EXHIBIT 10.17

                              EVOLVE SOFTWARE, INC.
                           LOAN AND SECURITY AGREEMENT



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                           LOAN AND SECURITY AGREEMENT

     THIS  LOAN  AND SECURITY AGREEMENT (this "AGREEMENT") is entered into as of
January  31,  2001,  by  and between IMPERIAL BANK ("BANK") and EVOLVE SOFTWARE,
INC.  ("BORROWER").

                                    RECITALS

     Borrower  wishes  to  obtain  credit  from time to time from Bank, and Bank
desires  to  extend credit to Borrower.  This Agreement sets forth the terms and
conditions  on  which  Bank  will  advance credit to Borrower, and Borrower will
repay  the  amounts  owing  to  Bank.

                                    AGREEMENT

     The  parties  agree  as  follows:

     1.   DEFINITIONS  AND  CONSTRUCTION.

          1.1  DEFINITIONS.  Capitalized  terms  used  in this Agreement without
definitions  shall  have  the  meanings  set  forth  on  Exhibit  A  hereto.

          1.2 ACCOUNTING TERMS. All accounting terms not specifically defined on
Exhibit  A shall be construed in accordance with GAAP and all calculations shall
be  made  in accordance with GAAP. The term "FINANCIAL STATEMENTS" shall include
the  accompanying  notes  and  schedules.

     2.   LOAN  AND  TERMS  OF  PAYMENT.

          2.1  CREDIT  EXTENSIONS.

               (a)  Borrower  promises  to  pay  to Bank, in lawful money of the
United  States  of  America, the aggregate unpaid principal amount of all Credit
Extensions  made  by  Bank  to  Borrower,  together  with interest on the unpaid
principal amount of such Credit Extensions at rates in accordance with the terms
hereof.

               (b)  REVOLVING  ADVANCES.

                    (i)  Subject  to  and  upon the terms and conditions of this
Agreement  (1) Borrower may request Revolving Advances and Letters of Credit (as
defined  below),  subject  to  Section  2.1(b)(ii),  in an aggregate outstanding
amount  not to exceed the lesser of (A) the Committed Revolving Line and (B) the
Borrowing  Base  (each  a  "REVOLVING  ADVANCE" and collectively, the "REVOLVING
ADVANCES")  and  (2)  amounts  borrowed  pursuant  to this Section 2.1(b) may be
repaid  and  reborrowed  at  any  time  prior to the earlier to occur of (a) the
Revolving  Maturity Date and (b) the termination of Bank's obligation to advance
money  pursuant  to  Section  9.1(b), at which time all Revolving Advances under
this  Section  2.1(b)  shall be immediately due and payable. Borrower may prepay
any  Revolving  Advances  at  any  time, in whole or in part, without penalty or
premium.  Revolving  Advances  may  be used for Revolving Advance Permitted Uses
only.

                    (ii) Whenever Borrower desires a Revolving Advance, Borrower
will  notify Bank by facsimile transmission or telephone no later than 3:00 p.m.
Pacific  Standard  Time, on the Business Day that the Revolving Advance is to be
made.  Each  such  notification shall be promptly confirmed by a Payment/Advance
Form  in  substantially  the  form  of  Exhibit  C.  Bank  is authorized to make
Revolving Advances under this Agreement, based upon instructions received from a
Responsible  Officer  or  a  designee  of  a  Responsible  Officer,  or  without
instructions  if  in  Bank's discretion such Revolving Advances are necessary to
meet Obligations which have become due and remain unpaid. Bank shall be entitled
to  rely on any telephonic notice given by a person who Bank reasonably believes
to  be a Responsible Officer or a designee thereof, and Borrower shall indemnify
and hold Bank harmless for any damages or losses suffered by Bank as a result of
such reliance. Bank will credit the amount of Revolving Advances made under this
Section  2.1(b)  to  Borrower's  deposit  account  maintained  with  Bank.


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                    (iii)  LETTERS  OF CREDIT. Subject to the availability under
the  Committed  Revolving  Line,  and  in  reliance  on  the representations and
warranties  of Borrower set forth herein, at any time and from time to time from
the  date  hereof  through  the  Business Day immediately prior to the Revolving
Maturity  Date,  Bank  shall  issue  for the account of Borrower such commercial
and/or  standby letters of credit ("LETTERS OF CREDIT") as Borrower may request,
which  request  shall  be  made  by delivering to Bank a duly executed letter of
credit  application  on  Bank's  standard  form;  provided,  however,  that  the
outstanding  and  undrawn  amounts  under  all  such Letters of Credit shall not
exceed  the lesser of (a) the Borrowing Base less the aggregate of all Revolving
Advances  outstanding  and  (b)  $5,000,000,  and  shall be deemed to constitute
Revolving  Advances  for  the  purpose  of  calculating  availability  under the
Committed  Revolving  Line.  Unless Borrower shall have deposited with Bank cash
collateral  in an amount sufficient to cover all undrawn amounts under each such
Letter  of  Credit  and  Bank  shall have agreed in writing, no Letter of Credit
shall  have  an  expiration date that is later than the Revolving Maturity Date.
All  Letters  of Credit shall be in form and substance acceptable to Bank in its
sole  discretion and shall be subject to the terms and conditions of Bank's form
application  and  letter  of  credit  agreement.  Borrower will pay any standard
issuance  and other fees that Bank notifies Borrower will be charged for issuing
and  processing  Letters  of  Credit  for  Borrower.

                    (iv)  Interest  shall accrue from the date of each Revolving
Advance at the rate specified in Section 2.3(a), and shall be payable monthly on
the  first  day  of  each  month  through  the  Revolving  Maturity  Date.

               (c)  EQUIPMENT  ADVANCES.

                    (i)  Subject  to  and  upon the terms and conditions of this
Agreement,  at  any time from the date hereof through the Tranche A Availability
End  Date or Tranche B Availability End Date, as applicable, Bank agrees to make
advances  to  Borrower  in  two  tranches,  Tranche  A  and  Tranche  B (each an
"EQUIPMENT  ADVANCE"  and  collectively, the "EQUIPMENT ADVANCES"). Borrower may
request  Equipment  Advances  under  Tranche  A at any time from the date hereof
through  the earlier to occur of (a) the Tranche A Availability End Date and (b)
the  termination  of  Bank's  obligation  to  advance  money pursuant to Section
9.1(b). Borrower may request Equipment Advances under Tranche B at any time from
the  Tranche  A  Availability  End  Date through the earlier to occur of (a) the
Tranche  B Availability End Date and (b) the termination of Bank's obligation to
advance  money  pursuant  to Section 9.1(b). The aggregate outstanding amount of
Tranche  A  Equipment Advances and Tranche B Equipment Advances shall not at any
time  exceed  the  Committed  Equipment  Line.  Each Equipment Advance shall not
exceed  100%  of  the  invoiced  amount  of  equipment,  furniture  and software
(excluding taxes, shipping, warranty charges, freight discounts and installation
expense),  which items Borrower shall have purchased within 90 days prior to the
date  of the corresponding Equipment Advance; provided, however, that during and
until  the date thirty (30) days after the Closing Date, Borrower may request an
Equipment Advance against invoices for equipment and furniture dated on or after
June 1, 2000 (a "SPECIAL TRANCHE A EQUIPMENT ADVANCE"). Amounts allocated to the
purchase  of software shall be limited to $1,500,000 in the aggregate. Equipment
Advances  may  be  used  for  Equipment  Advance  Permitted  Uses  only.

                    (ii)  Interest  shall accrue from the date of each Equipment
Advance at the rate specified in Section 2.3(a), and shall be payable monthly on
the  first  day  of  each month through the First Equipment Maturity Date or the
Second  Equipment  Maturity  Date,  as  applicable.

                              A.  SPECIAL  TRANCHE  A  EQUIPMENT  ADVANCES.  Any
Special  Tranche  A  Equipment  Advances  that  are outstanding on the Tranche A
Availability  End Date shall be due and payable in 24 equal monthly installments
of  principal,  plus all accrued and unpaid interest, beginning on the first day
of  the  month  following the Tranche A Availability End Date, and continuing on
the  first  day  of  each  month thereafter through the First Equipment Maturity
Date,  at  which  time  all amounts due in connection with the Special Equipment
Advances  made  under  this Section 2.1(c) shall be immediately due and payable.

                              B.  TRANCHE  A  EQUIPMENT  ADVANCES. Any Equipment
Advances  that are outstanding under Tranche A on the Tranche A Availability End
Date  shall be due and payable in 30 equal monthly installments of principal and
interest,  beginning  on  the  first  day  of  the month following the Tranche A
Availability  End Date, and continuing on the first day of each month thereafter


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through  the  Second  Equipment  Maturity Date, at which time all amounts due in
connection  with  Tranche  A  Equipment  Advances made under this Section 2.1(c)
shall  be  immediately  due  and  payable.

                              C.  TRANCHE  B  EQUIPMENT  ADVANCES. Any Equipment
Advances  that are outstanding under Tranche B on the Tranche B Availability End
Date  shall be due and payable in 24 equal monthly installments of principal and
interest,  beginning  on  the  first  day  of  the month following the Tranche B
Availability  End Date, and continuing on the first day of each month thereafter
through  the  Second  Equipment  Maturity Date, at which time all amounts due in
connection  with  Tranche  B  Equipment  Advances made under this Section 2.1(c)
shall  be  immediately  due  and  payable.

                    (iii)  Equipment  Advances,  once  repaid,  may  not  be
reborrowed.  Borrower may prepay any Equipment Advances at any time, in whole or
in  part,  without  penalty  or  premium.

                    (iv)  When  Borrower desires to obtain an Equipment Advance,
Borrower  shall  notify  Bank  (which  notice shall be irrevocable) by facsimile
transmission  to  be  received no later than 3:00 p.m. Pacific Standard Time one
Business  Day  before the day on which the Equipment Advance is to be made. Such
notice  shall  be  substantially  in  the form of Exhibit C. The notice shall be
signed  by  a  Responsible  Officer  or  its  designee and include a copy of the
invoice  for  any equipment, furniture and/or software to be financed, and shall
include  the  serial  numbers  of  such  items.

          2.2 OVERADVANCES. If the aggregate amount of the outstanding Revolving
Advances  (including  outstanding  and  undrawn  Letters  of Credit) exceeds the
lesser  of  the  Committed  Revolving  Line  or  the Borrowing Base at any time,
Borrower  shall  promptly  pay  to  Bank,  in  cash,  the amount of such excess.

          2.3  INTEREST  RATES,  PAYMENTS,  AND  CALCULATIONS.

               (a)     INTEREST  RATES.

                    (i)  REVOLVING  ADVANCES.  Except  as  set  forth in Section
2.3(b),  the  Revolving  Advances  shall bear interest, on the outstanding daily
balance  thereof,  at  a  rate  equal  to  .75%  above  the  Prime  Rate.

                    (ii)  EQUIPMENT  ADVANCES.  Except  as  set forth in Section
2.3(b),  the  Equipment  Advances  shall bear interest, on the outstanding daily
balance  thereof,  at  a  rate  equal  to  1.00%  above  the  Prime  Rate.

               (b) LATE FEE; DEFAULT RATE. If any payment is not made within ten
days  after  the  date  such  payment is due, Borrower shall pay Bank a late fee
equal  to  the  lesser of (i) 5% of the amount of such unpaid amount or (ii) the
maximum  amount  permitted  to  be charged under applicable law. All Obligations
shall bear interest, from and after the occurrence and during the continuance of
an Event of Default, at a rate equal to the lesser of (y) five percentage points
above  the  interest  rate applicable immediately prior to the occurrence of the
Event  of  Default  or  (z)  the  maximum  amount  permitted to be charged under
applicable  law.

               (c)  PAYMENTS. Bank shall, at its option, charge any interest due
hereunder,  all  Bank  Expenses,  and  all  Periodic  Payments  against  any  of
Borrower's  deposit  accounts  or against the Committed Revolving Line, in which
case  those amounts shall thereafter accrue interest at the rate then applicable
hereunder. Any interest not paid when due shall be compounded by becoming a part
of  the  Obligations,  and such interest shall thereafter accrue interest at the
rate  then  applicable  hereunder.

               (d) COMPUTATION. In the event the Prime Rate is changed from time
to  time hereafter, the applicable rate of interest hereunder shall be increased
or  decreased,  effective  as of the day the Prime Rate is changed, by an amount
equal  to  such change in the Prime Rate. All interest chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of  days  elapsed.


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          2.4  CREDITING  PAYMENTS.  Prior  to  the  occurrence  of  an Event of
Default,  Bank  shall  credit  a  wire transfer of funds, check or other item of
payment  to  such deposit account or Obligation as Borrower specifies. After the
occurrence  of  an Event of Default, the receipt by Bank of any wire transfer of
funds,  check,  or  other  item  of  payment  shall  be  immediately  applied to
conditionally  reduce  the Obligations, but shall not be considered a payment on
account  unless such payment is of immediately available federal funds or unless
and  until  such  check  or  other item of payment is honored when presented for
payment.  Notwithstanding  anything  to  the contrary contained herein, any wire
transfer  or  payment  received  by  Bank after 12:00 noon Pacific Standard Time
shall  be  deemed to have been received by Bank as of the opening of business on
the  immediately  following Business Day. Whenever any payment to Bank under the
Loan  Documents  would  otherwise be due (except by reason of acceleration) on a
date  that  is not a Business Day, such payment shall instead be due on the next
Business  Day, and additional fees or interest, as the case may be, shall accrue
and  be  payable  for  the  period  of  such  extension.

          2.5  FEES.  Borrower  shall  pay  to  Bank  the  following:

               (a)  FACILITY  FEE.  On the Closing Date, a facility fee equal to
$45,000 ($18,750 with respect to the Revolving Facility and $26,250 with respect
to  the  Equipment  Facility),  which  fee  shall  be  nonrefundable;

               (b)  BANK  EXPENSES.  On  the  Closing  Date,  all  Bank Expenses
incurred  through  the  Closing  Date,  including reasonable attorneys' fees and
expenses  and,  after  the Closing Date, all Bank Expenses, including reasonable
attorneys'  fees  and  expenses,  as  and  when  they  become  due.

          2.6  TERM.  This  Agreement shall become effective on the Closing Date
and, subject to Section 12.7, shall continue in full force and effect for a term
ending  on  the  Second  Equipment  Maturity  Date.

