NOTE PURCHASE AGREEMENT


EXHIBIT 10.3



EXECUTION COPY



WARRANT



NEITHER THIS WARRANT NOR ANY SECURITY INTO WHICH IT IS
CONVERTIBLE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), NOR UNDER ANY APPLICABLE STATE SECURITIES LAWS.  THIS WARRANT HAS
BEEN ACQUIRED FOR INVESTMENT AND NEITHER THIS WARRANT NOR ANY SECURITY INTO
WHICH IT IS CONVERTIBLE MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OF THEM UNDER THE ACT OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE ACT.  NEITHER THIS WARRANT NOR ANY SECURITY INTO WHICH IT
IS CONVERTIBLE MAY BE TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS
WARRANT AND THE NOTE AND WARRANT PURCHASE AGREEMENT, DATED AS OF EVEN DATE
HEREWITH (THE "PURCHASE AGREEMENT"), AND NO TRANSFER OF THIS WARRANT OR ANY
SECURITY INTO WHICH IT IS CONVERTIBLE SHALL BE VALID OR EFFECTIVE UNLESS AND
UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH.  THE TRANSFERABILITY OF
THIS WARRANT AND ANY SECURITY INTO WHICH IT IS CONVERTIBLE  IS SUBJECT TO THE
TRANSFER RESTRICTIONS SET FORTH HEREIN AND IN THE PURCHASE AGREEMENT.



WARRANT 

TO PURCHASE COMMON STOCK OF 

COMMERCE ONE, INC.



THIS WARRANT IS MADE AND DELIVERED PURSUANT TO A CERTAIN NOTE
AND WARRANT PURCHASE AGREEMENT, DATED AS OF EVEN DATE HEREWITH, AND SUBJECT TO
THE TERMS AND CONDITIONS THEREOF.





Certificate No. ____
Date of Issuance:  December 31,
2003

Expiration Date: December 31, 2004 


This Warrant is issued to COMVEST INVESTMENT PARTNERS II
LLC (the "Holder") by COMMERCE ONE, INC., a Delaware corporation (the "Company")
, pursuant to the terms of that certain Note and Warrant Purchase Agreement (the
"Purchase Agreement") of even date herewith, in connection with the Company's
issuance to the Holder of this Warrant and a Senior Secured Non-Convertible
Promissory Note of the Company in the principal amount of Four Million Dollars
($4,000,000) (the "Note"), in reliance upon an exemption from registration
pursuant to Section 4(2) of the Securities Act;    

THIS CERTIFIES THAT, for value received, the receipt and
sufficiency of which is hereby acknowledged:  

Subject to the conditions set forth herein and in the
Purchase Agreement, the Holder, with an address at 830 Third Avenue, New York,
NY 10022, is entitled, upon surrender of this Warrant at the principal office of
the Company, to subscribe for and purchase from the Company, for a period of one
(1) year, commencing as of the date hereof and ending at 5:00 p.m. Eastern
Standard Time on December 31, 2004 (the "Exercise Period"), up to 2,054,795
shares of Common Stock at the Per Share Exercise Price.  All capitalized terms
used but not defined herein shall have the meaning set forth in the Purchase
Agreement.

This Warrant is subject to the following provisions,
terms and conditions:

1.  Definitions.

1.1"Business Day" shall mean any day except a
Saturday, a Sunday, or a legal holiday in the City of New York other than a
legal holiday on which the New York Stock Exchange is open for trading on a
regular basis.

1.2"Common Stock" shall mean the shares of
common stock, $.0001 par value per share, of the Company. 

1.3"Commission" shall mean the U.S. Securities
and Exchange Commission or any other governmental authority at the time
administering the Securities Act.

1.4"Company" shall have the meaning specified
in the introduction to this Warrant, and shall include any corporation or
business entity resulting from the merger, consolidation or conversion of the
Company .

1.5"DCC Warrant" shall mean the warrant issued
as of even date hereof by the Company to DCC Ventures, LLC to purchase shares of
Common Stock pursuant to substantially the same terms and conditions of this
Warrant.

1.6"DCC Warrant Shares" shall mean the shares
of Common Stock issuable upon exercise of the DCC Warrant in accordance with its
terms and conditions.

1.7"Fair Market Price per Share" shall mean
the average of the closing sales prices, if available, or the average of the bid
and asked prices for the Warrant Shares, Common Stock or Marketable Securities,
as the case may be (or their successors) on the principal market therefor for
the five (5) full Trading Days preceding the day which is two (2) Business Days
prior to the day of exercise, or if no such price is available, then a price
that is mutually agreed upon by the Holder and the Company.  If the Holder and
the Company cannot agree upon a mutually acceptable price, then such price shall
be determined by a written appraisal of a recognized firm of investment bankers
who shall be selected by the Company and shall be reasonably acceptable to the
holders of a majority of the Warrants.  The determination of such independent
appraiser shall be conclusive and binding on the Holder and the Company. 

1.8"Marketable Securities" shall mean
securities of a corporation subject to the informational and reporting
requirements of the Securities Exchange Act of 1934, as amended, that are listed
and actively traded on a nationally-recognized stock exchange or inter-dealer
quotation system in the United States.

1.9"Per Share Exercise Price" shall be $.0001,
as may be adjusted in accordance with Section 4 hereof.

1.10"Registration Period" shall be the four
(4)-month period immediately following the Closing.

