CHANGE OF CONTROL AGREEMENT

This Change Of Control Agreement ("Agreement") is made by and between Chordiant
Software, Inc. (the "Company") and Sam Spadafora ("Executive"). This Agreement
will become effective upon its execution by both parties hereto (the "Effective
Date").

RECITALS

Whereas Executive is employed by the Company pursuant to the terms of
Executive's offer letter from the Company dated April 24, 1998 (the "Offer
Letter");

Whereas Executive has been granted option(s) to purchase shares of the Company's
Common Stock pursuant to the applicable stock option agreement(s) and stock
option plan(s) ("Prior Grants");

Whereas in the future, Executive may be granted additional options to purchase
the Company's Common Stock, subject to the Board's sole discretion (together
with Prior Grants, "Options"); and

Whereas the Company believes it is imperative to provide Executive with
accelerated vesting of the Options, as well as other severance benefits, in the
event that Executive is terminated without Cause (as defined herein) or resigns
for Good Reason (as defined herein) in connection with a Change of Control (as
defined herein).

Now, Therefore, in consideration of the foregoing, the mutual covenants
contained herein, and other good and valuable consideration, the parties hereto
hereby agree as follows:

 1. Termination of Employment.
    a. At-Will Employment. Executive's employment is at-will, which means that
       the Company may terminate Executive's employment at any time, with or
       without advance notice, and with or without Cause. Similarly, Executive
       may resign his employment at any time, with or without advance notice or
       Good Reason. Executive shall not receive any compensation of any kind,
       including, without limitation, severance benefits, following Executive's
       last day of employment with the Company (the "Termination Date"), except
       as expressly provided herein, as otherwise agreed in writing between
       Executive and the Chief Executive Officer of the Company, or as provided
       in any plan documents governing the Options. Executive shall devote all
       reasonable efforts to the performance of Executive's duties, and shall
       perform such duties in good faith.
    b. Termination Related to a Change of Control. If Executive's employment is
       terminated without Cause or Executive resigns for Good Reason within
       ninety (90) days prior to or twelve (12) months after a Change of
       Control, and Executive signs a release substantially in the form attached
       hereto as Exhibit A (the "Release"), then the Company shall provide
       Executive with the severance benefits described below in subparagraphs
       (i) through (vi). The severance benefits described below in subparagraphs
       (i) through (vi) are in lieu of the severance benefits provided for in
       paragraph 6 of Executive's Offer Letter if Executive is terminated
       without Cause within ninety (90) days prior to or twelve (12) months
       after a Change of Control. Executive shall only receive the severance
       benefits described in paragraph 6 of the Offer Letter if Executive is
       terminated without cause (as that term is defined in the Offer Letter)
       unrelated to a Change of Control.
       i.   The Company shall make severance payments to Executive in the form
            of continuation of Executive's base salary in effect on the
            Termination Date for twelve (12) months following the Termination
            Date (the "Severance Period"). These payments will be made on the
            Company's ordinary payroll dates and will be subject to standard
            payroll deductions and withholdings.
       ii.  The Company will pay Executive an amount equal to Executive's annual
            bonus. The bonus will be calculated at one of the following rates,
            whichever is higher: (1) as if both Executive and the Company
            achieved one hundred (100) percent of their specified performance
            objectives; or (2) the actual performance of the Company and
            Executive as measured against the specified performance objectives.
            This amount will be paid over the entire Severance Period on the
            Company's ordinary payroll dates, in equal installments, and will be
            subject to standard payroll deductions and withholdings.
       iii. The Company will pay the premiums necessary to continue Executive 's
            life and health insurance during the Severance Period.
       iv.  The time period in which Executive is required to repay any
            promissory note, loan or other indebtedness to the Company shall be
            extended by sixty (60) months.
       v.   The Company will accelerate the vesting of the Options such that the
            greater of the following shall vest within ten (10) days after the
            date Executive signs the Release: (a) 50% of the unvested shares as
            of the Termination Date subject to the Options (after taking into
            account any additional acceleration of vesting Executive may be
            receiving under any plan document(s) governing the Options
            instituted prior to or after this Agreement is executed); or (b) all
            such shares that would have vested if Executive had worked for the
            Company for twelve (12) additional months beyond the Termination
            Date. This acceleration of vesting will be in addition to any
            acceleration of vesting that the Executive would otherwise receive
            under the Company's 2000 Nonstatutory Equity Incentive Plan, the
            Company's 1999 Equity Incentive Plan, or any other plan document(s)
            governing the Options. Executive shall have sixty (60) months to
            exercise any vested Options in addition to any time specified in the
            plan document(s) governing the Options. The Options shall continue
            to be governed by the terms of the applicable stock option
            agreements and stock option plan documents.
       vi.  With respect to any Prior Grant intended to be an incentive stock
            option, the acceleration of the vesting of the Prior Grant and the
            extension of the time that Executive shall have to exercise the
            Prior Grant as provided in Paragraph 1(b)(iv) of this Agreement are
            deemed to be a modification of the Prior Grant within the meaning of
            Section 424(h) of the Internal Revenue Code ("Code"). Such
            modification shall result in the granting of a new option as of the
            date of execution of this Agreement, including providing a new grant
            date for purposes of starting the holding period specified in
            Section 422(a)(1) of the Code and for purposes of the provision that
            the option price be not less than the fair market value of the stock
            at the time such option is granted as specified in Section 422(b)(4)
            of the Code. If Executive and the Company agree that the Prior Grant
            shall remain an incentive stock option and if the new option meets
            the requirements for incentive stock options specified in Section
            422(b) of the Code, and the $100,000 per year limitation specified
            in Section 422(d) of the Code as of the date of execution of this
            Agreement, then the unexercised portion of the Prior Grant shall be
            appropriately modified as to the date of grant and the option price;
            provided, however, that the option price shall be the greater of the
            original option price of the Prior Grant or the fair market value of
            the stock on the date of execution of this Agreement. If Executive
            and the Company do not agree that such Prior Grant shall remain an
            incentive stock option, then the Prior Grant shall be deemed to be a
            nonstatutory stock option as of the date of execution of this
            Agreement, and the Prior Grant shall be appropriately modified to
            reflect such changed status.
    c. Termination For Cause Procedure. The Company may not terminate
       Executive's employment for Cause within ninety (90) days prior to or
       twelve (12) months after a Change of Control unless and until Executive
       receives a copy of a resolution duly adopted by the affirmative vote of
       at least a majority of the Board of Directors of the Company ("Board")
       finding that in the good faith opinion of the Board, Executive was guilty
       of the conduct constituting "Cause" and specifying the particulars
       thereof in detail. The Company shall provide Executive with reasonable
       notice of the Board vote and an opportunity for Executive, together with
       Executive's counsel, to be heard before the Board.
       
