Document:

PROMISSORY NOTE

Exhibit

10.29

 

PROMISSORY NOTE

 

$19,000,000                                                                                                                                                            March

15, 2002

 

                On

April 1, 2003, or such earlier date as the indebtedness evidenced by this Note

may become due pursuant to Sections 2.2 or 6.2 ("Maturity Date"), for value received,

the undersigned, COMMERCE ONE OPERATIONS, INC.,

a Delaware corporation (formerly known as Commerce One, Inc.) ("Borrower"), promises to pay to the

order of MICROSOFT CAPITAL CORPORATION

("Lender") at the

Payment Account (defined below), the principal sum of NINETEEN MILLION AND

00/100ths Dollars ($19,000,000).  Except

as the context requires otherwise, references to Borrower in Sections 4, 5 and

6 shall be deemed to include both Commerce One Operations, Inc. and its parent

company, Commerce One, Inc., a Delaware corporation.

 

Section 1.

Payment Terms.

 

                1.1.  Principal.  The actual principal amount at any time

outstanding and owing by the Borrower on account of this Note shall be the sum

stated above less all payments of principal actually received by Lender.  The balance of the principal sum hereof

outstanding on the Maturity Date shall be due and payable on the Maturity Date.

 

                1.2. 

Interest.  Borrower promises to pay interest (computed

on the basis of a year of 365 days for the actual number of days elapsed) to

Lender from the date hereof prior to the occurrence of an Event of Default

under Section 6.1(a) at the rate of seven percent (7%) per annum and after the

occurrence of an Event of Default under Section 6.1(a) (whether by lapse of

time, acceleration or otherwise) until paid in full at the rate of 10% per

annum.  Interest shall be payable in

arrears quarterly on the last day of each March, June, September and December

(commencing March 29, 2002) and on the Maturity Date, and after the Maturity

Date upon demand.  The interest rate

payable on this Note shall be subject, however, to the limitation that such

interest rate shall never exceed the highest rate which Borrower may contract

to pay under applicable law.

 

                1.3. 

Place and Application of Payments and

Collections.  All payments of

principal and interest payable on this Note will be made to Lender at the

following account (the "Payment Account")

no later than 11:00 a.m. (Pacific Time) on the date any such payment is due and

payable:

 

	

  Account Name:

  	

   

  	

  Microsoft Capital Corp.

  
	

  Account #:

  	

   

  	

  3049-7564

  
	

  Bank:

  	

   

  	

  Citibank N.A.

  
	

   

  	

   

  	

  111 Wall Street

  
	

   

  	

   

  	

  New York, NY  10013

  
	

  ABA#:

  	

   

  	

  021000089

  

 

                Subject

to the provisions of the Collateral Documents, all payments and collections

received in respect of the indebtedness evidenced by this Note and all proceeds

of the Collateral Account or other collateral received, in each instance, by

Lender will be remitted to Lender and distributed as follows:

 

(a)           first,

to the payment of any outstanding reasonable costs and expenses of a character

which Borrower has agreed to pay under Section 7;

 

 

 

 

(b)           second,

to the payment of any outstanding interest due under this Note;

 

(c)           third,

to the payment of the principal of this Note; and 

 

(d)           fourth,

to Borrower or whoever may be lawfully entitled thereto.

 

Section 2.

Prepayments.

 

                2.1.  Voluntary

Prepayments.  Borrower will

have the right to prepay without premium or penalty, in whole or in part (but,

if in part, then in an amount not less than $1,000,000), this Note upon three

(3) days prior written notice to Lender. 

Prepayments shall be applied in accordance with Section 1.3.

 

                2.2. 

Mandatory Prepayments.  Borrower covenants and agrees to

prepay all indebtedness evidenced by this Note in the event Borrower's

unencumbered cash, cash equivalent and short-term investment reserves are less

than $125,000,000 (and for purposes of this Section and Section 5.2,

unencumbered cash, cash equivalent and short-term investment reserves will be

deemed to include the permitted collateral in the Collateral Account).

 

Section 3.

Collateral.

 

                3.1.  Collateral. 

The payment and performance of the Liabilities (as defined in the

Security Agreement) shall be secured by collateral in the amount of $19,000,000

held at Bank of America, N.A. (the "Bank")

known as               (the "Collateral Account") pursuant to a

Account Pledge executed by Borrower in favor of Lender dated even date herewith

(the "Security Agreement")

granting a security interest in the Collateral Account, and subject to

Collateral Account Notification and Acknowledgement among the Bank, Borrower

and Lender dated as of March 21, 2002 ( the "Account Control Agreement").  The Security Agreement, the Account Control Agreement and any and

all other mortgages, deeds of trust, security agreements, assignments, financing

statements and other documents as shall from time to time secure the

obligations of this Note are each referred to herein as a "Collateral Document" and collectively

as the "Collateral Documents."

