FY2003 10K Exhibit 10.31





                                                                                    Exhibit 10.31



STRATEGIC ALLIANCE AGREEMENT AMENDMENT 3

The Strategic Alliance Agreement ("SAA") between and
amongst SAP AG ("SAP AG"), SAP Markets ("Markets"), Inc. collectively "SAP") and
Commerce One, Inc. dated September 18, 2000, as amended, is hereby amended by
the addition of this attached Amendment No. 3 ("Amendment") as of June 29, 2001
(the "Effective Date"). All defined terms set forth in the SAA shall apply to
this Amendment. The terms contained in this Amendment, together with the terms
contained in the SAA, as amended, shall govern SAP's use of the software
provided under this Schedule. If any conflict occurs between the provisions of
the SAA and this Amendment No. 3, the specific definitions, terms and conditions
of this Amendment shall govern. Unless specifically set forth as a modification
to the original SAA in this Amendment, all other terms and conditions of the SAA
shall remain in full force and effect and shall govern all aspects of this
Amendment and the relationship between the Parties contemplated herein.




	PURPOSE

To further clarify the rights and obligations under the SAA
and for the purpose of expanding the right to include the C1 Technology (as
delivered by Commerce One to SAP as part of the Joint Offering) as part of a
mySAP.com branded solution, the Parties wish to amend the SAA including
expansion of the licensing arrangements among the Parties to include the right
for SAP AG to license the C1 Technology to customers under a mySAP.com brand.
Without limiting the foregoing, this Amendment shall enable SAP to offer all or
a more limited set of scenarios than the full set of the scenarios provided as
part of the Joint Offering.



	LICENSE

2.1 Scope of Grant.


2.1.1 Beginning on the Effective Date, Commerce One hereby
agrees to amend Section 15.1.1 of the SAA to include the right of SAP AG to
incorporate the C1 Technology delivered by Commerce One as part of the Joint
Offering as part of a mySAP.com license under the terms and conditions set forth
herein and subject to the same restrictions set forth in Section 15 of the SAA
(for purposes of this Amendment such license of any of the C1 Technology
hereunder by SAP AG shall be referred to as the "Exchange Engine" herein).
Commerce One further grants SAP AG a terminable, non-exclusive, non-transferable
license to use, copy, distribute and sublicense (directly or indirectly) the
Documentation in connection with licenses of the Exchange Engine.


2.1.2 This grant does not provide the right for SAP AG to
license the Exchange Engine to a mySAP.com customer for the purpose of creating
or operating a Public E-marketplace. For purposes of this Amendment, a Public
E-Marketplace shall mean any open, for-profit, service bureau offering to buyers,
suppliers, and trading partners.


The Parties agree to cooperate to define the customer
licensing restrictions with respect to this Section 2.1.2 within thirty (30)
days of the Effective Date of this Amendment.




2.2 Trademarks, License By Commerce One. Commerce One
hereby grants SAP, for the Term of this Amendment, a limited, non-transferable,
non-exclusive license to use COMMERCE ONE and Logo mark in connection with the
licenses granted herein, subject to Commerce One's Branding and Style Guidelines
which may be published at
http://www.commerceone.com from time to time. Except
as set forth in this Section, nothing in this Schedule shall grant or shall be
deemed to grant to SAP any right, title or interest in or to the Commerce One's
trademarks. All uses of Commerce One's trademarks by SAP shall inure to the
benefit of Commerce One. At no time during or after the Term shall SAP challenge
or assist others to challenge the Commerce One trademarks (except to the extent
such restriction is prohibited by applicable law) or the registration thereof or
attempt to register any trademarks, marks or trade names confusingly similar to
those of Commerce One, EXCEPT AS EXPLICITLY SET FORTH IN THIS AMENDMENT,
COMMERCE ONE DOES NOT FOREGO OR EXTEND ANY RIGHTS TO USE ANY COMMERCE ONE OR
JOINT OFFERING TRADEMARKS IN CONNECTION WITH THE EXCHANGE ENGINE SOFTWARE,
EXCEPT AS OTHERWISE SET FORTH IN THE SAA.