     3.   CONDITIONS  OF  LOANS.

          3.1  CONDITIONS  PRECEDENT TO INITIAL CREDIT EXTENSION. The obligation
of  Bank  to  make  the  initial  Credit  Extension  is subject to the condition
precedent  that  Bank shall have received, in form and substance satisfactory to
Bank,  the  following:

               (a)  this  Agreement,  duly  executed;

               (b)  a  duly  executed  officer's  certificate  of  Borrower with
respect  to incumbency and resolutions authorizing the execution and delivery of
this  Agreement;

               (c)  a  duly executed Itemization of Amount Financed Disbursement
Instructions;

               (d)  a  duly  executed  Automatic  Debit  Authorization;

               (e)  duly  executed  financing  statements  (Forms UCC-1) as Bank
deems  necessary  or  appropriate;

               (f)  a  duly  executed  Intellectual Property Security Agreement;

               (g)  a  duly  executed  agreement  to  provide  insurance;

               (h)  payment  of the fees and Bank Expenses then due specified in
Section  2.5;

               (i)  at Bank's option, an audit of the Collateral, the results of
which  shall  be  satisfactory  to  Bank, such audit to be completed, if at all,
within  ten  days  after  the  date  hereof;

               (j)  current financial statements in accordance with Section 6.2;
and


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               (k)  such  other documents, and completion of such other matters,
as  Bank  may  reasonably  deem  necessary  or  appropriate.

          3.2  POST-CLOSING  CONDITIONS.  As soon as available, but in any event
within  45  calendar  days from the date hereof, Borrower shall deliver to Bank:

               (a)  a  fully-executed  termination statement terminating Silicon
Valley  Bank's  lien  evidenced  by  UCC-1  financing  statement 9607560795; and

               (b)  with  respect  to the existing real property leases covering
Borrower's  locations  in  Emeryville, California and Santa Clara, California, a
landlord agreement, in form and substance satisfactory to Bank, duly executed by
Borrower  and  its  applicable  landlord.

          3.3  CONDITIONS  PRECEDENT TO ALL CREDIT EXTENSIONS. The obligation of
Bank  to  make each Credit Extension, including the initial Credit Extension, is
further  subject  to  the  following  conditions:

               (a)  timely  receipt  by  Bank  of  the  Payment/Advance  Form as
provided  in  Section  2.1;  and

               (b)  the  representations  and  warranties contained in Section 5
shall be true and correct in all material respects on and as of the date of such
Payment/Advance  Form  and  on  the  effective  date of each Credit Extension as
though  made  at  and  as  of each such date, and no Event of Default shall have
occurred  and  be  continuing, or would exist after giving effect to such Credit
Extension  (provided,  however,  that  those  representations  and  warranties
expressly  referring  to another date shall be true, correct and complete in all
material respects as of such date). The making of each Credit Extension shall be
deemed  to  be  a  representation  and  warranty by Borrower on the date of such
Credit  Extension  as  to  the accuracy of the facts referred to in this Section
3.2.

     4.   CREATION  OF  SECURITY  INTEREST.

          4.1  GRANT OF SECURITY INTEREST. Borrower grants and pledges to Bank a
continuing security interest in all presently existing and hereafter acquired or
arising  Collateral to secure prompt repayment of any and all Obligations and to
secure  prompt performance by Borrower of each of its covenants and duties under
the  Loan Documents. Except as set forth in the Schedule, such security interest
constitutes  a valid, first priority security interest in the presently-existing
Collateral,  and  will  constitute  a valid, first priority security interest in
later-acquired  Collateral.  Notwithstanding any termination, Bank's Lien on the
Collateral  shall  remain  in  effect  for  so  long  as  any  Obligations  are
outstanding.

          4.2 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower shall from
time to time execute and deliver to Bank, at the reasonable request of Bank, all
Negotiable  Collateral,  all  financing statements and other documents that Bank
may  reasonably  request,  in form satisfactory to Bank, to perfect and continue
perfected  Bank's  security  interests  in  the Collateral and in order to fully
consummate  all  of  the  transactions  contemplated  under  the Loan Documents.

          4.3 RIGHT TO INSPECT. Bank (through any of its officers, employees, or
agents)  shall  have  the right, upon reasonable prior notice, from time to time
during  Borrower's  usual business hours but no more than once a year (unless an
Event  of  Default  has occurred and is continuing), to inspect Borrower's Books
and  to  make  copies thereof and to check, test, and appraise the Collateral in
order  to  verify Borrower's financial condition or the amount, condition of, or
any  other  matter  relating  to,  the  Collateral.

          4.4  REVISED  ARTICLE  9.  Borrower  and Bank acknowledge that revised
Article  9 of the UCC, in the form or substantially in the form approved in 1998
by  the  American  Law Institute and the National Conference of Commissioners on
Uniform  State  Law  ("REVISED  ARTICLE  9"),  has  been adopted in the State of
California  and  elsewhere,  and  hereby  agree  to  the following provisions in
anticipation  of the possible application thereof, in one or more jurisdictions,
to  the  transactions  contemplated  hereby.  Upon  such  application of Revised


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Article  9  to  the  transactions  contemplated  hereby,  all references in this
Agreement  to  sections  of  the  UCC shall be deemed to refer to the equivalent
corresponding  sections  of  Revised  Article  9.

               (a)  ATTACHMENT. In applying the law of any jurisdiction in which
Revised  Article  9  is in effect, the Collateral is all assets of the Borrower,
whether  or  not  within  the  scope  of Revised Article 9. The Collateral shall
include,  without  limitation,  the following categories of assets as defined in
Revised  Article  9:  goods  (including  inventory, equipment and any accessions
thereto),  instruments  (including  promissory  notes),  documents,  accounts
(including  health-care-insurance  receivables), chattel paper (whether tangible
or  electronic),  deposit  accounts, letter-of-credit rights (whether or not the
letter  of credit is evidenced by a writing), commercial tort claims, securities
and  all  other  investment  property, general intangibles (including payment on
intangibles  and  software),  supporting obligations and any and all proceeds of
any  thereof,  wherever  located,  whether  now  owned or hereafter acquired. If
Borrower shall at any time, whether or not Revised Article 9 is in effect in any
particular  jurisdiction, acquire a commercial tort claim, as defined in Revised
Article  9,  such  Borrower shall immediately notify Bank in a writing signed by
Borrower  of  the  brief  details  thereof  and  grant to Bank in such writing a
security  interest  therein  and  in the proceeds thereof, all upon the terms of
this  Agreement,  with  such writing to be in form and substance satisfactory to
Bank.

               (b)  PERFECTION  BY FILING. Bank may at any time and from time to
time  file  financing statements, continuation statements and amendments thereto
that  describe  the Collateral as all assets of the Borrower or words of similar
effect  and  which  contain  any other information required by Part 5 of Revised
Article  9  for  the  sufficiency  or  filing office acceptance of any financing
statement, continuation statement or amendment, including whether Borrower is an
organization,  the  type  of  organization  and  any organization identification
number  issued to such Borrower. Borrower agrees to furnish any such information
to  Bank  promptly  upon  request.  Any  such financing statements, continuation
statements  or amendments may be signed by Bank on behalf of Borrower and may be
filed  at  any time in any jurisdiction whether or not Revised Article 9 is then
in  effect  in  that  jurisdiction.

               (c)  OTHER  PERFECTION,  ETC. Borrower shall at any time and from
time  to  time,  whether or not Revised Article 9 is in effect in any particular
jurisdiction,  take  such  steps  as Bank may reasonably request for Bank (a) to
obtain  an  acknowledgement,  in form and substance satisfactory to Bank, of any
bailee  having  possession  of any of the Collateral, that the bailee holds such
Collateral for Bank, (b) to obtain "control" of any investment property, deposit
accounts, letter-of-credit rights or electronic chatter paper (as such terms are
defined  in  Revised  Article 9 with corresponding provisions in Sections 9-104,
9-105,  9-106  and  9-107  of  Revised  Article  9  relating to what constitutes
"control"  for  such  items  of  Collateral),  with  any agreements establishing
control  to  be in form and substance satisfactory to Bank, and (c) otherwise to
insure  the continued perfection and priority of the Bank's security interest in
any  of the Collateral and of the preservation of its rights therein, whether in
anticipation,  and  following  the  effectiveness,  of  Revised Article 9 in any
jurisdiction.

               (d)  SAVINGS  CLAUSE. Nothing contained in this SECTION 4.4 shall
be  construed  to  narrow  the  scope  of Bank's security interest in any of the
Collateral,  or  the  perfection  or priority thereof, or to impair or otherwise
limit  any  of  the  rights,  powers,  privileges or remedies of Bank hereunder,
except  as  mandated  by  Revised Article 9, but only to the extent so mandated.

     5.   REPRESENTATIONS  AND  WARRANTIES.

          Borrower  represents  and  warrants  as  follows:

          5.1  DUE  ORGANIZATION AND QUALIFICATION. Borrower and each Subsidiary
is  a corporation duly existing under the laws of its state of incorporation and
qualified  and  licensed to do business in any state in which the conduct of its
business  or  its ownership of property requires that it be so qualified, except
where  the failure to do so could not reasonably be expected to cause a Material
Adverse  Effect.

          5.2  DUE  AUTHORIZATION;  NO  CONFLICT.  The  execution, delivery, and
performance  of  the Loan Documents are within Borrower's powers, have been duly
authorized,  and  are  not  in  conflict  with  nor  constitute  a breach of any
provision  contained  in  Borrower's Certificate of Incorporation or Bylaws, nor
will  they  constitute an event of default under any material agreement by which
Borrower is bound. Borrower is not in default under any agreement by which it is
bound,  which  default  could  have  a  Material  Adverse  Effect.


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          5.3  COLLATERAL.  Borrower  has good title to the Collateral, free and
clear  of Liens, except for Permitted Liens. The Eligible Accounts are bona fide
existing  obligations.  The  property  giving rise to such Eligible Accounts has
been  delivered to the account debtor or its agent for immediate shipment to and
unconditional acceptance by the account debtor. Borrower has not received notice
of  an  actual  or  imminent  Insolvency  Proceeding of any account debtor whose
accounts  are included in any Borrowing Base Certificate as an Eligible Account.
All  Inventory  is in all material respects of good and marketable quality, free
from all material defects, except for Inventory for which adequate reserves have
been  made.

          5.4  INTELLECTUAL  PROPERTY  COLLATERAL. Borrower is the sole owner of
the Intellectual Property Collateral, except for Licenses granted by Borrower to
its  customers  in  the  ordinary  course  of  business. Each of the Copyrights,
Trademarks  and  Patents is, to Borrower's knowledge, valid and enforceable, and
no  part  of  the  Intellectual  Property  Collateral has been judged invalid or
unenforceable,  in whole or in part, and no claim has been made that any part of
the  Intellectual  Property  Collateral  violates  the rights of any third party
except  to  the  extent  such  claim could not reasonably be expected to cause a
Material  Adverse Effect. Except as set forth in the Schedule, Borrower's rights
as  a  licensee  and  reseller of intellectual property do not give rise to more
than  5% of its gross revenue in any given month, including, without limitation,
revenue  derived  from  the  sale,  licensing,  rendering  or disposition of any
product  or  service.

          5.5 NAME; LOCATION OF CHIEF EXECUTIVE OFFICE AND COLLATERAL. Except as
disclosed  in  the Schedule, Borrower has not done business under any name other
than  that specified on the signature page hereof. The chief executive office of
Borrower  is  located  at  the  address  indicated  in  Section  10  hereof. The
Collateral  is  presently  located  at  the addresses set forth on the Schedule.

          5.6  LITIGATION.  Except  as  set  forth in the Schedule, there are no
actions  or  proceedings pending by or against Borrower or any Subsidiary before
any  court  or  administrative  agency  in which a likely adverse decision could
reasonably  be expected to have a Material Adverse Effect, or a material adverse
effect  on  Borrower's  interest  or Bank's security interest in the Collateral.

          5.7  NO  MATERIAL  ADVERSE  CHANGE  IN  FINANCIAL  STATEMENTS.  All
consolidated  financial  statements  related to Borrower and any Subsidiary that
are  delivered  by  Borrower  to  Bank  fairly  present in all material respects
Borrower's  consolidated  financial  condition  as  of  the  date  thereof  and
Borrower's  consolidated  results of operations for the period then ended. There
has  not  been a material adverse change in the consolidated financial condition
of  Borrower  since  the  date  of  the most recent of such financial statements
submitted  to  Bank.

          5.8  SOLVENCY,  PAYMENT  OF  DEBTS.  Borrower is able to pay its debts
(including  trade  debts)  as they mature; the fair saleable value of Borrower's
Assets  (including  goodwill  minus disposition costs) exceeds the fair value of
its  liabilities  less  its deferred maintenance and royalties and other revenue
derived  from Licenses; and Borrower is not left with unreasonably small capital
after  the  transactions  contemplated  by  this  Agreement.

          5.9 COMPLIANCE WITH LAWS AND REGULATIONS. Borrower and each Subsidiary
have  met the minimum funding requirements of ERISA with respect to any employee
benefit  plans subject to ERISA. No event has occurred resulting from Borrower's
failure  to  comply with ERISA that is reasonably likely to result in Borrower's
incurring  any  liability that could have a Material Adverse Effect. Borrower is
not an "INVESTMENT COMPANY" or a company "CONTROLLED" by an "INVESTMENT COMPANY"
within  the  meaning  of  the  Investment  Company  Act of 1940. Borrower is not
engaged  principally,  or as one of the important activities, in the business of
extending  credit for the purpose of purchasing or carrying margin stock (within
the  meaning  of  Regulations  T  and U of the Board of Governors of the Federal
Reserve  System).  Borrower  has  complied in all material respects with all the
provisions  of  the  Federal Fair Labor Standards Act. Borrower is in compliance
with all environmental laws, regulations and ordinances except where the failure
to  comply  is not reasonably likely to have a Material Adverse Effect. Borrower
has  not  violated  any  statutes,  laws,  ordinances or rules applicable to it,
violation  of  which  could  have  a  Material Adverse Effect. Borrower and each
Subsidiary  have  filed  or  caused  to  be filed all tax returns required to be
filed,  and  have  paid, or have made adequate provision for the payment of, all
taxes reflected therein except those being contested in good faith with adequate
reserves  under  GAAP.

          5.10  SUBSIDIARIES.  Borrower  does  not  own  any  stock, partnership
interest  or  other  equity  securities  of  any  Person,  except  for Permitted
Investments.


