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|LEASE TERMINATION
    AGREEMENT
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|This Lease Termination Agreement (this "Agreement") is made effective as
      of August 22, 2002, by and between BEP-EMERY TECH LLC, a Delaware
      limited liability company ("Landlord"), and EVOLVE SOFTWARE, INC.,
      a Delaware  corporation ("Tenant").
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|R E C I T A L
  S
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|A.           
      BEP-Emeryville, L.P. (predecessor-in-interest to Landlord) and Tenant
      entered into that certain Amended and Restated Office Building Net Lease
      dated as of October 18, 2000, as amended by that certain First Amendment
      to Amended and Restated Office Building Net Lease dated as of November 28,
      2000, as further amended by that certain Second Amendment to Amended and
      Restated Office Building Net Lease dated as of October 4, 2001 (as
      amended, the "Lease") for approximately 72,351 rentable square feet in the
      Building (the "Leased Premises").  The Leased Premises consists of
      the following: (i) approximately 35,335 rentable square feet on the 1st,
      2nd and 3rd floors of the East Wing of the Building (the "East Wing
      Premises"), (ii) approximately 15,926 rentable square feet on the 1st
      floor of the West Wing of the Building (the "1st Floor West Wing
      Premises"), and (iii) approximately 21,090 rentable square feet on the 2nd
      floor and mezzanine of the West Wing of the Building (the "2nd Floor and
      Mezzanine West Wing Premises").  Any capitalized term used but not
      defined herein shall have the meaning given to it in the
    Lease.
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|B.           
      Tenant subleased (i) the 1st Floor West Wing Premises to Landlord pursuant
      to that certain Sublease between Tenant, as sublessor, and Landlord, as
      sublessee, dated on or about  October 4, 2001 (the "1st Floor West
      Wing Premises Sublease"), and (ii) the 2nd Floor and Mezzanine West Wing
      Premises to Landlord pursuant to that certain Sublease between Tenant, as
      sublessor, and Landlord, as sublessee, dated on or about  October 4,
      2001 (the "2nd Floor and Mezzanine West Wing Premises Sublease"). 
      Tenant is currently only occupying the East Wing Premises.  The
      scheduled term expiration date (i) for the East Wing Premises is July 20,
      2007, and (ii) for the 1st Floor West Wing Premises and the 2nd Floor and
      Mezzanine West Wing Premises is July 10, 2003.
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|C.           
      Landlord is currently negotiating a lease for the East Wing Premises (the
      "WAMU Lease") with Washington Mutual Bank, FA
  ("WAMU").
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|D.            The
      parties hereto desire to terminate the Lease in accordance with the terms
      set forth herein.
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|**A G R E E M E N
      T**
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|1.            
      Recitals.The parties hereby confirm the accuracy of
      the foregoing Recitals which are incorporated herein by this
      reference.
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|2.            
      Mutual Termination of Lease.  Subject to the terms and
      conditions hereof, Tenant and Landlord hereby agree to terminate the Lease
      effective 11:59 p.m. California time on the date that the conditions
      precedent described in Paragraphs 3(b), 4, 5, and 6 (and Paragraph 7, if
      applicable) below have been satisfied by Tenant (the "Termination
      Date").  Tenant agrees that it shall use commercially reasonable
      efforts to satisfy the conditions precedent described in Paragraphs 3(b),
      4, 5, and 6 below by October 1, 2002 and no later than October 15,
      2002.  Notwithstanding the foregoing, if Tenant shall be in monetary
      default under the Lease or under this Agreement on the Termination Date,
      the Lease shall not terminate and the Termination Date shall be the date
      that such default is cured by Tenant (provided that the WAMU Lease is not
      terminated as a result thereof).  The 1st Floor West Wing Premises
      Sublease and the 2nd Floor and Mezzanine West Wing Premises Sublease shall
      also terminate on the Termination Date.  Tenant agrees that even if
      Tenant has not satisfied the conditions precedent described in Paragraphs
      3(b), 4, 5, and 6 below by October 15, 2002, Landlord, in its sole and
      absolute discretion, can immediately terminate the Lease by providing
      Tenant with written notice of such termination, and the Termination Date
      (as such term is used in this Agreement) shall be the date of Landlord's
      written notice of termination to Tenant.