 

                3.2.  Further

Assurances.  Borrower

covenants and agrees that it shall comply with all terms and conditions of each

of the Collateral Documents and that it shall, at any time and from time to

time as requested by Lender, execute and deliver such further instruments and

do and perform such other acts as Lender may reasonably deem necessary or

desirable to provide for or protect or perfect the liens granted under the

Collateral Documents.

 

Section 4.

Representations and Warranties.  Borrower

represents and warrants to Lender as follows:

 

                4.1.         Organization

and Authority.  Borrower is

duly organized, validly existing and in good standing as a corporation under

the laws of the State of Delaware, has full and adequate corporate power to own

its property and conduct its business as now conducted.  Borrower has full right and authority to

execute, deliver and perform its obligations under this Note and the Collateral

Documents, and to grant to Lender the liens described in the Collateral

Documents.  This Note and the Collateral

Documents have been duly authorized, executed and delivered by Borrower and

constitute valid and binding obligations of Borrower enforceable in accordance

with their terms except as enforceability may be limited by bankruptcy,

insolvency fraudulent conveyance or similar laws affecting creditors' rights

generally and general principles of equity (regardless of whether the

application of such principles is considered in a proceeding in equity or at

law); and this Note and the Collateral Documents do not, nor does the

performance or observance by Borrower of any of the matters and things herein

or therein provided for, contravene or constitute a material

 

 

 

2

default under any provision of law or any

judgment, injunction, order or decree binding upon Borrower or any provision of

the certificate of incorporation or by-laws of Borrower or any covenant,

indenture or agreement of or affecting Borrower or any of its properties, or

result in the creation or imposition of any material lien on any property of

Borrower except for the lien granted in favor of Lender pursuant to the

Collateral Documents.

 

                4.2.         Financial

Reports.  The consolidated

balance sheet of Borrower and its Subsidiaries as at December 31, 2000, and the

related consolidated statements of income, retained earnings and cash flows of

Borrower and its Subsidiaries for the fiscal year then ended, and accompanying

notes thereto, which financial statements are accompanied by the audit report

of Ernst & Young, independent public accountants, and the unaudited interim

consolidated balance sheet of Borrower and its Subsidiaries as at

October 31, 2001, and the related consolidated statements of income,

retained earnings and cash flows of Borrower and its Subsidiaries for the nine

(9) months then ended, heretofore furnished to the Lenders, when read together

fairly present in all material respects the consolidated financial condition of

Borrower and its Subsidiaries as at said dates and the consolidated results of

their operations and cash flows for the periods then ended in conformity with

generally accepted accounting principles applied on a consistent basis; provided,

however, that such interim financial statements may not contain full

footnotes as may be required by generally accepted accounting principles.  Neither Borrower nor any Subsidiary has

contingent liabilities which are material to Borrower and its Subsidiaries,

taken as a whole, other than as indicated on such financial statements (or the

footnotes thereto) or, with respect to future periods, on the financial

statements (or the footnotes thereto) furnished to the Securities and Exchange

Commission.

 

                4.3.         No

Material Adverse Change.  Since

December 31, 2001, there has been no change in the condition (financial or

otherwise) of Borrower and its Subsidiaries, taken as a whole, except (a) those

occurring in the ordinary course of business, none of which individually or in

the aggregate have been materially adverse and (b) to the extent they may be

deemed material, the matters disclosed in Borrower's press releases dated

January 22, 2002 and the publicly reported and announced changes in the

Borrower's relationship with SAP AG and SAP Markets.

 

                4.4.         Litigation

and Other Controversies.  There

is no litigation or governmental proceeding or labor controversy pending, nor

to the knowledge of Borrower threatened, against Borrower or any Subsidiary

which could reasonably be expected to (a) impair the validity or enforceability

of, or impair the ability of Borrower to perform its obligations under, this

Note or any Collateral Document or (b) result in any material adverse change in

the financial condition, business or operations of Borrower and its

Subsidiaries, taken as a whole.

 

                4.5.         Approvals.  No authorization, consent,

license, or exemption from, or filing or registration by Borrower with, any court

or governmental department, agency or instrumentality, nor any approval or

consent of the stockholders of Borrower or any other person or entity, is or

will be necessary to the valid execution, delivery or performance by Borrower

of this Note or any Collateral Document.

 

                4.6.         Cash

Reserve Accounts.  Borrower's

unencumbered cash, cash equivalents and short-term investments are currently

held with the financial institutions and in the accounts identified on Schedule

4.6 to this Note (the "Cash Reserve

Accounts").

 

                4.7.         No Default.  No Event of

Default has occurred and is continuing.

 

Section 5.