<PAGE>
          5.11  GOVERNMENT  CONSENTS. Borrower and each Subsidiary have obtained
all  consents, approvals and authorizations of, made all declarations or filings
with,  and given all notices to, all governmental authorities that are necessary
for  the  continued  operation  of  Borrower's  business as currently conducted,
except  where  the  failure to do so could not reasonably be expected to cause a
Material  Adverse  Effect.

          5.12  INBOUND  LICENSES. Except as disclosed on the Schedule, Borrower
is  not  a  party  to,  nor  is  bound  by,  any License or other agreement that
prohibits  or  otherwise restricts Borrower from granting a security interest in
Borrower's  interest  in  such  License  or  agreement  or  any  other property.

          5.13  FULL  DISCLOSURE. No representation, warranty or other statement
made by Borrower in any certificate or written statement furnished to Bank taken
together  with  all  such  certificates and written statements furnished to Bank
contains  any  untrue  statement of a material fact or omits to state a material
fact necessary in order to make the statements contained in such certificates or
statements  not misleading, it being recognized by Bank that the projections and
forecasts  provided  by  Borrower  in  good  faith  and  based  upon  reasonable
assumptions  are  not  to  be viewed as facts and that actual results during the
period  or periods covered by any such projections and forecasts may differ from
the  projected  or  forecasted  results.

     6.   AFFIRMATIVE  COVENANTS.

          Borrower  covenants  that,  until  payment  in full of all outstanding
Obligations,  and  for  so long as Bank may have any commitment to make a Credit
Extension  hereunder,  Borrower  shall  do  all  of  the  following:

          6.1  GOOD  STANDING AND GOVERNMENT COMPLIANCE. Borrower shall maintain
its  and  each  of  its Subsidiaries' corporate existence in its jurisdiction of
incorporation  and  maintain  qualification  in  each  jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. Borrower shall meet,
and  shall  cause  each  Subsidiary to meet, the minimum funding requirements of
ERISA  with  respect  to  any  employee benefit plans subject to ERISA. Borrower
shall  comply,  and  shall  cause  each Subsidiary to comply, with all statutes,
laws,  ordinances  and  government rules and regulations to which it is subject,
and  shall  maintain,  and  shall cause each of its Subsidiaries to maintain, in
force  all  licenses,  approvals and agreements, the loss of which or failure to
comply  with  which  could have a Material Adverse Effect, or a material adverse
effect  on  the  Collateral  or  the  priority of Bank's Lien on the Collateral.

          6.2  FINANCIAL  STATEMENTS,  REPORTS,  CERTIFICATES.  Borrower  shall
deliver  to  Bank: (a) as soon as available, but in any event within 20 Business
Days  after  the  end  of  each  calendar month, a company-prepared consolidated
balance  sheet  and income statement covering Borrower's consolidated operations
during  such period, in a form acceptable to Bank and certified by a Responsible
Officer; (b) as soon as available, but in any event within 90 days after the end
of Borrower's fiscal year, audited consolidated financial statements of Borrower
prepared in accordance with GAAP, consistently applied, together with an opinion
which  is  unqualified  or  otherwise  consented  to  in writing by Bank on such
financial  statements  of  an  independent  certified  public  accounting  firm
reasonably  acceptable  to  Bank; (c) promptly upon receipt of notice thereof, a
report  of  any  legal  actions  pending  or  threatened against Borrower or any
Subsidiary  that  could result in damages or costs to Borrower or any Subsidiary
of  $250,000  or  more;  (d) such budgets, sales projections, operating plans or
other  financial  information  generally  prepared  by  Borrower in the ordinary
course  of  business  as  Bank may reasonably request from time to time; and (e)
within  30  days  of  the  last  day  of each fiscal quarter, a report signed by
Borrower,  in  form  reasonably  acceptable to Bank, listing any applications or
registrations  that  Borrower  has  made  or  filed  in  respect of any Patents,
Copyrights  or  Trademarks  and  the  status  of any outstanding applications or
registrations,  as  well  as  any  material  change  in  Borrower's Intellectual
Property  Collateral,  including,  but  not limited to, any subsequent ownership
right  of  Borrower in or to any Trademark, Patent or Copyright not specified in
Exhibits  A,  B, and C of the Intellectual Property Security Agreement delivered
to  Bank  by  Borrower  in  connection  with  this  Agreement.

               (a)  Within  10  Business  Days after the last day of each month,
Borrower  shall  deliver  to  Bank  a  Borrowing  Base  Certificate  signed by a
Responsible Officer in substantially the form of Exhibit D hereto, together with
aged  listings  of  accounts  receivable  and  accounts  payable.


<PAGE>
               (c)  Within  20  Business  Days after the last day of each month,
Borrower  shall  deliver  to  Bank,  with  the  monthly  financial statements, a
Compliance Certificate signed by a Responsible Officer in substantially the form
of  Exhibit  E  hereto.

               (c)  Bank shall have a right from time to time hereafter to audit
Borrower's Accounts and appraise Collateral at Borrower's expense, provided that
such audits will be conducted no more often than every 12 months unless an Event
of  Default  has  occurred  and  is  continuing. Notwithstanding anything to the
contrary  herein,  if  there  is no continuing Event of Default at the time Bank
verifies  Accounts,  Bank  shall  not  identify  itself  as  Bank to the Account
debtors.

          6.3 INVENTORY; RETURNS. Borrower does not currently maintain Inventory
of  any significant magnitude, however, Borrower shall keep the Inventory it has
in  good  and  marketable  condition,  free from all material defects except for
Inventory for which adequate reserves have been made. Returns and allowances, if
any,  as between Borrower and its account debtors shall be on the same basis and
in  accordance  with the usual customary practices of Borrower, as they exist on
the  Closing  Date.  Borrower  shall  promptly  notify  Bank  of all returns and
recoveries  of Inventory and of all disputes and claims involving Inventory with
an  amount  of  more  than  $100,000.

          6.4 TAXES. Borrower shall make, and cause each Subsidiary to make, due
and  timely  payment or deposit of all material federal, state, and local taxes,
assessments,  or contributions required of it by law, including, but not limited
to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability,
and  will  execute  and  deliver  to Bank, on demand, proof satisfactory to Bank
indicating  that Borrower or a Subsidiary has made such payments or deposits and
any  appropriate  certificates  attesting  to  the  payment  or deposit thereof;
provided  that  Borrower or a Subsidiary need not make any payment if the amount
or  validity  of  such  payment  is  contested  in  good  faith  by  appropriate
proceedings  and  is  reserved  against  (to  the  extent  required  by GAAP) by
Borrower.

          6.5  INSURANCE.

               (a)  Borrower,  at its expense, shall keep the Collateral insured
against  loss  or  damage  by  fire, theft, explosion, sprinklers, and all other
hazards  and  risks, and in such amounts, as ordinarily insured against by other
owners  in  similar  businesses  conducted  in  the  locations  where Borrower's
business is conducted on the date hereof. Borrower shall also maintain liability
and  other  insurance  in amounts and of a type that are customary to businesses
similar  to  Borrower's.

               (b)  All  such  policies of insurance shall be in such form, with
such  companies,  and  in  such  amounts as reasonably satisfactory to Bank. All
policies  of  property  insurance  shall  contain  a  lender's  loss  payable
endorsement,  in a form satisfactory to Bank, showing Bank as an additional loss
payee,  and  all  liability  insurance policies shall show Bank as an additional
insured  and  specify that the insurer must give at least 20 days notice to Bank
before  canceling its policy for any reason. Upon Bank's request, Borrower shall
deliver  to  Bank  certified copies of the policies of insurance and evidence of
all  premium  payments.  If  no Event of Default has occurred and is continuing,
proceeds  payable  under  any  casualty  policy  will,  at Borrower's option, be
payable  to Borrower to replace the property subject to the claim, provided that
any  such replacement property shall be deemed Collateral in which Bank has been
granted  a first priority security interest. If an Event of Default has occurred
and  is  continuing, all proceeds payable under any such policy shall, at Bank's
option,  be  payable  to  Bank  to  be  applied  on  account of the Obligations.

          6.6 PRIMARY DEPOSITORY. Borrower shall maintain its primary depositary
account  and  banking relationship with Bank. Notwithstanding the foregoing, (i)
Borrower  may maintain investment accounts with institutions other than Bank (so
long  as  Borrower  shall  deliver  a  control  agreement, in form and substance
satisfactory  to  Bank, executed by such other institutions within 30 days after
Bank's  request  therefor)  and  (ii)  Borrower's  Subsidiaries  may  maintain
depository  and  operating  accounts  with  institutions  other  than  Bank.

          6.7  FINANCIAL  COVENANTS. Borrower shall maintain, as of the last day
of  each  calendar  month:


<PAGE>
               (a)  QUICK  RATIO.  A  ratio  of (i) Quick Assets to (ii) Current
Liabilities  less  deferred  maintenance and royalties and other revenue derived
from  Licenses,  of  at  least  1.75  to  1.00.

               (b)  LIQUIDITY RATIO. A ratio of the sum of (i) unrestricted cash
plus (ii) the amount available under the Committed Revolving Line, to the sum of
(x)  Borrower's  total  Indebtedness  to  Bank  plus  (y)  all  other  secured
Indebtedness  of  Borrower,  of  at  least  1.75  to  1.00.

               (c)  MINIMUM  REVENUE. Gross revenue in an amount greater than or
equal  to 80% of Borrower's projected gross revenue pursuant to its revenue plan
attached  hereto  as  Exhibit  F.

          6.8  REGISTRATION  OF  INTELLECTUAL  PROPERTY  RIGHTS.

               (a)  Borrower  shall  register  or  cause  to be registered on an
expedited  basis  (to  the extent not already registered) with the United States
Patent  and  Trademark  Office  or  the  United  States  Copyright  Office,  as
applicable: (i) those intellectual property rights listed on Exhibits A, B and C
to the Intellectual Property Security Agreement delivered to Bank by Borrower in
connection  with  this  Agreement, within 30 days of the date of this Agreement,
(ii)  all  material  registrable  intellectual  property  rights  Borrower  has
developed  as  of  the date of this Agreement but heretofore failed to register,
within  30  days  of  the  date  of  this  Agreement, and (iii) those additional
material  intellectual  property  rights  developed or acquired by Borrower from
time  to  time in connection with any product, prior to the sale or licensing of
such  product  to  any  third party, and prior to Borrower's use of such product
(including  without  limitation major revisions or additions which significantly
improve  the  functionality  of  the intellectual property rights listed on such
Exhibits  A,  B and C). Borrower shall give Bank notice of all such applications
or  registrations.

               (b)  Borrower  shall  execute  and  deliver  such  additional
instruments  and documents from time to time as Bank shall reasonably request to
perfect  Bank's  security  interest  in  the  Intellectual  Property Collateral.

               (c)  Borrower shall (i) protect, defend and maintain the validity
and  enforceability of the Trademarks, Patents and Copyrights, (ii) use its best
efforts  to  detect  infringements of the Trademarks, Patents and Copyrights and
promptly advise Bank in writing of material infringements detected and (iii) not
allow  any  Trademarks,  Patents  or  Copyrights  material to Borrower's ongoing
operations  to  be  abandoned,  forfeited or dedicated to the public without the
written  consent  of  Bank,  which  shall  not  be  unreasonably  withheld.

               (d) Bank may audit Borrower's Intellectual Property Collateral to
confirm compliance with this Section 6.8, provided such audit may not occur more
often  than  twice  per  twelve-month  period,  unless  an  Event of Default has
occurred  and  is continuing. Bank shall have the right, but not the obligation,
to take, at Borrower's sole expense, any actions that Borrower is required under
this  Section  6.8  to  take  but  which  Borrower fails to take, after 15 days'
written  notice to Borrower. Borrower shall reimburse and indemnify Bank for all
reasonable  costs and reasonable expenses incurred in the reasonable exercise of
its  rights  under  this  Section  6.8.

          6.9  CONSENT  OF INBOUND LICENSORS. Prior to entering into or becoming
bound  by  any License or agreement that is reasonably likely to have a material
impact  on  Borrower's  business  or  financial  condition,  Borrower shall: (i)
provide  written  notice  to  Bank  of  the  material  terms  of such License or
agreement  with  a  description  of  its likely impact on Borrower's business or
financial  condition;  and  (ii)  take such steps as Bank requests to obtain the
consent  of,  or  waiver by, any person whose consent or waiver is necessary for
Borrower's  interest in such Licenses or contract rights to be deemed Collateral
and  for  Bank  to  have  a  security  interest  in  it  that might otherwise be
restricted  by  the  terms  of  the applicable License or agreement, whether now
existing  or  entered  into  in  the  future.

          6.10  FURTHER  ASSURANCES.  At any time and from time to time Borrower
shall  execute and deliver such further instruments and take such further action
as may reasonably be requested by Bank to effect the purposes of this Agreement.

     7.   NEGATIVE  COVENANTS.


<PAGE>
          Borrower  covenants  and  agrees that, so long as any credit hereunder
shall  be  available and until payment in full of the outstanding Obligations or
for  so  long  as  Bank  may  have any commitment to make any Credit Extensions,
Borrower  will not do any of the following without Bank's prior written consent:

          7.1  DISPOSITIONS.  Convey, sell, lease, transfer or otherwise dispose
of (collectively, to "TRANSFER"), or permit any of its Subsidiaries to Transfer,
all  or  any  part  of its business or property, other than Permitted Transfers.

          7.2  CHANGE IN BUSINESS; CHANGE IN CONTROL OR EXECUTIVE OFFICE. Engage
in  any  business,  or permit any of its Subsidiaries to engage in any business,
other  than  or  reasonably  related  or  incidental to the businesses currently
engaged in by Borrower. Borrower will not have a Change in Control and will not,
without 30 days prior written notification to Bank, relocate its chief executive
office.

          7.3  MERGERS  OR  ACQUISITIONS.  Other than in the normal and ordinary
course  of  Borrower's  business,  merge  or  consolidate,  or permit any of its
Subsidiaries  to merge or consolidate, with or into any other Person (other than
mergers  or  consolidations  of  a  Subsidiary  into  another Subsidiary or into
Borrower),  or  acquire,  or  permit  any of its Subsidiaries to acquire, all or
substantially  all  of  the  capital  stock or property of another Person except
where,  upon  the  prior  written  consent  of  Bank, which consent shall not be
unreasonably  withheld  (i)  the  Borrower  or Subsidiary, as applicable, is the
surviving  entity  after such merger or acquisition and (ii) no Event of Default
has  occurred,  is  continuing  or  would  exist  after  giving  effect  to  the
transactions.