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|3.            
      Consideration to Tenant and Landlord.
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|(a)          
      Termination Fee.  In consideration of the early termination of
      the Lease, Tenant and Landlord agree that Tenant shall pay to Landlord a
      termination fee in the amount of $4,865,649 (the "Termination Fee") as set
      forth below.  Tenant acknowledges and agrees that the Termination Fee
      is fair value for the concessions of Landlord granted in this
      Agreement.  The Termination Fee shall be payable by Tenant to
      Landlord in lawful money of the United States, with the first payment due
      on October 15, 2002, and the remaining payments due in monthly
      installments on or before the first day of each calendar month commencing
      November 1, 2002 to and including July 1, 2007 in the amounts set forth in
      the payment schedule (the "Termination Fee Payment Schedule") attached
      hereto as Exhibit 1.
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|(b)           Other
      Fees.  In consideration of the early termination of the Lease, in
      addition to the Termination Fee, Tenant shall also pay to Landlord, on or
      prior to the Termination Date, the following fees, which fees shall be a
      condition precedent to the termination of the Lease on the Termination
      Date: (i) a $10,000 administrative fee (to partially compensate Landlord
      for its time involved in connection with the early termination of the
      Lease and the negotiation of the WAMU Lease), (ii) a $15,000 legal fee
      reimbursement (to partially compensate Landlord for its legal fees
      incurred in connection with the early termination of the Lease (including,
      but not limited to, the preparation and negotiation of this Agreement, the
      WAMU Lease and other related documents)), and (iii) $212,010 in commission
      fees payable from Landlord to Grubb & Ellis (the procuring tenant
      broker for the WAMU Lease) (the "Procuring Tenant Commission Fees"). 
      Landlord shall provide Tenant with written invoices or other written
      documentation showing the commission fees paid by Landlord to Grubb &
      Ellis and shall refund to Tenant any unused portion of the Procuring
      Tenant Commission Fees paid by Tenant to Landlord.
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|(c)          
      Brokers.  Tenant represents and warrants to Landlord that, to
      its knowledge, the Procuring Tenant Commission Fees will be the only
      commission or compensation payable by Landlord in connection with the
      termination of the Lease and the negotiation of this Agreement, and none
      of CM Realty (the entity which represented Tenant in these lease
      termination negotiations) or any other agents, brokers, finders or other
      similar parties with whom Tenant has had any dealings in connection with
      the negotiation of this Agreement will be owed any commission or
      compensation by Landlord.  Tenant hereby agrees to indemnify, defend
      and hold Landlord free and harmless from and against liability for
      compensation or charges which may be claimed by CM Realty or any agent,
      broker, finder or other similar party by reason of any dealings with or
      actions of Tenant in connection with the negotiation of this Agreement and
      the consummation of this transaction, including any costs, expenses and
      attorneys' fees incurred with respect thereto.  Landlord hereby
      agrees to indemnify, defend and hold Tenant free and harmless from and
      against liability for compensation or charges which may be claimed by any
      agent, broker, finder or other similar party by reason of any dealings
      with or actions of Landlord in connection with the negotiation of this
      Agreement and the consummation of this transaction or the negotiation and
      consummation of the WAMU Lease, including any costs, expenses and
      attorneys' fees incurred with respect
thereto.
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|4.            
      Letter of Credit.