       Termination Unrelated to a Change of Control. In the event that, at any
       time other than within ninety (90) days prior to or twelve (12) months
       after a Change of Control, Executive's employment with the Company is
       terminated, then the only severance benefits provided to Executive by the
       Company will be as set forth in Executive's Offer Letter.
    
    d. Change of Control Benefits in Executive's Offer Letter. The severance
       benefits described above in subparagraphs (i) through (vi) are in
       addition to any benefits Executive may receive pursuant to paragraph 3 of
       Executive's Offer Letter upon a change of control (as that term is
       defined in Executive's Offer Letter).
 2. Definitions.
    a. Definition of Cause. For purposes of this Agreement, "Cause" shall mean
       that Executive has committed, or there has occurred, one or more of the
       following events: (1) conviction of any felony or misdemeanor involving
       moral turpitude, fraud or act of dishonesty against the Company; (2) a
       finding by the Board, after a good faith and reasonable factual
       investigation, that Executive has engaged in gross misconduct; or (3)
       material violation or material breach of any Company policy or statutory,
       fiduciary, or contractual duty of Executive to the Company; provided,
       however, that in the event that any of the foregoing events occurs, the
       Company shall provide notice to Executive describing the nature of such
       event and Executive shall thereafter have ten (10) days to cure such
       event if such event is capable of being cured.
    b. Definition of Good Reason. For purposes of this Agreement, "Good Reason"
       shall mean that any one of the following events occurs during the
       Executive's employment with the Company without Executive's consent: (i)
       any reduction of Executive's annual base salary (including bonus) as of
       the time period immediately preceding the Change of Control, except to
       the extent that the annual base salary (including bonus) of all other
       officers of the Company is similarly reduced; (ii) any material reduction
       in the package of benefits and incentives provided to the Executive, or
       any action by the Company which would materially and adversely affect the
       Executive's participation or reduce the Executive's benefits under any
       such plans, except to the extent that such benefits and incentives of all
       other officers of the Company are similarly reduced; (iii) any material
       change in Executive's position or responsibilities (including the person
       or persons to whom Executive has reporting responsibilities) that
       represents an adverse change from Executive's position or
       responsibilities as in effect at any time within ninety (90) days
       preceding the date of the Change of Control or at any time thereafter,
       excluding for this purpose an isolated, insubstantial and inadvertent
       action not taken in bad faith that is remedied by the Company promptly
       after notice thereof is given by Executive; (iv) the Company's requiring
       Executive to relocate to any place outside of a twenty-five (25) mile
       driving distance of Executive's current work site, except for reasonably
       required travel on the business of the Company or its affiliates that is
       not materially greater than such travel requirements prior to the Change
       in Control or unless Executive accepts such relocation opportunity; or
       (v) any failure to pay Executive any compensation or benefits to which
       Executive is entitled within fifteen (15) days of the date due. Executive
       may terminate his employment for Good Reason so long as Executive tenders
       his resignation to the Company within thirty (30) days after the
       occurrence of the event which forms the basis for his resignation for
       Good Reason. Executive shall provide written notice to the Company
       describing the nature of the event which forms the basis for Executive's
       resignation for Good Reason, and the Company shall thereafter have ten
       (10) days to cure such event.
    c. Definition of Change of Control. For purposes of this Agreement, a
       "Change of Control" means: (i) a dissolution, liquidation or sale of all
       or substantially all of the assets of the Company; (ii) a merger or
       consolidation in which the Company is not the surviving corporation;
       (iii) a reverse merger in which the Company is the surviving corporation
       but the shares of the Company's common stock outstanding immediately
       preceding the merger are converted by virtue of the merger into other
       property, whether in the form of securities, cash or otherwise; (iv) the
       acquisition by any person, entity or group within the meaning of Section
       13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
       "Exchange Act"), or any comparable successor provisions (excluding any
       employee benefit plan, or related trust, sponsored or maintained by the
       Company or any Affiliate of the Company) of the beneficial ownership
       (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or