          7.4  INDEBTEDNESS.  Create,  incur, assume or be or remain liable with
respect  to  any  Indebtedness,  or  permit  any Subsidiary so to do, other than
Permitted  Indebtedness.

          7.5 ENCUMBRANCES. Create, incur, assume or allow any Lien with respect
to  any  of  its  property,  or  assign or otherwise convey any right to receive
income, including the sale of any Accounts, or permit any of its Subsidiaries so
to do, except for Permitted Liens, or covenant to any other Person that Borrower
in  the  future  will refrain from creating, incurring, assuming or allowing any
Lien  with  respect  to  any  of  Borrower's  property.

          7.6 DISTRIBUTIONS. Pay any dividends or make any other distribution or
payment  on  account  of or in redemption, retirement or purchase of any capital
stock,  except  that  Borrower  may  repurchase  the  stock of former employees,
consultants  and independent contractors pursuant to stock repurchase agreements
as  long  as  (a)  the market value of such stock is greater than the repurchase
price,  and  (b)  an Event of Default does not exist prior to such repurchase or
would  not  exist  after  giving  effect  to  such  repurchase.

          7.7  INVESTMENTS.  Other  than  in  the  normal and ordinary course of
Borrower's  business,  directly  or  indirectly  acquire  or  own,  or  make any
Investment  in  or  to  any  Person, or permit any of its Subsidiaries so to do,
other  than  Permitted  Investments.

          7.8 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit  to  exist any material transaction with any Affiliate of Borrower except
(a)  transactions  that  are in the ordinary course of Borrower's business, upon
fair  and  reasonable terms that are no less favorable to Borrower than would be
obtained in an arm's length transaction with a non-affiliated Person, and (b) as
set  forth  in  paragraph  (e)  of  the  definition of "Permitted Indebtedness."

          7.9 SUBORDINATED DEBT. Make any payment in respect of any Subordinated
Debt,  or  permit  any  of  its Subsidiaries to make any such payment, except in
compliance  with  the  terms  of  such Subordinated Debt, or amend any provision
contained  in any documentation relating to the Subordinated Debt without Bank's
prior  written  consent,  which  consent  shall  not  be  unreasonably withheld.

          7.10  INVENTORY  AND  EQUIPMENT.  Store the Inventory or the Equipment
with  a bailee, warehouseman, or similar party unless Bank has received a pledge
of  the  warehouse receipt covering such Inventory. Except for Inventory sold in
the  ordinary course of business and except for such other locations as Bank may
approve  in writing, Borrower shall keep the Inventory and Equipment only at the


<PAGE>
locations  set  forth on the Schedule and such other locations of which Borrower
gives  Bank  prior  written  notice  and  as to which Borrower signs and files a
financing  statement  where  needed  to  perfect  Bank's  security  interest.

          7.11  COMPLIANCE.  Become or be controlled by an "INVESTMENT COMPANY,"
within  the meaning of the Investment Company Act of 1940, or become principally
engaged  in,  or  undertake  as one of its important activities, the business of
extending  credit for the purpose of purchasing or carrying margin stock, or use
the  proceeds of any Credit Extension for such purpose. Fail to meet the minimum
funding  requirements  of  ERISA,  permit  a  Reportable  Event  or  Prohibited
Transaction, as defined in ERISA, to occur, fail to comply with the Federal Fair
Labor  Standards  Act  or  violate  any law or regulation, which violation could
reasonably  be expected to have a Material Adverse Effect, or a material adverse
effect  on  the  Collateral or the priority of Bank's Lien on the Collateral, or
permit  any  of  its  Subsidiaries  to  do  any  of  the  foregoing.

     8.   EVENTS  OF  DEFAULT.

          Any  one  or more of the following events shall constitute an Event of
Default  by  Borrower  under  this  Agreement:

          8.1  PAYMENT  DEFAULT. If Borrower fails to pay any of the Obligations
and  such  failure  continues  for  3  Business Days or more after the due date,
provided  that  within such 3 Business Day cure period, the failure to pay shall
not  be  deemed  an  Event  of  Default,  but no Credit Extensions will be made;

          8.2  COVENANT  DEFAULT.  If  Borrower  fails to perform any obligation
under  Article 6 or violates any of the covenants contained in Article 7 of this
Agreement,  or  fails or neglects to perform or observe any other material term,
provision,  condition,  covenant contained in this Agreement, in any of the Loan
Documents, or in any other present or future agreement between Borrower and Bank
and  as  to  any default under such other term, provision, condition or covenant
that  can  be  cured,  has  failed  to  cure  such default within ten days after
Borrower  receives  notice  thereof  or  any  officer  of Borrower becomes aware
thereof;  provided,  however,  that if the default cannot by its nature be cured
within the ten day period or cannot after diligent attempts by Borrower be cured
within  such  ten  day  period,  and such default is likely to be cured within a
reasonable time, then Borrower shall have an additional reasonable period (which
shall  not  in  any  case  exceed  30 days) to attempt to cure such default, and
within  such reasonable time period the failure to have cured such default shall
not  be  deemed  an  Event  of  Default  but  no Credit Extensions will be made;

          8.3 MATERIAL ADVERSE CHANGE. If there occurs a material adverse change
in Borrower's business or financial condition taken as a whole, or if there is a
material  impairment  of  the  prospect  of  repayment  of  any  portion  of the
Obligations or a material impairment of the value or priority of Bank's security
interests  in  the  Collateral;

          8.4  ATTACHMENT.  If  any  material  portion  of  Borrower's assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity  and such attachment, seizure, writ or distress warrant or levy has not
been  removed,  discharged  or  rescinded  within  ten  days,  or if Borrower is
enjoined,  restrained, or in any way prevented by court order from continuing to
conduct  all  or  any material part of its business affairs, or if a judgment or
other  claim  becomes  a  lien  or  encumbrance  upon  any  material  portion of
Borrower's  assets,  or  if  a  notice  of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or  any department, agency, or instrumentality thereof, or by any state, county,
municipal,  or  governmental  agency,  and  the same is not paid within ten days
after  Borrower  receives  notice  thereof,  provided that none of the foregoing
shall  constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that  no Credit Extensions will be required to be made during such cure period);

          8.5  INSOLVENCY.  If  Borrower  becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within 30 days (provided that no
Credit  Extensions  will  be  made  prior  to  the  dismissal of such Insolvency
Proceeding);


<PAGE>
          8.6  OTHER AGREEMENTS. If there is a default in any agreement to which
Borrower  is  a party with a third party or parties resulting in a right by such
third  party or parties, whether or not exercised, to accelerate the maturity of
any  Indebtedness  in  an  amount  in  excess  of  $250,000 or that could have a
Material Adverse Effect; provided, however, that the Event of Default under this
Section  8.6  caused  by  the  occurrence  of  a default under another agreement
described in this Section shall be cured for purposes of this Agreement upon the
receipt  of  proof by Bank of the cure or waiver of the default under such other
agreement;

          8.7  SUBORDINATED  DEBT.  If  Borrower makes any payment on account of
Subordinated  Debt,  except  to  the  extent  the  payment  is allowed under any
subordination  agreement  entered  into  with  Bank;

          8.8  JUDGMENTS. If a judgment or judgments for the payment of money in
an  amount,  individually  or  in  the  aggregate, of at least $250,000 shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a period
of  10  Business  Days (provided that no Credit Extensions will be made prior to
the  satisfaction  or  stay  of  the  judgment);  or

          8.9  MISREPRESENTATIONS. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
herein  or  in  any  certificate  delivered  to  Bank by any Responsible Officer
pursuant to this Agreement or to induce Bank to enter into this Agreement or any
other  Loan  Document.

     9.   BANK'S  RIGHTS  AND  REMEDIES.

          9.1  RIGHTS  AND  REMEDIES.  Upon  the  occurrence  and  during  the
continuance of an Event of Default, Bank may, at its election, without notice of
its  election  and  without  demand, do any one or more of the following, all of
which  are  authorized  by  Borrower:

               (a) Declare all Obligations, whether evidenced by this Agreement,
by  any  of  the other Loan Documents, or otherwise, immediately due and payable
(provided  that  upon the occurrence of an Event of Default described in Section
8.5, all Obligations shall become immediately due and payable without any action
by  Bank);

               (b)  Cease  advancing  money  or  extending  credit to or for the
benefit  of  Borrower  under this Agreement or under any other agreement between
Borrower  and  Bank;

               (c)  Demand that Borrower (i) deposit cash with Bank in an amount
equal  to  the  amount of any Letters of Credit remaining undrawn, as collateral
security  for the repayment of any future drawings under such Letters of Credit,
and  Borrower  shall  forthwith  deposit  and  pay such amounts, and (ii) pay in
advance  all  Letters  of  Credit  fees scheduled to be paid or payable over the
remaining  term  of  the  Letters  of  Credit;

               (d)  Settle  or  adjust disputes and claims directly with account
debtors  for  amounts,  upon  terms  and  in whatever order that Bank reasonably
considers  advisable;

               (e)  Make  such  payments  and  do  such  acts  as Bank considers
necessary  or  reasonable  to  protect  its security interest in the Collateral.
Borrower  agrees to assemble the Collateral if Bank so requires, and to make the
Collateral  available to Bank as Bank may designate. Borrower authorizes Bank to
enter  the  premises  where  the  Collateral  is  located,  to take and maintain
possession  of the Collateral, or any part of it, and to pay, purchase, contest,
or  compromise  any  encumbrance,  charge, or lien which in Bank's determination
appears to be prior or superior to its security interest and to pay all expenses
incurred  in  connection  therewith.  With  respect  to  any of Borrower's owned
premises, Borrower hereby grants Bank a license to enter into possession of such
premises  and  to  occupy  the same, without charge, in order to exercise any of
Bank's  rights  or  remedies  provided  herein, at law, in equity, or otherwise;

               (f) Set off and apply to the Obligations any and all (i) balances
and deposits of Borrower held by Bank, or (ii) indebtedness at any time owing to
or  for  the  credit  or  the  account  of  Borrower  held  by  Bank;


<PAGE>
               (g)  Ship,  reclaim,  recover,  store,  finish, maintain, repair,
prepare  for  sale,  advertise  for  sale,  and sell (in the manner provided for
herein)  the Collateral. Bank is hereby granted a license or other right, solely
pursuant  to  the  provisions  of  this  Section  9.1,  to  use, without charge,
Borrower's  labels,  patents,  copyrights,  rights  of  use  of  any name, trade
secrets,  trade names, trademarks, service marks, and advertising matter, or any
property  of  a  similar nature, as it pertains to the Collateral, in completing
production  of,  advertising  for  sale,  and  selling  any  Collateral  and, in
connection with Bank's exercise of its rights under this Section 9.1, Borrower's
rights  under  all  licenses  and all franchise agreements shall inure to Bank's
benefit;

               (h)  Sell  the  Collateral at either a public or private sale, or
both,  by way of one or more contracts or transactions, for cash or on terms, in
such  manner  and  at  such  places  (including  Borrower's  premises)  as  Bank
determines is commercially reasonable, and apply any proceeds to the Obligations
in  whatever  manner  or  order  Bank  deems  appropriate;

               (i)  Bank  may  credit  bid  and purchase at any public sale; and

               (j)  Any  deficiency  that  exists  after  disposition  of  the
Collateral  as  provided  above  will  be  paid  immediately  by  Borrower.

          9.2  POWER  OF ATTORNEY. Effective only upon the occurrence and during
the  continuance  of  an  Event of Default, Borrower hereby irrevocably appoints
Bank  (and  any  of Bank's designated officers, or employees) as Borrower's true
and lawful attorney to: (a) send requests for verification of Accounts or notify
account  debtors  of  Bank's  security  interest  in  the  Accounts; (b) endorse
Borrower's  name  on  any  checks or other forms of payment or security that may
come  into Bank's possession; (c) sign Borrower's name on any invoice or bill of
lading  relating  to  any Account, drafts against account debtors, schedules and
assignments  of  Accounts,  verifications  of  Accounts,  and notices to account
debtors;  (d) dispose of any Collateral; (e) make, settle, and adjust all claims
under and decisions with respect to Borrower's policies of insurance; (f) settle
and  adjust  disputes  and  claims respecting the accounts directly with account
debtors,  for amounts and upon terms which Bank determines to be reasonable; (g)
to  modify, in its sole discretion, any intellectual property security agreement
entered  into  between  Borrower  and  Bank  without  first obtaining Borrower's
approval  of or signature to such modification by amending Exhibits A, B, and C,
thereof, as appropriate, to include reference to any right, title or interest in
any  Copyrights,  Patents or Trademarks acquired by Borrower after the execution
hereof  or  to  delete  any  reference  to  any  right, title or interest in any
Copyrights,  Patents  or Trademarks in which Borrower no longer has or claims to
have  any  right, title or interest; (h) to file, in its sole discretion, one or
more  financing  or  continuation statements and amendments thereto, relative to
any  of the Collateral without the signature of Borrower where permitted by law;
and  (i)  to transfer the Intellectual Property Collateral into the name of Bank
or  a  third  party  to  the  extent  permitted under the UCC; provided Bank may
exercise  such  power  of  attorney  to  sign the name of Borrower on any of the
documents described in Section 4.2 regardless of whether an Event of Default has
occurred.  The  appointment of Bank as Borrower's attorney in fact, and each and
every  one  of  Bank's  rights  and  powers,  being coupled with an interest, is
irrevocable  until  the earlier of the cure or waiver of the Event of Default or
such  time  as  all  of the Obligations have been fully repaid and performed and
Bank's  obligation  to  provide  advances  hereunder  is  terminated.

          9.3  ACCOUNTS  COLLECTION.  At  any  time  during  the  term  of  this
Agreement, Bank may notify any Person owing funds to Borrower of Bank's security
interest  in  such  funds  and verify the amount of such Account. Borrower shall
collect all amounts owing to Borrower for Bank, receive in trust all payments as
Bank's  trustee, and immediately deliver such payments to Bank in their original
form  as received from the account debtor, with proper endorsements for deposit.

          9.4 BANK EXPENSES. If Borrower fails to pay any amounts or furnish any
required  proof  of  payment due to third persons or entities, as required under
the  terms of this Agreement, then Bank may do any or all of the following after
reasonable notice to Borrower: (a) make payment of the same or any part thereof;
(b) set up such reserves under the Revolving Facility as Bank deems necessary to
protect  Bank  from  the  exposure  created  by  such failure; or (c) obtain and
maintain  insurance  policies  of  the  type  discussed  in  Section 6.5 of this
Agreement,  and  take  any  action  with  respect to such policies as Bank deems
prudent.  Any  amounts  so  paid  or  deposited  by  Bank  shall constitute Bank
Expenses,  shall  be immediately due and payable, and shall bear interest at the
then  applicable  rate  hereinabove  provided,  and  shall  be  secured  by  the
Collateral.  Any payments made by Bank shall not constitute an agreement by Bank


<PAGE>
to  make  similar  payments  in  the  future or a waiver by Bank of any Event of
Default  under  this  Agreement.