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|(a)           Pursuant
      to the Lease, Tenant delivered to Landlord that certain irrevocable
      standby letter of credit No. OSF99000883 in the current amount of
      $2,320,902 issued by Imperial Bank (as amended, the "Letter of
      Credit").  As of the Termination Date, the Letter of Credit shall
      secure the full and faithful performance of Tenant's obligations set forth
      in this Agreement.  Therefore, prior to the Termination Date and as a
      condition precedent to the termination of the Lease on the Termination
      Date, Tenant shall cause the Letter of Credit to be amended as follows:
      (1) Paragraph 2 under "REQUIRED DOCUMENTS" set forth in the Letter of
      Credit shall be deleted in its entirety and replaced with the following:
      "BENEFICIARY'S STATEMENT PURPORTEDLY SIGNED BY AN AUTHORIZED OFFICER
      CERTIFYING THAT EVOLVE SOFTWARE, INC. IS IN MONETARY DEFAULT OF THAT
      CERTAIN LEASE TERMINATION AGREEMENT DATED AUGUST __, 2002 THAT EXISTS
      BETWEEN EVOLVE SOFTWARE INC. AND BEP-EMERY TECH LLC BEYOND APPLICABLE
      NOTICE AND CURE PERIODS."; (2) the Letter of Credit shall be reduced to
      $1,620,902 as of October 15, 2002; and (3) the reduction schedule shall be
      amended to reflect the reduction schedule in Paragraph 4(b) below. 
      Tenant agrees that in the event of a monetary default by Tenant hereunder
      beyond applicable notice and cure periods, Landlord may draw upon the
      Letter of Credit to the extent necessary to cure such default. 
      Except as specifically set forth in this Agreement, the Letter of Credit
      shall remain unmodified and in full force and effect.  Tenant shall
      not be deemed to be in "monetary default" under this Agreement unless
      Tenant fails to make a required payment hereunder and does not cure such
      failure within three (3) business days after written notice of such
      failure.  Notwithstanding the foregoing, if Tenant continues to be in
      monetary default under this Agreement beyond applicable notice and cure
      periods for sixty (60) consecutive days, Landlord may draw upon the full
      remaining amount of the Letter of Credit to the extent necessary to
      compensate Landlord for damages as set forth in Paragraph 9 of this
      Agreement.
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|(b)          
      Notwithstanding any provision to the contrary in this Paragraph 4, the
      amount of the Letter of Credit shall be reduced to $1,620,902 as of
      October 15, 2002.  Thereafter, the amount of the Letter of Credit
      shall be reduced as follows on the following
  dates:
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|REDUCTION DATE | REDUCTION AMOUNT | AMOUNT OFSECURITY
      DEPOSIT
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|July 1, 2003   | $570,902         | $1,050,000                     
|July 1, 2004   | $350,000         | $700,000                       
|July 1, 2005   | $300,000         | $400,000                       
|July 1, 2006   | $200,000         | $200,000                       
|July 1, 2007   | $200,000         | $0                             

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|Notwithstanding the foregoing, no reduction in the amount of the Letter of
      Credit shall take place on the dates referenced above if Tenant shall be
      in monetary default under this Agreement on the applicable date; provided,
      however, the amount of the Letter of Credit shall be reduced as set forth
      above as soon as such monetary default is cured by Tenant.
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|5.            
      Vacation and Surrender of the East Wing Premises. 
      Tenant agrees that it shall use commercially reasonable efforts to vacate
      and surrender the East Wing Premises in the condition set forth in this
      Agreement on or before October 1, 2002; provided, however, Tenant
      acknowledges that October 15, 2002  (the "Latest Move Out Date") is
      the latest that Tenant can vacate and surrender the East Wing Premises in
      the condition set forth in this Agreement without incurring penalties, as
      set forth in Paragraph 7 below.  Landlord shall accept the East Wing
      Premises in their "AS IS" condition existing as of the date of this
      Agreement, except that Tenant shall (i) remove all of its personal
      property from the East Wing Premises (except as otherwise set forth
      herein) and repair any damage to the East Wing Premises or the Building
      caused by such removal, and (ii) surrender the East Wing Premises in broom
      clean condition and free of debris.  Tenant shall be obligated to
      maintain and repair the East Wing Premises and the Office Property (as
      defined in Paragraph 6 below), in its current "AS IS" condition from the
      date of this Agreement to the Termination Date, reasonable wear and tear
      and casualty excepted.  Tenant's vacation and surrender of the East
      Wing Premises in the condition set forth in this Agreement shall be a
      condition precedent to the termination of the Lease on the Termination
      Date.  Notwithstanding the foregoing, in the event Tenant vacates and
      surrenders the East Wing Premises prior to the Latest Move Out Date, then
      Tenant shall receive a day for day credit towards the Termination Fee
      payments first becoming due hereunder in the amount of $7,090.03 per day
      for each day between the date Tenant actually vacates and surrenders the
      East Wing Premises (and satisfies the other conditions precedent described
      in Paragraphs 3(b), 4, and 6) and the Latest Move Out Date (not to exceed
      15 days).
