<PAGE>

                                                                   EXHIBIT 10.18

                             EVOLVE SOFTWARE, INC.
                      RESTRICTED STOCK PURCHASE AGREEMENT

     This Agreement is made as of the 15 day of March, 2000, by and between
Evolve Software, Inc., a Delaware corporation (the "Company"), and Douglas
Sinclair ("Purchaser").

     In consideration of the mutual covenants and representations herein set
forth, the Company and Purchaser agree as follows:

     1.   Purchase and Sale of Stock.
          --------------------------

          (a)  Subject to the terms and conditions of this Agreement, the
Company hereby agrees to sell to Purchaser and Purchaser agrees to purchase from
the Company on the Closing Date (as herein defined), 1,500,000 shares of the
Company's Common Stock (the "Stock") at a price of $1.00 per share, for an
aggregate purchase price of $1,500,000. The purchase price for the Stock shall
be paid by Purchaser in cash or by check payable to the Company, or by means of
a duly executed full-recourse promissory note in the form attached hereto as
Exhibit A (the "Note") made to the Company, or by a combination of such methods
of payment.

          (b)  The Note shall become payable in full upon the earlier of four
years from the date of this Agreement, thirty (30) days following termination of
Purchaser's employment with or services to the Company except for death or
disability, and one (1) year following termination as a result of death or
disability.

          (c)  As security for the faithful performance of this Agreement, the
repayment of the amount owing under the Note (if any) and to insure the
availability for delivery of the Purchaser's Stock upon exercise of the Purchase
Option (as defined below), the Purchaser shall deliver to the Secretary of the
Company, acting as escrow holder, or such other escrow holder as designated by
the Company (the "Escrow Holder"), all certificates representing the Stock and
two executed blank stock assignments, in the form attached hereto as Exhibit B,
for use in transferring all or a portion of said Stock to the Company, as
required under this Section 1(c) or under any other provision of this Agreement,
and shall enter into a set of Joint Escrow Instructions in the form attached
hereto as Exhibit C.

          (d)  As security for the payment of the Note and any renewal,
extension or modification thereof, the Purchaser hereby grants to the Company,
pursuant to the Security Agreement attached hereto as Exhibit D, a security
interest in and pledges with and delivers to the Company the certificate or
certificates representing the Stock.

          (e)  In the event of any foreclosure of the security interest, the
Company may sell the Stock at a private sale or may itself repurchase any or all
of the Stock. The parties acknowledge that, prior to the establishment of a
public market for the Stock of the Company, the securities laws applicable to
the sale of the Stock make a public sale of the Stock commercially unreasonable.
The parties agree that the repurchasing of said Stock by the Company, or by any
person to whom the Company may have assigned its rights hereunder, is
commercially reasonable
<PAGE>

if made at any of the following prices: (i) a price determined by the Board of
Directors in its discretion, fairly exercised, representing what would be the
fair market value of the Stock diminished by any limitation on transferability,
whether due to the size of the block of shares or the restrictions of applicable
securities laws, or (ii) the book value per Share as recorded on the Company's
books at the end of the last fiscal quarter prior to the date of sale of the
Stock upon foreclosure (whether or not such book value per share is unaudited
and subject to adjustment), or (iii) the price at which the Stock was originally
purchased by the Purchaser.

          (f)  In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Stock at a private or public sale or
repurchase the Stock as provided above.  The proceeds of any sale shall be
applied in the following order:

                 (i)  To pay all reasonable expenses of the Company in enforcing
this Agreement, including without limitation reasonable attorneys' fees and
legal expenses incurred by the Company.

                (ii)  In satisfaction of the remaining indebtedness under the
Note.

               (iii)  To the Purchaser, any remaining proceeds.

          (g)  Upon full payment by the Purchaser of all amounts due on
Purchaser's Note, the Escrow Holder shall deliver to the Purchaser the
certificate or certificates representing the Stock in the Escrow Holder's
possession belonging to the Purchaser, the blank stock assignment and the
executed original of the Note marked "canceled" by the Company, and the Escrow
Holder shall be discharged of all further obligations hereunder; provided,
however, that the Escrow Holder shall nevertheless retain said certificate or
certificates and stock assignment as escrow agent if so required pursuant to
other restrictions imposed pursuant to this Agreement.

     2.   Closing.  The purchase and sale of the Stock shall occur at a Closing
          -------
to be held at such time and place (the "Closing Date"), as designated by the
Company.  The Closing will take place at the principal office of the Company or
at such other place as shall be designated by the Company.  At the Closing,
Purchaser shall deliver to the Company a check payable to the order of the
Company in the aggregate amount of the purchase price of the Stock or a duly
executed Note in the principal amount of the purchase price (or a combination of
checks and promissory notes), and a certificate representing the Stock
registered in the name of the Purchaser will be delivered to the Escrow Holder
to be held subject to the terms of the Security Agreement and the Joint Escrow
Instructions.

                                      -2-
<PAGE>

     3.   Purchase Option.
          ---------------

          (a)  A total of 1,500,000 shares of the Stock ("Purchasable Shares")
shall be subject to the right and option of the Company to repurchase such
shares ("Purchase Option") as set forth in this paragraph 3. In the event
Purchaser shall cease to serve as an employee, officer, consultant or member of
the Board of Directors of the Company for any reason or no reason, with or
without cause, including involuntary termination, death or temporary or
permanent disability (the "Termination"), the Purchase Option shall come into
effect, subject to Section 3(c) below. Following a Termination, the Company
shall have the right, as provided in subparagraph (b) hereof, to purchase from
the Purchaser or his personal representative, as the case may be, at the
purchase price per share originally paid as set forth in paragraph 1 hereof
("Option Price") that portion of the Purchasable Shares which remains unvested
as of the date of the Termination (the "Unvested Shares"). Subject to
Purchaser's continued service as an employee, officer, consultant or member of
the Board of Directors of the Company, 187,500 shares shall vest on October 4,
2000 (the "Vesting Commencement Date"), and one forty-eighth (1/48) of the Stock
shall vest monthly thereafter.

          (b)  Within 90 days following a Termination, the Company shall notify
Purchaser by written notice delivered or mailed as provided in subparagraph
9(c), as to whether it wishes to purchase the Unvested Shares pursuant to
exercise of the Purchase Option. If the Company (or its assignee) elects to
purchase the Unvested Shares hereunder, it shall set a date for the closing of
the transaction at a place and time specified by the Company or, at Company's
option, such closing may be consummated by mail as provided in Section 9(c)
hereof. At such closing, the Company (or its assignee) shall tender payment for
the Unvested Shares and the certificates representing the Unvested Shares so
purchased shall be canceled. The Option Price shall be payable, at the option of
the Company by cancellation of all or any outstanding indebtedness of Purchaser
to the Company (including but not limited to indebtedness under the Note) or in
cash or by check. If the Purchase Option is assigned by the Company and the fair
market value of the Stock, as determined by the Board of Directors of the
Company, exceeds the repurchase price, and such assignee exercises the Purchase
Option, then the assignee shall pay to the Company the difference between the
fair market value of the Stock repurchased and the aggregate repurchase price.