          9.5  BANK'S  LIABILITY  FOR  COLLATERAL. So long as Bank complies with
reasonable banking practices and Section 9-207 of the UCC, Bank shall not in any
way  or  manner  be  liable  or  responsible  for:  (a)  the  safekeeping of the
Collateral; (b) any loss or damage thereto occurring or arising in any manner or
fashion  from any cause; (c) any diminution in the value thereof; or (d) any act
or  default  of  any  carrier, warehouseman, bailee, forwarding agency, or other
person  whomsoever.  All  risk  of loss, damage or destruction of the Collateral
shall  be  borne  by  Borrower,  except  where  such loss, damage or destruction
results  from  the  gross  negligence  or  willful  misconduct of Bank or Bank's
failure  to  comply  with  Section  9-207  of  the  UCC.

          9.6  REMEDIES  CUMULATIVE.  Bank's  rights  and  remedies  under  this
Agreement,  the  Loan  Documents,  and all other agreements shall be cumulative.
Bank  shall  have  all  other  rights  and remedies not inconsistent herewith as
provided  under  the UCC, by law, or in equity. No exercise by Bank of one right
or  remedy  shall  be  deemed an election, and no waiver by Bank of any Event of
Default on Borrower's part shall be deemed a continuing waiver. No delay by Bank
shall  constitute  a  waiver, election, or acquiescence by it. No waiver by Bank
shall  be  effective  unless made in a written document signed on behalf of Bank
and  then  shall be effective only in the specific instance and for the specific
purpose  for  which  it  was  given.

          9.7  DEMAND;  PROTEST.  Borrower  waives  demand,  protest,  notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of  any  default,  nonpayment  at  maturity,  release,  compromise,  settlement,
extension,  or  renewal  of accounts, documents, Instruments, Chattel Paper, and
guarantees  at any time held by Bank on which Borrower may in any way be liable.

     10.  NOTICES.

          Unless otherwise provided in this Agreement, all notices or demands by
any  party  relating  to  this  Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other  informational  documents  which  may be sent by first-class mail, postage
prepaid)  shall  be  personally  delivered  or  sent  by  a recognized overnight
delivery  service, certified mail, postage prepaid, return receipt requested, or
by  telefacsimile  to  Borrower or to Bank, as the case may be, at its addresses
set  forth  below:

     If to Borrower:         Evolve  Software,  Inc.
                             1400  65th  Street,  Suite  100
                             Emeryville,  CA  94608
                             Attn:   Douglas Sinclair, Chief Financial Officer
                             Fax:    (510)  428-6902

     If  to  Bank:           Imperial  Bank
                             Emerging  Growth  Division
                             555  California  Street,  Suite  3160
                             San  Francisco,  CA  94104
                             Attn:   Benjermin  Colombo
                             Fax:    (415)  705-5818

     with a copy to:         Imperial  Bank
                             226  Airport  Parkway
                             San  Jose,  CA  95110
                             Attn:  Corporate  Banking  Center
                             Fax:  (408)  451-8586

     The  parties  hereto  may  change  the address at which they are to receive
notices  hereunder,  by  notice  in writing in the foregoing manner given to the
other.


<PAGE>
     11.  CHOICE  OF  LAW  AND  VENUE;  JURY  TRIAL  WAIVER.

          This Agreement shall be governed by, and construed in accordance with,
the  internal  laws  of the State of California, without regard to principles of
conflicts  of  law.  Each  of  Borrower and Bank hereby submits to the exclusive
jurisdiction  of  the  state  and  Federal courts located in the County of Santa
Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF  ANY  OF  THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING  CONTRACT  CLAIMS,  TORT  CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON  LAW  OR  STATUTORY  CLAIMS.  EACH  PARTY  RECOGNIZES AND AGREES THAT THE
FOREGOING  WAIVER  CONSTITUTES  A  MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT.  EACH  PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH  ITS  LEGAL  COUNSEL  AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL  RIGHTS  FOLLOWING  CONSULTATION  WITH  LEGAL  COUNSEL.

     12.  GENERAL  PROVISIONS.

          12.1  SUCCESSORS  AND  ASSIGNS. This Agreement shall bind and inure to
the  benefit  of  the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may  be assigned by Borrower without Bank's prior written consent, which consent
may  be granted or withheld in Bank's sole discretion. Bank shall have the right
without  the  consent  of or notice to Borrower to sell, transfer, negotiate, or
grant  participation  in  all  or  any  part  of,  or  any  interest  in, Bank's
obligations,  rights  and  benefits  hereunder.

          12.2  INDEMNIFICATION.  Borrower  shall  defend,  indemnify  and  hold
harmless  Bank  and  its  officers,  employees,  and  agents  against:  (a)  all
obligations,  demands,  claims, and liabilities claimed or asserted by any other
party  in  connection  with the transactions contemplated by this Agreement; and
(b)  all  losses or Bank Expenses in any way suffered, incurred, or paid by Bank
as  a  result  of  or  in any way arising out of, following, or consequential to
transactions  between  Bank  and  Borrower  whether  under  this  Agreement,  or
otherwise (including without limitation reasonable attorneys fees and expenses),
except  for losses caused by Bank's gross negligence or willful misconduct. Bank
may  not enter into any settlement or other compromise with respect to any claim
covered  by  the  indemnity set forth in this Section 12.2 without giving notice
thereof  to Borrower. If Bank or any other indemnified party obtains recovery of
any  of the amounts that Borrower has paid to them pursuant to the indemnity set
forth in this Section, then Bank or such other indemnified party, as applicable,
shall  promptly  pay  to  Borrower  such  amounts  paid  by  Borrower.

          12.3  TIME  OF  ESSENCE. Time is of the essence for the performance of
all  obligations  set  forth  in  this  Agreement.

          12.4  SEVERABILITY  OF  PROVISIONS.  Each  provision of this Agreement
shall  be severable from every other provision of this Agreement for the purpose
of  determining  the  legal  enforceability  of  any  specific  provision.

          12.5  AMENDMENTS  IN  WRITING,  INTEGRATION.  All  amendments  to  or
terminations  of  this  Agreement  must  be  in  writing.  All prior agreements,
understandings,  representations,  warranties,  and  negotiations  between  the
parties hereto with respect to the subject matter of this Agreement, if any, are
merged  into  this  Agreement  and  the  Loan  Documents.

          12.6  COUNTERPARTS.  This  Agreement  may be executed in any number of
counterparts  and  by different parties on separate counterparts, each of which,
when  executed  and  delivered,  shall  be  deemed to be an original, and all of
which,  when  taken  together,  shall constitute but one and the same Agreement.

          12.7  SURVIVAL.  All covenants, representations and warranties made in
this  Agreement  shall  continue  in  full  force  and  effect  so  long  as any
Obligations  remain  outstanding.  The obligations of Borrower to indemnify Bank
with  respect  to the expenses, damages, losses, costs and liabilities described


<PAGE>
in  Section  12.2  shall  survive  until  all  applicable statute of limitations
periods  with  respect  to  actions  that  may be brought against Bank have run.

          12.8  CONFIDENTIALITY.  In  handling any confidential information Bank
and all employees and agents of Bank shall exercise the same degree of care that
Bank exercises with respect to its own proprietary information of the same types
to  maintain  the confidentiality of any non-public information thereby received
or  received  pursuant  to  this  Agreement  except  that  disclosure  of  such
information  may  be  made  (i)  to  the  subsidiaries  or affiliates of Bank in
connection  with  their present or prospective business relations with Borrower,
(ii)  to  prospective  transferees  or  purchasers of any interest in the Loans,
provided  that  they have entered into a comparable confidentiality agreement in
favor  of  Borrower  and have delivered a copy to Borrower, (iii) as required by
law,  regulations,  rule  or  order,  subpoena, judicial order or similar order,
provided  that  Bank shall, if permitted by applicable law, use its best efforts
to notify Borrower in advance of any such disclosure; (iv) as may be required in
connection  with the examination, audit or similar investigation of Bank and (v)
as  Bank  may  determine  in  connection  with  the  enforcement of any remedies
hereunder. Confidential information hereunder shall not include information that
either:  (a)  is  in the public domain or in the knowledge or possession of Bank
when disclosed to Bank, or becomes part of the public domain after disclosure to
Bank  through  no  fault  of Bank; or (b) is disclosed to Bank by a third party,
provided Bank does not have actual knowledge that such third party is prohibited
from  disclosing  such  information.




                          [The signature page follows.]



<PAGE>
     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
executed  as  of  the  date  first  above  written.


                                           EVOLVE  SOFTWARE,  INC.

                                           By:
                                                --------------------------------

                                           Name:
                                                 -------------------------------

                                           Title:
                                                  ------------------------------


                                           IMPERIAL  BANK

                                           By:
                                                --------------------------------

                                           Name:
                                                 -------------------------------

                                           Title:
                                                  ------------------------------


<PAGE>
                                    EXHIBIT A

                                   DEFINITIONS

     "ACCOUNTS"  means  all  presently  existing and hereafter arising accounts,
contract  rights,  and  all other forms of obligations owing to Borrower arising
out  of the sale or lease of goods (including, without limitation, the licensing
of  software  and  other  technology)  or the rendering of services by Borrower,
whether  or  not  earned  by  performance,  and  any  and  all credit insurance,
guaranties,  and other security therefor, as well as all merchandise returned to
or  reclaimed by Borrower and Borrower's Books relating to any of the foregoing.

     "AFFILIATE"  means,  with  respect  to  any Person, any Person that owns or
controls  directly  or  indirectly  such  Person, any Person that controls or is
controlled  by  or  is  under  common control with such Person, and each of such
Person's  senior  executive  officers,  directors,  and  partners.

     "ASSETS"  means all assets that should be characterized as such pursuant to
GAAP.

     "BANK  EXPENSES"  means  all:  reasonable  costs  or  expenses  (including
reasonable  attorneys'  fees  and  expenses)  incurred  in  connection  with the
preparation, negotiation, administration, and enforcement of the Loan Documents;
reasonable  Collateral  audit  fees;  and  Bank's reasonable attorneys' fees and
expenses  incurred  in  amending,  enforcing  or  defending  the  Loan Documents
(including  fees  and  expenses of appeal), incurred before, during and after an
Insolvency  Proceeding,  whether  or  not  suit  is  brought.

     "BORROWER'S  BOOKS"  means  all  of Borrower's books and records including:
ledgers;  records  concerning  Borrower's assets or liabilities, the Collateral,
business  operations  or financial condition; and all computer programs, or tape
files,  and  the  equipment,  containing  such  information.

     "BORROWING  BASE"  means, through and until March 31, 2001, an amount equal
to  80%  of  Eligible Accounts, as determined by Bank with reference to the most
recent Borrowing Base Certificate delivered by Borrower, plus $3,000,000; on and
after  March  31, 2001, "BORROWING BASE" shall mean 80% of Eligible Accounts, as
determined  by Bank with reference to the most recent Borrowing Base Certificate
delivered  by  Borrower.

     "BORROWING  BASE  CERTIFICATE" has the meaning set forth in Section 6.2(a).

     "BUSINESS  DAY"  means any day that is not a Saturday, Sunday, or other day
on  which  banks in the State of California are authorized or required to close.

     "CHANGE  IN  CONTROL"  shall  mean  a  transaction in which any "person" or
"group"  (within  the  meaning  of  Section 13(d) and 14(d)(2) of the Securities
Exchange  Act  of 1934) becomes the "beneficial owner" (as defined in Rule 13d-3
under  the  Securities  Exchange  Act  of  1932),  directly  or indirectly, of a
sufficient number of shares of all classes of stock then outstanding of Borrower
ordinarily  entitled  to  vote  in  the  election  of directors, empowering such
"person"  or  "group" to elect a majority of the Board of Directors of Borrower,
who  did  not  have  such  power  before  such  transaction.

     "CHATTEL  PAPER"  means  any  "chattel  paper,"  as such term is defined in
Section 9105(1)(b) of the UCC, now owned or hereafter acquired by Borrower or in
which  Borrower  now  holds  or  hereafter  acquires  an  interest.

     "CLOSING  DATE"  means  the  date  of  this  Agreement.

     "COLLATERAL"  means the property described on Exhibit B attached hereto and
all Negotiable Collateral and Intellectual Property Collateral to the extent not
described on Exhibit B, except to the extent any such property or rights (i) are
nonassignable  by  law  or  by  their  terms without the consent of the licensor
thereof or another party (but only to the extent such prohibition on transfer is
enforceable under applicable law, including, without limitation, Section 9318(4)
of  the UCC), or (ii) the granting of a security interest therein is contrary to
applicable  law  or  the  terms of the agreement pursuant to which the rights or
property  is  acquired, provided that upon the cessation of any such restriction
or prohibition, such property shall automatically become part of the Collateral.


<PAGE>
     "COMMITTED EQUIPMENT LINE" means a Credit Extension in the principal amount
of  up  to  $7,500,000.

     "COMMITTED REVOLVING LINE" means a Credit Extension in the principal amount
of  up  to  $7,500,000.

     "CONTINGENT  OBLIGATION"  means,  as  applied  to any Person, any direct or
indirect  liability, contingent or otherwise, of that Person with respect to (i)
any  indebtedness,  lease,  dividend,  letter  of  credit or other obligation of
another,  including,  without  limitation,  any  such  obligation  directly  or
indirectly  guaranteed, endorsed, co-made or discounted or sold with recourse by
that  Person,  or  in  respect  of  which  that  Person is otherwise directly or
indirectly  liable;  (ii)  any  obligations  with  respect to undrawn letters of
credit  issued for the account of that Person; and (iii) all obligations arising
under any interest rate, currency or commodity swap agreement, interest rate cap
agreement,  interest  rate  collar  agreement, or other agreement or arrangement
designated  to  protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; provided, however, that the term "CONTINGENT
OBLIGATION"  shall  not  include  endorsements  for collection or deposit in the
ordinary  course  of  business. The amount of any Contingent Obligation shall be
deemed  to  be an amount equal to the stated or determined amount of the primary
obligation  in  respect  of  which such Contingent Obligation is made or, if not
stated  or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith; provided, however, that such
amount shall not in any event exceed the maximum amount of the obligations under
the  guarantee  or  other  support  arrangement.