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|6.            
      Furniture and Office Equipment.  On or prior to the
      Termination Date, Tenant shall sell, assign and transfer to Landlord all
      of its right, title and interest in and to that certain furniture and
      equipment (the "Office Property") located in the East Wing Premises
      described in the furniture and equipment list (the "Furniture and
      Equipment List") attached hereto as Exhibit 2 free of any
      liens, encumbrances or interests of third parties.  As a condition
      precedent to the termination of the Lease on the Termination Date, Tenant
      shall deliver to Landlord a Bill of Sale with respect to the Office
      Property in the form attached hereto as Exhibit 3. 
      Tenant represents and warrants that, as of the date Tenant delivers to
      Landlord the Bill of Sale with respect to the Office Property, Tenant will
      hold all right, title and interest in and to the Office Property, free of
      any liens, encumbrances or interests of third parties.  Tenant hereby
      agrees to indemnify, protect, defend and hold the Landlord harmless of and
      from any and all claims or expenses (including without limitation
      reasonable attorneys' fees) arising out of or in any way related to
      Tenant's breach of its foregoing representation and warranty with respect
      to the Office Property.  Subject to the preceding sentences, the
      Office Property shall be conveyed to Landlord in their "AS IS" condition,
      with all faults and defects.  Landlord shall pay Tenant $75,000 for
      the Office Furniture upon Tenant's delivery to Landlord of the Bill of
      Sale with respect to the Office Property.
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|7.            
      Failure to Surrender theEast Wing Premises by the
      Latest Move Out Date.  Tenant acknowledges that Landlord will
      incur significant damages as set forth in the WAMU Lease (including free
      rent and lease termination if delivery delays occur) if Tenant does not
      surrender the East Wing Premises pursuant to the terms of this Agreement
      by the Latest Move Out Date, and Tenant shall indemnify, defend and hold
      Landlord harmless from and against all claims, demands, liabilities,
      losses, costs, expenses (including attorneys' fees), injury and damages
      incurred by Landlord as a result of Tenant's delay in vacating the East
      Wing Premises by the Latest Move Out Date.  In addition to the
      foregoing indemnity, in the event Tenant does not vacate and surrender the
      East Wing Premises by the Latest Move Out Date, then Tenant shall pay to
      Landlord, as holdover rent and a penalty, $10,635.05 per day for each day
      between the date Tenant actually vacates and surrenders the East Wing
      Premises (and satisfies the condition precedent described in Paragraphs
      3(b), 4, 6, and 7) and the Latest Move Out Date (collectively, the "Late
      Surrender Penalty") and Landlord shall have all of the rights and remedies
      provided for in the Lease, at law, and under this Agreement.  Payment
      of the Late Surrender Penalty by Tenant to Landlord shall be a condition
      precedent to the termination of the Lease on the Termination Date.
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|8.            
      Release.   Except for Tenant's obligations under
      this Agreement, effective as of the Termination Date, the Landlord hereby
      releases, remises and forever discharges the Tenant of and from all
      covenants, obligations, claims and actions arising out of or pertaining to
      the Leased Premises or the Lease, and the Landlord hereby acknowledges and
      agrees that the Lease shall be of no further force or effect and thereupon
      the Tenant shall not be liable for any rents or other monetary
      assessments, except as set forth in this Agreement. Landlord expressly
      waives, as of the Termination Date, the provisions of California Civil
      Code Section 1542 as it applies to the foregoing release, which provides
      as follows:
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| |  |  | "A general release does not extend to claims which the
      creditor does not know or suspect to exist in his favor at the time of
      executing the release, which if known by him must have materially affected
      his settlement with the debtor."