1.11"Registration Statement" shall be (i) the
registration statement that the Company shall file with the Commission in
accordance with Section 2(a) of the Registration Rights Agreement, covering all
of the Conversion Shares, if any, and the  Warrant Shares, within thirty (30)
days after the Closing, or (ii) the registration statement that the Company may
file (or has filed) with the Commission in accordance with Section 2(b) of the
Registration Rights Agreement, covering all or a part of the Conversion Shares,
if any, and the Warrant Shares so long as such registration statement is
declared effective prior to the time the registration statement contemplated by
Section 2(a) of the Registration Rights Agreement is declared effective;
provided, however, that if any registration statement filed under
Section 2(b) of the Registration Rights Agreement covers only a portion of the
Conversion Shares, if any, and the Warrant Shares, then "Registration Statement"
shall mean both registration statements described in subparagraphs (i) and (ii)
above.

1.12"Securities Act" shall mean the Securities
Act of 1933, as amended, or any similar or successor federal statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.  Reference to a particular section of the Securities Act
shall include a reference to the comparable section, if any, of any such similar
or successor federal statute.

1.13"This Warrant" shall mean and include this
Warrant and any Warrant or Warrants hereafter issued as a consequence of the
exercise or transfer of this Warrant in whole or in part.

1.14"Trading Days" shall mean any days
during the course of which the Company's Common Stock is listed and traded with
the Nasdaq National Market, the Nasdaq SmallCap Market or any national
securities exchange or the OTC Electronic Bulletin Board or similar organization
if Nasdaq is no longer reporting such information.  



2.Payment upon Exercise; Issuance of Certificates;
No Fractional Shares.  

(a)  This Warrant may be exercised during the Exercise
Period, in whole or in part, by the surrender of this Warrant with the election
at the end hereof (the "Election") duly executed to the Company, during normal
business hours on any Business Day, at the address and in the manner set forth
in Section 13 hereof, or at such other place as is designated in writing by the
Company.  Such executed Election must be accompanied by payment in an amount
equal to the applicable exercise price multiplied by the number of Warrant
Shares for which this Warrant is being exercised. Such payment may be made by
check payable to the order of the Company.  The Company agrees that the Warrant
Shares so purchased shall be and are deemed to be issued to the Holder or its
designee (subject to the transfer restrictions applicable to this Warrant) as
the record owner of such Warrant Shares as of the close of business on the date
on which this Warrant shall have been surrendered and payment shall have been
made as aforesaid.  

(b)Certificates for the Warrant Shares so purchased,
representing the aggregate number of securities specified in the Election, shall
be delivered to the Holder or its designee within a reasonable time, not
exceeding ten (10) Business Days after this Warrant shall have been duly
exercised.  The stock certificate or certificates so delivered shall be in such
denominations as may be requested by the Holder and shall be registered in the
name of the Holder or such other name as shall be designated by the Holder
(subject to the transfer restrictions applicable to this Warrant).  The Company
shall pay all expenses and charges payable in connection with the preparation,
execution and delivery of stock certificates pursuant to this Section 2, except
that, in case such stock certificates shall be registered in a name or names
other than the Holder or the Holder's designee, funds sufficient to pay all
stock transfer taxes which shall be payable in connection with the execution and
delivery of such stock certificates shall be paid by the Holder to the Company
at the time of delivery of such stock certificates by the Company.

(c)This Warrant shall be exercisable only for a whole
number of Warrant Shares.  No fractions of such securities, or scrip for any
such fraction of securities, shall be issued upon the exercise of this Warrant.
The Company shall pay a cash adjustment in respect of such fractional interest
in an amount equal to the Fair Market Price per Share of one share of Warrant
Shares at the time of such exercise multiplied by such fraction computed to the
nearest whole cent. 

3.Cashless Exercise.At any time during the
Exercise Period , the Company agrees that:

(a)The Holder may exercise this Warrant by
surrendering it to the Company and receiving, in exchange therefor, the number
of shares of Common Stock then purchasable upon exercise of that portion of the
Warrant to be exercised less the number of shares of Common Stock equal to the
quotient of the aggregate exercise price of all such shares underlying that
portion of the Warrant to be exercised divided by the Fair Market Price per
Share.

(b)Concurrent with the occurrence of any event
described in Section 4(a) for cash, the Holder may exercise this Warrant by
surrendering it to the Company in exchange for the amount of cash per share the
Holder would be entitled to receive after the happening of such event if this
Warrant had been exercised immediately prior to the close of business on such
record date or effective date, as applicable, less the applicable exercise price
per share.

(c)Concurrent with the occurrence of any event
described in Section 4(a) for Marketable Securities, the Holder may exercise
this Warrant by surrendering it to the Company in exchange for the applicable
amount of such Marketable Securities the Holder would be entitled to receive
after the happening of such event if this Warrant had been exercised immediately
prior to the close of business on such record date or effective date, as
applicable, less the number of such Marketable Securities equal to the quotient
of the aggregate exercise price of all shares underlying this Warrant divided by
the Fair Market Price per Share of such Marketable Securities.

4.Adjustments.  