     "CONTRACTS"  means  all  contracts,  undertakings,  franchise agreements or
other  agreements  (other  than  rights evidenced by Chattel Paper, Documents or
Instruments)  in  or  under  which Borrower may now or hereafter have any right,
title  or  interest, including, without limitation, any and all right, title and
interest  of  Borrower  under  any  customer  agreements,  supply  agreements,
distribution  agreements,  rebate agreements, processing agreements, warehousing
agreements  or  royalty  agreements  and shall include, without limitation, with
respect  to  an  Account,  any agreement relating to the terms of payment or the
terms  of  performance  thereof.

     "COPYRIGHT  LICENSE"  means  any  agreement  granting  any right to use any
Copyright  or  Copyright  registration  (whether Borrower is the licensee or the
licensor  thereunder),  now  owned or hereafter acquired by Borrower, including,
without  limitation,  licenses  pursuant  to  which  Borrower  has  obtained the
exclusive  right  to  use  a  copyright  owned  by  a  third  party.

     "COPYRIGHTS"  means  any  and all copyright rights, copyright applications,
copyright  registrations  and  like  protections  in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same  also  constitutes  a  trade  secret,  now  or hereafter existing, created,
acquired  or  held.

     "CREDIT EXTENSION" means each Revolving Advance, Equipment Advance, and any
other  extension  of  credit  by  Bank  for  the  benefit of Borrower hereunder.

     "CURRENT  LIABILITIES"  means,  as  of any applicable date, (i) all amounts
that  should, in accordance with GAAP, be included as current liabilities on the
consolidated  balance  sheet  of  Borrower and its Subsidiaries, as at such date
plus (ii) to the extent not already included therein, all Obligations, including
outstanding  Letters  of  Credit  and  other  Credit  Extensions made under this
Agreement,  including all Indebtedness that is payable upon demand or within one
year  from  the  date  of  determination  thereof  unless  such  Indebtedness is
renewable  or  extendible  at the option of Borrower or any Subsidiary to a date
more  than  one  year  from  the  date  of  determination.

     "DEPOSIT  ACCOUNTS"  means any "deposit account" as such term is defined in
Section  9105(1)(e)  of  the  UCC,  and  should include, without limitation, any
demand,  time,  savings passbook or like account, now or hereafter maintained by
or  for  the  benefit  of  Borrower, or in which Borrower now holds or hereafter
acquires  any  interest, with a bank, savings and loan association, credit union
or like organization (including Bank) and all funds and amounts therein, whether
or  not  restricted  or  designated  for  a  particular  purpose.

     "ELIGIBLE  ACCOUNTS" means those Accounts that arise in the ordinary course
of  Borrower's  business  that comply with all of Borrower's representations and
warranties  to Bank set forth in Section 5.3; provided, that Bank may change the


<PAGE>
standards of eligibility by giving Borrower 30 days prior written notice. Unless
otherwise  agreed to by Bank, Eligible Accounts shall not include the following:

     (a)  Accounts  that  the account debtor has failed to pay within 90 days of
invoice  date;

     (b)  Accounts  with respect to an account debtor, 25% of whose Accounts the
account  debtor  has  failed  to  pay  within  90  days  of  invoice  date;

     (c)  Accounts  with  respect  to  which  the  account debtor is an officer,
employee,  or  agent  of  Borrower;

     (d)  Accounts  with  respect  to  which  goods  are  placed on consignment,
guaranteed sale, sale or return, sale on approval, bill and hold, or other terms
by  reason  of  which  the  payment  by  the  account debtor may be conditional;

     (e)  Accounts  with  respect to which the account debtor is an Affiliate of
Borrower;

     (f)  Accounts  with  respect  to which the account debtor does not have its
principal  place  of  business  in  the  United  States;

     (g)  Accounts with respect to which the account debtor is the United States
or  any  department,  agency,  or  instrumentality  of  the  United  States;

     (h) Accounts with respect to which Borrower is liable to the account debtor
for  goods sold or services rendered by the account debtor to Borrower, but only
to the extent of any amounts owing to the account debtor against amounts owed to
Borrower;

     (i)  Accounts with respect to an account debtor, including Subsidiaries and
Affiliates,  whose  total obligations to Borrower exceed 25% of all Accounts, to
the  extent  such  obligations  exceed  the aforementioned percentage, except as
approved  in  writing  by  Bank;

     (j) Accounts with respect to which the account debtor disputes liability or
makes  any  claim  with  respect  thereto as to which Bank believes, in its sole
discretion, that there may be a basis for dispute (but only to the extent of the
amount  subject  to  such  dispute  or  claim),  or is subject to any Insolvency
Proceeding,  or  becomes  insolvent,  or  goes  out  of  business;  and

     (k)  Accounts  the  collection  of  which  Bank reasonably determines after
inquiry  and  consultation  with  Borrower  to  be  doubtful.

     "EQUIPMENT"  means  all  present  and  future  machinery, equipment, tenant
improvements,  furniture,  fixtures,  vehicles,  tools, parts and attachments in
which  Borrower  has  any  interest.

     "EQUIPMENT  ADVANCE" and "EQUIPMENT ADVANCES" have the meaning set forth in
Section  2.1(c).

     "EQUIPMENT  ADVANCE  PERMITTED  USES" means, subject to Section 2.1(c), the
purchase  of  equipment,  furniture  and  software.

     "EQUIPMENT  FACILITY"  means  the facility under which Borrower may request
Bank  to  issue  Equipment  Advances,  as  specified  in  Section 2.1(c) hereof.

     "ERISA"  means  the  Employee  Retirement  Income  Security Act of 1974, as
amended,  and  the  regulations  thereunder.

     "EVENT  OF  DEFAULT"  has  the  meaning  set  forth  in  Article  8.

     "FIRST  EQUIPMENT  MATURITY  DATE"  means  July  31,  2003.


<PAGE>
     "GAAP"  means  generally  accepted  accounting principles as in effect from
time  to  time.

     "GENERAL  INTANGIBLES"  means  any  "general  intangibles," as such term is
defined  in Section 9106 of the UCC, now owned or hereafter acquired by Borrower
or  in  which  Borrower now holds or hereafter acquires an interest, and, in any
event,  shall  include,  without limitation, all right, title and interest which
Borrower  may  now  or hereafter have in or under any Contract, all Intellectual
Property,  interests  in  partnerships,  joint  ventures  and  other  business
associations,  Licenses,  permits,  goodwill (including, without limitation, the
goodwill  associated  with  any  Trademark,  Trademark registration or Trademark
licensed  under  any  Trademark License), claims in or under insurance policies,
including  unearned  premiums,  uncertificated  securities,  deposit  accounts
(including  as  defined in Section 9105(1)(e) of the UCC), rights to receive tax
refunds  and  other  payments  and  rights  of  indemnification.

     "INDEBTEDNESS"  means  (a)  all  indebtedness  for  borrowed  money  or the
deferred  purchase  price  of property or services, including without limitation
reimbursement  and other obligations with respect to surety bonds and letters of
credit,  (b)  all  obligations  evidenced by notes, bonds, debentures or similar
Instruments,  (c)  all  capital  lease  obligations  and  (d)  all  Contingent
Obligations.

     "INSOLVENCY  PROCEEDING"  means  any proceeding commenced by or against any
person  or  entity  under any provision of the United States Bankruptcy Code, as
amended,  or under any other bankruptcy or insolvency law, including assignments
for  the  benefit  of  creditors,  formal  or  informal moratoria, compositions,
extension  generally  with its creditors, or proceedings seeking reorganization,
arrangement,  or  other  relief.

     "INSTRUMENTS"  means  any  "instrument," as such term is defined in Section
9105(1)(i)  of  the  UCC now owned or hereafter acquired by Borrower or in which
Borrower  now  holds  or  hereafter  acquires  any  interest, including, without
limitation,  all  notes,  certificated  securities,  and  other  evidences  of
indebtedness,  other  than instruments that constitute, or are a part of a group
of  writings  that  constitute,  Chattel  Paper.

     "INTELLECTUAL  PROPERTY  COLLATERAL"  means all of Borrower's right, title,
and  interest  in  and  to  the  following:

     (a)  Copyrights,  Trademarks  and  Patents;

     (b) Any and all trade secrets, and any and all intellectual property rights
in  computer  software and Software Products now or hereafter existing, created,
acquired  or  held;

     (c)  Any  and  all  design rights which may be available to Borrower now or
hereafter  existing,  created,  acquired  or  held;

     (d)  Any  and  all  claims  for  damages by way of past, present and future
infringement  of  any  of the rights included above, with the right, but not the
obligation,  to sue for and collect such damages for said use or infringement of
the  intellectual  property  rights  identified  above;

     (e)  All  licenses or other rights to use any of the Copyrights, Patents or
Trademarks,  and  all  license  fees  and royalties arising from such use to the
extent  permitted  by  such  license  or  rights;

     (f)  All  amendments,  renewals  and  extensions  of any of the Copyrights,
Trademarks  or  Patents;  and

     (g)  All  proceeds  and  products  of  the  foregoing,  including  without
limitation  all payments under insurance or any indemnity or warranty payable in
respect  of  any  of  the  foregoing.

     "INTELLECTUAL  PROPERTY  SECURITY AGREEMENT" means an Intellectual Property
Security  Agreement  in form and substance satisfactory to Bank, dated as of the
Closing  Date,  by  and  between  Borrower  and  Bank.

     "INVENTORY"  means  all  present and future inventory in which Borrower has
any interest, including merchandise, raw materials, parts, supplies, packing and
shipping  materials,  work in process and finished products intended for sale or
lease  or  to  be  furnished  under  a  contract  of  service, of every kind and
description  now  or  at  any  time  hereafter  owned  by  or  in the custody or
possession,  actual or constructive, of Borrower, including such inventory as is


<PAGE>
temporarily  out  of  its  custody or possession or in transit and including any
returns  upon  any  accounts  or  other  proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents
of  title representing any of the above, and Borrower's Books relating to any of
the  foregoing.

     "INVESTMENT"  means  any  beneficial  ownership  of  (including  stock,
partnership  interest  or  other securities) any Person, or any loan, advance or
capital  contribution  to  any  Person.

     "IRC"  means  the  Internal  Revenue  Code  of  1986,  as  amended, and the
regulations  thereunder.

     "LICENSE" means any Copyright License, Patent License, Trademark License or
any  other  license  of  rights  or  interests now held or hereafter acquired by
Borrower  or  in which Borrower now holds or hereafter acquires an interest, and
any  renewals  or  extensions  thereof.

     "LIEN"  means  any  mortgage, lien, deed of trust, charge, pledge, security
interest  or  other  encumbrance.

     "LOAN  DOCUMENTS"  means,  collectively,  this  Agreement, the Intellectual
Property  Security  Agreement,  any  note  or notes executed by Borrower and any
other  agreement  entered into between Borrower and Bank in connection with this
Agreement,  all  as  amended  or  extended  from  time  to  time.

     "MATERIAL  ADVERSE  EFFECT"  means  a  material  adverse  effect on (i) the
business  operations  or  condition (financial or otherwise) of Borrower and its
Subsidiaries  taken  as  a  whole  or  (ii) the ability of Borrower to repay the
Obligations  or  otherwise  perform  its  obligations  under the Loan Documents.

     "NEGOTIABLE  COLLATERAL" means all of Borrower's present and future letters
of  credit of which it is a beneficiary, notes, drafts, Instruments, securities,
documents  of  title, and Chattel Paper, and Borrower's Books relating to any of
the  foregoing.

     "OBLIGATIONS"  means all debt, principal, interest, Bank Expenses and other
amounts  owed  to  Bank  by  Borrower  pursuant  to  this Agreement or any other
agreement, whether absolute or contingent, due or to become due, now existing or
hereafter arising, including any interest that accrues after the commencement of
an  Insolvency Proceeding and including any debt, liability, or obligation owing
from  Borrower to others that Bank may have obtained by assignment or otherwise.

     "PATENT  LICENSE"  means  any  written  agreement  granting  any right with
respect  to  any  invention  on  which  a  Patent  is in existence, now owned or
hereafter  acquired  by  Borrower  or  in  which Borrower now holds or hereafter
acquires  an  interest.

     "PATENTS"  means  all  patents,  patent  applications  and like protections
including  without  limitation improvements, divisions, continuations, renewals,
reissues,  extensions  and  continuations-in-part  of  the  same.

     "PERIODIC  PAYMENTS"  means  all installments or similar recurring payments
that  Borrower  may now or hereafter become obligated to pay to Bank pursuant to
the  terms  and  provisions  of any instrument, or agreement now or hereafter in
existence  between  Borrower  and  Bank.

     "PERMITTED  INDEBTEDNESS"  means:

     (a)  Indebtedness of Borrower in favor of Bank arising under this Agreement
or  any  other  Loan  Document;

     (b)  Indebtedness  existing  on  the  Closing  Date  and  disclosed  in the
Schedule,  and  any  extensions,  refinancings,  modifications,  amendments  and
restatements  thereof,  provided  that  the  principal  amount  thereof  is  not
increased  or the terms thereof are not modified to impose more burdensome terms
upon  Borrower  or  its  Subsidiaries,  as  the  case  may  be;


<PAGE>
     (c)  Indebtedness  secured by a lien described in clause (c) of the defined
term "PERMITTED LIENS," provided such Indebtedness does not exceed the lesser of
the  cost or fair market value of the equipment financed with such Indebtedness;

     (d)  Indebtedness  arising  from  the  endorsement  of  instruments  in the
ordinary  course  of  business;

     (e)     Indebtedness  incurred  within  6  months  from  the date hereof by
Evolve  Software  Limited,  a UK corporation and Evolve Software (India) Private
Limited,  an India corporation, in an aggregate amount not to exceed $5,000,000.

     (f)  Subordinated  Debt;

     (g)  Extensions,  renewals  or  refinancings of Borrower's Obligations; and

     (h)  Trade  debt  incurred  in  the  ordinary  course  of  business.