2.3 Term & Termination. This Amendment shall
become effective as of the Effective Date as set forth above and shall continue
in effect for a term coterminous with that of the SAA.


2.4 No Obligations. Except as otherwise explicitly
provided in this Amendment and subject to any rights or obligations which have
accrued prior to termination, neither Party shall have any further obligation
beyond those obligations set forth in the SAA upon termination of this Amendment
for any reason.


2.5 Maintenance & Support. Commerce One shall
provide "Level 3" support (as defined in the SAA, the joint SLA agreed to by the
parties and relevant amendments) and Updates and Upgrades for the Exchange
Engine licensed by SAP AG subject to the payments referenced
below.



In consideration of such maintenance and support provided by
Commerce One for the Exchange Engine licenses, SAP shall pay to Commerce One
eight percent (8%) of the cumulative Exchange Engine license royalties which SAP
has paid to Commerce One in respect of customers under valid and existing
maintenance agreements with respect to the Exchange Engine annually, paid at the
rate of two percent (2%) per calendar quarter.

Following any expiration or termination of this Amendment,
Commerce One shall continue to provide maintenance and support consistent with
the post-termination rights in the SAA including, but not limited to, providing
Updates and Upgrades for the Exchange Engine for a period of three (3) years
from termination of this Amendment subject to payment of the appropriate
maintenance and support fees.




	ROYALTIES

3.1 All royalties paid under this provision shall be separate
and distinct from the royalty reporting and sharing obligations and provisions
set forth in the SAA. The payment of such royalties, however, shall be subject
to the relevant provisions in the SAA.


3.2 Upon the completion of any license agreements by SAP for
the Exchange Engines or additional users for the Exchange Engines, SAP shall pay
to Commerce One a royalty equal to the greater of: (i) seven and one half
percent (7.5%) of the mySAP.com Net License Fees or (ii) the Minimum Royalty
(for the initial Exchange Engine license only) as defined in Exhibit A. For
purposes of this calculation "mySAP.com Net License Fees" shall equal total
gross license fees charged to the customer by SAP in respect of the relevant
exchange-enabled users or engines, less taxes or other reallocation of license
revenues as mandated under SEC or GAAP requirements, and less license fees
received for products separately listed and independently branded on the
mySAP.com price list. (such as third party databases resold under a mySAP.com
licenses). Any credits extended to customers in consideration for any license
fees previously paid to SAP or any SAP subsidiary under any other SAP software
license agreement shall be added back in the calculation of amounts actually
charged to customers for purposes of calculating mySAP.com Net License Fees. An
example of this calculation is reflected in Exhibit C hereto. SAP shall not be
entitled to receive a credit toward future royalty obligations in the event that
the minimum royalty exceeds the fees otherwise calculated by multiplying seven
and one half percent (7.5%) by the mySAP.com Net License Fees. For purposes of
calculating mySAP.com Net License Fees in any given mySAP.com transaction
hereunder, the discount applied to the user prices and engine prices used as the
basis for the royalty calculation shall not be greater than the average discount
across such mySAP.com transaction.


3.3 The Parties agree to reconsider these royalty terms on or
about every six (6) month anniversary of the Effective Date of this Amendment on
the basis of relative contributions of the Parties and specifically reflecting
adjustments in the C1 Technology contributions for new developments and/or
modifications to the technology utilized in the Exchange Engine
scenarios.


3.4 The Parties agree that they will revise the minimum
royalties payable in connection with licenses of the Joint Offering by any Party
set forth in Amendment No. 2 to the SAA executed on April 12, 2001 in accordance
with Exhibit B to this Amendment No. 3.


3.5 In the event that Commerce One reduces its low VSOE rate
for similar reseller agreements in a way that would impact the minimum royalties
referenced herein, Commerce One agrees to adjust such minimum royalties to the
low VSOE on a going forward basis. 




