Exhibit 10.1




 




LOAN AND SECURITY AGREEMENT


COMMERCE ONE OPERATIONS, INC.




 





























 




LOAN AND SECURITY AGREEMENT




 




TABLE OF CONTENTS




 




	

  1.


  	

  ACCOUNTING AND OTHER TERMS.


  
	

   


  	

   


  
	

  2.


  	

  LOAN AND TERMS OF PAYMENT.


  
	

   


  	

   


  
	

   


  	

  2.1


  	

  Promise to Pay.


  
	

   


  	

  2.2


  	

  Loan Advance.


  
	

   


  	

  2.3


  	

  Interest Rate,

  Payments.


  
	

   


  	

   


  	

  2.3.1


  	

  Interest Rate.


  
	

   


  	

   


  	

  2.3.2


  	

  Interest Payments

  On Payment Dates.


  
	

   


  	

   


  	

  2.3.3


  	

  Prepayment.


  
	

   


  	

  2.4


  	

  Debit of

  Borrower’s Accounts.


  
	

   


  	

  2.5


  	

  Fees.


  	

   


  
	

   


  	

   


  	

  2.5.1


  	

  Bank Expenses.


  
	

   


  	

   


  	

  2.5.2


  	

  Due Diligence Fee.


  
	

   


  	

   


  	

   


  	

   


  
	

  3.


  	

  CONDITIONS OF LOANS.


  
	

   


  	

   


  
	

   


  	

  3.1


  	

  Conditions Precedent to

  Credit Extension.


  
	

   


  	

   


  	

   


  
	

  4.


  	

  CREATION OF SECURITY

  INTEREST.


  
	

   


  	

   


  
	

   


  	

  4.1


  	

  Grant

  of Security Interest.


  
	

   


  	

   


  	

   


  
	

  5.


  	

  REPRESENTATIONS AND

  WARRANTIES.


  
	

   


  	

   


  
	

   


  	

  5.1


  	

  Due

  Organization and Authorization.


  
	

   


  	

  5.2


  	

  Collateral.


  
	

   


  	

  5.3


  	

  No Material

  Adverse Change in Financial Statements.


  
	

   


  	

  5.4


  	

  Solvency.


  
	

   


  	

  5.5


  	

  Regulatory

  Compliance.


  
	

   


  	

  5.6


  	

  Full Disclosure.


  
	

   


  	

   


  	

   


  
	

  6.


  	

  AFFIRMATIVE COVENANTS.


  
	

   


  	

   


  
	

   


  	

  6.1


  	

  Government Compliance.


  
	

   


  	

  6.2


  	

  Financial

  Statements, Reports, Certificates.


  
	

   


  	

  6.3


  	

  Taxes.


  
	

   


  	

  6.4


  	

  Further Assurances.


  
	

   


  	

   


  	

   


  
	

  7.


  	

  NEGATIVE COVENANTS.


  
	

   


  	

   


  
	

   


  	

  7.1


  	

  Dispositions.


  
	

   


  	

  7.2


  	

  Encumbrance.


  
	

   


  	

  7.3


  	

  Compliance.


  
	

   


  	

   


  	

   


  
	

  8.


  	

  EVENTS OF DEFAULT.


  
	

   


  	

   


  
	

   


  	

  8.1


  	

  Payment Default.


  
	

   


  	

  8.2


  	

  Covenant Default.


  





 




i





























 




 




	

   


  	

  8.3


  	

  Material Adverse

  Change.


  
	

   


  	

  8.4


  	

  Attachment.


  
	

   


  	

  8.5


  	

  Insolvency.


  
	

   


  	

  8.6


  	

  Other Agreements.


  
	

   


  	

  8.7


  	

  Judgments.


  
	

   


  	

  8.8


  	

  Misrepresentations.


  
	

   


  	

   


  	

   


  
	

  9.


  	

  BANK’S RIGHTS AND

  REMEDIES.


  
	

   


  	

   


  
	

   


  	

  9.1


  	

  Rights and

  Remedies.


  
	

   


  	

  9.2


  	

  Power of Attorney.


  
	

   


  	

  9.3


  	

  Bank’s

  Liability for Collateral.


  
	

   


  	

  9.4


  	

  Remedies

  Cumulative.


  
	

   


  	

  9.5


  	

  Demand Waiver.


  
	

   


  	

   


  	

   


  
	

  10.


  	

  NOTICES.


  
	

   


  	

   


  
	

  11.


  	

  CHOICE OF LAW , VENUE AND

  JURY TRIAL WAIVER.


  
	

   


  	

   


  
	

  12.


  	

  GENERAL

  PROVISIONS.


  
	

   


  	

   


  
	

   


  	

  12.1


  	

  Successors and

  Assigns.