(a)Merger, Sale of Assets, etc.  In the event the
Company, at any time prior to the Holder's exercise of this Warrant, (i)
reorganizes (other than a combination, reclassification, exchange or
subdivision); (ii) merges or consolidates the Company with or into another
corporation in which the Company is not the surviving entity, or merges with
another corporation 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) sells or transfers the Company's
properties and assets (other than the SRM Sale (as defined in the Notes)) as, or
substantially as, an entirety to any other person, then, as part of such
reorganization, merger, consolidation, sale or transfer, provision shall be made
so that the Holder shall thereafter be entitled to receive upon exercise of this
Warrant the number of securities or property of the successor corporation
resulting from such reorganization, merger, consolidation, sale or transfer that
a holder of the securities deliverable upon exercise of this Warrant would have
been entitled to receive in such reorganization, consolidation, merger, sale or
transfer if this Warrant had been exercised immediately prior to such
reorganization, merger, consolidation, sale or transfer.  



(b)Declaration of Dividends, Stock Splits, etc.
In the event the Company declares a dividend or distribution of its common
stock, or effects a stock split or reverse stock split with respect to its
common stock, or issues any shares of its common  stock by reclassification of
shares of its common  stock, the exercise rights of the Holder in effect on the
date of such event shall be adjusted proportionately so that the Holder
thereafter shall be entitled to receive upon exercise pursuant to the terms and
conditions hereof the aggregate number of shares of common  stock that the
Holder would own or be entitled to receive after the happening of any of the
events mentioned in this Section 4(b) if this Warrant had been exercised
immediately prior to the close of business on the date of such happening;
provided, however that this Section 4(b) shall not apply to the
declaration or payment of any dividends with respect to the dividends payable to
BayStar Capital II, L.P. ("Baystar") in accordance with the terms of the
Certificate of Designations filed by the Company in connection with the
transactions contemplated by that certain Securities Purchase Agreement, dated
as of July 10, 2003, by and between  the Company and Baystar. 



(c)Written Notice.The Company shall give
written notice to the Holder within ten (10) days following the consummation of
any transaction within the scope of this Section 4 and provide in such written
notice a brief description of the terms and conditions of such transaction.



(d)Minimal Adjustments.  No adjustment
in a Per Share Exercise Price need be made if such adjustment would result in a
change in such Per Share Exercise Price of less than five cents ($0.05).  Any
adjustment of less than five cents ($0.05) which is not made shall be carried
forward and shall be made at the time of and together with any subsequent
adjustment which, on a cumulative basis, amounts to an adjustment of five cents
($0.05) or more in a Per Share Exercise Price.



5.[Reserved]



6.Repurchase; Market Stand-Off.



(a)In the event that (i) the Company repays the
entire principal amount of the Note plus all accrued Interest thereon within the
four (4) months immediately following the date of issuance of this Warrant (the
"Repurchase Period") and (ii) the Registration Statement has been declared
effective, then the Company shall have the right to repurchase (the
"Repurchase") from the Holder up to Twenty Percent (20%) of this Warrant or the
Warrant Shares (for purposes of this Section 6, the "Repurchase Shares"), as the
case may be (the "Repurchase"), at a per share purchase price equal to the Per
Share Exercise Price. 



(b)In the event the Company desires to effect a
Repurchase, the Company shall provide the Holder with notice (the "Repurchase
Note") that (i) all conditions of a Repurchase have been satisfied and (ii) the
Company desires to effect a Repurchase.  The Repurchase Notice shall also set
forth the amount of the Warrants or the Repurchase Shares, as the case may be,
that will be subject to the Repurchase and the date on which the Company desires
the Repurchase to occur).  The Repurchase Notice shall be delivered to the
Holder no later than ten (10) days following the Company's satisfaction of the
conditions of a Repurchase and no less than ten (10) days prior to the date on
which the Repurchase shall be effective.  Any Repurchase effected hereunder
shall be done on a pro rata basis between the Warrants or the Repurchase Shares,
as the case may be.         



(c)The Holder hereby agrees that, during the
Repurchase Period, the Holder shall not sell, transfer or otherwise dispose of
(i) Twenty Percent (20%) of this Warrant or (ii) the Repurchase Shares, as the
case may be, and that the Holder shall reserve (i) such portion of the Warrant
or (ii) all of the Repurchase Shares, as the case may be, for Repurchase by the
Company in accordance with Sections 6(a) and (b) above.   



(d)Any Repurchase that is effected pursuant to this
Section 6 shall be made on a pro rata basis with the DCC Warrant or the DCC
Warrant Shares, as the case may be. 



7.Issue Tax.The issuance of certificates for
the Warrant Shares upon the exercise of this Warrant shall be made without
charge to the Holder for any issuance tax in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder .

 

8.Transferability and Assignment.  Except as set
forth in Section 6 hereof and subject to compliance with applicable federal and
state securities laws, and to the extent applicable, the parties may not assign
their rights and obligations under this Warrant except in accordance with
Section 14(a) of the Purchase Agreement.  In the event the Holder proposes to
effect an assignment, the Holder must present this Warrant to the Company for
transfer, accompanied by a duly completed and executed Form of Assignment (as
provided at the end hereof), the transferee must agree to be bound by the terms
of this Warrant as if such transferee were an original holder of this Warrant,
and the Holder must deliver to the Company an opinion of counsel of the Holder
in form reasonably satisfactory to the Company that the transfer may be properly
made under an exemption from registration under the Securities Act and
applicable state securities laws.  Upon any registration of transfer, the
Company shall execute and deliver a new Warrant certificate to the person
entitled thereto.  In the event the Warrant is transferred, the subsequent
holder shall have no greater rights than those afforded the Holder hereunder.
Any transfer made in violation of this Section 8 shall be void.  