     (c)  If there is any sale of all, or substantially all, of the assets of
the Company, or any merger or consolidation as a result of which the holders of
the Company's capital stock immediately prior to such transaction own less than
50% of the combined voting power of all shares of capital stock of the surviving
entity (the "Acquiror") following such transaction (each, an "Acquisition"),
then the Purchase Option in favor of the Company, as set forth in Section 3(a)
above, shall be amended as follows: (i) If Purchaser voluntarily terminates his
service as an employee, officer, consultant or member of the Board of Directors
of the Company or the Acquiror (as the case may be) prior to the one-year
anniversary of the Acquisition, the Stock will vest only up to such termination
date without any acceleration or continued vesting of the Stock

                                      -3-
<PAGE>

beyond the date of Purchaser's voluntary termination; (ii) If Purchaser's
position is eliminated and/or Purchaser is not offered a position with
comparable remuneration, function or location in the Acquiror, the Purchase
Option shall lapse with respect to all of the Stock; (iii) If Purchaser's
services as an employee, officer, consultant or member of the Board of Directors
of the Company is terminated by the Acquiror during the first year of such
service following the Acquisition, the portion of the Stock which would have
vested absent such termination during the period through the second anniversary
of the Acquisition shall vest immediately upon such termination; or (iv) If the
Purchaser completes one year of continuous service as an employee, officer,
consultant or member of the Board of Directors of the Company or the Acquiror
following the Acquisition, then the portion of the Stock which would otherwise
have vested over the period through the second anniversary of the Acquisition
shall vest immediately on the first anniversary of the Acquisition.

     4.   Stock Splits, etc.  If, from time to time during the term of this
          -----------------
Agreement, there is any stock dividend or liquidating dividend of cash and/or
property, stock split or other change in the character or amount of any of the
outstanding securities of the Company, then, in such event, any and all new,
substituted or additional securities or other property to which Purchaser is
entitled by reason of his ownership of Stock shall be immediately subject to all
other provisions of this Agreement and be included in the word "Stock" for all
purposes with the same force and effect as the shares of Stock presently subject
to the right of first refusal and other terms of this Agreement.

     5.   Restriction on Transfer; Right of First Refusal.
          -----------------------------------------------

          Purchaser shall not sell, transfer, pledge, hypothecate or otherwise
dispose of any shares of the Stock which remain subject to the Purchase Option.

          Before any shares of Stock registered in the name of Purchaser that
are no longer subject to the Purchase Option may be sold or transferred
(including transfer by operation of law), such shares shall first be offered to
the Company.

          (a)  The Purchaser shall deliver a notice ("Notice") to the Company
stating (i) his bona fide intention to sell or transfer such shares, (ii) the
number of such shares to be sold or transferred, (iii) the price for which he
proposes to sell or transfer such shares, and (iv) the name of the proposed
purchaser or transferee.

          (b)  Within thirty (30) days after receipt of the Notice, the Company
or its assignee may elect to purchase all or none of the shares to which the
Notice refers, at the price per share specified in the Notice.

          (c)  If all of the shares to which the Notice refers are not elected
to be purchased, as provided in subparagraph 5(b) hereof, the Purchaser may sell
the shares to any

                                      -4-
<PAGE>

person named in the Notice at the price specified in the Notice or at a higher
price, provided that (i) such sale or transfer is consummated within 60 days of
the date of said Notice to the Company, (ii) any such sale is in accordance with
all the terms and conditions hereof, and (iii) any transferee of shares of the
Stock agrees to be bound by the Standoff Agreement set forth in Section 10
below.

          The provisions of this paragraph 5 shall terminate on (i) the closing
date of a registration statement filed by the Company under the Act, with
respect to an underwritten public offering of Common Stock of the Company or
(ii) the closing date of a sale of assets or merger or other business
combination of the Company pursuant to which shareholders of this Company
receive securities of a buyer whose shares are publicly traded. The provisions
of subparagraphs 5(a), 5(b) and 5(c) shall not apply to a transfer of any shares
of Stock by Purchaser, either during his lifetime or on death by will or
intestacy to his other ancestors, descendants or spouse, or any custodian or
trustee for the account of Purchaser or Purchaser's ancestors, descendants or
spouse; provided, in each such case that the transferee shall receive and hold
such shares subject to the provisions of this paragraph 5 and there shall be no
further transfer of such shares except in accordance herewith. The provisions of
Sections 5(a), 5(b) and 5(c) shall not apply to any sale of shares of Stock by
the Purchaser pursuant to a Registration Statement filed under the Act.

          The Company shall not be required (i) to transfer on its books any
shares of Stock which shall have been sold or transferred in violation of any of
the provisions set forth in this Agreement, or (ii) to treat as owner of such
shares or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares shall have been so transferred.

     6.   Legends.  All certificates representing any of the shares of Stock
          -------
subject to the provisions of this Agreement shall have endorsed thereon the
following legends:

          (a)  "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS UPON TRANSFER, INCLUDING A STANDOFF AGREEMENT, RIGHTS OF
REPURCHASE AND RIGHTS OF FIRST REFUSAL AS SET FORTH IN AN AGREEMENT BETWEEN THE
CORPORATION AND THE REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THE CORPORATION. SUCH TRANSFER RESTRICTIONS, INCLUDING THE
STANDOFF AGREEMENT AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
THESE SHARES."

          (b)  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THESE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE
PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO
COST BY

                                      -5-
<PAGE>

WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION."

          (c)  Any legend required to be placed thereon by applicable blue sky
laws of any state.

     7.   Purchaser's Representations.  In connection with his purchase of the
          ---------------------------
Stock, the Purchaser hereby represents and warrants to the Company as follows:

          (a)  Investment Intent; Capacity to Protect Interests.  The Purchaser
               ------------------------------------------------
is purchasing the Stock solely for his own account for investment and not with a
view to or for sale in connection with any distribution of the Stock or any
portion thereof and not with any present intention of selling, offering to sell
or otherwise disposing of or distributing the Stock or any portion thereof in
any transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act"). The Purchaser also represents
that the entire legal and beneficial interest of the Stock is being purchased,
and will be held, for the Purchaser's account only, and neither in whole or in
part for any other person. Purchaser either has a pre-existing business or
personal relationship with the Company or any of its officers, directors or
controlling persons or by reason of Purchaser's business or financial experience
or the business or financial experience of Purchaser's professional advisors who
are unaffiliated with and who are not compensated by the Company or any
affiliate or selling agent of the Company, directly or indirectly, could be
reasonably assumed to have the capacity to evaluate the merits and risks of an
investment in the Company and to protect Purchaser's own interests in connection
with this transaction.

          (b)  Residence.  The Purchaser's principal residence is located at the
               ---------
address indicated beneath the Purchaser's signature below.

          (c)  Information Concerning Company.  The Purchaser has heretofore
               ------------------------------
discussed the Company and its plans, operations and financial condition with the
Company's officers and has heretofore received all such information as the
Purchaser has deemed necessary and appropriate to enable the Purchaser to
evaluate the financial risk inherent in making an investment in the Stock, and
the Purchaser has received satisfactory and complete information concerning the
business and financial condition of the Company in response to all inquiries in
respect thereof.

          (d)  Economic Risk.  The Purchaser realizes that the purchase of the
               -------------
Stock will be a highly speculative investment and involves a high degree of
risk, and the Purchaser is able, without impairing financial condition, to hold
the Stock for an indefinite period of time and to suffer a complete loss on the
Purchaser's investment.

          (e)  Restricted Securities. The Purchaser understands and acknowledges
               ---------------------
that:

                                      -6-
<PAGE>

                 (i) the sale of the Stock has not been registered under the
Act, and the Stock must be held indefinitely unless subsequently registered
under the Act or an exemption from such registration is available (such as Rule
144 or the resale provisions of Rule 701 under the Act) and the Company is under
no obligation to register the Stock;

                (ii) the share certificate representing the Stock will be
stamped with the legends specified in Section 6 hereof; and

               (iii) the Company will make a notation in its records of the
aforementioned restrictions on transfer and legends.