  
	

   


  	

  12.2


  	

  Indemnification.


  
	

   


  	

  12.3


  	

  Time of Essence.


  
	

   


  	

  12.4


  	

  Severability of

  Provision.


  
	

   


  	

  12.5


  	

  Amendments in

  Writing, Integration.


  
	

   


  	

  12.6


  	

  Counterparts.


  
	

   


  	

  12.7


  	

  Survival.


  
	

   


  	

  12.8


  	

  Confidentiality.


  
	

   


  	

  12.9


  	

  Attorneys’ Fees, Costs and Expenses.


  
	

   


  	

   


  	

   


  
	

  13.


  	

  DEFINITIONS.


  	

   


  
				





 




ii





























 




EXHIBITS




 




Exhibit A -

Description of Collateral




Exhibit B - Loan

Payment/Advance Request Form




 




iii





























 




LOAN AND

SECURITY AGREEMENT




 




THIS LOAN AND SECURITY AGREEMENT (this

“Agreement”) dated as of the Effective Date, by and between SILICON VALLEY BANK

(“Bank”), a California-chartered bank whose address is 3003 Tasman Drive, Santa

Clara, California 95054, and COMMERCE ONE OPERATIONS, INC. (“Borrower”), a

Delaware corporation whose address is 4440 Rosewood Drive, Pleasanton,

California 94588, provides the terms and conditions upon which Bank will lend

certain funds to Borrower and Borrower will repay such funds to Bank.  The parties agree as follows:




 




1.             ACCOUNTING AND OTHER TERMS.




 




Accounting terms not defined in this Agreement will be

construed following GAAP.  Calculations

and determinations must be made following GAAP.  The term “financial statements” includes the notes and

schedules.  The terms “including” and

“includes” always mean “including (or includes) without limitation,” in this or

any Loan Document.  Any capitalized term

set forth herein shall have the meaning ascribed to such term in Section 13 of

this Agreement.




 




2.             LOAN AND TERMS OF PAYMENT.




 




2.1  Promise to Pay.




 




Borrower promises to pay Bank the unpaid principal

amount of all Credit Extensions and interest on the unpaid principal amount of

the Credit Extensions.




 




2.2  Loan Advance.




 




Subject to the terms and conditions of this Agreement,

Bank agrees to lend to Borrower on the Funding Date, a single advance (the

“Advance”) not to exceed the Loan Amount. 

When repaid, no portion of the Advance may be re-borrowed.  The proceeds of the Advance shall be used to

pay off an existing term loan in the outstanding principal amount of

$19,000,000 due to Microsoft Capital Corporation and the remainder of the

Advance may be used to fund any corporate purpose (a “Corporate Purpose”)

approved by Borrower’s Board of Directors (if such approval is required by

Borrower’s internal policies).  Bank

will disburse the Advance on the Funding Date by internal transfer to

Borrower’s Account No. 3300359545 with Bank.




 




2.3  Interest Rate,

Payments.




 




2.3.1       Interest Rate.




 




The Advance shall accrue interest at the per annum

rate of interest equal to the Prime Rate determined by Bank, as of the

Effective Date, and on the first Business Day of each quarter thereafter, minus

one-half of one percent (0.50%); provided that, if Borrower maintains a minimum

aggregate balance of at least $5,000,000 in operating accounts at Bank and/or

investment accounts through Bank and its Affiliates at all times during a

calendar quarter (but in no event including the Collateral) , interest shall

accrue at the per annum rate of the Prime Rate minus three-quarters of one

percent (0.75%) during the next calendar quarter.  Any amounts




 





























 




outstanding during the continuance of an Event of

Default shall bear interest at a per annum rate equal to the Basic Rate plus

five percent (5%).




 




2.3.2       Interest Payments On Payment Dates.




 




Borrower will make monthly payments in arrears of the

interest accrued upon the then-outstanding principal of the Advance

(collectively, “Scheduled Payments”), on the last day of each month following

the Effective Date (each, a “Payment Date”). 

The outstanding principal balance and all accrued and unpaid interest is

due and payable in full on the Maturity Date. 

Payments received after 12:00 noon, Pacific time, are considered

received at the opening of business on the next Business Day.  The Advance may only be prepaid in

accordance with Section 2.3.3 below.




 




2.3.3       Prepayment.




 




(a)           If the Advance is accelerated

following the occurrence of an Event of Default, Borrower shall immediately pay

to Bank (i) all unpaid principal, (ii) all unpaid accrued interest to the

date of the payment; (iii) if the Event of Default occurs within one year

after the Effective Date, a prepayment fee of $15,000; and (iv) all other sums,

if any, that shall have become due and payable hereunder with respect to this

Agreement.