9.Reservation of Warrant Shares. The Company
shall, at all times when this Warrant shall be outstanding, reserve and keep
available out of its authorized but unissued stock, for the purpose of effecting
the exercise of this Warrant, such number of its duly authorized shares of
capital stock as shall from time to time be sufficient to effect the exercise of
this Warrant. Alternatively, the Company shall take all action necessary to
cause it to be authorized to issue all necessary shares issuable upon exercise
of this Warrant.  All shares of capital stock which may be issued in connection
with the exercise of this Warrant will, upon issuance by the Company, be validly
issued, fully paid and non-assessable.

10.Mutilated or Missing Warrant Certificate.  In
case the certificate evidencing this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Holder, issue and deliver in
exchange and substitution for and upon cancellation of the mutilated
certificate, or in lieu of and in substitution for the certificate lost, stolen
or destroyed, a new Warrant certificate of like tenor and representing the
equivalent rights and interests, but only upon receipt of evidence satisfactory
to the Company of such loss, theft or destruction of such Warrant.  Applicants
for such substitute Warrant certificate shall also comply with such other
reasonable requirements and pay such other reasonable charges as the Company may
prescribe.  The Company shall pay all taxes (other than securities transfer
taxes) and all other expenses and charges payable in connection with the
preparation, execution and delivery of Warrants pursuant to this Section 10.

11.No Rights as a Shareholder.  Nothing contained
herein shall be construed as conferring upon the Holder or its transferees any
rights as a shareholder of the Company, including the right to vote, receive
dividends, consent or receive notices as a shareholder in respect of any meeting
of shareholders for the election of directors of the Company or any other
matter.

12.Legend.  The Warrant Shares issued upon
exercise of this Warrant shall be subject to a stop transfer order and the
certificate or certificates evidencing such Warrant Shares shall bear the
following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and neither such securities nor any interest therein may
be offered, sold, pledged, assigned or otherwise transferred unless (1) a
registration statement with respect thereto is effective under the Act and any
applicable state securities laws, or (2) the Company receives an opinion of
counsel to the holder of such securities, which counsel and opinion are
reasonably satisfactory to the Company, that such securities may be offered,
sold, pledged, assigned or transferred in the manner contemplated without an
effective registration statement under the Act or applicable state securities
laws."





13.Notices.  Any notice or other communication
required or permitted to be given hereunder shall be in writing and shall be
mailed by certified mail, return receipt requested, or by Federal Express,
Express Mail or similar overnight delivery or courier service or delivered (in
person or by telecopy, telex or similar telecommunications equipment) against
receipt to the party to whom it is to be given, (i) if to the Company, addressed
to Commerce One, Inc., One Market Street, Steuart Tower, Suite 1300, San
Francisco, CA 94105: Attn:  General Counsel,  Telecopy No. (415) 644-8750; with
a copy to Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto,
CA 94304, Attn: N. Anthony Jeffries, Esq., Telecopy No. (650) 493-6811 (ii) if
to the Holder, at the address set forth above, or (iii) in either case, to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section 13.  Notice to the estate of any party shall be
sufficient if addressed to the party as provided in this Section 13.  Any notice
or other communication given by certified mail shall be deemed given at the time
of certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.  Any notice given by other
means permitted by this Section 13 shall be deemed given at the time of receipt
thereof.

14.Governing Law.  This Warrant shall be
construed in accordance with the laws of the State of Delaware, without regard
to principles governing conflicts of law.  Any action or proceeding arising out
of or relating to this Warrant 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 Company and the Holder and any
assignee of the Holder submits to the personal jurisdiction of the State of New
York  The parties hereby irrevocably consent to the exclusive 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 Warrant.

15.Remedies.The Company stipulates that the
remedies at law of the Holder in the event of any default or threatened default
by the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.



16.Amendments; Waivers.  The terms and
provisions of this Warrant may be amended, modified, waived or altered only in
writing in accordance with Section 9 of the Security Agreement, and any such
amendment effected pursuant to this Section 16 shall be binding upon the
successors and assigns of the parties.                   

17.Headings.The descriptive headings of the
several sections of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.



 

[Signature Page to Warrant]



Dated:  December 31, 2003



 
COMMERCE ONE, INC.



 

By: /s/ Charles Boynton

Name:  

Title:   














ACKNOWLEDGED AND ACCEPTED:

COMVEST INVESTMENT PARTNERS II LLC


 

By: /s/ Harold Blue

Name:

Title:



FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder
desires to transfer the attached Warrant.)



FOR VALUE RECEIVED, ___________________ hereby sells,
assigns, and transfers unto _____________________________  Warrants to purchase
_____________ shares of _______________ of Commerce One, Inc. (the "Company"),
together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint _____________________________ attorney to
transfer such Warrant on the books of the Company, with full power of
substitution.



 

Dated:____________________



 
Signature:___________________

















NOTICE

The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.



To:Commerce One, Inc.

One Market Street

Steuart Tower, Suite 1300

San Francisco, CA 94105




 

 



ELECTION TO EXERCISE



 

The undersigned hereby exercises his or its rights to
purchase ______ Warrant Shares covered by the within Warrant certificate and
tenders payment herewith in the amount of $_____________ in accordance with the
terms thereof, and requests that certificates for such securities be issued in
the name of, and delivered to:









(Print Name, Address and Social Security or Tax
Identification Number)



The undersigned also hereby represents that the representations and
warranties provided by the undersigned in Section 6 of the Purchase Agreement
are true and correct in all material respects as if made on and as of the date
hereof.