Covenants.  Borrower agrees

that, so long as any indebtedness remains unpaid under this Note:

 

                5.1.         Financial

Reporting.  Borrower shall,

and shall cause each Subsidiary to, maintain a standard system of accounting in

accordance with GAAP and shall furnish to Lender:

 

 

3

 

                (a)           as soon as available and in any event

within 90 days after the end of each fiscal year of Borrower a consolidated

balance sheet of Borrower and its Subsidiaries as of the end of such fiscal

year and the related consolidated statements of income and cash flows for such

fiscal year, setting forth in each case in comparative form the figures for the

previous fiscal year, all prepared in accordance with generally accepted

accounting principles applied on a consistent basis and certified by

independent public accountants of nationally recognized standing;

 

                (b)           as soon as available and in any event within 45 days after

the end of each of the first three quarters of each fiscal year of the Borrower

a consolidated balance sheet of Borrower and its Subsidiaries as of the end of

such quarter and the related consolidated statements of income and cash flows

for such quarter and for the portion of Borrower's fiscal year ended at the end

of such quarter, setting forth in each case in comparative form the figures for

the corresponding quarter and the corresponding portion of Borrower's previous

fiscal year, all in reasonable detail and duly certified (subject to normal

year-end adjustments) by the chief financial officer of Borrower as having been

prepared in accordance with generally accepted accounting principles applied on

a consistent basis: provided, however, that such financial

statements shall not be required to contain full footnotes as may be required

by generally accepted accounting principles; and

 

                (c)           promptly upon the Borrower's obtaining knowledge of any

Event of Default, a certificate of the chief financial officer of the Borrower

setting forth the details thereof and any action that the Borrower is taking or

proposes to take with respect thereto.

 

                Reports

required to be delivered pursuant to Sections 5.1(a) or (b) above

shall be deemed to have been delivered on the date on which Borrower posts such

reports on its website on the Internet at www.commerceone.com or such other

website address of Borrower as to which it may have notified the Lender, or

when such report is posted on the Securities and Exchange Commission's website

at www.sec.gov; provided that (x) such reports otherwise comply with the

requirements of Sections 5.1(a) or (b) above, as applicable, (y)

Borrower shall deliver paper copies of such reports to Lender upon Lender's

request, continuing until such time as the Lender may give notice to Borrower

that it may cease delivering paper copies, subject to this paragraph, and

Borrower shall notify Lender of the posting of any such new reports.

 

                5.2. 

Unencumbered Cash  Borrower

will keep its unencumbered cash, cash equivalent and short-term investment

reserves in the Cash Reserve Accounts. Borrower will direct each financial

institution maintaining a Cash Reserve Account to copy Lender on any account

statements (which account statements shall be delivered not less often than

monthly) and, in the event unencumbered cash, cash equivalent and short-term

investment reserves are less than $185,000,000 as of the date of the current

balance provided in any account statement (for purposes of this Section,

unencumbered cash, cash equivalent and short-term investment reserves will be

deemed to include the permitted collateral in the Collateral Account), direct

each such financial institution to provide Lender access to daily account

balances with respect to any Cash Reserve Account. Borrower may change Cash

Reserve Accounts by updating Schedule 4.6 and directing the relevant financial

institution to copy Lender on account statements and, if applicable, direct the

relevant financial institution to provide Lender access to daily account

balances with respect to any Cash Reserve Account.

 

Section 6.

Events of Default and Their Effect.

 

                Section

6.1 Events of Default.  Each

of the following shall constitute an "Event of Default" under this

Note:

 

4

(a)           Payment Default. 

Borrower fails to pay when due principal or interest of this Note or any

other of the liabilities due Lender by Borrower in connection with this Note or

any Collateral Document.

 

(b)           Breach of Other Covenants or Failure of any Condition.  Borrower fails to perform, keep or observe

any provision (not involving a payment obligation) or condition contained in

this Note or any Collateral Document and fails to cure the failure within 30

days after Lender notifies Borrower of such failure (except for a breach under

Section 5.2, in which case the cure period will be a period of seven days after

Lender notifies Borrower that it has been denied access to the amount of the

daily balance of a Cash Reserve Account after rightfully requesting such

access).

 

(c)           Misrepresentation. 

Any representation or warranty made by Borrower in this Note or in any

Collateral Document, or in any certificate furnished by it pursuant hereto or

thereto, proves untrue in any material respect as of the date of the issuance

or making thereof. 

 

(d)           Unenforceability. 

This Note or any Collateral Document shall for any reason not be or

shall cease to be in full force and effect, declared to be null and void, or

any of the Collateral Documents shall for any reason fail to create a valid and

perfected first priority lien in favor of Lender in any collateral purported to

be covered thereby.

 

(e)           Bankruptcy, Etc. 

Borrower consolidates, dissolves or liquidates or takes an equivalent

action, or an involuntary petition is filed under any federal or state

bankruptcy, reorganization, insolvency, moratorium or similar statute against

Borrower or a custodian, receiver, trustee, assignee for the benefit of

creditors or other similar official is appointed to take possession, custody,

or control of the property of Borrower, unless such petition or appointment is

set aside or withdrawn or ceases to be in effect within 30 days from the date

of said filing or appointment; or Borrower becomes insolvent or admits in

writing its inability to pay its debts as they mature, or files any petition or

action for relief relating to any bankruptcy, reorganization, insolvency or

moratorium law, or any other law or laws for the relief of, or relating to,

debtors; or Borrower makes an assignment for the benefit of creditors or enters

into an agreement of composition with its creditors; or Borrower fails

generally to pay its debts as they become due; or Borrower fails to have

discharged within 30 days any judgment, execution, garnishment or attachment of

such consequence as could materially impair the ability of Borrower to carry on

its operations as presently conducted; or

 

(f)            Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture

proceedings, self-help, repossession or any other method, by any creditor of

Borrower other than Lender or by any governmental agency against the

Collateral, as defined in the Security Agreement, or any other collateral

securing the indebtedness evidenced by this Note, including any garnishment of

or levy upon Lender for obligations of Borrower.