	ROYALTY REPORTS; ACCESS TO DOCUMENTS SUPPORTING ROYALTY
REPORTS

The Parties agree to define the format of the royalty report
required under the SAA and a process for providing a certification and
supporting documentation for such royalty report within sixty (60) days of the
Effective Date of this Amendment.



	RESTATEMENT OF PRIOR OBLIGATIONS

Within thirty (30) days of the Effective Date, SAPM agrees to
provide the list of Designated Customers required under Amendment 2 to the SAA,
dated April 12, 2001 for anticipated deployment of the MarketSite Operating
Environment customer joint development licenses.



	ENTERPRISE PROCUREMENT 

SAP and Commerce One agrees to mutually redefine the Joint
Offering cooperation model for procurement applications within thirty (30) days
of the Effective Date of this Amendment.



	CALL OUTS

Until such time as the parties have agreed to a
cooperation model regarding procurement pursuant to Section 6 of this Amendment,
all "call-outs" on both sides must be registered in writing, in advance, with
the Joint Call-Out Committee which shall be comprised of Gary Former, Werner
Brandt, Peter Pervere and Robert Tarkoff. Any disputes on these call-outs which
cannot be resolved on a timely basis by the Joint Call-Out Committee shall be
escalated for resolution to the CEO's of each of SAP AG and Commerce One.



	JOINT PROMOTION OBLIGATIONS

8.1 Both Commerce One and SAPM will continue to promote and
distribute the Joint Offering MarketSet 2.0 or later versions as "the joint
product of SAPMarkets and Commerce One" to any customers or prospects for the
Joint Offering.


8.2 The Parties shall agree within thirty (30) days of the
Effective Date of this Amendment upon a mutually agreeable detailed marketing
presence at each of eLink and Sapphire, including but not limited to continuing
rights to deploy booths, present product demonstrations, and develop leads under
mutually agreed to lead generation guidelines. The Parties agree that compliance
with this provision is essential to the purpose of the provisions set forth in
this Amendment, and furthermore agree to review compliance with this provision
on a regular basis.


8.3 The Parties shall agree within sixty (60) days of the
Effective Date of this Amendment upon a mutually agreeable methodology for
Commerce One for identifying and publicizing customers (subject to customer
consent) which license the Exchange Engine as joint customers.





	TEST, DEMONSTRATION, EVALUATION AND INTERNAL USE LICENSES.

9.1 Internal Use. The Parties agree that the minimum
royalty provisions of the SAA, including all Amendments thereto, shall not apply
to licenses for internal use (such as support and training), provided that such
licenses: (i) do not allow for productive use of the software; (ii) carry a
minimum royalty to the non-licensing Party equal to the non-licensing Party's
external cost of goods (to be provided by each Party on or before August 1, 2001
and updated quarterly).


9.2 Evaluation. The Parties agree that the minimum
royalty provisions of the SAA, including all Amendments thereto, shall not apply
to licenses for evaluation by customers/prospects either of the Joint Offering
or the Exchange Engines provided that: (i) the non-licensing Party shall approve
the license prior to the grant or pay a royalty of $50,000; (ii) the license
does not allow for productive use of the software; (iii) the term of the license
shall not in any event exceed ninety days (120) in total; and (iv) the license
is recorded on the appropriate royalty report as an evaluation or test license
as of the effective date of the license and at the end of the license term the
license is recorded on the appropriate royalty report as either "revoked" or
"licensed for productive use" with the appropriate royalty information.


	Notwithstanding the foregoing, all such internal use and
evaluation licenses are to be channeled through a single contact at SAPM and at
Commerce One upon execution of a definitive evaluation license
agreement.

9.3 The Parties shall agree within sixty (60) days of the
Effective Date of this Amendment upon a mutually agreeable process for handling
test/demonstration licenses of the Joint Offering and Exchange Engine for
partners.