 

Signature:____________________________









EXECUTION COPY 



WARRANT



NEITHER THIS WARRANT NOR ANY SECURITY INTO WHICH IT IS
CONVERTIBLE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), NOR UNDER ANY APPLICABLE STATE SECURITIES LAWS.  THIS WARRANT HAS
BEEN ACQUIRED FOR INVESTMENT AND NEITHER THIS WARRANT NOR ANY SECURITY INTO
WHICH IT IS CONVERTIBLE MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OF THEM UNDER THE ACT OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE ACT.  NEITHER THIS WARRANT NOR ANY SECURITY INTO WHICH IT
IS CONVERTIBLE MAY BE TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS
WARRANT AND THE NOTE AND WARRANT PURCHASE AGREEMENT, DATED AS OF EVEN DATE
HEREWITH (THE "PURCHASE AGREEMENT"), AND NO TRANSFER OF THIS WARRANT OR ANY
SECURITY INTO WHICH IT IS CONVERTIBLE SHALL BE VALID OR EFFECTIVE UNLESS AND
UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH.  THE TRANSFERABILITY OF
THIS WARRANT AND ANY SECURITY INTO WHICH IT IS CONVERTIBLE  IS SUBJECT TO THE
TRANSFER RESTRICTIONS SET FORTH HEREIN AND IN THE PURCHASE AGREEMENT.



WARRANT 

TO PURCHASE COMMON STOCK OF 

COMMERCE ONE, INC.



THIS WARRANT IS MADE AND DELIVERED PURSUANT TO A CERTAIN NOTE
AND WARRANT PURCHASE AGREEMENT, DATED AS OF EVEN DATE HEREWITH, AND SUBJECT TO
THE TERMS AND CONDITIONS THEREOF.





Certificate No. ____
Date of Issuance:  December 31,
2003

Expiration Date: December 31, 2004 



This Warrant is issued to DCC VENTURES, LLC (the
"Holder") by COMMERCE ONE, INC., a Delaware corporation (the "Company") ,
pursuant to the terms of that certain Note and Warrant Purchase Agreement (the
"Purchase Agreement") of even date herewith, in connection with the Company's
issuance to the Holder of this Warrant and a Senior Secured Non-Convertible
Promissory Note of the Company in the principal amount of One Million Dollars
($1,000,000) (the "Note"), in reliance upon an exemption from registration
pursuant to Section 4(2) of the Securities Act;    

THIS CERTIFIES THAT, for value received, the receipt and
sufficiency of which is hereby acknowledged:  

Subject to the conditions set forth herein and in the
Purchase Agreement, the Holder, with an address at 3960 Howard Hughes Parkway,
Fifth Floor, Las Vegas NV 89109, is entitled, upon surrender of this Warrant at
the principal office of the Company, to subscribe for and purchase from the
Company, for a period of one (1) year, commencing as of the date hereof and
ending at 5:00 p.m. Eastern Standard Time on December 31, 2004 (the "Exercise
Period"), up to 513,699 shares of Common Stock at the Per Share Exercise Price.
All capitalized terms used but not defined herein shall have the meaning set
forth in the Purchase Agreement.


This Warrant is subject to the following provisions,
terms and conditions:

1.  Definitions.

1.1"Business Day" shall mean any day except a
Saturday, a Sunday, or a legal holiday in the City of New York other than a
legal holiday on which the New York Stock Exchange is open for trading on a
regular basis.

1.2"Common Stock" shall mean the shares of
common stock, $.0001 par value per share, of the Company. 

1.3"Commission" shall mean the U.S. Securities
and Exchange Commission or any other governmental authority at the time
administering the Securities Act.

1.4"Company" shall have the meaning specified
in the introduction to this Warrant, and shall include any corporation or
business entity resulting from the merger, consolidation or conversion of the
Company .

1.5"ComVest Warrant" shall mean the warrant
issued as of even date hereof by the Company to ComVest Investment Partners II
LLC to purchase shares of Common Stock pursuant to substantially the same terms
and conditions of this Warrant.

1.6"ComVest Warrant Shares" shall mean the
shares of Common Stock issuable upon exercise of the ComVest Warrant in
accordance with its terms and conditions.

1.7"Fair Market Price per Share" shall mean
the average of the closing sales prices, if available, or the average of the bid
and asked prices for the Warrant Shares, Common Stock or Marketable Securities,
as the case may be (or their successors) on the principal market therefor for
the five (5) full Trading Days preceding the day which is two (2) Business Days
prior to the day of exercise, or if no such price is available, then a price
that is mutually agreed upon by the Holder and the Company.  If the Holder and
the Company cannot agree upon a mutually acceptable price, then such price shall
be determined by a written appraisal of a recognized firm of investment bankers
who shall be selected by the Company and shall be reasonably acceptable to the
holders of a majority of the Warrants.  The determination of such independent
appraiser shall be conclusive and binding on the Holder and the Company. 

1.8"Marketable Securities" shall mean
securities of a corporation subject to the informational and reporting
requirements of the Securities Exchange Act of 1934, as amended, that are listed
and actively traded on a nationally-recognized stock exchange or inter-dealer
quotation system in the United States.

1.9"Per Share Exercise Price" shall be $.0001,
as may be adjusted in accordance with Section 4 hereof.

1.10"Registration Period" shall be the four
(4)-month period immediately following the Closing.