 

                Section 6.2. Effect of Event of Default.  If any Event of Default described

in Sections 6.1 (e) or 6.1 (f) shall occur, all indebtedness

evidenced by this Note shall immediately become due and payable, all without

presentment, demand or notice of any kind; and, in the case of any other Event

of Default, Lender may declare this Note and all indebtedness evidenced by this

Note to be due and payable, all without presentment, demand or notice of any

kind.

 

Section 7.

Costs and Expenses; Set-off.  Borrower agrees

to pay to the holder of this Note all expenses incurred or paid by such holder

in connection with the collection of this Note and the enforcement of rights

under any Collateral Document. Borrower waives and shall not have any set-off

rights against Lender with respect to the indebtedness evidenced by this Note.

 

5

Section 8. Definitions.  As used in this Note, the following capitalized terms shall have the

following meanings:

 

                "Subsidiary" means any entity more than 50% of the outstanding ordinary voting

shares or other equity interests of which is at the time directly or indirectly

owned by Borrower, by one or more of its Subsidiaries, or by Borrower and one

or more of its Subsidiaries.

 

Section 9. Waivers; Governing Law; Severability.  Borrower

hereby waives presentment and notice of dishonor. No delay by Lender in the

exercise of any right or remedy shall operate as a waiver thereof, and no

single or partial exercise by Lender of any right or remedy shall preclude any

other or further exercise thereof or the exercise of any other right or remedy.

It is agreed that this Note and all the rights and remedies of the holder

hereof shall be construed in accordance with and governed by the laws of

Nevada. If any part of this Note is unenforceable, that will not make any other

part unenforceable.

 

Section 10. Submission to Jurisdiction; Waiver of Jury Trial.  EACH

OF BORROWER AND ANY HOLDER HEREOF SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA AND OF ANY NEVADA

STATE COURT SITTING IN WASHOE COUNTY, NEVADA. FOR PURPOSES OF ALL LEGAL

PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE, THE COLLATERAL DOCUMENTS

OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

[remainder of page left

intentionally blank; signature page follows]

 

 

 

 

 

6

                EACH OF BORROWER

AND ANY HOLDER HEREOF WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL

PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, THE COLLATERAL DOCUMENTS OR

THE TRANSACTIONS CONTEMPLATED HEREBY.

 

 

	

   

  	

   

  	

  COMMERCE ONE OPERATIONS, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/ Peter Pervere

  
	

   

  	

  By:

  	

  Peter Pervere

  
	

   

  	

  Its:

  	

  SVP

  

 

 

 

 

 

 

 

 

 

 

 

 

7COLLATERAL ACCOUNT NOTIFICATION AND ACKNOWLEDGMENT

Exhibit 10.30

 

COLLATERAL ACCOUNT NOTIFICATION AND

ACKNOWLEDGMENT

(THIRD PARTY)

 

Bank of America, N.A                                         March

21, 2002

Pledging Unit

NC1-004-03-06

200 N. College Street

Charlotte, NC 28255

 

Ladies and Gentlemen:

 

This is to notify you that

Commerce One Operations, Inc. ("Pledgor", whether one or more) has

granted to Microsoft Capital Corporation ("Pledgee") a security

interest in Account number(s) 899470 (the "Collateral Account",

whether one or more) held by Bank of America, N.A. (the "Securities

Intermediary") in the name of the Pledgor together with all securities now

or hereafter held therein, and the proceeds thereof (collectively, the

"Collateral"). Pledgor, Pledgee and the Securities Intermediary agree

that the Collateral Account is a "securities account" within the

meaning of Article 8 of the Uniform Commercial Code of the State of New York

(the "UCC") and that all Collateral held in the Collateral Account

will be treated as financial assets under the UCC.

 

In connection therewith, the

parties hereto agree (which agreement by the Pledgor will be construed as

instructions to the Securities Intermediary):

 

	

  1.

  	

   

  	

  The

  Securities Intermediary is instructed to register the pledge on its books.

  The Pledgor and the Pledgee acknowledge that the only financial assets that

  may be held in the Collateral Account are securities eligible to be held at a

  Federal Reserve Bank and/or the Depository Trust Company ("Eligible

  Securities"). The Pledgor agrees that it will deliver or caused to be

  delivered to the Securities Intermediary for deposit in the Collateral

  Account only Eligible Securities.

  
	

   

  	

   

  	

   

  
	

  2.