          (f)  Disposition under Rule 144.  The Purchaser understands that the
               --------------------------
shares of Stock are restricted securities within the meaning of Rule 144
promulgated under the Act; that the exemption from registration under Rule 144
will not be available in any event for at least one year from the date of
purchase and payment of the Stock (unless Rule 701 promulgated under the Act is
available), and even then will not be available unless (i) a public trading
market then exists for the Common Stock of the Company, (ii) adequate
information concerning the Company is then available to the public, and (iii)
other terms and conditions of Rule 144 are complied with; and that any sale of
the Stock may be made only in limited amounts in accordance with such terms and
conditions. Purchaser further understands that the resale provisions of Rule
701, if available, will not apply until ninety (90) days after the Company
becomes subject to the reporting obligations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). There can be no assurance that the
requirements of Rule 144 or Rule 701 will be met or that the Stock will ever be
saleable.

          (g)  Further Limitations on Disposition.  Without in any way limiting
               ----------------------------------
his representations set forth above, the Purchaser further agrees that it shall
in no event make any disposition of all or any portion of the Stock unless and
until:

                (i)  (A)  there is then in effect a Registration Statement under
the Act covering such proposed disposition and such disposition is made in
accordance with said Registration Statement; or, (B)(1) the Purchaser shall have
                                             --
notified the Company of the proposed disposition and shall have furnished the
Company with a detailed statement of the circumstances surrounding the proposed
disposition, (2) the Purchaser shall have furnished the Company with an opinion
of the Purchaser's counsel to the effect that such disposition will not require
registration of such shares under the Act, and (3) such opinion of the
                                           ---
Purchaser's counsel shall have been concurred in by counsel for the Company and
the Company shall have advised the Purchaser of such concurrence; and,
                                                                  ---

               (ii)  the shares of Stock proposed to be transferred are no
longer subject to the Purchase Option set forth in Section 3 hereof and the
Purchaser shall have complied with the Right of First Refusal set forth in
Section 5 hereof; and,
                  ---

                                      -7-
<PAGE>

               (iii)  any prospective transferee agrees to be bound by the
restrictions on transfer, Standoff Agreement, and right of first refusal as set
forth in this Agreement.

          (h)  Valuation of Common Stock.  The Purchaser understands that the
               -------------------------
Stock has been valued by the board of directors and that the Company believes
this valuation represents a fair attempt at reaching an accurate appraisal of
its worth; the Purchaser understands, however, that the Company can give no
assurances that such price is in fact the fair market value of the Stock and
that it is possible that, with the benefit of hindsight, the Internal Revenue
Service would successfully assert that the value of the common stock on the date
of purchase is substantially greater than so determined.

          If the Internal Revenue Service were to succeed in a tax determination
that the Stock received had value greater than that upon which the transaction
was based, the additional value would constitute ordinary income as of the date
of its receipt.  The additional taxes (and interest) due would be payable by the
Purchaser, and there is no provision for the Company to reimburse him for that
tax liability, and the Purchaser assumes all responsibility for such potential
tax liability.  In the event such additional value would represent more than 25
percent of the Purchaser's gross income for the year in which the value of the
shares were taxable, the Internal Revenue Service would have six years from the
due date for filing the return (or the actual filing date of the return if filed
thereafter) within which to assess the Purchaser the additional tax and interest
which would then be due.

          (i)  Section 83(b) Election. The Purchaser understands that Section 83
               ----------------------
of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
income the difference between the amount paid for the Stock and the fair market
value of the Stock as of the date any restrictions on the Stock lapse. In this
context, "restriction" means the right of the Company to buy back the stock
pursuant to the Purchase Option. In the event the Company has registered under
the Exchange Act, "restriction" with respect to officers, directors and 10%
shareholders also means the 6-month period after the Closing during which such
officers, directors and 10% shareholders are subject to suit under Section 16(b)
of the Exchange Act. The Purchaser understands that he may elect to be taxed at
the time the Stock is purchased rather than when and as the Purchase Option or
6-month Section 16(b) period expires by filing an election under Section 83(b)
of the Code with the I.R.S. Even if the fair market value of the Stock equals
the amount paid for the Stock, the election must be made to avoid adverse tax
consequences in the future. The form for making this election is attached
hereto. The Purchaser understands that failure to make this filing timely will
result in the recognition of ordinary income by the Purchaser, as the Purchase
Option lapses, or after the lapse of the 6-month Section 16(b) period, on the
difference between the purchase price and the fair market value of the Stock at
the time such restrictions lapse. Purchaser understands that if Purchaser
desires to make a Section 83 election, Purchaser must file a properly completed
and executed election form with the I.R.S. Center in which Purchaser files tax
returns within 30 days of the date of purchase. Furthermore,

                                      -8-
<PAGE>

Purchaser acknowledges that Purchaser must file an election form with such
I.R.S. Center with the Purchaser's tax return for the tax year in which the
Purchaser makes the election. Purchaser must also file a copy of the election
form with the Company.

     THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF
THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE PURCHASER'S BEHALF.

     THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS
A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A
CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS
BEEN FILED IN A TIMELY MANNER.

     8.   Miscellaneous.
          -------------

          (a)  Subject to the provisions and limitations hereof, Purchaser may,
during the term of this Agreement, exercise all rights and privileges of a
stockholder of the Company with respect to the Stock deposited in said escrow.

          (b)  The parties agree to execute such further instruments and to take
such further action as may reasonably be necessary to carry out the intent of
this Agreement.

          (c)  Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to Purchaser at his address shown on the
Company's employment records and to the Company at the address of its principal
corporate offices (attention: President) or at such other address as such party
may designate by ten days' advance written notice to the other party hereto.

          (d)  The Company may assign its rights and delegate its duties under
this Agreement, including paragraphs 3 and 5 hereof. This Agreement shall inure
to the benefit of the successors and assigns of the Company and, subject to the
restrictions on transfer herein set forth, be binding upon Purchaser, his heirs,
executors, administrators, successors and assigns.

          (e)  Purchaser hereby authorizes and directs the Secretary or Transfer
Agent of the Company to transfer the Stock as to which the Purchase Option,
right of foreclosure under the Note, if applicable, or right of first refusal
has been exercised from Purchaser to the Company or the Company's assignee.

                                      -9-
<PAGE>

     9.   Arbitration.  At the option of either party, any and all disputes or
          -----------
controversies whether of law or fact and of any nature whatsoever arising from
or respecting this Agreement shall be decided by arbitration by the American
Arbitration Association in accordance with the rules and regulations of that
Association.

          The arbitrators shall be selected as follows: In the event the Company
and Purchaser agree on one arbitrator, the arbitration shall be conducted by
such arbitrator. In the event the Company and Purchaser do not so agree, the
Company and Purchaser shall each select one independent, qualified arbitrator
and the two arbitrators so selected shall select the third arbitrator. The
Company reserves the right to object to any individual arbitrator who shall be
employed by or affiliated with a competing organization.

          Arbitration shall take place in San Francisco County, California or
any other location mutually agreeable to the parties.  At the request of either
party, arbitration proceedings will be conducted in the utmost secrecy; in such
case all documents, testimony and records shall be received, heard and
maintained by the arbitrators in secrecy under seal, available for the
inspection only of the Company or Purchaser and their respective attorneys and
their respective experts who shall agree in advance and in writing to receive
all such information confidentially and to maintain such information in secrecy
until such information shall become generally known. The arbitrators, who shall
act by majority vote, shall be able to decree any and all relief of an equitable
nature, including but not limited to such relief as a temporary restraining
order, a temporary and/or a permanent injunction, and shall also be able to
award damages, with or without an accounting and costs. The decree or judgment
of an award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.

          Reasonable notice of the time and place of arbitration shall be given
to all persons, other than the parties, as shall be required by law, in which
case such persons or those authorized representatives shall have the right to
attend and/or participate in all the arbitration hearings in such manner as the
law shall require.

     10.  Standoff Agreement.  Purchaser agrees, in connection with the
          ------------------
Company's initial public offering of its equity securities, and upon request of
the Company or the underwriters managing such offering, not to sell, make any
short sale of, loan, grant any option for the purchase of or otherwise dispose
of any shares of Stock (other than those included in the registration, if any)
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as may be requested by the Company or such
underwriters.