     "PERMITTED  INVESTMENT"  means:

     (a)  Investments  existing  on  the Closing Date disclosed in the Schedule;

     (b)  (i) Marketable direct obligations issued or unconditionally guaranteed
by  the  United  States  of  America or any agency or any State thereof maturing
within  one  year  from  the  date of acquisition thereof, (ii) commercial paper
maturing  no  more than one year from the date of creation thereof and currently
having  rating  of at least A-2 or P-2 from either Standard & Poor's Corporation
or  Moody's  Investors Service, (iii) Bank's certificates of deposit maturing no
more  than  one  year from the date of investment therein, and (iv) Bank's money
market  accounts;

     (c)  Repurchases  of  stock  from former employees or directors of Borrower
under  the  terms  of applicable repurchase agreements, provided that the market
value  of such stock is greater than the repurchase price, and provided further,
that no Event of Default has occurred, is continuing or remains unwaived by Bank
or  would  exist  after  giving  effect  to  the  repurchases;

     (d)  Investments  accepted  in  connection  with  Permitted  Transfers;

     (e) Investments of Subsidiaries in or to other Subsidiaries or Borrower and
Investments  by Borrower in Subsidiaries not to exceed $250,000 in the aggregate
in  any  fiscal  year;

     (f)  Investments  consisting of (i) travel advances and employee relocation
loans  and other employee loans and advances in the ordinary course of business,
and  (ii)  loans to employees, officers or directors relating to the purchase of
equity  securities  of  Borrower  or its Subsidiaries pursuant to employee stock
purchase  plan  agreements  approved  by  Borrower's  Board  of  Directors;

     (g)  Investments  (including  debt obligations) received in connection with
the  bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent  obligations  of,  and  other  disputes  with, customers or suppliers
arising  in  the  ordinary  course  of  Borrower's  business;

     (h) Investments consisting of notes receivable of, or prepaid royalties and
other  credit  extensions, to customers and suppliers who are not Affiliates, in
the  ordinary  course of business, provided that this subparagraph (h) shall not
apply  to  Investments  of  Borrower  in  any  Subsidiary;

     (i)  Joint  ventures  or  strategic  alliances  in  the  ordinary course of
Borrower's business consisting of the non-exclusive licensing of technology, the
development  of  technology or the providing of technical support, provided that
any  cash Investments by Borrower do not exceed $250,000 in the aggregate in any
fiscal  year;  and


<PAGE>
     (j)  Investments  by  Borrower  pursuant  to  Borrower's written investment
policy  approved  by  Borrower's  Board  of  Directors  on  October 13, 2000 and
attached  hereto  as  Exhibit  G.

     "PERMITTED  LIENS"  means  the  following:

     (a) Any Liens existing on the Closing Date and disclosed in the Schedule or
arising  under  this  Agreement  or  the  other  Loan  Documents;

     (b)  Liens  for  taxes,  fees, assessments or other governmental charges or
levies,  either  not  delinquent or being contested in good faith by appropriate
proceedings  and  for  which  Borrower maintains adequate reserves in accordance
with  GAAP,  provided  the  same  have  no  priority over any of Bank's security
interests;

     (c)  Liens,  not  to  exceed  $100,000  in the aggregate (i) upon or in any
Equipment  and  related software, if any, acquired or held by Borrower or any of
its  Subsidiaries  to  secure  the purchase price of such Equipment (which shall
include,  for  purposes  of  this  paragraph (c), shipping, tax and installation
charges  financed by the Person holding the security interest) of such Equipment
and  related  software  or  indebtedness  incurred  solely  for  the  purpose of
financing  the  acquisition  and  installation  of  such  Equipment  and related
software,  (ii)  existing  on such Equipment and related Software at the time of
its  acquisition,  provided  that the Lien is confined solely to the property so
acquired  and improvements thereon, and the proceeds of such Equipment; or (iii)
liens  securing  lease  obligations  on  assets  subject  to  such  leases

     (d) Liens to secure payment of workers' compensation, employment insurance,
old  age  pensions,  social  security  or other like obligations incurred in the
ordinary  course  of  business;

     (e) Liens incurred in connection with the extension, renewal or refinancing
of  the  indebtedness  secured  by  Liens  of  the type described in clauses (a)
through  (c)  above,  provided  that  any extension, renewal or replacement Lien
shall  be  limited  to  the  property  encumbered  by  the existing Lien and the
principal  amount of the indebtedness being extended, renewed or refinanced does
not  increase;

     (f)  Liens  arising from judgments, decrees or attachments in circumstances
not  constituting  an  Event  of  Default  under  Sections  8.4  or  8.8;

     (g)  Liens  in  favor of other financial institutions arising in connection
with  Borrower's  Deposit Accounts held at such institutions, provided that Bank
has  a perfected security interest in the amounts held in such Deposit Accounts;
and

     (h)  Other  Liens  not  described  above  arising in the ordinary course of
business  and  not  having  or  not reasonably likely to have a Material Adverse
Effect  on  Borrower  and  its  Subsidiaries  taken  as  a  whole.

     "PERMITTED  TRANSFER"  means  the  conveyance,  sale,  lease,  transfer  or
disposition  by  Borrower  or  any  Subsidiary  of:

     (a)  Inventory  in  the  ordinary  course  of  business;

     (b)  licenses  and  similar  arrangements  for  the  use of the property of
Borrower  or  its  Subsidiaries  in  the  ordinary  course  of  business;

     (c)  surplus,  worn-out  or  obsolete  Equipment;  or

     (d)  other  assets  of  Borrower  or  its  Subsidiaries which do not in the
aggregate  exceed  $250,000  per  fiscal  year.

     "PERSON"  means  any  individual, sole proprietorship, partnership, limited
liability  company,  joint  venture,  trust,  unincorporated  organization,
association,  corporation,  institution, public benefit corporation, firm, joint
stock  company,  estate,  entity  or  governmental  agency.


<PAGE>
     "PRIME  RATE" means the variable rate of interest, per annum, most recently
announced  by  Bank,  as its "PRIME RATE," whether or not such announced rate is
the  lowest  rate  available  from  Bank.

     "QUICK  ASSETS"  means, at any date as of which the amount thereof shall be
determined,  Borrower's  unrestricted  cash and cash-equivalents plus Borrower's
net  book  accounts  receivable,  determined  in  accordance  with  GAAP.

     "RESPONSIBLE  OFFICER" means each of the Chief Executive Officer, the Chief
Operating  Officer,  the Chief Financial Officer and the Controller of Borrower.

     "REVOLVING  ADVANCE"  and REVOLVING ADVANCES" have the meaning set forth in
Section  2.1(b)(i).

     "REVOLVING  ADVANCE  PERMITTED  USES"  means  the  support  of  Borrower's
short-term  working  capital requirements and the issuance by Bank of Letters of
Credit.

     "REVOLVING  FACILITY"  means  the facility under which Borrower may request
Bank  to  issue  Revolving  Advances,  as  specified  in  Section 2.1(b) hereof.

     "REVOLVING  MATURITY  DATE"  means  January  31,  2002.

     "SCHEDULE"  means  the  schedule  of  exceptions  attached  hereto.

     "SECOND  EQUIPMENT  MATURITY  DATE"  means  January  31,  2004.

     "SOFTWARE  PRODUCTS"  means  all  software, computer source codes and other
computer  programs,  and  all  common law and statutory copyrights and copyright
registrations, applications for registration, now existing or hereafter arising,
United  States  of  America  and  foreign,  obtained  or to be obtained on or in
connection with the Software Products, or any parts thereof or any underlying or
component elements of the Software Products together with the right to copyright
and  all  rights  to  renew or extend such copyrights and the right (but not the
obligation)  of  Bank to sue in its own name and/or the name of the Borrower for
past,  present  and  future  infringements  of  copyright.

     "SUBORDINATED  DEBT"  means  any  debt  incurred  by  Borrower  that  is
subordinated  to  the debt owing by Borrower to Bank on terms acceptable to Bank
in  its  sole  discretion.

     "SUBSIDIARY"  means any corporation or partnership in which (i) any general
partnership  interest  or  (ii) more than 50% of the stock of which by the terms
thereof  ordinary  voting  power  to  elect  the Board of Directors, managers or
trustees of the entity, at the time as of which any determination is being made,
is  owned  by  Borrower,  either  directly  or  through  an  Affiliate.

     "TRADEMARK  LICENSE"  means any written agreement granting any right to use
any Trademark or Trademark registration (whether Borrower is the licensee or the
licensor  thereunder)  now  owned  or hereafter acquired by Borrower or in which
Borrower  now  holds  or  hereafter  acquires  an  interest.

     "TRADEMARKS" means any trademark and servicemark rights, whether registered
or  not,  applications  to  register  and  registrations  of  the  same and like
protections,  and the entire goodwill of the business of Borrower connected with
and  symbolized  by  such  trademarks.

     "TRANCHE  A"  has  the  meaning  set  forth  in  Section  2.1(c)(i).

     "TRANCHE  B"  has  the  meaning  set  forth  in  Section  2.1(c)(i).

     "TRANCHE  A  EQUIPMENT ADVANCE" or "TRANCHE A EQUIPMENT ADVANCES" means any
Equipment  Advance(s)  made  under  Tranche  A.


<PAGE>
     "TRANCHE  B  EQUIPMENT ADVANCE" or "TRANCHE B EQUIPMENT ADVANCES" means any
Equipment  Advance(s)  made  under  Tranche  B.

     "TRANCHE  A  AVAILABILITY  END  DATE"  means  July  31,  2001.

     "TRANCHE  B  AVAILABILITY  END  DATE"  means  January  31,  2002.

     "UCC" means the Uniform Commercial Code as the same may, from time to time,
be  in  effect in the State of California; provided, however, in the event that,
by  reason  of  mandatory  provisions  of  law,  any  or  all of the attachment,
perfection or priority of Bank's security interest in any Collateral is governed
by  the  Uniform  Commercial  Code as in effect in a jurisdiction other than the
State of California, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to  such  attachment,  perfection  or  priority  and for purposes of definitions
related  to  such  provisions.


<PAGE>
                                    EXHIBIT B

                              COLLATERAL DEFINITION

The  Collateral shall consist of all of Borrower's right, title and interest in,
to  and under the following, wherever located and whether now owned or hereafter
owned  or  acquired in which Borrower now has or hereafter acquires any right or
interest  (collectively,  the  "Collateral"):

A.        All  Accounts  of  Borrower;

B.        All  Chattel  Paper  of  Borrower;

C.        All  Copyrights  of  Borrower;

D.        All  Contracts  of  Borrower;

E.        All  Deposit  Accounts  of  Borrower;

F.        All  Equipment  of  Borrower;

G.        All  General  Intangibles  of  Borrower;

H.        All  Instruments  of  Borrower;

I.        All  Inventory  of  Borrower;

J.        All  Licenses  of  Borrower;

K.        All  Patents  of  Borrower;

L.        All  Software  Products  of  Borrower;

M.        All  Trademarks  of  Borrower;

N.        All property of Borrower held by Bank or any other party for whom Bank
is  acting  as  agent  hereunder, including, without limitation, all property of
every description now or hereafter in the possession or custody of or in transit
to  Bank  or  such  other  party for any purpose, including, without limitation,
safekeeping,  collection  or pledge, for the account of Borrower, or as to which
Borrower  may  have  any  right  or  power;

O.        All  other goods and personal property of Borrower, including, without
limitation, returns, repossessions, books and records, Equipment containing such
books  and  records, whether tangible or intangible and whether now or hereafter
owned  or  existing,  leased,  consigned  by or to, or acquired by, Borrower and
wherever  located;  and

P.        To  the  extent  not  otherwise included, all Proceeds  of each of the
foregoing  and all accessions to, substitutions and replacements for, and rents,
profits  and  products  of  each  of  the  foregoing.

     Notwithstanding  the foregoing, the grant of the security interest provided
for herein shall not extend to, and the term "Collateral" shall not include, any
property  rights or licenses to the extent that the grant of a security interest
therein,  or  an  assignment  thereof, would be contrary to applicable law or is
prohibited  by  or  would  constitute  a default under any agreement or document
governing  such  property  (but  only  to  the  extent  that such prohibition is
enforceable  under  applicable  law).


<PAGE>
                                    EXHIBIT C

                   LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

LOAN  PAYMENT/ADVANCE  TELEPHONE  REQUEST  FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.
TO:        [_______________]                            DATE:  _______________
FAX  #:  [_______________]                              TIME:  _______________
FROM:  EVOLVE  SOFTWARE,  INC.
       -------------------------------------------------------------------------
CLIENT  NAME
REQUESTED  BY:
               -----------------------------------------------------------------
AUTHORIZED  SIGNER'S  NAME

AUTHORIZED  SIGNATURE:
                       ---------------------------------------------------------

PHONE  NUMBER:
               -----------------------------------------------------------------

FROM ACCOUNT # ______________________     TO ACCOUNT # _________________________

REQUESTED TRANSACTION TYPE                REQUEST  DOLLAR  AMOUNT
--------------------------                -----------------------
                                          $_____________________________________
PRINCIPAL INCREASE (ADVANCE)              $_____________________________________
PRINCIPAL PAYMENT (ONLY)                  $_____________________________________
INTEREST PAYMENT (ONLY)                   $_____________________________________
PRINCIPAL AND INTEREST (PAYMENT)          $_____________________________________

OTHER  INSTRUCTIONS:____________________________________________________________
________________________________________________________________________________
All  representations  and warranties of Borrower stated in the Loan and Security
Agreement are true, correct and complete in all material respects as of the date
of the telephone request for an Advance confirmed by this Borrowing Certificate;
provided, however, that those representations and warranties expressly referring
to  another date shall be true, correct and complete in all material respects as
of  such  date.
________________________________________________________________________________

________________________________________________________________________________
BANK  USE  ONLY
TELEPHONE  REQUEST:
------------------

The  following  person  is  authorized to request the loan payment transfer/loan
advance  on  the  advance  designated  account  and  is  known  to  me.