  	

   

  	

  The

  Securities Intermediary is instructed to deliver to the Pledgee copies of

  monthly statements on the Collateral Account.

  
	

   

  	

   

  	

   

  
	

  3.

  	

   

  	

  Except as a

  result of computer system or accounting changes affecting securities accounts

  of the Securities Intermediary generally (in which case the Securities

  Intermediary shall provide prompt notice to the Pledgee), the Securities

  Intermediary shall not change the account number of the Collateral Account

  without the prior written consent of the Pledgee and at least five business

  days prior notice to the Pledgor.

  
	

   

  	

   

  	

   

  
	

  4.

  	

   

  	

  All

  dividends, interest, gains and other profits with respect to the Collateral

  Account will be reported in the name and tax identification number of the

  Pledgor.

  
	

   

  	

   

  	

   

  
	

  5.

  	

   

  	

  Except as

  provided in Section 6, the Securities Intermediary may not, without the

  prior written consent of Pledgee, deliver, release or otherwise dispose of

  the Collateral or any interest therein unless the proceeds thereof are held

  or reinvested in the Collateral Account as part of the Collateral or applied

  by Securities Intermediary to the satisfaction of an obligation owed to it.

  Except for such limitation and unless and until the Securities Intermediary receives

  and has a reasonable period of time to act upon written notice from the

  Pledgee which states that Pledgee is exercising exclusive control over the

  Collateral Account (a "Notice of Exclusive Control"), the

  Securities Intermediary may comply with any other orders or instructions from

  Pledgor concerning the Collateral Account. A Notice of Exclusive Control

  (Exhibit A) shall designate the account, person or other location to which

  the financial assets in the Collateral Account, and

  
	

   

  	

   

  	

   

  

 

 

 

	

   

  	

   

  	

  cash dividends,

  interest, income, earnings and other distributions received with respect

  thereto, shall thereafter be delivered.

  
	

   

  	

   

  	

   

  
	

  6.

  	

   

  	

  The Pledgee

  agrees that the Securities Intermediary is authorized to pay to the Pledgor

  any interest, interest equivalent, dividends, and principal payments on

  declining balance securities received by the Securities Intermediary with

  respect to any securities in the Collateral Account until the Securities

  Intermediary receives and has a reasonable period of time to act upon a Notice

  of Exclusive Control from the Pledgee. The Pledgee further agrees that for

  any non-interest bearing security held in the Collateral Account

  "interest equivalent" shall mean the amount of any discount earned

  on such security at the maturity or redemption date of such security.

  
	

   

  	

   

  	

   

  
	

  7.

  	

   

  	

  The Pledgor

  authorizes the Securities Intermediary, and the Securites Intermediary

  agrees, to comply with any order or instruction from Pledgee concerning the

  Collateral Account, including an order or instruction directing sale,

  transfer or redemption of all or part of the Collateral and the remittance of

  the proceeds thereof, if any, to Pledgee, without further consent by the

  Pledgor. Securities Intermediary shall have no responsibility or liability to

  Pledgor for complying with any order or instruction, whether oral or written,

  concerning the Collateral Account originated by Pledgee and shall have no

  responsibility to investigate the appropriateness of any such order or

  instruction, even if Pledgor notifies Securities Intermediary that Pledgee is

  not legally entitled to originate any such order or instruction.  Securities Intermediary shall have no

  responsibility to Pledgee for complying with any order or instruction,

  whether oral or written, concerning the Collateral Account originated by

  Pledgor except to the extent such compliance would cause Securities

  Intermediary to violate (i) paragraph 5 hereof or (ii) written orders or

  instructions previously received from Pledgee, but only to the extent

  Securites Intermediary has had a reasonable period of time to act

  thereon.  Securities Intermediary

  shall be able to rely upon any notice or order that it reasonably believes to

  be genuine.  Securities Intermediary

  shall have no responsibility or liability to Pledgee with respect to the

  value of the Collateral Account or any of the Collateral. This Agreement does

  not create any obligation or duty on the part of Securities Intermediary

  other than those expressly set forth herein.

  
	

   

  	

   

  	

   

  
	

  8.

  	

   

  	

  Securities

  Intermediary shall not be liable for any loss or damage with respect to any

  matter that may arise out of or in connection with this Agreement or any

  action taken or not taken pursuant hereto, except to the extent caused by

  Securities Intermediary's gross negligence or willful misconduct. In no event

  shall Securities Intermediary be responsible for special, indirect,

  exemplary, or consequential damages, including but not limited to lost

  profits, regardless of any notice, or any loss or damage caused, directly or

  indirectly, by conditions beyond its control. Pledgor and the Pledgee agree

  jointly and severally to indemnify and hold the Securities Intermediary, its

  directors, officers, employees, and agents harmless from and against any and

  all claims, causes of action, liabilities, lawsuits, demands and/or damages,

  including, without limitation, any and all costs, including court costs and

  reasonable attorneys' fees (including allocated costs of in-house counsel),

  that may arise out of or in connection with this Agreement or any action

  taken or not taken pursuant hereto, except to the extent caused by Securities

  Intermediary's gross negligence or willful misconduct. The indemnities of the

  Pledgor and Pledgee set forth in this Section 8 shall survive the

  termination of this Agreement.