     11.  Governing Law.  This Agreement shall be governed by, and shall be
          -------------
construed and enforced in accordance with, the laws of the State of California
without giving effect to the conflicts of laws principles thereof.

                                      -10-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.


PURCHASER                           COMPANY

Douglas Sinclair                    Evolve Software, Inc.
                                    a Delaware Corporation


  /s/ Douglas Sinclair              By:  /s/ J. Russel DeLeon
---------------------------------      -----------------------------------

Address:  1000 Hayne Road           Title:     V.P. Finance
        -------------------------         --------------------------------
          Hillsborough
        -------------------------
            CA 94010
        -------------------------

                                      -11-
<PAGE>

                               CONSENT OF SPOUSE
                               -----------------


     The undersigned spouse of Purchaser has read and hereby approves the
foregoing Agreement.  In consideration of the Company's granting my spouse the
right to purchase the Stock as set forth in the Agreement, the undersigned
hereby agrees to be irrevocably bound by the Agreement and further agrees that
any community property interest shall be similarly bound by the Agreement.  I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.



                                    ___________________________
                                    Spouse of Purchaser

                                      -12-
<PAGE>

                                   EXHIBIT A
                                   ---------

                                PROMISSORY NOTE

$1,500,000                                         March 15, 2000

     For value received, the undersigned promises to pay to Evolve Software,
Inc., a Delaware corporation (the "Company"), or order, at its principal office
the principal sum of $1,500,000 with interest thereof at the rate of 6.80% per
annum, compounded annually, on the unpaid balance of the principal sum. Said
principal and any accrued but unpaid interest shall be due on the earlier to
occur of the fourth anniversary of the date of this Note, thirty (30) days after
termination other than for death or disability, and one year after termination
for death or disability.

     This Note is subject to the terms of a Restricted Stock Purchase Agreement,
dated March 15, 2000.  This Note is secured by a pledge of the Company's Common
Stock under the terms of a Security Agreement of even date herewith and is
subject to all the provisions thereof.

     The holder of this Note shall have full recourse against the undersigned
personally for failure to pay the Note as and when due.

     The principal is payable in lawful money of the United States of America.
The privilege is reserved to prepay any portion of the Note at any time.

     Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The maker waives presentment for payment, protest, notice of protest and notice
of non-payment of this Note.  This Note shall be governed by the laws of the
State of California as they apply to contracts entered into and wholly to be
performed within such state.


                               --------------------------------
                               Douglas Sinclair

<PAGE>

                                   EXHIBIT B
                                   ---------

                     ASSIGNMENT SEPARATE FROM CERTIFICATE


     FOR VALUE RECEIVED I, __________________________, hereby sell, assign and
transfer unto _____________________________________________ (__________) shares
of the Common Stock of Evolve Software, Inc. standing in my name of the books of
said corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint Wilson, Sonsini, Goodrich & Rosati,
attorneys, to transfer the said stock on the books of the within named
corporation with full power of substitution in the premises.

     This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement between Evolve Software, Inc. and the undersigned dated
_________ ____, 2000.


Dated: _______________, _______



                                    ------------------------------------------
                                    (to be signed exactly as name is to appear
                                    on stock certificate)



INSTRUCTIONS:  Please do not fill in the blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase option," as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
<PAGE>

                                   EXHIBIT C
                                   ---------

                           JOINT ESCROW INSTRUCTIONS
                           -------------------------



                                 March 15, 2000



Corporate Secretary
Evolve Software, Inc.
615 Battery Street
San Francisco, CA 94111

Dear Corporate Secretary:

     As Escrow Agent for both Evolve Software, Inc., a Delaware corporation (the
"Company"), and the undersigned purchaser of stock of the Company (the
"Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of the Restricted Stock Purchase
Agreement (the "Agreement") between the Company and the undersigned in
accordance with the following instructions:

     1.  In the event the Company and/or any assignee of the Company (referred
to collectively for convenience herein as the "Company") exercises the Company's
repurchase option set forth in the Agreement, the Company shall give to
Purchaser and you a written notice specifying the number of shares of stock to
be purchased, the purchase price and the time for a closing hereunder at the
principal office of the Company.  Purchaser and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.

     2.  At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, cancellation of indebtedness or some combination thereof) for the
number of shares of stock being purchased pursuant to the exercise of the
Company's repurchase option.

     3.  Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any
<PAGE>

applicable state blue sky authority of any required applications for consent to,
or notice of transfer of, the securities. Subject to the provisions of this
paragraph 3, Purchaser shall exercise all rights and privileges of a shareholder
of the Company while the stock is held by you.

     4.  Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised, you
will deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's repurchase option,
provided that such shares have been fully paid for and do not secure an unpaid
promissory note or shares not fully paid for.  Within 90 days after cessation of
Purchaser's continuous employment by or consultancy with the Company or any
parent or subsidiary of the Company except for death or disability and within
one year after cessation for death or disability, you will deliver to Purchaser
a certificate or certificates representing the aggregate number of shares held
or issued pursuant to the Agreement and not purchased by the Company or its
assignees pursuant to exercise of the Company's repurchase option.

     5.  If at the time of termination of this escrow you should have in your
possession any documents, securities or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.

     6.  Your duties hereunder may be altered, amended, modified or revoked only
by a writing signed by all of the parties hereto.

     7.  You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties.
You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in
good faith, and any act done or omitted by you pursuant to the advice of your
own attorneys shall be conclusive evidence of such good faith.

     8.  You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In case you obey or comply with any such order, judgment or decree, you shall
not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.

     9.  You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.


                                      -2-
<PAGE>

     10.  You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.

     11.  You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.

     12.  Your responsibilities as Escrow Agent hereunder shall terminate if you
shall cease to be an officer or agent of the Company or if you shall resign by
written notice to each party.  In the event of any such termination, the Company
shall appoint a successor Escrow Agent.

     13.  If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.

     14.  It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities held
by you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.

     15.  Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
days' advance written notice to each of the other parties hereto.

     COMPANY:       Evolve Software, Inc.
                    615 Battery Street, Suite 400
                    San Francisco, CA 94111

     PURCHASER:     Douglas Sinclair
                    _________________
                    _________________

     ESCROW AGENT:  J. Russell DeLeon
                    c/o Evolve Software, Inc.
                    615 Battery Street, Suite 400
                    San Francisco, CA 94111


                                      -3-
<PAGE>

     16.  By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Agreement.

     17.  This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.

     18.  These Joint Escrow Instructions shall be governed by, and construed
and enforced in accordance with, the laws of the State of California.

                         Very truly yours,

                         Evolve Software, Inc.


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


                         Title:       V.P. of Finance
                                -------------------------------------


                         Purchaser


                         --------------------------------------------
                         (Signature)

                                  DOUGLAS SINCLAIR
                         --------------------------------------------
                         (Print or type name)


ESCROW AGENT:


_________________________________
Corporate Secretary


                                      -4-
<PAGE>

                                   EXHIBIT D
                                   ---------

                              SECURITY AGREEMENT

     This Security Agreement is made as of March 15, 2000 between Evolve
Software, Inc., a Delaware corporation ("Pledgee"), Douglas Sinclair
("Pledgor"), and J. Russell DeLeon, Secretary of Pledgee, as the holder of the
Securities pledged hereunder ("Pledgeholder").

                                  Recitals
                                  --------

     Pursuant to Pledgor's purchase of Shares under the Restricted Stock
Purchase Agreement dated March 15, 2000 (the "Agreement"), between Pledgor and
Pledgee, and Pledgor's election under the terms of the Agreement to pay for such
shares with Pledgor's promissory note (the "Note"), Pledgor has purchased
1,500,000 shares of Pledgee's Common Stock (the "Stock") at a price of $1.00 per
share, for a total purchase price of $1,500,000.  The Note and the obligations
thereunder are as set forth in Exhibit A to the Agreement.