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|Notwithstanding the foregoing, this release
      shall not apply to (i) indemnity obligations under the Lease regarding
      claims asserted by third parties alleging bodily injury as a result of the
      negligence or willful misconduct of Tenant or its agents or contractors,
      (ii) indemnity obligations under the Lease with respect to environmental
      matters regarding claims asserted by third parties, or (iii) events or
      circumstances first occurring or arising during the period from the date
      this Agreement is executed by both Landlord and Tenant through and
      including the Termination Date.  Notwithstanding the foregoing
      release, for amounts due under the Lease by Tenant or Landlord in
      connection with Tenant's Proportionate Share of Basic Operating Cost which
      cannot be ascertained as of the Termination Date, such amounts shall be
      reconciled as provided for pursuant to the terms of the
    Lease.
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|9.            
      Late Charge; Interest on Past-Due Obligations;
      Acceleration.  If any payment required to be made by Tenant
      under this Agreement is not received by Landlord on or before five (5)
      days after the date the same is due, Tenant shall pay to Landlord an
      amount equal to five percent (5%) of the delinquency.  The parties
      agree that Landlord would incur costs not contemplated by this Agreement
      by virtue of such delinquencies, including without limitation
      administrative, collection, processing and accounting expenses, the amount
      of which would be extremely difficult to compute, and the amount stated
      herein represents a reasonable estimate thereof.  Acceptance of such
      late charge by Landlord shall in no event constitute a waiver of Tenant's
      breach or default with respect to such delinquency, or prevent Landlord
      from exercising any of Landlord's other rights and remedies.  Any
      payment required to be made by Tenant under this Agreement, other than
      late charges, which is not received by Landlord on the date on which it
      was due, shall bear interest from the day after it was due at the lesser
      of (i) twelve percent (12%) per annum, or (ii) the maximum rate then
      allowed by law.  Without limiting the obligations of Tenant or the
      rights and remedies of Landlord under the terms and covenants of this
      Agreement, if Tenant continues to be in monetary default under this
      Agreement beyond applicable notice and cure periods for sixty (60)
      consecutive days, Tenant agrees that Landlord shall have the right, at its
      sole option, to declare the present value of the Termination Fee not yet
      paid, irrespective of the date due specified herein, immediately due and
      payable in full, subject, however, to discounting to present value using
      the discount rate of the Federal Reserve Bank of San Francisco at the time
      of such acceleration plus one percent (1%).
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|10.          
      Authority; Fraudulent Transfer.  Landlord and Tenant
      each represents to the other that (i) it has the full power, authority and
      legal right to enter into and perform this Agreement and the documents to
      be delivered by it hereunder, (ii) the execution, delivery and performance
      of this Agreement by it have been duly authorized by all necessary action
      (corporate or otherwise) and do not require the consent or approval of any
      person or entity that has not been obtained and (iii) this Agreement
      constitutes a legally valid and binding agreement of it enforceable
      against it in accordance with the terms hereof. The Tenant represents and
      warrants that  no transfer of property is being made by Tenant and no
      obligation is being incurred by Tenant in connection with this Agreement
      with the intent to hinder, delay, or defraud either present or future
      creditors of the Tenant.
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|IN WITNESS WHEREOF, this Agreement is being executed by the parties on the
      date set forth above.
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|"LANDLORD":
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|BEP-EMERY TECH LLC,
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|a Delaware limited liability company
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|By:          BEP-Emeryville,
      L.P,
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|a Delaware limited partnership
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|its Member
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|By:          EPI Investors
      103 LLC,
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|a California limited
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|liability company
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|its General Partner
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|By:          Ellis Partners,
      Inc.,
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|a California corporation
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|its Managing Member
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|James F. Ellis
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|Vice President
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|"TENANT":
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|EVOLVE SOFTWARE, INC.,
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|a Delaware corporation
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|By:
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|Name:
|-----

|Title:
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