_________________________________                  _____________________________
Authorized  Requester                              Phone  #


_________________________________                  _____________________________
Received By (Bank)                                 Phone  #


_________________________________
Authorized Signature (Bank)



<PAGE>
                                    EXHIBIT D

                           BORROWING BASE CERTIFICATE

Borrower:  Evolve Software, Inc.                          Lender:  Imperial Bank

Commitment  Amount:  $15,000,000


ACCOUNTS  RECEIVABLE
     1.   Accounts Receivable Book Value as of ___        $________
     2.   Additions (please explain on reverse)                        $________
     3.   TOTAL  ACCOUNTS  RECEIVABLE                                  $________

ACCOUNTS  RECEIVABLE  DEDUCTIONS  (without  duplication)
     4.   Amounts  over  90  days  due                    $________
     5.   Balance  of  25%  over  90 day accounts         $________
     6.   Concentration  Limits                           $________
     7.   Foreign  Accounts                               $________
     8.   Governmental  Accounts                          $________
     9.   Contra  Accounts                                $________
     10.  Demo  Accounts                                  $________
     11.  Intercompany/Employee  Accounts                 $________
     12.  Other  (please  explain  on  reverse)           $________
     13.  TOTAL  ACCOUNTS  RECEIVABLE  DEDUCTIONS                      $________
     14.  Eligible  Accounts  (#3  minus  #13)                         $________
     15.  LOAN VALUE OF ACCOUNTS (__% of #14)             $________

BALANCES
     16.  Maximum  Loan  Amount                                        $________
     17.  Total  Funds  Available  [Lesser of #16 or #15] $________
     18.  Present  balance owing on Line of Credit                     $________
     19.  Outstanding under Sublimits (Letters of Credit) $________
     20.  RESERVE POSITION (#17 minus #18 and #19)        $________

     The  undersigned  represents  and  warrants  that  the  foregoing  is true,
complete  and correct, and that the information reflected in this Borrowing Base
Certificate  complies  with  the representations and warranties set forth in the
Loan  and  Security  Agreement  between  the  undersigned  and  Imperial  Bank.

EVOLVE  SOFTWARE,  INC.

By:
     --------------------------------
          Authorized  Signer


<PAGE>
                                    EXHIBIT E

                             COMPLIANCE CERTIFICATE

TO:    IMPERIAL  BANK

FROM:  EVOLVE  SOFTWARE,  INC.

The  undersigned  authorized  officer of EVOLVE SOFTWARE, INC., hereby certifies
that  in  accordance  with  the  terms  and  conditions of the Loan and Security
Agreement  between  Borrower  and  Bank  (the  "AGREEMENT"),  (i) Borrower is in
complete  compliance  for  the  period  ending _______________ with all required
covenants,  including  without limitation Section 6.8, except as noted below and
(ii)  all representations and warranties of Borrower stated in the Agreement are
true  and  correct  in  all  material  respects as of the date hereof.  Attached
herewith  are  the  required  documents supporting the above certification.  The
Officer  further  certifies that these are prepared in accordance with Generally
Accepted  Accounting  Principles  (GAAP)  and  are consistently applied from one
period  to  the next except as explained in an accompanying letter or footnotes.

PLEASE  INDICATE  COMPLIANCE  STATUS BY CIRCLING YES/NO UNDER "Complies" COLUMN.

<TABLE>
<CAPTION>
REPORTING COVENANT                       REQUIRED                                  COMPLIES
------------------                       --------                                  --------
<S>                                      <C>                                       <C>
Monthly financial statements             Monthly within 20 days                    Yes          No
Annual (CPA Audited)                     FYE within 90 days                        Yes          No
10K and 10Q                              Quarterly within 5 days of filing         Yes          No
A/R & A/P Agings, Borrowing Base Cert.   Monthly within 10 days                    Yes          No
Collateral Audit                         Initial and annually                      Yes          No
IP Report                                Quarterly within 30 days                  Yes          No

FINANCIAL COVENANT                       REQUIRED                     ACTUAL       COMPLIES
------------------                       --------                     ------       --------

Maintain on a Monthly  Basis:
   Minimum Quick Ratio                   1.75:1.00                    _____:1.00   Yes          No
   Minimum Liquidity Ratio               1.75:1.00                    _____:1.00   Yes          No

Minimum Revenue                          80% of amount listed         $  ______    Yes          No
                                         on existing revenue
                                         plan ($______)
</TABLE>


COMMENTS REGARDING EXCEPTIONS:  See Attached.    BANK USE ONLY

                                                 Received by:
                                                             -------------------
Sincerely,                                       AUTHORIZED SIGNER

                                                 Date:
                                                      --------------------------

------------------------------------------       Verified:
SIGNATURE                                                 ----------------------
                                                 AUTHORIZED SIGNER


------------------------------------------       Date:
TITLE                                                ---------------------------

                                                 Compliance Status    Yes    No
------------------------------------------
DATE




<PAGE>
                                    EXHIBIT F

                             BORROWER'S REVENUE PLAN




<PAGE>
                                    EXHIBIT G

                          BORROWER'S INVESTMENT POLICY




<PAGE>
                             SCHEDULE OF EXCEPTIONS

PERMITTED  INDEBTEDNESS  (Exhibit  A)

PERMITTED  INVESTMENTS  (Exhibit  A)

     1.   Evolve  International,  Inc.,  a  Delaware  corporation
     2.   Evolve  Software  Limited,  a  UK  corporation  (Chertsey,  England)
     3.   Evolve  Software  (India)  Private  Limited,  an  Indian corporation
          (Chennai (Madras),  India)

PERMITTED  LIENS  (Exhibit  A)

PRIOR  NAMES  (Section  5.5)

          Cortez  Software  International,  Inc.

COLLATERAL  LOCATIONS  (Section  5.5)

     1.   1400-65th  Street
          Suite  100
          Emeryville,  CA  94608

     2.   2855  Kifer  Road,  Suite  204
          Santa  Clara,  CA  95051

     3.   895  Dove  Street,  3rd  Floor
          Newport  Beach,  CA  92660

     4.   7799  Leesburg  Pike
          Suite  900-N
          Falls  Church,  VA  22043

     5.   15305 Dallas Parkway,  Suite 300
          Addison,  TX  75001

     6.   3525  Piedmont  Road
          7  Piedmont  Center,  Suite 300
          Atlanta,  GA  30305

     7.   Two Mid America Plaza, Suite 800
          Oak  Brook  Terrace,  IL  60181

     8.   Park  80  West,  Plaza  2,  Suite  200
          Saddle  Brook,  NJ  07663-5836


     9.   25  Burlington  Mall  Road,  Suite  300
          Burlington,  MA  01803

     10.  9800 Mount Pyramid Court, Suite 400
          Englewood,  CO  80112

     11.  3000  Hillswood  Drive


<PAGE>
          Hillswood  Business  Park
          Chertsey,  KT16  ORS
          UNITED  KINGDOM

     12.  No.  4,  Canal  Bank  Road
          Taramani,  Chennai  600  113
          INDIA

LITIGATION  (Section  5.6)

     1.     In  January 2000, PeopleSoft, Inc. filed an action in the California
Superior  Court,  Alameda  County,  alleging  claims  arising  out of Borrower's
employment  of  former  employees  of  PeopleSoft,  and  seeking preliminary and
permanent  injunctions  to  preclude  additional hiring of PeopleSoft employees.
PeopleSoft's  claims include inducing breach of contract and unfair competition.
PeopleSoft filed a motion for preliminary injunction enjoining the Borrower from
recruiting  additional  PeopleSoft  employees or disclosing any PeopleSoft trade
secrets.  The  court  denied the motion in July 2000 due to PeopleSoft's failure
to  show  that  it was likely to succeed in the litigation on the merits or show
that  it  would  be  harmed  if  the  injunction  did not issue.  PeopleSoft has
appealed  the  court's ruling on the motion.  Borrower does not believe that the
motion,  even if granted on appeal, will have a material impact on its business.
The  parties conducted a mediation in September 2000 but were unable to reach an
agreeable settlement. Borrower is now in settlement discussions with PeopleSoft,
and  the  current  proposal contains a cash settlement amount of between $50,000
(Borrower's  offer)  and  $75,000  (PeopleSoft's  offer), along with a number of
non-monetary  demands  (non-recruitment,  non-solicitation,  etc.).

     2.     In  September 2000, Albert Lucas, the former Vice President of Sales
for  Borrower,  filed a wrongful termination suit against Borrower in California
Superior  Court,  Alameda  County,  claiming  unspecified  monetary damages. The
parties  are  meeting in a mediation in early February 2001 to settle the claim.

INBOUND  LICENSES  (Section  5.12)

     1.     Software  OEM  License  Agreement  by  and  between  POET  Software
Corporation  and  Borrower,  dated November 20, 1997, as amended by Amendment to
Software  OEM  License Agreement between POET Software Corporation and Borrower,
dated  December  29,  2000

     2.     Value  Added  Reseller  Agreement  for  Visigenic  Products  with
Manufacturing  Rights  by  and  between Inprise Borland (formerly Visigenic) and
Borrower,  dated  March  31,  1998

     3.     License Agreement by and between Paradigm  Software Technologies and
Borrower,  dated  March  22,  1999,  as  amended  by  First Amendment to License
Agreement dated July 29, 1999, as further amended by letter agreements dated May
24,  1999  and  December  22,  1999,  as  amended by Second Amendment to License
Agreement  dated  August  25,  2000

     4.     E.Business  Application  Partner  Software  License Agreement by and
between  Actuate  Corporation  and  Borrower,  dated  May  16,  2000

     5.     Commercial  Software  License  Agreement  by and between ICEsoft and
Borrower,  dated  August  4,  2000

     6.     Silver  Support  Agreement  by and  between  Allaire Corporation and
Borrower, dated  December  20,  2000



<PAGE>
                              OFFICER'S CERTIFICATE

Borrower:     EVOLVE  SOFTWARE,  INC.
Date:         January  31,  2001

     I,  the  undersigned  officer of EVOLVE SOFTWARE, INC. (the "CORPORATION"),
HEREBY  CERTIFY  that  the  Corporation  is  organized and existing under and by
virtue  of  the  laws  of  the  State  of  Delaware.

     I  FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true and
complete  copies  of  the  Certificate  of  Incorporation  and the Bylaws of the
Corporation,  each  of  which  as amended and as in full force and effect on the
date  hereof.

     I  FURTHER  CERTIFY  that  attached  hereto  as  Attachment 3 is a true and
complete  copy  of  the  resolutions  duly  adopted  by  the  Corporation by the
unanimous  written  consent  of  the  Corporation's board of directors, and such
resolutions  have  not  been  amended,  modified or rescinded and remain in full
force  and effect as of the date hereof, and such resolutions stand of record on
the  books  of  the  Corporation.

          I  FURTHER  CERTIFY  that  the following named persons, whose original
signatures  are  shown below, are duly elected, qualified and acting officers of
the Corporation and have the positions set forth opposite their respective names
and the authority to execute the documents described in the attached resolutions
on  behalf  of  the  Corporation:

          NAME                  OFFICE                       SIGNATURE


Douglas Sinclair           Chief Financial Officer      ________________________



John  Bantleman            President  &  CEO            ________________________



     IN  WITNESS  WHEREOF, I have hereunto set my hand on the date first written
above  and  attest  that  the signatures set opposite the names listed above are
their  genuine  signatures.


                                            CERTIFIED  AND  ATTESTED  BY:


                                            X    _______________________________



<PAGE>
                                  IMPERIAL BANK
                                   MEMBER FDIC

                         ITEMIZATION OF AMOUNT FINANCED
                            DISBURSEMENT INSTRUCTIONS

NAME:  EVOLVE SOFTWARE, INC.     DATE:

$                   credited to deposit account No. __________ when Advances are
                    requested or disbursed to Borrower by cashiers check or wire
                    transfer

Amounts paid to others on your behalf:

     $              to Imperial  Bank  for  Loan  Fee

     $              to Imperial  Bank  for  Document  Fee

     $              to Imperial Bank for accounts receivable audit (estimate)

     $              to  Bank  counsel  fees  and  expenses

     $              to  _______________

     $              to  _______________

     $              TOTAL  (AMOUNT  FINANCED)

Upon  consummation  of  this  transaction,  this document will also serve as the
authorization  for  Imperial Bank to disburse the loan proceeds as stated above.


--------------------------------                --------------------------------
Signature                                       Signature


<PAGE>
                         AGREEMENT TO PROVIDE INSURANCE

TO:  IMPERIAL  BANK                             Date:  January 31, 2001
     c/o Insurance Services
     Post Office Box  8061
     Walnut Creek, CA 94596-8061

     Borrower:  EVOLVE  SOFTWARE,  INC.

     In  consideration  of  a  loan in the amount of $15,000,000, secured by all
personal  property  including  inventory  and  equipment.

     I/We  agree to obtain adequate insurance coverage to remain in force during
the  term  of  the  loan.

     I/We  also  agree  to  advise the below named agent to add Imperial Bank as
lender's  loss  payable  on the new or existing insurance policy, and to furnish
Bank at above address with a copy of said policy/endorsements and any subsequent
renewal  policies.

     I/We  understand  that  the  policy  must  contain:

     1.   Fire and  extended  coverage  in  an  amount sufficient to cover:

          (a)     The  amount  of  the  loan,  OR

          (b)     All  existing  encumbrances,  whichever  is  greater,

          but  not in excess of the replacement value of the improvements on the
          real  property.

     2.   Lender's  "LOSS  PAYABLE"  Endorsement  Form  438  BFU  in  favor  of
Imperial  Bank,  or  any  other  form  acceptable  to  Bank.

INSURANCE  INFORMATION

     Insurance  Co./Agent                        Telephone  No.:

     Agent's  Address:

                        Signature of Obligor:
                                                 ---------------------------

                        Signature of Obligor:
                                                 ---------------------------

--------------------------------------------------------------------------------
                        FOR  BANK  USE  ONLY

                        INSURANCE  VERIFICATION:  Date:
                                                       ------------------
                        Person  Spoken  to:
                                                  -----------------------
                        Policy  Number:
                                                  -----------------------
                        Effective From:           To:
                                       ---           --------------------
                        Verified  by:
                                                  -----------------------


<PAGE>
--------------------------------------------------------------------------------
IMPERIAL  BANK
CALIFORNIA'S  BUSINESS  BANKS     AUTOMATIC  DEBIT  AUTHORIZATION
MEMBER  FDIC
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
To:  IMPERIAL  BANK

Re:  LOAN  #  ___________________________________

You are hereby authorized and instructed to charge account No.__________________
in  the  name  of
EVOLVE  SOFTWARE,  INC.
--------------------------------------------------------------------------------
for  principal  and  interest payments due on above referenced loan as set forth
below  and  credit  the  loan  referenced  above.

          ____  Debit  each  interest payment as it becomes due according to the
          terms  of  the  Loan  and  Security  Agreement  and  any  renewals  or
          amendments  thereof.

          ____  Debit  each principal payment is at becomes due according to the
          terms  of  the  Loan  and  Security  Agreement  and  any  renewals  or
          amendments  thereof.

This  Authorization  is  to  remain  in  full  force and effect until revoked in
writing.

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
     Borrower Signature                     |   Date
--------------------------------------------------------------------------------
                                            |
--------------------------------------------------------------------------------
                                            |
--------------------------------------------------------------------------------


<PAGE>