     NOW, THEREFORE, it is agreed as follows:

     1.  Creation and Description of Security Interest.  In consideration of the
         ---------------------------------------------
transfer of the Stock to Pledgor under the Agreement, Pledgor, pursuant to the
California Commercial Code, hereby pledges all of such Shares (herein sometimes
referred to as the "Collateral") represented by certificate number ___, duly
endorsed in blank or with an executed stock power or powers, and herewith
delivers said certificate to Pledgeholder, who shall hold said certificate
subject to the terms and conditions of this Security Agreement.

     The pledged stock (together with an executed blank stock assignment or
assignments for use in transferring all or a portion of the Stock to Pledgee if,
as and when required pursuant to this Security Agreement) shall be held by
Pledgeholder as security for the repayment of the Note, and any extensions or
renewals thereof, to be executed by Pledgor pursuant to the terms of the
Agreement, and Pledgeholder shall not encumber or dispose of such Shares except
in accordance with the provisions of this Security Agreement.

     2.  Pledgor's Representations and Covenants.  To induce Pledgee to enter
         ---------------------------------------
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:

         (a)  Payment of Indebtedness.  Pledgor will pay the principal sum of
              -----------------------
the Note secured hereby, and interest thereon, at the time and in the manner
provided in the Note.

         (b)  Encumbrances.  The Stock is free of all other encumbrances,
              ------------
defenses and liens (other than restrictions on transfer imposed by applicable
securities laws), except for (i) Pledgee's rights to repurchase Shares pursuant
to Section 3 of the Agreement and (ii) the pledge of the Stock
<PAGE>

hereunder as security for payment of the Note, and Pledgor will not further
encumber the Stock without the prior written consent of Pledgee.

         (c)  Margin Regulations.  In the event that Pledgee's Common Stock is
              ------------------
now or later becomes margin-listed by the Federal Reserve Board and Pledgee is
classified as a "lender" within the meaning of the regulations under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G"), Pledgor agrees to
cooperate with Pledgee in making any amendments to the Note or providing any
additional collateral as may be necessary to comply with such regulations.

     3.  Voting Rights.  During the term of this pledge and so long as all
         -------------
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Stock pledged
hereunder.

     4.  Stock Adjustments.  In the event that during the term of the pledge any
         -----------------
stock dividend, reclassification, readjustment or other changes are declared or
made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Stock originally pledged hereunder.  In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.

     5.  Options and Rights.  In the event that, during the term of this pledge,
         ------------------
subscription Options or other rights or options shall be issued in connection
with the pledged Shares, such rights, Options and options shall be the property
of Pledgor and, if exercised by Pledgor, all new stock or other securities so
acquired by Pledgor as it relates to the pledged Shares then held by
Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Stock pledged.

     6.  Default.  Pledgor shall be deemed to be in default of the Note and of
         -------
this Security Agreement in the event:

         (a)  Payment of principal or interest on the Note shall be delinquent
for a period of 10 days or more; or

         (b)  Pledgor fails to perform any of the covenants set forth in the
Agreement or contained in this Security Agreement for a period of 10 days after
written notice thereof from Pledgee.

     In the case of an event of Default, as set forth above, Pledgee shall have
the right to accelerate payment of the Note upon notice to Pledgor, and Pledgee
shall thereafter be entitled to pursue its remedies under the California
Commercial Code.


                                      -2-
<PAGE>

     7   Release of Collateral.  Subject to any applicable contrary rules under
         ---------------------
Regulation G, there shall be released from this pledge a portion of the pledged
Shares held by Pledgeholder hereunder upon payments of the principal of the
Note.  The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.  Notwithstanding the foregoing, upon any release
of pledged Shares hereunder any such Shares which shall continue to constitute
Unreleased Shares as defined in the Agreement shall continue to be held in
escrow pursuant to Sections 3 and 5 of the Agreement.

     8   Withdrawal or Substitution of Collateral.  Pledgor shall not sell,
         ----------------------------------------
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.

     9   Term.  The within pledge of Shares shall continue until the payment of
         ----
all indebtedness secured hereby, subject to the provisions for prior release of
a portion of the Collateral as provided in paragraph 7 above.

     10  Insolvency.  Pledgor agrees that if a bankruptcy or insolvency
         ----------
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.

     11  Pledgeholder Liability.
         ----------------------

         (a)  Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder unless Pledgeholder is proved to have acted
in bad faith.  Any act done or omitted pursuant to the advice of legal counsel,
other than an act or omission involving gross or wilful negligence, shall be
deemed to be done or omitted in good faith.

         (b)  Pledgeholder shall be entitled to employ such legal counsel and
other experts as Pledgeholder may deem necessary properly to advise Pledgeholder
in connection with its obligations hereunder, and Pledgeholder may rely upon the
advice of such counsel.  Such counsel's reasonable fees and costs shall be borne
50% by Pledger and 50% by Pledgee.

         (c)  It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by Pledgeholder hereunder, Pledgeholder is authorized and
directed to retain in Pledgeholder's possession without liability to anyone all
or any part of said securities until such disputes shall have been settled
either by mutual written agreement of the parties concerned or by a final order,
decree or judgment of the arbitrator provided for in Section 9 of the Agreement
or of a court of competent jurisdiction after the time for appeal has expired
and no appeal has been perfected, but Pledgeholder shall be under no duty
whatsoever to institute or defend any such proceedings.


                                      -3-
<PAGE>

     In addition, upon any dispute Pledgeholder should be entitled to engage
legal counsel, one-half of whose fees and expenses shall be borne by Pledgor and
one-half by Pledgee.

     12   Invalidity of Particular Provisions.  Pledgor and Pledgee agree that
          -----------------------------------
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.

     13   Successors or Assigns.  Pledgor and Pledgee agree that all of the
          ---------------------
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.

     14   Governing Law.  This Security Agreement shall be interpreted and
          -------------
governed under the laws of the State of California.


                                      -4-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

"PLEDGOR"                   By:   -------------------------------

                                          DOUGLAS SINCLAIR
                                  -------------------------------
                                  Print Name

                       Address:     1000 HAYNE RD
                                  -------------------------------

                                    HILLSBOROUGH, CA 94010
                                  -------------------------------


"PLEDGEE"                        Evolve Software, Inc.
                                 a Delaware corporation


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

                            Title:    V.P. Finance
                                  -------------------------------


"PLEDGEHOLDER"                    -------------------------------
                                  Secretary of Pledgee

                                      -5-
<PAGE>

                             EVOLVE SOFTWARE, INC.
                      RESTRICTED STOCK PURCHASE AGREEMENT

     This Agreement is made as of the ___ day of July, 2000, by and between
Evolve Software, Inc., a Delaware corporation (the "Company"), and Douglas
Sinclair ("Purchaser").

     In consideration of the mutual covenants and representations herein set
forth, the Company and Purchaser agree as follows:

     1.   Purchase and Sale of Stock.
          --------------------------

          (a) Subject to the terms and conditions of this Agreement, the Company
hereby agrees to sell to Purchaser and Purchaser agrees to purchase from the
Company on the Closing Date (as herein defined), 1,000,000 shares of the
Company's Common Stock (the "Stock") at a price of $0.75 per share, for an
aggregate purchase price of $750,000. The purchase price for the Stock shall be
paid by Purchaser in cash or by check payable to the Company, or by means of a
duly executed full-recourse promissory note in the form attached hereto as
Exhibit A (the "Note") made to the Company, or by a combination of such methods
of payment.