 




(b)           Borrower shall have the option to

prepay all or a portion of the Advance at anytime, provided that Borrower (i)

gives written notice to Bank of its election to prepay the Advance or portion

thereof, and the dollar amount it desires to prepay, at least 10 days

prior to such prepayment, and (ii) if such prepayment occurs prior to the first

anniversary of the Effective Date, Borrower shall pay Bank, on the date of the

prepayment, a prepayment fee equal to ten basis points (0.10%) multiplied by the

amount of the Advance to be prepaid, up to the first $15,000,000 of the Advance

being prepaid.




 




2.4  Debit of Borrower’s

Accounts.




 




Bank will debit any of Borrower’s deposit accounts

with Bank, including Account No. 3300359545, for principal and interest

payments and any other amounts Borrower owes Bank when due.  Bank will notify Borrower when it debits

Borrower’s accounts.  These debits are

not a set-off.




 




2.5  Fees.




 




2.5.1       Bank Expenses.




 




Borrower will pay all Bank Expenses (including

reasonable attorneys’ fees and reasonable expenses) incurred through the date

of this Agreement, not to exceed $5,000. 

All Bank Expenses are due and payable upon demand by Bank.




 




2.5.2       Due Diligence Fee.




 




Borrower will pay Bank a due diligence fee in the

amount of $10,000 on the Effective Date.




 




2





























 




3.             CONDITIONS OF

LOANS.




 




3.1  Conditions

Precedent to Credit Extension.




 




Bank’s obligation to make the Advance is subject to

the satisfaction of the following conditions precedent:




 




(a)           Bank shall have received the

agreements, documents and fees contemplated by this Agreement.




 




(b)           Borrower shall have deposited the

Collateral with Bank.




 




(c)           Bank shall have received a

Payment/Advance Form.




 




(d)           The representations and warranties in

Section 0 hereof must be materially true on the date of the

Payment/Advance Form and on the effective date of the Advance, and no Event of

Default may have occurred and be continuing or result from the Advance.




 




4.             CREATION

OF SECURITY INTEREST.




 




4.1  Grant of Security

Interest.




 




Borrower grants Bank a continuing security interest in

the Collateral to secure all Obligations and the performance of each of

Borrower’s duties under the Loan Documents. 

Any security interest of Bank in the Collateral shall be a first priority

security interest in the Collateral. 

Bank may place a “hold” on any deposit account pledged as Collateral. If

this Agreement is terminated, Bank’s lien and security interest in the

Collateral will continue until Borrower fully satisfies its Obligations.  Bank will release Collateral to the extent

of any prepayments by Borrower.




 




5.             REPRESENTATIONS AND WARRANTIES.




 




Borrower represents and warrants as follows:




 




5.1  Due Organization

and Authorization.




 




Borrower is duly existing and in good standing in its

state of formation and qualified and licensed to do business in, and in good

standing in, any state in which the conduct of its business or its ownership of

property requires that it be qualified, except where the failure to do so could

not reasonably be expected to cause a Material Adverse Change.  Borrower is a Delaware corporation.  The execution, delivery and performance of

the Loan Documents have been duly authorized, and do not conflict with

Borrower’s formation documents, nor constitute an event of default under any

material agreement by which Borrower is bound. 

Borrower is not in default under any agreement to which or by which it

is bound in which the default could reasonably be expected to cause a Material

Adverse Change.




 




5.2  Collateral.




 




Borrower has good title or rights to the Collateral,

free of Liens.




 




3





























 




5.3  No Material Adverse

Change in Financial Statements.




 




All consolidated financial statements for Borrower,

and any Subsidiary of Borrower, delivered to Bank fairly present in all

material respects Borrower’s consolidated financial condition and Borrower’s

consolidated results of operations. 

There has not been any material deterioration in Borrower’s consolidated

financial condition since the date of the most recent financial statements

submitted to Bank.




 




5.4  Solvency.




 




The fair salable value of Borrower’s assets (including

goodwill minus disposition costs) exceeds the fair value of its liabilities;

the Borrower is not left with unreasonably small capital after the transactions

in this Agreement; and Borrower is able to pay its debts (including trade

debts) as they mature.




 




5.5  Regulatory Compliance.




 




Borrower is not an “investment company” or a company

“controlled” by an “investment company” under The Investment Company Act

1940.  Borrower is not engaged as one of

its important activities in extending credit for margin stock (under

Regulations T and U of the Federal Reserve Board of Governors).  Borrower has complied in all material respects

with the Federal Fair Labor Standards Act. 