       comparable successor rule) of securities of the Company representing at
       least fifty percent (50%) of the combined voting power entitled to vote
       in the election of directors; or (v) an acquisition by the Company of an
       unaffiliated company, for cash or stock of the Company, in which some or
       all of the members of senior management of the acquired company are
       retained by the Company for employment by the acquired company or the
       Company.
 3. Gross Up Provision.
    a. In the event that any payment and the value of any benefit (collectively,
       "Payments"), or any portion thereof, received or to be received by
       Executive under this Agreement would otherwise be subject to excise tax
       under Section 4999 of the Code, then the Company or the acquiring or
       successor entity to the Company shall pay to Executive within ninety (90)
       days of the date Executive becomes subject to the Excise Tax, an
       additional amount (the "Excise Tax Gross-Up Payment") such that the net
       amount retained by the Executive, after deduction of (i) any Excise Tax
       on the Payments and (ii) any federal, state and local income or
       employment tax and Excise Tax upon the payment provided for by this
       section 3, shall be equal to the Payments, reduced by the amount of any
       United States federal, state and local income or employment tax liability
       of the Executive if the Payments were not subject to the Excise Tax.
    b. For purposes of determining whether any of the Payments will be subject
       to the Excise Tax and the amount of such Excise Tax:
       i.   Any other payments or benefits received or to be received by
            Executive in connection with transactions contemplated by a Change
            in Control or Executive's termination of employment (whether
            pursuant to the terms of this Agreement or any other plan,
            arrangement or agreement with the Company), shall be treated as
            "parachute payments" within the meaning of Section 280G of the Code
            or any similar or successor provision, and all "excess parachute
            payments" within the meaning of Section 280G or any similar or
            successor provision shall be treated as subject to the Excise Tax,
            unless in the opinion of tax counsel selected by the Company such
            other payments or benefits (in whole or in part) do not constitute
            parachute payments, or such excess parachute payments (in whole or
            in part) represent reasonable compensation for services actually
            rendered within the meaning of Section 280G (or any similar or
            successor provision of the Code) in excess of the base amount within
            the meaning of Section 280G (or any similar or successor provision
            of the Code), or are otherwise not subject to the Excise Tax.
       ii.  The amount of the Payments which shall be treated as subject to the
            Excise Tax shall be equal to the lesser of (i) the total amount of
            the Payments or (ii) the amount of the excess parachute payments
            within the meaning of Section 280G.
       iii. The value of any non-cash benefits or any deferred payment or
            benefit shall be determined by the accounting firm that is the
            Company's outside auditor at the time of such determination, which
            firm must be reasonably acceptable to Executive (the "Accounting
            Firm") in accordance with the principles of Section 280G of the
            Code.
    c. For purposes of determining the amount of the Excise Tax Gross-Up
       Payment, Executive shall be deemed to pay federal income taxes at the
       highest marginal rate of federal income taxation in the calendar year in
       which the Excise Tax Gross-Up Payment is to be made and state and local
       income taxes at the highest marginal rate of taxation in the state and
       locality of Executive's residence on the date the Excise Tax Gross-Up
       Payment is to be made, net of the maximum reduction in federal income
       taxes which could be obtained from deduction of such state and local
       taxes.
    d. In the event that the Excise Tax is subsequently determined to be less
       than the amount taken into account under this section 3, Executive shall
       repay to the Company at the time that the amount of such reduction in
       Excise Tax is finally determined the portion of the Excise Tax Gross-Up
       Payment attributable to such reduction (plus the portion of the Excise
       Tax Gross-Up Payment attributable to the Excise Tax and federal, state
       and local income tax imposed on the Excise Tax Gross-Up Payment being
       repaid by Executive if such repayment results in a reduction in Excise
       Tax and/or a federal, state or local income tax deduction) plus interest
       on the amount of such repayment at the rate provided in
       Section 1274(b)(2)(B) of the Code.
    e. In the event that the Excise Tax is determined to exceed the amount taken
       into account under this section 3 (including by reason of any payment the
       existence or amount of which cannot be determined at the time of the