1.11"Registration Statement" shall be (i) the
registration statement that the Company shall file with the Commission in
accordance with Section 2(a) of the Registration Rights Agreement, covering all
of the Conversion Shares, if any, and the  Warrant Shares, within thirty (30)
days after the Closing, or (ii) the registration statement that the Company may
file (or has filed) with the Commission in accordance with Section 2(b) of the
Registration Rights Agreement, covering all or a part of the Conversion Shares,
if any, and the Warrant Shares so long as such registration statement is
declared effective prior to the time the registration statement contemplated by
Section 2(a) of the Registration Rights Agreement is declared effective;
provided, however, that if any registration statement filed under
Section 2(b) of the Registration Rights Agreement covers only a portion of the
Conversion Shares, if any, and the Warrant Shares, then "Registration Statement"
shall mean both registration statements described in subparagraphs (i) and (ii)
above.

1.12"Securities Act" shall mean the Securities
Act of 1933, as amended, or any similar or successor federal statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.  Reference to a particular section of the Securities Act
shall include a reference to the comparable section, if any, of any such similar
or successor federal statute.

1.13"This Warrant" shall mean and include this
Warrant and any Warrant or Warrants hereafter issued as a consequence of the
exercise or transfer of this Warrant in whole or in part.

1.14"Trading Days" shall mean any days
during the course of which the Company's Common Stock is listed and traded with
the Nasdaq National Market, the Nasdaq SmallCap Market or any national
securities exchange or the OTC Electronic Bulletin Board or similar organization
if Nasdaq is no longer reporting such information.  



2.Payment upon Exercise; Issuance of Certificates;
No Fractional Shares.  

(a)  This Warrant may be exercised during the Exercise
Period, in whole or in part, by the surrender of this Warrant with the election
at the end hereof (the "Election") duly executed to the Company, during normal
business hours on any Business Day, at the address and in the manner set forth
in Section 13 hereof, or at such other place as is designated in writing by the
Company.  Such executed Election must be accompanied by payment in an amount
equal to the applicable exercise price multiplied by the number of Warrant
Shares for which this Warrant is being exercised. Such payment may be made by
check payable to the order of the Company.  The Company agrees that the Warrant
Shares so purchased shall be and are deemed to be issued to the Holder or its
designee (subject to the transfer restrictions applicable to this Warrant) as
the record owner of such Warrant Shares as of the close of business on the date
on which this Warrant shall have been surrendered and payment shall have been
made as aforesaid.  

(b)Certificates for the Warrant Shares so purchased,
representing the aggregate number of securities specified in the Election, shall
be delivered to the Holder or its designee within a reasonable time, not
exceeding ten (10) Business Days after this Warrant shall have been duly
exercised.  The stock certificate or certificates so delivered shall be in such
denominations as may be requested by the Holder and shall be registered in the
name of the Holder or such other name as shall be designated by the Holder
(subject to the transfer restrictions applicable to this Warrant).  The Company
shall pay all expenses and charges payable in connection with the preparation,
execution and delivery of stock certificates pursuant to this Section 2, except
that, in case such stock certificates shall be registered in a name or names
other than the Holder or the Holder's designee, funds sufficient to pay all
stock transfer taxes which shall be payable in connection with the execution and
delivery of such stock certificates shall be paid by the Holder to the Company
at the time of delivery of such stock certificates by the Company.

(c)This Warrant shall be exercisable only for a whole
number of Warrant Shares.  No fractions of such securities, or scrip for any
such fraction of securities, shall be issued upon the exercise of this Warrant.
The Company shall pay a cash adjustment in respect of such fractional interest
in an amount equal to the Fair Market Price per Share of one share of Warrant
Shares at the time of such exercise multiplied by such fraction computed to the
nearest whole cent. 

3.Cashless Exercise.At any time during the
Exercise Period, the Company agrees that:

(a)The Holder may exercise this Warrant by
surrendering it to the Company and receiving, in exchange therefor, the number
of shares of Common Stock then purchasable upon exercise of that portion of the
Warrant to be exercised less the number of shares of Common Stock equal to the
quotient of the aggregate exercise price of all such shares underlying that
portion of the Warrant to be exercised divided by the Fair Market Price per
Share.

(b)Concurrent with the occurrence of any event
described in Section 4(a) for cash, the Holder may exercise this Warrant by
surrendering it to the Company in exchange for the amount of cash per share the
Holder would be entitled to receive after the happening of such event if this
Warrant had been exercised immediately prior to the close of business on such
record date or effective date, as applicable, less the applicable exercise price
per share.

(c)Concurrent with the occurrence of any event
described in Section 4(a) for Marketable Securities, the Holder may exercise
this Warrant by surrendering it to the Company in exchange for the applicable
amount of such Marketable Securities the Holder would be entitled to receive
after the happening of such event if this Warrant had been exercised immediately
prior to the close of business on such record date or effective date, as
applicable, less the number of such Marketable Securities equal to the quotient
of the aggregate exercise price of all shares underlying this Warrant divided by
the Fair Market Price per Share of such Marketable Securities.

4.Adjustments.  