Borrower has not violated any laws, ordinances or rules, the violation

of which could reasonably be expected to cause a Material Adverse Change.  None of Borrower’s or any of its

Subsidiaries’ properties or assets has been used by Borrower or any of its

Subsidiaries or, to the best of Borrower’s knowledge, by previous Persons, in

disposing, producing, storing, treating, or transporting any hazardous

substance other than legally.  Borrower

and each of its Subsidiaries has timely filed all required material tax returns

and paid, or made adequate provision to pay, all material taxes, except those

being contested in good faith with adequate reserves under GAAP.  Borrower and each of its Subsidiaries has

obtained all consents, approvals and authorizations of, made all declarations

or filings with, and given all notices to, all government authorities that are

necessary to continue its business as currently conducted, except where the

failure to do so could not reasonably be expected to cause a Material Adverse

Change.




 




5.6  Full Disclosure.




 




No written representation, warranty or other statement

of Borrower in any certificate or written statement given to Bank (taken

together with all such written certificates and written statements to Bank)

contains any untrue statement of a material fact or omits to state a material

fact necessary to make the statements contained in the certificates or

statements not misleading, it being recognized by Bank that the projections and

forecasts provided by Borrower in good faith and based upon reasonable

assumptions are not viewed as facts and that actual results during the period

or periods covered by such projections and forecasts may differ from the

projected and forecasted results.




 




6.             AFFIRMATIVE COVENANTS.




 




Borrower will do all of the following for so long as

there are outstanding Obligations:




 




4





























 




6.1  Government Compliance.




 




Borrower will maintain its legal existence and good

standing in its jurisdiction of formation and maintain qualification in each

jurisdiction in which the failure to so qualify would reasonably be expected to

cause a Material Adverse Change. 

Borrower will comply with all laws, ordinances and regulations to which

it is subject, noncompliance with which could cause a Material Adverse Change.




 




6.2  Financial Statements,

Reports, Certificates.




 




(a)           Borrower will deliver to Bank:  (i) no later than 45 days after

the last day of each quarter, a company-prepared consolidated balance sheet and

income statement covering Borrower’s consolidated operations during the period,

in the form of Borrower’s Form 10-Q for that period as filed with the SEC;

(ii) no later than 90 days after the last day of Borrower’s fiscal year,

commencing with fiscal year end December 31, 2002, audited consolidated

financial statements prepared under GAAP, in the form of Borrower’s

Form 10-K for that period as filed with the SEC.




 




6.3  Taxes.




 




Borrower will make, and cause each of its Subsidiaries

to make, timely payment of all material federal, state and local taxes, fees or

assessments (other than taxes, fees and assessments which Borrower is

contesting in good faith, with adequate reserves maintained in accordance with

GAAP), and will deliver to Bank, on demand, appropriate certificates attesting

to the payment.




 




6.4  Further Assurances.




 




Borrower will execute any further instruments and take

further action as Bank reasonably requests to perfect or continue Bank’s

security interest in the Collateral or to effect the purposes of this

Agreement.




 




7.             NEGATIVE COVENANTS.




 




Borrower will not do any of the following without

Bank’s prior written consent, which will not be unreasonably withheld, for so

long as there are any outstanding Obligations:




 




7.1  Dispositions.




 




Borrower will not convey, sell, lease, transfer or

otherwise dispose of all or any material part of the Collateral or its

interests therein.




 




7.2  Encumbrance.




 




Borrower will not create, incur or allow any Lien to

exist upon any of the Collateral.




 




5





























 




7.3  Compliance.




 




Borrower will not become an “investment company” or a

company controlled by an “investment company,” under The Investment Company Act

of 1940 or undertake as one of its important activities extending credit to

purchase or carry margin stock, or use the proceeds of any Credit Extension for

that purpose; fail to meet the minimum funding requirements of ERISA, permit a

Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail

to comply with the Federal Fair Labor Standards Act or violate any other law or

regulation, if the violation would reasonably be expected to cause a Material

Adverse Change.




 




8.             EVENTS OF DEFAULT.




 




Any one of the following is an Event of Default:




 




8.1  Payment Default.




 




Borrower fails to pay any of the Obligations within

three Business Days after its due date. 

During said three-Business Day period, the failure to cure the default

is not itself an Event of Default (but Bank shall have no obligation to make any

Credit Extension during the three-Business Day period).




 




8.2  Covenant Default.




 




Borrower fails to perform any obligation in Section 6

or violates any covenant in Section 7 or does not perform or observe any other

material term, condition or covenant in this Agreement, in any other Loan

Document, or in any agreement between Borrower and Bank, and as to any default

under a term, condition or covenant that can be cured, has not cured the

default within ten days after it occurs; provided, however, that if the default

cannot by its nature be cured within a ten-day period, but the default may be

cured within a reasonable time thereafter, then Borrower has an additional

period (which shall not in any case exceed 30 days in the aggregate) to cure

the default.  During the additional

time, the failure to cure the default is not itself an Event of Default (but

Bank shall have no obligation to make any Credit Extensions during such

period).