       Excise Tax Gross-Up Payment), the Company shall make an additional Excise
       Tax Gross-Up Payment in respect of such excess (plus any interest payable
       with respect to such excess) at the time that the amount of such excess
       is finally determined in accordance with the principles set forth in this
       section 3.
    f. All determinations required to be made under this section 3 shall be made
       by the Accounting Firm. The Company shall cause the Accounting Firm to
       provide detailed supporting calculations of its determinations to the
       Company and Executive. Notice must be given to the Accounting Firm within
       fifteen (15) business days after an event entitling Executive to any
       Payments under this Agreement. All fees and expenses of the Accounting
       Firm shall be borne solely by the Company. The Accounting Firm's
       determinations must be made with substantial authority (within the
       meaning of Section 6662 of the Code).
 4. Other Employment Terms and Conditions. The employment relationship between
    the parties shall be governed by the general employment policies and
    procedures of the Company, including those relating to the protection of
    confidential information and assignment of inventions; provided, however,
    that when the terms of this Agreement differ from or are in conflict with
    the Company's general employment policies or procedures, this Agreement
    shall control.
 5. General Provisions.
    a. This Agreement, including all exhibits hereto, constitutes the complete,
       final and exclusive embodiment of the entire agreement between the
       parties with regard to the subject matter hereof. It is entered into
       without reliance on any promise or representation, written or oral, other
       than those expressly contained herein, and it supersedes any other such
       promises or representations. Notwithstanding the foregoing, nothing in
       this Agreement shall affect the parties' obligations under the Stock
       Agreements or the Executive's Employee Proprietary Information and
       Inventions Agreement. Furthermore, as set forth in paragraphs 1(d) and
       1(e) of this Agreement, Executive's Offer Letter is not superseded by
       this Agreement except to the extent described in paragraph 1(b) of this
       Agreement. This Agreement cannot be modified except in a writing signed
       by Executive and a duly-authorized member of the Board.
    b. Whenever possible, each provision of this Agreement will be interpreted
       in such a manner as to be effective under applicable law. The invalidity
       or unenforceability of any provision of this Agreement shall not affect
       the validity or enforceability of any other provision of this Agreement.
       Any invalid or unenforceable provision shall be modified so as to be
       rendered valid and enforceable in a manner consistent with the intent of
       the parties insofar as possible.
    c. The Executive's or the Company's failure to insist upon strict compliance
       with any provision of this Agreement or the failure to assert any right
       the Executive or the Company may have hereunder shall not be deemed to be
       a waiver of such provision or right or any other provision or right of
       this Agreement.
    d. This Agreement may be executed in several counterparts, each of which
       shall be deemed to be an original but all of which together will
       constitute one and the same instrument. Facsimile signatures shall be
       deemed as effective as originals.
    e. This Agreement is intended to bind and inure to the benefit of and be
       enforceable by Executive, the Company and their respective successors,
       assigns, heirs, executives and administrators, except that Executive may
       not assign any of his duties hereunder and he may not assign any of his
       rights hereunder without the written consent of the Company.
    f. If either party hereto bring any action to enforce such party's rights
       hereunder, the prevailing party in any such action shall be entitled to
       recover such party's reasonable attorneys' fees and costs incurred in
       connection with such action.
    g. For purposes of construction, this Agreement shall be deemed to have been
       drafted by the Company, and the rule of construction of contracts that
       ambiguities are construed against the drafting party shall be applied
       against the Company.
    h. Any notice required to be given or delivered to the Company under the
       terms of this Agreement shall be in writing and addressed to the
       Corporate Secretary of the Company at its principal corporate offices.
       Any notice required to be given or delivered to Executive shall be in
       writing and addressed to Executive at the address indicated herein or to
       the last known address provided by Executive to the Company. All notices
       shall be deemed to have been given or delivered upon: personal delivery;
       three (3) days after deposit in the United States mail by certified or
       registered mail (return receipt requested); one (1) business day after
       deposit with any return receipt express courier (prepaid); or one (1)
       business day after transmission by facsimile.