          (b) The Note shall become payable in full upon the earlier of four
years from the date of this Agreement, thirty (30) days following termination of
Purchaser's employment with or services to the Company except for death or
disability, and one (1) year following termination as a result of death or
disability.

          (c) As security for the faithful performance of this Agreement, the
repayment of the amount owing under the Note (if any) and to insure the
availability for delivery of the Purchaser's Stock upon exercise of the Purchase
Option (as defined below), the Purchaser shall deliver to the Secretary of the
Company, acting as escrow holder, or such other escrow holder as designated by
the Company (the "Escrow Holder"), all certificates representing the Stock and
two executed blank stock assignments, in the form attached hereto as Exhibit B,
for use in transferring all or a portion of said Stock to the Company, as
required under this Section 1(c) or under any other provision of this Agreement,
and shall enter into a set of Joint Escrow Instructions in the form attached
hereto as Exhibit C.

          (d) As security for the payment of the Note and any renewal, extension
or modification thereof, the Purchaser hereby grants to the Company, pursuant to
the Security Agreement attached hereto as Exhibit D, a security interest in and
pledges with and delivers to the Company the certificate or certificates
representing the Stock.

          (e) In the event of any foreclosure of the security interest, the
Company may sell the Stock at a private sale or may itself repurchase any or all
of the Stock.  The parties acknowledge that, prior to the establishment of a
public market for the Stock of the Company, the securities laws applicable to
the sale of the Stock make a public sale of the Stock commercially unreasonable.
The parties agree that the repurchasing of said Stock by the Company, or by any
person to whom the Company may have assigned its rights hereunder, is
commercially reasonable
<PAGE>

if made at any of the following prices: (i) a price determined by the Board of
Directors in its discretion, fairly exercised, representing what would be the
fair market value of the Stock diminished by any limitation on transferability,
whether due to the size of the block of shares or the restrictions of applicable
securities laws, or (ii) the book value per Share as recorded on the Company's
books at the end of the last fiscal quarter prior to the date of sale of the
Stock upon foreclosure (whether or not such book value per share is unaudited
and subject to adjustment), or (iii) the price at which the Stock was originally
purchased by the Purchaser.

          (f) In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code, including the right to sell the Stock at a private or public sale or
repurchase the Stock as provided above.  The proceeds of any sale shall be
applied in the following order:

                   (i) To pay all reasonable expenses of the Company in
enforcing this Agreement, including without limitation reasonable attorneys'
fees and legal expenses incurred by the Company.

                  (ii) In satisfaction of the remaining indebtedness under the
Note.

                 (iii) To the Purchaser, any remaining proceeds.

          (g) Upon full payment by the Purchaser of all amounts due on
Purchaser's Note, the Escrow Holder shall deliver to the Purchaser the
certificate or certificates representing the Stock in the Escrow Holder's
possession belonging to the Purchaser, the blank stock assignment and the
executed original of the Note marked "canceled" by the Company, and the Escrow
Holder shall be discharged of all further obligations hereunder; provided,
however, that the Escrow Holder shall nevertheless retain said certificate or
certificates and stock assignment as escrow agent if so required pursuant to
other restrictions imposed pursuant to this Agreement.

     2.  Closing.  The purchase and sale of the Stock shall occur at a Closing
         -------
to be held at such time and place (the "Closing Date"), as designated by the
Company.  The Closing will take place at the principal office of the Company or
at such other place as shall be designated by the Company.  At the Closing,
Purchaser shall deliver to the Company a check payable to the order of the
Company in the aggregate amount of the purchase price of the Stock or a duly
executed Note in the principal amount of the purchase price (or a combination of
checks and promissory notes), and a certificate representing the Stock
registered in the name of the Purchaser will be delivered to the Escrow Holder
to be held subject to the terms of the Security Agreement and the Joint Escrow
Instructions.

                                       2
<PAGE>

     3.   Purchase Option.
          ---------------

          (a) A total of 1,000,000 shares of the Stock ("Purchasable Shares")
shall be subject to the right and option of the Company to repurchase such
shares ("Purchase Option") as set forth in this paragraph 3. In the event
Purchaser shall cease to serve as an employee, officer, consultant or member of
the Board of Directors of the Company for any reason or no reason, with or
without cause, including involuntary termination, death or temporary or
permanent disability (the "Termination"), the Purchase Option shall come into
effect, subject to Section 3(c) below.  Following a Termination, the Company
shall have the right, as provided in subparagraph (b) hereof, to purchase from
the Purchaser or his personal representative, as the case may be, at the
purchase price per share originally paid as set forth in paragraph 1 hereof
("Option Price") that portion of the Purchasable Shares which remains unvested
as of the date of the Termination (the "Unvested Shares").  Subject to
Purchaser's continued service as an employee, officer, consultant or member of
the Board of Directors of the Company, 9/48 of the shares shall vest on April
10, 2001 (the "Vesting Commencement Date"), and one forty-eighth (1/48) of the
Stock shall vest monthly thereafter.

          (b) Within 90 days following a Termination, the Company shall notify
Purchaser by written notice delivered or mailed as provided in subparagraph
9(c), as to whether it wishes to purchase the Unvested Shares pursuant to
exercise of the Purchase Option.  If the Company (or its assignee) elects to
purchase the Unvested Shares hereunder, it shall set a date for the closing of
the transaction at a place and time specified by the Company or, at Company's
option, such closing may be consummated by mail as provided in Section 9(c)
hereof.  At such closing, the Company (or its assignee) shall tender payment for
the Unvested Shares and the certificates representing the Unvested Shares so
purchased shall be canceled.  The Option Price shall be payable, at the option
of the Company by cancellation of all or any outstanding indebtedness of
Purchaser to the Company (including but not limited to indebtedness under the
Note) or in cash or by check.  If the Purchase Option is assigned by the Company
and the fair market value of the Stock, as determined by the Board of Directors
of the Company, exceeds the repurchase price, and such assignee exercises the
Purchase Option, then the assignee shall pay to the Company the difference
between the fair market value of the Stock repurchased and the aggregate
repurchase price.

     (c) If there is any sale of all, or substantially all, of the assets of the
Company, or any merger or consolidation as a result of which the holders of the
Company's capital stock immediately prior to such transaction own less than 50%
of the combined voting power of all shares of capital stock of the surviving
entity (the "Acquiror") following such transaction (each, an "Acquisition"),
then the Purchase Option in favor of the Company, as set forth in Section 3(a)
above, shall be amended as follows: (i) If Purchaser voluntarily terminates his
service as an employee, officer, consultant or member of the Board of Directors
of the Company or the Acquiror (as the case may be) prior to the one-year
anniversary of the Acquisition, the Stock will vest only up to such termination
date without any acceleration or continued vesting of the Stock

                                       3
<PAGE>

beyond the date of Purchaser's voluntary termination; (ii) If Purchaser's
position is eliminated and/or Purchaser is not offered a position with
comparable remuneration, function or location in the Acquiror, the Purchase
Option shall lapse with respect to all of the Stock; (iii) If Purchaser's
services as an employee, officer, consultant or member of the Board of Directors
of the Company is terminated by the Acquiror during the first year of such
service following the Acquisition, the portion of the Stock which would have
vested absent such termination during the period through the second anniversary
of the Acquisition shall vest immediately upon such termination; or (iv) If the
Purchaser completes one year of continuous service as an employee, officer,
consultant or member of the Board of Directors of the Company or the Acquriror
following the Acquisition, then the portion of the Stock which would otherwise
have vested over the period through the second anniversary of the Acquisition
shall vest immediately on the first anniversary of the Acquisition.