 




8.3  Material Adverse

Change.




 




There occurs a material impairment of Bank’s lien

upon, or a material impairment in the value of, the Collateral (or any material

portion thereof).




 




8.4  Attachment.




 




Any material portion of Borrower’s assets is attached,

seized, levied on, or comes into possession of a trustee or receiver and the

attachment, seizure or levy is not removed in ten days, or Borrower is

enjoined, restrained or prevented by court order from conducting a material

part of its business, or a judgment or other claim becomes a Lien on a material

portion of Borrower’s assets, or a notice of lien, levy, or assessment is filed

against any material portion of Borrower’s assets by any government agency and

not paid within ten days after Borrower receives notice.  None of the foregoing is an Event of Default

if stayed or if a bond is posted pending contest by




 




6





























 




Borrower (but Bank shall have no obligation to make

any Credit Extensions during the stay period or pending contest).




 




8.5  Insolvency.




 




Borrower becomes insolvent or begins an Insolvency

Proceeding, or an Insolvency Proceeding is begun against Borrower and not

dismissed or stayed within 30 days (but Bank shall have no obligation to make

any Credit Extensions before any Insolvency Proceeding is dismissed).




 




8.6  Other Agreements.




 




There is a default in any agreement between Borrower

and a third party that gives the third party the right to accelerate any

Indebtedness exceeding $3,000,000 or that could cause a Material Adverse

Change.




 




8.7  Judgments.




 




A money judgment in the aggregate of at least

$3,000,000 is rendered against Borrower and is unsatisfied and unstayed for ten

days (but Bank shall have no obligation to make any Credit Extensions before

the judgment is stayed or satisfied).




 




8.8  Misrepresentations.




 




Borrower or any Person acting for Borrower makes any

material misrepresentation or material misstatement when made now or later in

any warranty or representation in this Agreement or in any writing delivered to

Bank or to induce Bank to enter this Agreement or any Loan Document.




 




9.             BANK’S RIGHTS AND REMEDIES.




 




9.1  Rights and Remedies.




 




When an Event of Default occurs and the period for

cure has expired, Bank may, without notice or demand, do any or all of the

following:




 




(a)           Declare all Obligations immediately

due and payable (but if an Event of Default described in Section 8.5 occurs,

all Obligations are immediately due and payable without any action by Bank);




 




(b)           Stop advancing money or extending

credit for Borrower’s benefit under this Agreement or under any other agreement

between Borrower and Bank;




 




(c)           Make any payments and do any acts it

considers necessary or reasonable to protect its security interest in the

Collateral, and in furtherance thereof: 

(i) Borrower will make the Collateral available as Bank designates;

and (ii) Bank may pay, purchase, contest, or compromise any Lien which

appears to be prior or superior to its security interest and pay all expenses

incurred;




 




7





























 




(d)           Apply to the Obligations any

(i) balances and deposits of Borrower it holds, or (ii) any amount

held by Bank owing to or for the credit or the account of Borrower (including

but not limited to all or any portion of the Collateral); and




 




(e)           Dispose of the Collateral according

to the Code.




 




9.2  Power of Attorney.




 




Borrower irrevocably appoints Bank as its lawful

attorney-in-fact, with full power and in the name of Borrower, upon the

occurrence and continuance of an Event of Default to transfer the Collateral

into the name of Bank or a third party as the Code permits.  Notwithstanding the foregoing, Bank may

exercise the power of attorney to sign Borrower’s name on any documents

necessary to perfect or continue the perfection of any security interest

regardless of whether an Event of Default has occurred.  Bank’s appointment as Borrower’s

attorney-in-fact, and all of Bank’s rights and powers, are coupled with an

interest and irrevocable until all Obligations have been fully repaid and

performed.




 




9.3  Bank’s Liability

for Collateral.




 




If Bank complies with reasonable banking practices and

the Code, it is not liable for: (i) the safekeeping of the Collateral;

(ii) any loss or damage to the Collateral; or (iii) any diminution in

the value of the Collateral.




 




9.4  Remedies Cumulative.




 




Bank’s rights and remedies under this Agreement, the

Loan Documents, and all other agreements are cumulative.  Bank has all rights and remedies provided

under the Code, by law, or in equity. Bank’s exercise of one right or remedy is

not an election, and Bank’s waiver of any Event of Default is not a continuing

waiver.  Bank’s delay is not a waiver,

election, or acquiescence. No waiver is effective unless signed by Bank and

then is only effective for the specific instance and purpose for which it was

given.