In Witness Whereof, the parties have executed this Agreement as of the day and
year written below.

 

Date:9/10/01                                                                                                                                
/s/ Sam Spadafora

Sam Spadafora

Address:

________________________________

Chordiant software, inc.

Date:9/10/01                                                                                                                                 
/s/ Kathryn Gould

> > > Name: Kathryn Gould
> > > Title: Director; Compensation Committee Member

Exhibit A - Release Agreement

Exhibit A

RELEASE AGREEMENT

In exchange for the severance benefits I am receiving to which I would not
otherwise be entitled, I hereby release, acquit and forever discharge the
Company, and its officers, directors, agents, servants, employees, attorneys,
shareholders, successors, assigns and affiliates, of and from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys'
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related to agreements, events,
acts or conduct at any time prior to and including the execution date of this
Release Agreement, including but not limited to: all such claims and demands
directly or indirectly arising out of or in any way connected with my employment
with the Company or the termination of that employment; claims or demands
related to salary, bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe benefits, expense
reimbursements, severance pay, or any other form of compensation; claims
pursuant to any federal, state or local law, statute, or cause of action
including, but not limited to, the federal Civil Rights Act of 1964, as amended;
the federal Americans with Disabilities Act of 1990; the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"); the California
Fair Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; harassment; fraud; defamation; emotional distress;
and breach of the implied covenant of good faith and fair dealing.

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this Release; (b) I have been advised hereby
that I have the right to consult with an attorney prior to executing this
Release; (c) I have twenty-one (21) days to consider this Release (although I
may choose to voluntarily execute this release earlier); (d) I have seven (7)
days following my execution of this Release to revoke my agreement to it; and
(e) this Release will not be effective until the date upon which the revocation
period has expired, which will be the eighth day after this Release is executed
by me.

I UNDERSTAND THAT THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS. In giving this release, which includes claims which may be unknown to me
at present, I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any unknown or
unsuspected claims I may have against the Company.

Dated: Agreed:

Sam Spadafora