	GENERAL AMENDMENTS TO SAA

10.1 Exclusivity Commitments. The Parties agree to meet
and discuss in good faith potential amendments to the SAA to reduce or eliminate
the Exclusivity Commitment provisions in the SAA (Section 7). The Parties hereby
waive any claims against one another relating to violations of Section 7 of the
SAA occurring prior to the Effective Date of this Amendment.


10.2 Prepayments and Royalty Expiration. SAPM's
obligation to pay to Commerce One prepaid royalties as set forth in Part II of
Exhibit B to the SAA shall be amended as follows: (i) SAPM's obligation to pay
to Commerce One amounts owed on August 31, 2002 shall be extinguished in
consideration for a prepayment equal to seventy-five million dollars
($75,000,000) upon the Effective Date. Such accelerated royalty prepayment shall
be subject to Exhibit B Section IIA of the SAA.



10.3 Royalty Reporting. Royalties payable by either
Party to the other shall be reported on a monthly rather than a quarterly basis.
Each Party shall include all reasonably necessary detail to allow the other
Party to verify calculations made pursuant to such monthly royalty
reports.


10.4 Training. The training provisions in the SAA shall
be amended to provide that each Party shall be responsible for preparation of
its own training curriculum and materials for offering independent training to
partners and customers with respect to the Joint Offering (and components
thereto) and/or the Enterprise Buyer Software.


10.5 Maintenance Revenue Splits. The Parties shall
agree within thirty (30) days of the Effective Date of this Amendment upon a
mutually agreeable process for revising the maintenance and support revenue
splits set forth in the SAA, and its amendments.


10.6 Professional Services. The Parties hereby formally
commit and agree to a Blended Delivery mode for offering professional services
to customers of the Joint Offering and the Exchange Engines. Such Blended
Delivery Model shall be mutually agreed upon, and the reciprocal Professional
Services Agreement shall be executed, by the parties within thirty (30) days of
the Effective Date.


10.7 Escalation and Executive Review Process. The
Parties shall meet in good faith to discuss amendment of the escalation
procedure set forth in the SAA to provide a more detailed escalation procedure
for resolving conflicts in the alliance.




[SIGNATURE PAGE FOLLOWS]

 

 

 

IN WITNESS WHEREOF, the Parties have caused their duly
authorized representatives to enter into this Amendment effective on the Effective Date.



	
COMMERCE ONE, INC.
	
SAPMARKETS, INC.






	
By:  /s/ Mark B. Hoffman
	
By:  /s/ Mayur M Shah

	
Name: Mark B. Hoffman
	
Name: Mayur M.Shah

	
Title:____________________
	
Title: President







SAP AG

By: /s/ Dr. Werner Brandt

                   Name: Dr. Werner Brandt

                   Title: __________________



SAP AG

By: /s/ Michael Junge

                   Name:  Michael Junge

                   Title: General Counsel




















STRATEGIC ALLIANCE AGREEMENT AMENDMENT 3

Exhibit A

Pursuant to Section 3 of the Amendment, the minimum royalties
payable to Commerce One for each deal involving the Exchange Engine shall be
calculated as follows:




	Initial Engine Licensing Transaction

	
My SAP.com Net License Fees

Expressed in US dollars (or Euros for the
EU)
	
Minimum Royalty to Commerce One

Expressed in of US Dollars (or Euros for the
EU)

	
$10,000,000 and Above
	
$1,000,000

	
$5,000,000 - $9,999,999
	
$500,000

	
$3,300,000 - $4,999,999
	
$250,000

	
$2,000,000 - $3,299,999
	
$150,000

	
$0 - $1,999,999
	
See below*





*Minimum Royalty shall be 7.5% of the entire mySAP.com Net
License Fee

















STRATEGIC ALLIANCE AGREEMENT AMENDMENT 3

Exhibit B

MarketSet Minimum Royalties

(see sheet 1 of attached spreadsheet)


Exhibit B to Amendment Number 3

MarketSet Minimum Royalties

MarketSet for Public
Exchanges(in thousands of U.S. dollars except in Europe,
where in thousands of Euros)