  
	

   

  	

   

  	

   

  
	

  9.

  	

   

  	

  The Securities

  Intermediary represents that it has not received notice regarding any lien,

  encumbrance or other claim to the Collateral or the Collateral Account from

  any other person and has not entered into an agreement with any third party

  to act on such third party's instructions without further consent of the

  Pledgor. The Securities Intermediary further agrees not to enter into any

  such agreement with any third party.

  

 

 

 

2

 

 

	

  10.

  	

   

  	

  The

  Securities Intermediary waives and relinquishes any right of setoff,

  encumbrance, security interest or other claim that it may have against the

  Collateral, except for any lien, claim encumbrance or right of set off

  against the Collateral Account for any financial asset carried in the

  Collateral Account arising from transactions in the Collateral Account

  including, but not limited to, those for (i) customary commissions and fees

  arising from permitted trading activity within the Collateral Account, (ii)

  payment owed to Securities Intermediary for open trade commitments for the

  purchase and/or sale of financial assets in and for the Collateral Account,

  and (iii) any credit or advance by the Securities Intermediary in respect of

  interest, income or other proceeds from any financial asset in the Collateral

  Account for which final payment in collected funds is not received by the

  Securities Intermediary.

  
	

   

  	

   

  	

   

  
	

  11.

  	

   

  	

  To the

  extent a conflict exists between the terms of this Agreement and any

  Safekeeping Agreement and Receipt which the Securities Intermediary will

  issue and send in connection with crediting Collateral to the Collateral

  Account, the terms of this Agreement will control, provided that this

  Agreement shall not alter or affect any mandatory arbitration provision

  currently in effect between Securities Intermediary and Pledgor.

  
	

   

  	

   

  	

   

  
	

  12.

  	

   

  	

  The terms of

  this Agreement will in no way be modified except by a writing signed by all

  parties hereto.

  
	

   

  	

   

  	

   

  
	

  13.

  	

   

  	

  Securities

  Intermediary reserves the right, unilaterally, to terminate this Agreement,

  such termination to be effective thirty (30) days after written notice

  thereof is given to Pledgor and Pledgee. Termination shall not affect any of

  the rights and liabilities of the parties hereto incurred before the date of

  termination.

  
	

   

  	

   

  	

   

  
	

  14.

  	

   

  	

  This Agreement

  sets forth the entire agreement of the parties with respect to the subject

  matter hereof, and, subject to paragraph 11 above, supersedes any prior

  agreement and contemporaneous oral agreements of the parties concerning its

  subject matter.

  
	

   

  	

   

  	

   

  
	

  15.

  	

   

  	

  Except as

  otherwise expressly provided herein, any notice, order, instruction, request

  or other communication required or permitted to be given under this Agreement

  shall be in writing and may be delivered in person, sent by facsimile or

  other electronic means if electronic confirmation of error free receipt is

  received, or sent by United States mail, postage prepaid, addressed to the

  party at the address set forth below.

  
	

   

  	

   

  	

   

  
	

  16.

  	

   

  	

  Any notice,

  order, instruction, request or other communication from the Pledgee to the

  Securities Intermediary required to be in writing shall be on the Pledgee's

  letterhead and signed by an authorized 

  representative of the Pledgee. The names, titles, and specimen

  signatures of the Pledgee's authorized representatives are set forth on

  Exhibit B to this Agreement. The Pledgee may change its authorized

  representatives by written notice to the Securities Intermediary which notice

  shall include the name, title and specimen signature of each new authorized

  representative of Pledgee.

  
	

   

  	

   

  	

   

  
	

  17.

  	

   

  	

  The

  Securities Intermediary will be excused from failing to act or delay in

  acting, and no such failure or delay shall constitute a breach of this

  Agreement or otherwise give rise to any liability of the Securities

  Intermediary, if (i) such failure or delay is caused by circumstances beyond

  the reasonable control of the Securities Intermediary, including but not

  limited to legal constraint, emergency conditions, action or inaction of

  governmental, civil or military authority, fire, strike, lockout or other

  labor dispute, war, riot, theft, flood, earthquake or other natural disaster,

  breakdown of public or private or common carrier communication or

  transmission facilities, equipment failure, or act, negligence or default of

  Pledgor or Pledgee or (ii) such failure or delay

  

 

 

3

 

	

   

  	

   

  	

   

  
	

   

  	

   

  	

  resulted

  from Security Intermediary's reasonable belief that the action would have

  violated any guideline, rule or regulation of any governmental authority.

  
	

   

  	

   

  	

   

  
	

  18.