(a)Merger, Sale of Assets, etc.  In the event the
Company, at any time prior to the Holder's exercise of this Warrant, (i)
reorganizes (other than a combination, reclassification, exchange or
subdivision); (ii) merges or consolidates the Company with or into another
corporation in which the Company is not the surviving entity, or merges with
another corporation 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) sells or transfers the Company's
properties and assets (other than the SRM Sale (as defined in the Notes)) as, or
substantially as, an entirety to any other person, then, as part of such
reorganization, merger, consolidation, sale or transfer, provision shall be made
so that the Holder shall thereafter be entitled to receive upon exercise of this
Warrant the number of securities or property of the successor corporation
resulting from such reorganization, merger, consolidation, sale or transfer that
a holder of the securities deliverable upon exercise of this Warrant would have
been entitled to receive in such reorganization, consolidation, merger, sale or
transfer if this Warrant had been exercised immediately prior to such
reorganization, merger, consolidation, sale or transfer.  



(b)Declaration of Dividends, Stock Splits, etc.
In the event the Company declares a dividend or distribution of its common
stock, or effects a stock split or reverse stock split with respect to its
common stock, or issues any shares of its common  stock by reclassification of
shares of its common  stock, the exercise rights of the Holder in effect on the
date of such event shall be adjusted proportionately so that the Holder
thereafter shall be entitled to receive upon exercise pursuant to the terms and
conditions hereof the aggregate number of shares of common  stock that the
Holder would own or be entitled to receive after the happening of any of the
events mentioned in this Section 4(b) if this Warrant had been exercised
immediately prior to the close of business on the date of such happening;
provided, however that this Section 4(b) shall not apply to the
declaration or payment of any dividends with respect to the dividends payable to
BayStar Capital II, L.P. ("Baystar") in accordance with the terms of the
Certificate of Designations filed by the Company in connection with the
transactions contemplated by that certain Securities Purchase Agreement, dated
as of July 10, 2003, by and between the Company and Baystar. 



(c)Written Notice.The Company shall give
written notice to the Holder within ten (10) days following the consummation of
any transaction within the scope of this Section 4 and provide in such written
notice a brief description of the terms and conditions of such transaction.



(d)Minimal Adjustments.  No adjustment
in a Per Share Exercise Price need be made if such adjustment would result in a
change in such Per Share Exercise Price of less than five cents ($0.05).  Any
adjustment of less than five cents ($0.05) which is not made shall be carried
forward and shall be made at the time of and together with any subsequent
adjustment which, on a cumulative basis, amounts to an adjustment of five cents
($0.05) or more in a Per Share Exercise Price.



5.[Reserved]



6.Repurchase; Market Stand-Off.



(a)In the event that (i) the Company repays the
entire principal amount of the Note plus all accrued Interest thereon within the
four (4) months immediately following the date of issuance of this Warrant (the
"Repurchase Period") and (ii) the Registration Statement has been declared
effective, then the Company shall have the right to repurchase (the
"Repurchase") from the Holder up to Twenty Percent (20%) of this Warrant or the
Warrant Shares (for purposes of this Section 6, the "Repurchase Shares"), as the
case may be (the "Repurchase"), at a per share purchase price equal to the Per
Share Exercise Price. 



(b)In the event the Company desires to effect a
Repurchase, the Company shall provide the Holder with notice (the "Repurchase
Note") that (i) all conditions of a Repurchase have been satisfied and (ii) the
Company desires to effect a Repurchase.  The Repurchase Notice shall also set
forth the amount of the Warrants or the Repurchase Shares, as the case may be,
that will be subject to the Repurchase and the date on which the Company desires
the Repurchase to occur).  The Repurchase Notice shall be delivered to the
Holder no later than ten (10) days following the Company's satisfaction of the
conditions of a Repurchase and no less than ten (10) days prior to the date on
which the Repurchase shall be effective.  Any Repurchase effected hereunder
shall be done on a pro rata basis between the Warrants or the Repurchase Shares,
as the case may be.         



(c)The Holder hereby agrees that, during the
Repurchase Period, the Holder shall not sell, transfer or otherwise dispose of
(i) Twenty Percent (20%) of this Warrant or (ii) the Repurchase Shares, as the
case may be, and that the Holder shall reserve (i) such portion of the Warrant
or (ii) all of the Repurchase Shares, as the case may be, for Repurchase by the
Company in accordance with Sections 6(a) and (b) above.   



(d)Any Repurchase that is effected pursuant to this
Section 6 shall be made on a pro rata basis with the ComVest Warrant or the
ComVest Warrant Shares, as the case may be. 



7.Issue Tax.The issuance of certificates for
the Warrant Shares upon the exercise of this Warrant shall be made without
charge to the Holder for any issuance tax in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder .

 

8.Transferability and Assignment.  Except as set
forth in Section 6 hereof and subject to compliance with applicable federal and
state securities laws, and to the extent applicable, the parties may not assign
their rights and obligations under this Warrant except in accordance with
Section 14(a) of the Purchase Agreement.  In the event the Holder proposes to
effect an assignment, the Holder must present this Warrant to the Company for
transfer, accompanied by a duly completed and executed Form of Assignment (as
provided at the end hereof), the transferee must agree to be bound by the terms
of this Warrant as if such transferee were an original holder of this Warrant,
and the Holder must deliver to the Company an opinion of counsel of the Holder
in form reasonably satisfactory to the Company that the transfer may be properly
made under an exemption from registration under the Securities Act and
applicable state securities laws.  Upon any registration of transfer, the
Company shall execute and deliver a new Warrant certificate to the person
entitled thereto.  In the event the Warrant is transferred, the subsequent
holder shall have no greater rights than those afforded the Holder hereunder.
Any transfer made in violation of this Section 8 shall be void.  