 

	
Product
	
Tier One
	
Tier Two
	
Tier Three

	
Minimum MarketSet (Procurement, Auction/DP,
Infrastructure)
	
1,750
	
1,575
	
1,050

	
Life-Cycle Collaboration Pack
	
500
	
450
	
300

	
Supply Chain Collaborative Pack
	
750 
	
675
	
450

	
Total MarketSet
	
2,750
	
2,475
	
1,650




Minimum revenue share royalty: 3%

Minimum annual maintenance royalty: 8.5% of net upfront
license fees

MarketSet for Private Exchanges(in
thousands of U.S. dollar except in Europe, where in thousands of Euros)


	
 
	
Tier One
	
Tier Two
	
Tier Three

	
 
	
Joint
	
Independent
	
Joint
	
Independent
	
Joint
	
Independent

	
MarketSet Base (Must be purchased with at least one
pack)
	
1,000
	
700
	
900
	
630
	
600
	
420

	
Dynamic Pricing/Auction
	
250
	
175
	
225
	
158
	
150
	
105

	
e-Procurement
	
500
	
350
	
450
	
315
	
300
	
210

	
Life-Cycle Collaboration Pack
	
500
	
350
	
450
	
315
	
300
	
210

	
Supply Chain Collaborative Pack
	
750 
	
525
	
675
	
473
	
450
	
315

	
Total MarketSet package
	
2,750
	
1,925
	
2,475
	
1,733
	
1,650
	
1,155




No minimum volume-based or usage fee royalties for Private
Exchanges until parties can determine a mutually suitable model.

Parties will continue to use reasonable efforts to assess
volume-based and/or usage fees for Private Exchanges as appropriate.

Royalties on volume-based or usage fees for Private Exchanges
based upon same percentage royalties applicable to upfront license fees.

Minimum annual maintenance royalty: 8.5% of net upfront
license fees

Tier One: USA, Japan, Canada,
Germany/Switzerland, France, UK/IR

Tier Two: NZ, Korea, Singapore, Australia, Austria, Italy,
Spain, Netherlands, Belgium/Luxemburg, Denmark, Norway, Sweden, Finland, South
Africa

Tier Three: China, India, ASEAN, Latin America, Greece,
Bulgaria, Turkey, Israel, Arabia, Malta (Middle East), CIS, Czech, Slovakia,
Hungaria, Poland, AL, BIH, HR

CONFIDENTIAL - DO NOT DISTRIBUTE

















STRATEGIC ALLIANCE AGREEMENT AMENDMENT 3

                  Exhibit C

Example of Exchange Engine Royalty Calculation

                  (see sheet 2 of attached spreadsheet)


















Exhibit C to Amendment Number 3

Example for Calculation of Exchange Engine Royalties

Example mySAP.com Deal*

	
Number of "Professional" Users Licensed:
	
10,000

	
List Price per User
	
$5,000

	
Customer Discount:
	
30%

	
Discounted Price Per User:
	
$3,500

	
Discounted mySAP.com License Fee:
	
$35,000,000

	
Third Party Database:
	
$3,000,000

	
Total License Fee:
	
$38,000,000

	
Credit for Prior R/3 Licenses
	
($8,000,000)

	
Net, Net License Fee:
	
$30,000,000




*Note: User numbers, prices and discount used in example are
not actual. They are used for a simple example of the calculation
methodology.

Example Calculation of mySAP.com Net License Fees (in
respect of Exchange Engine License)

Assume Customer Chooses for 5,000 of Above Professional
Users to be Licensed for the Exchange Engine

	
Number of "Professional" Users Licensed for Exchange
Engine:
	
5,000

	
Discounted Price Per User:
	
$3,500

	
mySAP.com Net License Fees (in respect of Exchange Engine
License):
	
$17,500,000

	
Exchange Engine Royalty to Commerce One*:
	
$1,312,500




*Equal to 7.5% of mySAP.com Net License Fees (in respect of
Exchange Engine License)