 




9.5  Demand Waiver.




 




Borrower waives any right to require Bank to (a)

proceed against any guarantor or any other person; (b) marshal any assets of

Borrower; or (c) pursue any other remedy in Bank’s power whatsoever.  Bank may, at its election, exercise or

decline or fail to exercise any right or remedy it may have against Borrower or

any security held by Bank, including without limitation the right to foreclose

upon any such security by judicial or nonjudicial sale, without affecting or

impairing in any way the liability of Borrower hereunder until the Advance is

paid in full.  Borrower waives any

setoff, defense or counterclaim that it may have against Bank.  Borrower waives all presentments, demands

for performance, notices of nonperformance, protests, notices of payment and

nonpayment, or any nonpayment at maturity, notices of release, compromise,

settlement, extension, or renewal of accounts, documents, instruments, chattel

paper, and guarantees at any time held by Bank on which Borrower may in any way

be liable, and notices of existence, creation, or incurring of new or

additional indebtedness.




 




8





























 




10.          NOTICES.




 




All notices or demands by any party about this

Agreement or any other related agreement must be in writing and be personally

delivered or sent by an overnight delivery service, by certified mail, postage

prepaid, return receipt requested, or by telefacsimile to the addresses set

forth at the beginning of this Agreement. 

A party may change its notice address by giving the other party written

notice.




 




11.          CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER.




 




California law governs the Loan Documents without

regard to principles of conflicts of law. 

Borrower and Bank each submit to the exclusive jurisdiction of the State

and Federal courts in Santa Clara County, California.




 




BORROWER

AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION

ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION,

INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A

MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS

COUNSEL.




 




12.          GENERAL PROVISIONS.




 




12.1        Successors and

Assigns.




 




This Agreement binds and is for the benefit of the

successors and permitted assigns of each party.  Borrower may not assign this Agreement or any rights under it

(including but not limited to any assignment by law or otherwise in connection

with a merger or acquisition in which Borrower is not the surviving entity)

without Bank’s prior written consent which may be granted or withheld in Bank’s

discretion.  Bank has the right, without

the consent of or notice to Borrower, to sell, transfer, negotiate, or grant

participation in all or any part of, or any interest in, Bank’s obligations,

rights and benefits under this Agreement.




 




12.2        Indemnification.




 




Borrower will indemnify, defend and hold harmless Bank

and its officers, employees, and agents against:  (i) all obligations, demands, claims, and liabilities asserted by

any other party in connection with the transactions contemplated by the Loan

Documents; and (ii) all losses or Bank Expenses incurred, or paid by Bank from,

following, or consequential to transactions between Bank and Borrower

(including reasonable attorneys fees and expenses), except for losses caused by

Bank’s gross negligence or willful misconduct.




 




12.3        Time of Essence.




 




Time is of the essence for the performance of all

obligations in this Agreement.




 




9





























 




12.4        Severability of Provision.




 




Each provision of this Agreement is severable from

every other provision in determining the enforceability of any provision.




 




12.5        Amendments in Writing,

Integration.




 




All amendments to this Agreement must be in writing

and signed by Borrower and Bank.  This

Agreement represents the entire agreement about this subject matter, and

supersedes prior negotiations or agreements. 

All prior agreements, understandings, representations, warranties, and

negotiations between the parties about the subject matter of this Agreement

merge into this Agreement and the Loan Documents.




 




12.6        Counterparts.




 




This Agreement may be executed in any number of

counterparts and by different parties on separate counterparts, each of which,

when executed and delivered, are an original, and all taken together,

constitute one Agreement.




 




12.7        Survival.




 




All covenants, representations and warranties made in

this Agreement continue in full force while any Obligations remain

outstanding.  The obligations of

Borrower in Section 12.2 to indemnify Bank will survive until all statutes of

limitations for actions that may be brought against Bank have run.




 




12.8        Confidentiality.




 




In handling any confidential information, Bank will

exercise the same degree of care that it exercises for its own proprietary

information, but disclosure of information may be made (i) to Bank’s

subsidiaries or affiliates in connection with their business with Borrower,

(ii) to prospective transferees or purchasers of any interest in the loans

(provided, however, Bank shall use commercially reasonable efforts in obtaining

such prospective transferee or purchasers agreement of the terms of this

provision), (iii) as required by law, regulation, subpoena, or other

order, (iv) as required in connection with Bank’s examination or audit and

(v) as Bank considers appropriate exercising remedies under this

Agreement.  Confidential information

does not include information that either: (i) is in the public domain or in

Bank’s possession when disclosed to Bank, or becomes part of the public domain

after disclosure to Bank; or (ii) is disclosed to Bank by a third party, if

Bank does not know that the third party is prohibited from disclosing the

information.




 




12.9        Attorneys’ Fees,

Costs and Expenses.




 




In any action or proceeding between Borrower and Bank

arising out of the Loan Documents, the prevailing party will be entitled to

recover its reasonable attorneys’ fees and other reasonable costs and expenses

incurred, in addition to any other relief to which it may be entitled.