9.Reservation of Warrant Shares. The Company
shall, at all times when this Warrant shall be outstanding, reserve and keep
available out of its authorized but unissued stock, for the purpose of effecting
the exercise of this Warrant, such number of its duly authorized shares of
capital stock as shall from time to time be sufficient to effect the exercise of
this Warrant. Alternatively, the Company shall take all action necessary to
cause it to be authorized to issue all necessary shares issuable upon exercise
of this Warrant.  All shares of capital stock which may be issued in connection
with the exercise of this Warrant will, upon issuance by the Company, be validly
issued, fully paid and non-assessable.

10.Mutilated or Missing Warrant Certificate.  In
case the certificate evidencing this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Holder, issue and deliver in
exchange and substitution for and upon cancellation of the mutilated
certificate, or in lieu of and in substitution for the certificate lost, stolen
or destroyed, a new Warrant certificate of like tenor and representing the
equivalent rights and interests, but only upon receipt of evidence satisfactory
to the Company of such loss, theft or destruction of such Warrant.  Applicants
for such substitute Warrant certificate shall also comply with such other
reasonable requirements and pay such other reasonable charges as the Company may
prescribe.  The Company shall pay all taxes (other than securities transfer
taxes) and all other expenses and charges payable in connection with the
preparation, execution and delivery of Warrants pursuant to this Section 10.

11.No Rights as a Shareholder.  Nothing contained
herein shall be construed as conferring upon the Holder or its transferees any
rights as a shareholder of the Company, including the right to vote, receive
dividends, consent or receive notices as a shareholder in respect of any meeting
of shareholders for the election of directors of the Company or any other
matter.

12.Legend.  The Warrant Shares issued upon
exercise of this Warrant shall be subject to a stop transfer order and the
certificate or certificates evidencing such Warrant Shares shall bear the
following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and neither such securities nor any interest therein may
be offered, sold, pledged, assigned or otherwise transferred unless (1) a
registration statement with respect thereto is effective under the Act and any
applicable state securities laws, or (2) the Company receives an opinion of
counsel to the holder of such securities, which counsel and opinion are
reasonably satisfactory to the Company, that such securities may be offered,
sold, pledged, assigned or transferred in the manner contemplated without an
effective registration statement under the Act or applicable state securities
laws."





13.Notices.  Any notice or other communication
required or permitted to be given hereunder shall be in writing and shall be
mailed by certified mail, return receipt requested, or by Federal Express,
Express Mail or similar overnight delivery or courier service or delivered (in
person or by telecopy, telex or similar telecommunications equipment) against
receipt to the party to whom it is to be given, (i) if to the Company, addressed
to Commerce One, Inc., One Market Street, Steuart Tower, Suite 1300, San
Francisco, CA 94105: Attn:  General Counsel,  Telecopy No. (415) 644-8750; with
a copy to Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto,
CA 94304, Attn: N. Anthony Jeffries, Esq., Telecopy No. (650) 493-6811 (ii) if
to the Holder, at the address set forth above, or (iii) in either case, to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section 13.  Notice to the estate of any party shall be
sufficient if addressed to the party as provided in this Section 13.  Any notice
or other communication given by certified mail shall be deemed given at the time
of certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.  Any notice given by other
means permitted by this Section 13 shall be deemed given at the time of receipt
thereof.

14.Governing Law.  This Warrant shall be
construed in accordance with the laws of the State of Delaware, without regard
to principles governing conflicts of law.  Any action or proceeding arising out
of or relating to this Warrant 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 Company and the Holder and any
assignee of the Holder submits to the personal jurisdiction of the State of New
York  The parties hereby irrevocably consent to the exclusive 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 Warrant.

15.Remedies.The Company stipulates that the
remedies at law of the Holder in the event of any default or threatened default
by the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.



16.Amendments; Waivers.  The terms and
provisions of this Warrant may be amended, modified, waived or altered only in
writing in accordance with Section 9 of the Security Agreement, and any such
amendment effected pursuant to this Section 16 shall be binding upon the
successors and assigns of the parties.                   

17.Headings.The descriptive headings of the
several sections of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.



 

[Signature Page to Warrant]



Dated:  December 31, 2003



 
COMMERCE ONE, INC.



 

By:  /s/ Charles Boynton

Name:  

Title:   














ACKNOWLEDGED AND ACCEPTED:

DCC VENTURES, LLC


 

By: /s/ Michael T. Davies

Name: Michael T. Davies

Title: Secretary and Treasurer



FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder
desires to transfer the attached Warrant.)



FOR VALUE RECEIVED, ___________________ hereby sells,
assigns, and transfers unto _____________________________  Warrants to purchase
_____________ shares of _______________ of Commerce One, Inc. (the "Company"),
together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint _____________________________ attorney to
transfer such Warrant on the books of the Company, with full power of
substitution.



 

Dated:_________________



 
Signature:_________________

















NOTICE

The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.



To:Commerce One, Inc.

One Market Street

Steuart Tower, Suite 1300

San Francisco, CA 94105




 

 



ELECTION TO EXERCISE



 

The undersigned hereby exercises his or its rights to
purchase ______ Warrant Shares covered by the within Warrant certificate and
tenders payment herewith in the amount of $_____________ in accordance with the
terms thereof, and requests that certificates for such securities be issued in
the name of, and delivered to:









(Print Name, Address and Social Security or Tax
Identification Number)



The undersigned also hereby represents that the representations and
warranties provided by the undersigned in Section 6 of the Purchase Agreement
are true and correct in all material respects as if made on and as of the date
hereof.



 

Signature:____________________________