     4.   Stock Splits, etc.  If, from time to time during the term of this
          -----------------
Agreement, there is any stock dividend or liquidating dividend of cash and/or
property, stock split or other change in the character or amount of any of the
outstanding securities of the Company, then, in such event, any and all new,
substituted or additional securities or other property to which Purchaser is
entitled by reason of his ownership of Stock shall be immediately subject to all
other provisions of this Agreement and be included in the word "Stock" for all
purposes with the same force and effect as the shares of Stock presently subject
to the right of first refusal and other terms of this Agreement.

     5.   Restriction on Transfer; Right of First Refusal.
          -----------------------------------------------

          Purchaser shall not sell, transfer, pledge, hypothecate or otherwise
dispose of any shares of the Stock which remain subject to the Purchase Option.

          Before any shares of Stock registered in the name of Purchaser that
are no longer subject to the Purchase Option may be sold or transferred
(including transfer by operation of law), such shares shall first be offered to
the Company.

          (a) The Purchaser shall deliver a notice ("Notice") to the Company
stating (i) his bona fide intention to sell or transfer such shares, (ii) the
number of such shares to be sold or transferred, (iii) the price for which he
proposes to sell or transfer such shares, and (iv) the name of the proposed
purchaser or transferee.

          (b) Within thirty (30) days after receipt of the Notice, the Company
or its assignee may elect to purchase all or none of the shares to which the
Notice refers, at the price per share specified in the Notice.

          (c) If all of the shares to which the Notice refers are not elected to
be purchased, as provided in subparagraph 5(b) hereof, the Purchaser may sell
the shares to any

                                       4
<PAGE>

person named in the Notice at the price specified in the Notice or at a higher
price, provided that (i) such sale or transfer is consummated within 60 days of
the date of said Notice to the Company, (ii) any such sale is in accordance with
all the terms and conditions hereof, and (iii) any transferee of shares of the
Stock agrees to be bound by the Standoff Agreement set forth in Section 10
below.

          The provisions of this paragraph 5 shall terminate on (i) the closing
date of a registration statement filed by the Company under the Act, with
respect to an underwritten public offering of Common Stock of the Company or
(ii) the closing date of a sale of assets or merger or other business
combination of the Company pursuant to which shareholders of this Company
receive securities of a buyer whose shares are publicly traded.  The provisions
of subparagraphs 5(a), 5(b) and 5(c) shall not apply to a transfer of any shares
of Stock by Purchaser, either during his lifetime or on death by will or
intestacy to his other ancestors, descendants or spouse, or any custodian or
trustee for the account of Purchaser or Purchaser's ancestors, descendants or
spouse; provided, in each such case that the transferee shall receive and hold
such shares subject to the provisions of this paragraph 5 and there shall be no
further transfer of such shares except in accordance herewith.  The provisions
of Sections 5(a), 5(b) and 5(c) shall not apply to any sale of shares of Stock
by the Purchaser pursuant to a Registration Statement filed under the Act.

          The Company shall not be required (i) to transfer on its books any
shares of Stock which shall have been sold or transferred in violation of any of
the provisions set forth in this Agreement, or (ii) to treat as owner of such
shares or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares shall have been so transferred.

     6.   Legends.  All certificates representing any of the shares of Stock
          -------
subject to the provisions of this Agreement shall have endorsed thereon the
following legends:

          (a) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER, INCLUDING A STANDOFF AGREEMENT, RIGHTS OF REPURCHASE
AND RIGHTS OF FIRST REFUSAL AS SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION
AND THE REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THE CORPORATION.  SUCH TRANSFER RESTRICTIONS, INCLUDING THE STANDOFF AGREEMENT
AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES."

          (b) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  THESE
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT.  COPIES OF THE AGREEMENT COVERING THE
PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO
COST BY

                                       5
<PAGE>

WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION."

          (c) Any legend required to be placed thereon by applicable blue sky
laws of any state.

     7.   Purchaser's Representations.  In connection with his purchase of the
          ---------------------------
Stock, the Purchaser hereby represents and warrants to the Company as follows:

          (a) Investment Intent; Capacity to Protect Interests.  The Purchaser
              ------------------------------------------------
is purchasing the Stock solely for his own account for investment and not with a
view to or for sale in connection with any distribution of the Stock or any
portion thereof and not with any present intention of selling, offering to sell
or otherwise disposing of or distributing the Stock or any portion thereof in
any transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act").  The Purchaser also represents
that the entire legal and beneficial interest of the Stock is being purchased,
and will be held, for the Purchaser's account only, and neither in whole or in
part for any other person.  Purchaser either has a pre-existing business or
personal relationship with the Company or any of its officers, directors or
controlling persons or by reason of Purchaser's business or financial experience
or the business or financial experience of Purchaser's professional advisors who
are unaffiliated with and who are not compensated by the Company or any
affiliate or selling agent of the Company, directly or indirectly, could be
reasonably assumed to have the capacity to evaluate the merits and risks of an
investment in the Company and to protect Purchaser's own interests in connection
with this transaction.

          (b) Residence.  The Purchaser's principal residence is located at the
              ---------
address indicated beneath the Purchaser's signature below.

          (c) Information Concerning Company.  The Purchaser has heretofore
              ------------------------------
discussed the Company and its plans, operations and financial condition with the
Company's officers and has heretofore received all such information as the
Purchaser has deemed necessary and appropriate to enable the Purchaser to
evaluate the financial risk inherent in making an investment in the Stock, and
the Purchaser has received satisfactory and complete information concerning the
business and financial condition of the Company in response to all inquiries in
respect thereof.

          (d) Economic Risk.  The Purchaser realizes that the purchase of the
              -------------
Stock will be a highly speculative investment and involves a high degree of
risk, and the Purchaser is able, without impairing financial condition, to hold
the Stock for an indefinite period of time and to suffer a complete loss on the
Purchaser's investment.
          (e) Restricted Securities.  The Purchaser understands and acknowledges
              ---------------------
that:

                                       6
<PAGE>

                    (i) the sale of the Stock has not been registered under the
Act, and the Stock must be held indefinitely unless subsequently registered
under the Act or an exemption from such registration is available (such as Rule
144 or the resale provisions of Rule 701 under the Act) and the Company is under
no obligation to register the Stock;

                   (ii) the share certificate representing the Stock will be
stamped with the legends specified in Section 6 hereof; and

                  (iii) the Company will make a notation in its records of the
aforementioned restrictions on transfer and legends.

          (f)  Disposition under Rule 144.  The Purchaser understands that the
               --------------------------
shares of Stock are restricted securities within the meaning of Rule 144
promulgated under the Act; that the exemption from registration under Rule 144
will not be available in any event for at least one year from the date of
purchase and payment of the Stock (unless Rule 701 promulgated under the Act is
available), and even then will not be available unless (i) a public trading
market then exists for the Common Stock of the Company, (ii) adequate
information concerning the Company is then available to the public, and (iii)
other terms and conditions of Rule 144 are complied with; and that any sale of
the Stock may be made only in limited amounts in accordance with such terms and
conditions.  Purchaser further understands that the resale provisions of Rule
701, if available, will not apply until ninety (90) days after the Company
becomes subject to the reporting obligations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").  There can be no assurance that the
requirements of Rule 144 or Rule 701 will be met or that the Stock will ever be
saleable.

          (g) Further Limitations on Disposition.  Without in any way limiting
              ----------------------------------
his representations set forth above, the Purchaser further agrees that it shall
in no event make any disposition of all or any portion of the Stock unless and
until:

                    (i)  (A)  there is then in effect a Registration Statement
under the Act covering such proposed disposition and such disposition is made in
accordance with said Registration Statement; or, (B)(1) the Purchaser shall have
                                             --
notified the Company of the proposed disposition and shall have furnished the
Company with a detailed statement of the circumstances surrounding the proposed
disposition, (2) the Purchaser shall have furnished the Company with an opinion
of the Purchaser's counsel to the effect that such disposition will not require
registration of such shares under the Act, and (3) such opinion of the
                                           ---
Purchaser's counsel shall have been concurred in by counsel for the Company and
the Company shall have advised the Purchaser of such concurrence; and,
                                                                  ---

                   (ii) the shares of Stock proposed to be transferred are no
longer subject to the Purchase Option set forth in Section 3 hereof and the
Purchaser shall have complied with the Right of First Refusal set forth in
Section 5 hereof; and,
        ---

                                       7
<PAGE>

                  (iii) any prospective transferee agrees to be bound by the
restrictions on transfer, Standoff Agreement, and right of first refusal as set
forth in this Agreement.