  	

   

  	

  Pledgor and

  Pledgee jointly and severally agree to pay Securities Intermediary, upon

  receipt of Securities Intermediary's invoice, all reasonable costs, expenses

  and attorneys' fees (including reasonable allocated costs for in-house legal

  services) incurred by Securities Intermediary in connection with the

  enforcement of this Agreement or any instrument or agreement required

  hereunder, including but not limited to any such reasonable costs, expenses

  and fees arising out of the resolution of any conflict, dispute, motion

  regarding entitlement to rights or rights of action, or other action to

  enforce Securities Intermediary's rights hereunder in a case arising under

  Title 11, United States Code. This section 18 shall survive termination

  of this Agreement.

  
	

   

  	

   

  	

   

  
	

  19.

  	

   

  	

  Notwithstanding

  any of the other provisions of this Agreement, in the event of the

  commencement of a case pursuant to Title 11, United States Code, filed

  by or against Pledgor, or in the event of the commencement of any similar

  case under then applicable federal or state law providing for the relief of

  debtors or the protection of creditors by or against Pledgor, Securities

  Intermediary may act as Securities Intermediary reasonably deems necessary to

  comply with all applicable provisions of governing statutes and neither

  Pledgor nor Pledgee shall assert any claim against Securities Intermediary

  for so doing.

  
	

   

  	

   

  	

   

  
	

  20.

  	

   

  	

  If any term

  or provision in this Agreement shall be invalid or unenforceable the

  remainder of this Agreement, or the application of such terms or provisions

  to persons or circumstances other than these to which it held invalid or

  unenforceable, shall be construed in all respects as if such invalid or

  unenforceable term or provision were omitted.

  
	

   

  	

   

  	

   

  
	

  21.

  	

   

  	

  If any party

  to this Agreement is not a natural person, the person executing this

  Agreement on behalf of such party hereby represents that he or she has the

  proper authority to execute this Agreement on behalf of such party.

  
	

   

  	

   

  	

   

  
	

  22.

  	

   

  	

  The

  construction and effect of every provision of this Agreement, the rights of

  the parties hereunder and any questions arising out of the Agreement, shall

  be governed by the statutory and common law of the State of New York without

  reference to the conflict of law provisions thereof.

  

 

 

*   *   *   *   *  

*   *   *

 

 

4

 

IN WITNESS WHEREOF, the Pledgor

and the Pledgee have agreed to the terms of this agreement as of the date

indicated above.

 

 

	

  PLEDGOR:

  	

   

  	

   

  	

  PLEDGEE:

  
	

  COMMERCE ONE OPERATIONS, INC.

  	

   

  	

  MICROSOFT CAPITAL CORPORATION

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Telephone

  No.:

  	

   

  	

   

  	

  Telephone

  No.:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Facsimile

  No.:

  	

   

  	

   

  	

  Facsimile

  No.:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Address:

  	

   

  	

   

  	

  Address:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Date:

  	

   

  	

   

  	

  Date:

  	

   

  
																

 

Acknowledged and Agreed to:

 

BANK

OF AMERICA, N.A.

 

	

  By: 

  	

   /s/ 

  Jennifer Ackerman

  	

   

  
	

  Name:

  	

  Jennifer

  Ackerman

  	

   

  
	

  Title:

  	

  Vice

  President

  	

   

  
	

  Telephone

  No.: 800.687.4802

  	

   

  
	

  Facsimile

  No.: 704.386.0176

  	

   

  
	

  Address:

  	

   

  
	

   

  	

   

  
	

  Bank of

  America, N.A.

  	

   

  
	

  Pledging

  Unit

  	

   

  
	

  NC1-004-03-06

  	

   

  
	

  200 N.

  College Street

  	

   

  
	

  Charlotte, NC

  28255

  	

   

  
	

  Date:

  	

  3-25-02

  	

   

  
							

 

5

 

IN WITNESS WHEREOF, the Pledgor

and the Pledgee have agreed to the terms of this agreement as of the date

indicated above.

 

 

	

  PLEDGOR:

  	

   

  	

   

  	

  PLEDGEE:

  
	

  COMMERCE ONE OPERATIONS, INC.

  	

   

  	

  MICROSOFT CAPITAL CORPORATION

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  By:

  	

  /s/ Thomas

  Baumbach

  
	

   

  	

   

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  	

  Name:

  	

  Thomas

  Baumbach

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

  Title:

  	

  President

  
	

   

  	

   

  	

   

  	

   

  
	

  Telephone

  No.:

  	

   

  	

   

  	

  Telephone

  No.:

  	

  775 823 5601

  
	

   

  	

   

  	

   

  	

   

  
	

  Facsimile

  No.:

  	

   

  	

   

  	

  Facsimile

  No.:

  	

  775 826 0506

  
	

   

  	

   

  	

   

  	

   

  
	

  Address:

  	

   

  	

   

  	

  Address:

  
	

   

  	

   

  	

   

  	

         6100 Neil Road, Suite 100

  
	

   

  	

   

  	

         Reno, NV 89511-1137

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Date:

  	

   

  	

   

  	

  Date:

  	

   

  
													

 

Acknowledged and Agreed to:

 

BANK

OF AMERICA, N.A.