 




10





























 




13.          DEFINITIONS.




 




In this Agreement:




 




“Advance” is defined in Section 2.2.




 




“Affiliate” of a Person is a Person that

owns or controls directly or indirectly the Person, any Person that controls or

is controlled by or is under common control with the Person, and each of that

Person’s senior executive officers, directors, partners and, for any Person

that is a limited liability company, that Person’s managers and members.




 




“Bank Expenses” are all reasonable audit

fees and expenses and reasonable costs and expenses (including reasonable

attorneys’ fees and expenses) for preparing, negotiating, administering,

defending and enforcing the Loan Documents (including appeals or Insolvency

Proceedings).




 




“Business Day” is any day that is not a

Saturday, Sunday or other day on which the Bank is closed.




 




“Code” is the Uniform Commercial Code, as

applicable.




 




“Collateral” is the property described on Exhibit A.  At all times the value of the Collateral

shall equal or exceed the outstanding principal balance of the Credit

Extensions.




 




“Contingent Obligation” is, for any Person,

any direct or indirect liability, contingent or not, of that Person for

(i) any indebtedness, lease, dividend, letter of credit or other

obligation of another such as an obligation directly or indirectly guaranteed,

endorsed, co-made, discounted or sold with recourse by that Person, or for

which that Person is directly or indirectly liable; (ii) any obligations

for undrawn letters of credit for the account of that Person; and

(iii) all obligations from any interest rate, currency or commodity swap

agreement, interest rate cap or collar agreement, or other agreement or

arrangement designated to protect a Person against fluctuation in interest

rates, currency exchange rates or commodity prices;  but “Contingent Obligation” does not include endorsements in the

ordinary course of business.  The amount

of a Contingent Obligation is the stated or determined amount of the primary

obligation for which the Contingent Obligation is made or, if not determinable,

the maximum reasonably anticipated liability for it determined by the Person in

good faith; but the amount may not exceed the maximum of the obligations under

the guarantee or other support arrangement.




 




“Credit Extension” is the Advance and any

other extension of credit by Bank for Borrower’s benefit.




 




“Effective Date” is October 23, 2002.




 




“ERISA” is the Employment Retirement Income

Security Act of 1974, and its regulations.




 




“Funding Date” is the later of (i) the

Effective Date or (ii) the date on which Bank funds the Advance, but in no

event later than November 29, 2002.




 




11





























 




“GAAP” is generally accepted accounting

principles, consistently applied over the period(s) in question.




 




“Indebtedness” is (i) indebtedness for

borrowed money or the deferred price of property or services, such as

reimbursement and other obligations for surety bonds and letters of credit,

(ii) obligations evidenced by notes, bonds, debentures or similar

instruments, (iii) capital lease obligations and (iv) Contingent

Obligations; provided, that Indebtedness does not include past due payments

under operating leases in an aggregate amount of up to $5,000,000.




 




“Insolvency Proceeding” are proceedings by

or against any Person under the United States Bankruptcy Code, or any other

bankruptcy or insolvency law, including assignments for the benefit of

creditors, compositions, extensions generally with its creditors, or

proceedings seeking reorganization, arrangement, or other relief.




 




“Lien” is a mortgage, lien, deed of trust,

charge, pledge, security interest or other encumbrance.




 




“Loan Amount” is the amount of the Advance,

not to exceed $25,000,000.




 




“Loan Documents” are, collectively, this

Agreement, any note, or notes or guaranties executed by Borrower or Guarantor,

and any other present or future agreement between Borrower and/or for the

benefit of Bank in connection with this Agreement, all as amended, extended or

restated.




 




“Material Adverse Change” is described in

Section 8.3.




 




“Maturity Date” is the last day of the

Repayment Period for the Advance, or if earlier, the date of full prepayment by

Borrower or acceleration of the Advance by Bank following an Event of Default,

but in no event later than November 29, 2005.




 




“Obligations” are debts, principal,

interest, Bank Expenses and other amounts Borrower owes Bank now or later

pursuant to the Loan Documents, and including interest accruing after

Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower

assigned to Bank.




 




“Payment Date” is defined in Section 2.3.1.




 




“Person” is any individual, sole

proprietorship, partnership, limited liability company, joint venture, company

association, trust, unincorporated organization, association, corporation,

institution, public benefit corporation, firm, joint stock company, estate,

entity or government agency.




 




“Prime Rate” is Bank’s “prime rate”

announced by Bank at the beginning of each calendar quarter, even if it is not

Bank’s lowest rate.




 




“Repayment Period” is the 36-month period

commencing on the later of (i) the Effective Date or (ii) the Funding

Date, but in no event later than November 29, 2002.




