and
the amount of such bid need not be paid by Purchasers but shall be credited
against the Guaranteed Obligations. To the extent permitted by applicable law,
the amount of the successful bid at any such sale shall be conclusively deemed
to be the fair market value of the collateral and the difference between such
bid amount and the remaining balance of the Guaranteed Obligations shall be
conclusively deemed to be the amount of the Guaranteed Obligations guaranteed
under this Guaranty, notwithstanding that any present or future law or court
decision or ruling may have the effect of reducing the amount of any deficiency
claim to which Purchasers might otherwise be entitled but for such bidding at
any such sale.

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2.10 Funds Transfers. If Guarantor shall engage in any transaction as a result
of which Seller is required to make a mandatory prepayment with respect to the
Guaranteed Obligations under the terms of the Closing Documents, Guarantor shall
deliver to the Seller an amount equal to the mandatory prepayment required under
the terms of the Closing Documents.

3. Deliveries. In a form satisfactory to Purchasers, Guarantor shall deliver to
Purchasers concurrently with the execution of this Guaranty, the other Closing
Documents and other instruments, certificates and documents as are required to
be delivered by Guarantor to Purchasers under the Purchase Agreement.

4. Representations and Warranties. To induce Purchasers to purchase the Notes
and Warrants under the Purchase Agreement, the Guarantor makes, to the extent
applicable and as indicated in the Purchase Agreement), the representations and
warranties contained in the Purchase Agreement, which, to the extent applicable
to the Guarantor, are incorporated herein by reference, to Purchasers, and
which, to the extent applicable to the Guarantor, shall survive the execution
and delivery of this Guaranty.

5. Further Assurances. Guarantor agrees, upon the written request of Purchasers,
to execute and deliver to Purchasers, from time to time, any additional
instruments or documents reasonably considered necessary by Purchasers to cause
this Guaranty to be, become or remain valid and effective in accordance with its
terms.

6. Payments Free and Clear of Taxes. All payments required to be made by
Guarantor hereunder shall be made to Purchasers free and clear of, and without
deduction for, any and all present and future taxes. If Guarantor shall be
required by law to deduct any taxes from or in respect of any sum payable
hereunder, (a) the sum payable shall be increased as much as shall be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 6), Purchaser receive an amount equal
to the sum it would have received had no such deductions been made, (b)
Guarantor shall make such deductions, and (c) Guarantor shall pay the full
amount deducted to the relevant taxing or other authority in accordance with
applicable law. Within thirty (30) days after the date of any payment of taxes,
Guarantor shall furnish to Purchasers the original or a certified copy of a
receipt evidencing payment thereof. Guarantor shall indemnify and, within ten
(10) days of demand therefor, pay Purchasers for the full amount of taxes
(including any taxes imposed by any jurisdiction on amounts payable under this
Section 6) paid by Purchasers in connection with the transactions contemplated
by this Guaranty, the Purchase Agreement and other Closing Documents (other than
income taxes), and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such taxes were
correctly or legally asserted. Purchasers hereby agree to cooperate at
Guarantor's cost and expense with Guarantor's reasonable requests in any action
brought by Guarantor to contest the accuracy, applicability or legality of any
taxes so paid.

7. Other Terms.

7.1 Entire Agreement. This Guaranty, together with the other Closing Documents,
constitutes the entire agreement between the parties with respect to the subject

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matter hereof and supersedes all prior agreements relating to a guaranty of the
Notes and/or the Guaranteed Obligations.

7.2 Headings. The headings in this Guaranty are for convenience of reference
only and are not part of the substance of this Guaranty.

7.3 Severability. Whenever possible, each provision of this Guaranty shall be
interpreted in such a manner to be effective and valid under applicable law, but
if any provision of this Guaranty shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Guaranty.

7.4 Notices. Whenever it is provided herein that any notice, demand, request,
consent, approval, declaration or other communication shall or may be given to
or served upon any of the parties by any other party, or whenever any of the
parties desires to give or serve upon another any such communication with
respect to this Guaranty, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be addressed to
the party to be notified at the address set forth in the Purchase Agreement (or
such other address as may be substituted by notice given in the manner required
by the Purchase Agreement), and given in the manner required by Section 14(e)
Purchase Agreement.

7.5 Successors and Assigns. This Guaranty and all obligations of Guarantor
hereunder shall be binding upon the successors and assigns of Guarantor
(including a debtor-in-possession on behalf of such Guarantor) and shall,
together with the rights and remedies of Purchasers hereunder, inure to the
benefit of Purchasers, all future holders of any instrument evidencing any of
the Obligations and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Guaranteed Obligations or any
portion thereof or interest therein shall in any manner affect the rights of
Purchasers hereunder. Guarantor may not assign, sell, hypothecate or otherwise
transfer any interest in or obligation under this Guaranty.

7.6 No Waiver; Cumulative Remedies; Amendments. Purchasers shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
Purchasers in accordance with Section 9 of the Security Agreement and then only
to the extent therein set forth. A waiver by Purchasers of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Purchasers would otherwise have had on any future occasion. No
failure to exercise nor any delay in exercising on the part of Purchasers, any
right, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights and remedies provided by law. None of the terms or provisions of this
Guaranty may be waived, altered, modified, supplemented or amended except by an
instrument in writing, duly executed by Purchasers (in accordance with Section 9
of the Security Agreement) and Guarantor.

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7.7 Termination. This Guaranty is a continuing guaranty and shall remain in full
force and effect until the Satisfaction Date. Upon payment and performance in
full of the Guaranteed Obligations, Purchasers shall deliver to Guarantor such
documents as Guarantor may reasonably request to evidence such termination.

7.8 Counterparts. This Guaranty may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.

7.9 Limitation on Guaranteed Obligations. Notwithstanding any provision herein
contained to the contrary, Guarantor's liability hereunder shall be limited to
an amount not to exceed the aggregate principal amount of the Note plus all
accrued interest thereon.

8. Governing Law. This Guaranty shall be governed by, construed under and
interpreted and enforced in accordance with laws of the State of New York,
without giving effect to principles of choice of law. Any action or proceeding
arising out of or relating to this Guaranty shall be commenced in a federal or
state court having competent jurisdiction in the State of New York, and for the
purpose of any such action or proceeding, each of the parties and any assignees
thereof submits to the personal jurisdiction of the State of New York. The
parties hereby irrevocably consents to the exclusive personal jurisdiction of
any state or federal court for New York County in the State of New York or the
Southern District of New York. The parties hereby waive any objection to venue
and any objection based on a more convenient forum in any action instituted
under this Guaranty.

9. Security. To secure payment of Guarantor's obligations under this Guaranty,
concurrently with the execution of this Guaranty, Guarantor has entered into a
Security Agreement pursuant to which Guarantor and Seller have granted to
Purchasers a security interest in the Collateral and Guarantor has entered into
a Pledge Agreement pursuant to which the Guarantor has pledged the Perfect
Commerce Note to Purchasers.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Guaranty
as of the date first above written.

 

COMMERCE ONE OPERATIONS, INC.

By: /s/ Mark B. Hoffman

Name:

Title:

 

COMVEST INVESTMENT PARTNERS II LLC

By: /s/ Harold Blue

Name:

Title:

 

DCC VENTURES, LLC

By: /s/ Michael T. Davies

Name: Michael T. Davies

Title: Secretary and Treasurer

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