 

	

  By:

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  
	

  Telephone

  No.: 800.687.4802

  	

   

  
	

  Facsimile

  No.: 704.386.0176

  	

   

  
	

  Address:

  	

   

  
	

   

  	

   

  
	

  Bank of

  America, N.A.

  	

   

  
	

  Pledging

  Unit

  	

   

  
	

  NC1-004-03-06

  	

   

  
	

  200 N.

  College Street

  	

   

  
	

  Charlotte,

  NC 28255

  	

   

  
	

  Date:

  	

   

  	

   

  
							

 

6

 

IN WITNESS WHEREOF, the Pledgor

and the Pledgee have agreed to the terms of this agreement as of the date

indicated above.

 

 

	

  PLEDGOR:

  	

   

  	

   

  	

  PLEDGEE:

  
	

  COMMERCE ONE OPERATIONS, INC.

  	

   

  	

  MICROSOFT CAPITAL CORPORATION

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

   /s/ Peter Pervere

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Name:

  	

  Peter

  Pervere

  	

   

  	

  Name:

  	

   

  
									

 

	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Title:

  	

  SVP

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Telephone

  No.:

  	

      (925)

  520-6022

  	

   

  	

  Telephone

  No.:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Facsimile

  No.:

  	

      (925)

  520-6063

  	

   

  	

  Facsimile

  No.:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Address:

  	

   

  	

   

  	

  Address:

  
	

  4440

  Rosewood Dr., B4F4, 4226

  	

   

  	

   

  
	

  Pleasanton,

  CA 94588

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Date:

  	

  March 22,

  2002

  	

   

  	

  Date:

  	

   

  
									

 

Acknowledged and Agreed to:

 

BANK

OF AMERICA, N.A.

 

	

  By:

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  
	

  Telephone

  No.: 800.687.4802

  	

   

  
	

  Facsimile

  No.: 704.386.0176

  	

   

  
	

  Address:

  	

   

  
	

   

  	

   

  
	

  Bank of

  America, N.A.

  	

   

  
	

  Pledging

  Unit

  	

   

  
	

  NC1-004-03-06

  	

   

  
	

  200 N.

  College Street

  	

   

  
	

  Charlotte,

  NC 28255

  	

   

  
	

  Date:

  	

   

  	

   

  
							

 

 

7

 

Exhibit A

[Lettehead of the Pledgee]

[Date]

 

 

Bank of America, N.A

Pledging Unit

NC1-004-03-06

200 N. College Street

Charlotte, NC 28255

 

 

Notice of Exclusive Control

 

Ladies and Gentlemen:

 

As referenced in the Collateral

Account Notification and Acknowlegment, dated as of March 21, 2002, among

Commerce One Operations, Inc., as Pledgor, Microsoft Capital Corporation, as

Pledgee, and Bank of America N.A., we hereby give you notice of our exclusive

control over securities account number [                ]

(the "Collateral Account") and all financial assets credited

thereto. You are hereby instructed not to accept any direction, instruction or

entitlement order with respect to the Collateral Account or the financial

assets credited thereto from any person other than the undersigned.

 

You are hereby instructed to

deliver the financial assets in the Collateral Account and cash dividends,

interest, income, earning, and other distributions received with respect

thereto, as follows:

 

                Account Name:    Microsoft Capital Corp.

                Account #:            3049-7564

                Bank:                      Citibank

N.A.
                                                111

Wall Street
                                                New

York, NY 10013
                                     ABA #:                             021000089

 

	

   

  	

  Very truly

  yours,

  
	

   

  	

   

  
	

   

  	

  MICROSOFT

  CAPITAL CORPORATION

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  
					

 

cc:           Commerce One Operations, Inc.

 

 

 

8

 

[Pledgee letterhead]

 

Exhibit B

 

CERTIFICATE OF AUTHORIZED PERSONS

 

 

To:          Bank of America, N.A.
                GSO - Safekeeping

Department
                Pledging Unit

NC1-004-03-06
                200 N. College Street
                Charlotte, NC 28255

 

 

I,                                  ,                                     [insert Title] of the                                      [insert name of Pledgee], do hereby certify

that I am authorized to make and deliver this certificate and that each of the

persons named below has been duly authorized to deliver oral and written

instructions on behalf of                                     [insert name of Pledgee] with respect to

Account

                    .

You are authorized to act upon such instructions from each person named below

until you have received at the above address and have had a reasonable

opportunity to act upon (a) written notice from an authorized representative of

[insert name of Pledgee] revoking his or her authorization or (b) a revised

Certificate of Authorized Persons from an authorized representative of [insert name

of Pledgee].

 

I further certify that the

signatures appearing below opposite the names are true and correct.

 

Name                                                                      Signature                                                                               Title

 

 

 

	

   

  	

   

  	

   

  	

   

  	

   

  
	

  (Signature

  of Pledgee Authorized

  	

   

  	

   

  	

   

  	

   

  
	

    Representative)

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  (Date)

  	

   

  	

   

  	

   

  	

   

  

 

 

 

9

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