 




“SEC” is the U.S. Securities and Exchange

Commission.




 




12





























 




“Subsidiary” is for any Person, or any other

business entity of which more than 50% of the voting stock or other equity

interests is owned or controlled, directly or indirectly, by the Person or one

or more Affiliates of the Person, if any.




 




 




IN

WITNESS WHEREOF, each of the parties hereto has caused its

duly authorized representative to execute and deliver this Agreement as of the

Effective Date.




 




	

  BORROWER:


  	

  BANK:


  
	

   


  	

   


  
	

  COMMERCE ONE OPERATIONS, INC.,


  a Delaware corporation


  	

  SILICON VALLEY BANK,


  a California-chartered bank


  
	

   


  	

   


  
	

   


  	

   


  
	

  By: 


  	

  /s/ Charles D. Boynton/John Biestman


  	

   


  	

  By:


  	

  /s/ Richard J. Cerf


  
	

   


  	

   


  
	

  Name: 


  	

  Charles D. Boynton/John Biestman


  	

   


  	

  Name:


  	

  Richard J. Cerf


  
	

   


  	

   


  
	

  Title: 


  	

   SVP, CFO/VP, Treasurer


  	

   


  	

  Title: 


  	

  SVP


  





 




 




13





























 




EXHIBIT

A




 




The Collateral consists of all of Borrower’s right,

title and interest in and to the Certificate of Deposit No. 8800057353

held by Bank, and all proceeds thereof.




 





























 




EXHIBIT

B




 




LOAN PAYMENT/ADVANCE

REQUEST FORM




 




	

  Fax To:


  	

   


  	

   


  	

   


  	

  Date: 


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  o


  	

   Loan Payment:


  	

   


  	

  Commerce One Operations, Inc.


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  From Account #


  	

   


  	

   


  	

  To Account #


  	

   


  
	

   


  	

  (Deposit Account #)


  	

   


  	

  (Loan Account #)


  
	

   


  	

  Principal $ 


  	

   


  	

  and/or Interest $


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  All Borrower’s representation and warranties in the Loan and Security

  Agreement are true, correct and complete in all material respects to on the

  date of the telephone transfer request for and advance, but those

  representations and warranties expressly referring to another date shall be

  true, correct and complete in all material respects as of the date:


  
	

   


  	

   


  
	

   


  	

  Authorized

  Signature: 


  	

   


  	

   Phone Number:


  	

   


  	

   


  
																	





 




 




	

  o


  	

  LOAN ADVANCE:


  	

   


  	

   


  
	

   


  	

  Complete

  Outgoing

  Wire Request section below if all or a portion of the funds from

  this loan advance are for an outgoing wire.


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  From Account #


  	

   


  	

   


  	

  To Account #


  	

   


  
	

   


  	

  (Loan Account #)


  	

   


  	

  (Deposit Account #)


  
	

   


  	

  Amount of Revolving Advance $


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  All Borrower’s representation and warranties in the Loan and Security

  Agreement  are true, correct and complete

  in all material respects to on the date of the telephone transfer request for

  and advance, but those representations and warranties expressly referring to

  another date shall be true, correct and complete in all material respects as

  of the date:


  
	

   


  	

   


  
	

   


  	

  Authorized

  Signature: 


  	

   


  	

  Phone Number:


  	

   


  	

   


  
															





 




 




	

   


  	

  OUTGOING WIRE REQUEST


  	

   


  	

   


  	

   


  
	

   


  	

  Complete only if all or a portion of funds from the loan

  advance above are to be wired.


  	

   


  
	

   


  	

  Deadline for same day processing

  is 12:00 p.m., P.T.


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Beneficiary Name: 


  	

   


  	

   


  	

   


  	

  Amount of Wire: $


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Beneficiary Bank:


  	

   


  	

   


  	

   


  	

  Account Number:


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  City and Sate:


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Beneficiary Bank Transit (ABA) #:


  	

  _ _ _ _ _ _ _ 


  	

    Beneficiary Bank Code

  (Swift, Sort, Chip, etc.):


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  (For International Wire Only)


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Intermediary Bank: 


  	

   


  	

   


  	

  Transit (ABA) #: 


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  For Further Credit to:


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Special Instruction:


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By

  signing below, I (we) acknowledge and agree that my (our) funds transfer

  request shall be processed in accordance with and subject to the terms and conditions

  set forth in the agreements(s) covering funds transfer service(s), which

  agreements(s) were previously received and executed by me (us).


  
																





 




	

   


  	

  Authorized Signature:


  	

   


  	

   


  	

  2nd Signature (If Required):


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Print Name/Title:


  	

   


  	

   


  	

  Print Name/Title:


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Telephone #


  	

   


  	

   


  	

  Telephone #