          (h) Valuation of Common Stock.  The Purchaser understands that the
              -------------------------
Stock has been valued by the board of directors and that the Company believes
this valuation represents a fair attempt at reaching an accurate appraisal of
its worth; the Purchaser understands, however, that the Company can give no
assurances that such price is in fact the fair market value of the Stock and
that it is possible that, with the benefit of hindsight, the Internal Revenue
Service would successfully assert that the value of the common stock on the date
of purchase is substantially greater than so determined.

          If the Internal Revenue Service were to succeed in a tax determination
that the Stock received had value greater than that upon which the transaction
was based, the additional value would constitute ordinary income as of the date
of its receipt.  The additional taxes (and interest) due would be payable by the
Purchaser, and there is no provision for the Company to reimburse him for that
tax liability, and the Purchaser assumes all responsibility for such potential
tax liability.  In the event such additional value would represent more than 25
percent of the Purchaser's gross income for the year in which the value of the
shares were taxable, the Internal Revenue Service would have six years from the
due date for filing the return (or the actual filing date of the return if filed
thereafter) within which to assess the Purchaser the additional tax and interest
which would then be due.

          (i) Section 83(b) Election.  The Purchaser understands that Section 83
              ----------------------
of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
income the difference between the amount paid for the Stock and the fair market
value of the Stock as of the date any restrictions on the Stock lapse.  In this
context, "restriction" means the right of the Company to buy back the stock
pursuant to the Purchase Option.  In the event the Company has registered under
the Exchange Act, "restriction" with respect to officers, directors and 10%
shareholders also means the 6-month period after the Closing during which such
officers, directors and 10% shareholders are subject to suit under Section 16(b)
of the Exchange Act.  The Purchaser understands that he may elect to be taxed at
the time the Stock is purchased rather than when and as the Purchase Option or
6-month Section 16(b) period expires by filing an election under Section 83(b)
of the Code with the I.R.S.  Even if the fair market value of the Stock equals
the amount paid for the Stock, the election must be made to avoid adverse tax
consequences in the future.  The form for making this election is attached
hereto.  The Purchaser understands that failure to make this filing timely will
result in the recognition of ordinary income by the Purchaser, as the Purchase
Option lapses, or after the lapse of the 6-month Section 16(b) period, on the
difference between the purchase price and the fair market value of the Stock at
the time such restrictions lapse.  Purchaser understands that if Purchaser
desires to make a Section 83 election, Purchaser must file a properly completed
and executed election form with the I.R.S. Center in which Purchaser files tax
returns within 30 days of the date of purchase.  Furthermore,

                                       8
<PAGE>

Purchaser acknowledges that Purchaser must file an election form with such
I.R.S. Center with the Purchaser's tax return for the tax year in which the
Purchaser makes the election. Purchaser must also file a copy of the election
form with the Company.

     THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF
THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE PURCHASER'S BEHALF.

     THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS
A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A
CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS
BEEN FILED IN A TIMELY MANNER.

     8.   Miscellaneous.
          -------------

          (a) Subject to the provisions and limitations hereof, Purchaser may,
during the term of this Agreement, exercise all rights and privileges of a
stockholder of the Company with respect to the Stock deposited in said escrow.

          (b) The parties agree to execute such further instruments and to take
such further action as may reasonably be necessary to carry out the intent of
this Agreement.

          (c) Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to Purchaser at his address shown on the
Company's employment records and to the Company at the address of its principal
corporate offices (attention: President) or at such other address as such party
may designate by ten days' advance written notice to the other party hereto.

          (d) The Company may assign its rights and delegate its duties under
this Agreement, including paragraphs 3 and 5 hereof.  This Agreement shall inure
to the benefit of the successors and assigns of the Company and, subject to the
restrictions on transfer herein set forth, be binding upon Purchaser, his heirs,
executors, administrators, successors and assigns.

          (e) Purchaser hereby authorizes and directs the Secretary or Transfer
Agent of the Company to transfer the Stock as to which the Purchase Option,
right of foreclosure under the Note, if applicable, or right of first refusal
has been exercised from Purchaser to the Company or the Company's assignee.

                                       9
<PAGE>

     9.   Arbitration.  At the option of either party, any and all disputes or
          -----------
controversies whether of law or fact and of any nature whatsoever arising from
or respecting this Agreement shall be decided by arbitration by the American
Arbitration Association in accordance with the rules and regulations of that
Association.

          The arbitrators shall be selected as follows: In the event the Company
and Purchaser agree on one arbitrator, the arbitration shall be conducted by
such arbitrator.  In the event the Company and Purchaser do not so agree, the
Company and Purchaser shall each select one independent, qualified arbitrator
and the two arbitrators so selected shall select the third arbitrator.  The
Company reserves the right to object to any individual arbitrator who shall be
employed by or affiliated with a competing organization.

          Arbitration shall take place in San Francisco County, California or
any other location mutually agreeable to the parties.  At the request of either
party, arbitration proceedings will be conducted in the utmost secrecy; in such
case all documents, testimony and records shall be received, heard and
maintained by the arbitrators in secrecy under seal, available for the
inspection only of the Company or Purchaser and their respective attorneys and
their respective experts who shall agree in advance and in writing to receive
all such information confidentially and to maintain such information in secrecy
until such information shall become generally known.  The arbitrators, who shall
act by majority vote, shall be able to decree any and all relief of an equitable
nature, including but not limited to such relief as a temporary restraining
order, a temporary and/or a permanent injunction, and shall also be able to
award damages, with or without an accounting and costs.  The decree or judgment
of an award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.

          Reasonable notice of the time and place of arbitration shall be given
to all persons, other than the parties, as shall be required by law, in which
case such persons or those authorized representatives shall have the right to
attend and/or participate in all the arbitration hearings in such manner as the
law shall require.

     10.  Standoff Agreement.  Purchaser agrees, in connection with the
          ------------------
Company's initial public offering of its equity securities, and upon request of
the Company or the underwriters managing such offering, not to sell, make any
short sale of, loan, grant any option for the purchase of or otherwise dispose
of any shares of Stock (other than those included in the registration, if any)
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as may be requested by the Company or such
underwriters.

     11.  Governing Law.  This Agreement shall be governed by, and shall be
          -------------
construed and enforced in accordance with, the laws of the State of California
without giving effect to the conflicts of laws principles thereof.

                                       10
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.


PURCHASER                           COMPANY

Douglas Sinclair                    Evolve Software, Inc.
                                    a Delaware Corporation


_________________________________   By:  _________________________________

Address:  _________________________ Title: ________________________________
          _________________________
          _________________________

                                       11
<PAGE>

                               CONSENT OF SPOUSE
                               -----------------


     The undersigned spouse of Purchaser has read and hereby approves the
foregoing Agreement.  In consideration of the Company's granting my spouse the
right to purchase the Stock as set forth in the Agreement, the undersigned
hereby agrees to be irrevocably bound by the Agreement and further agrees that
any community property interest shall be similarly bound by the Agreement.  I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.



                                    ___________________________
                                    Spouse of Purchaser

                                       12
<PAGE>

                                   EXHIBIT A
                                   ---------

                                PROMISSORY NOTE

$750,000                                           July ___, 2000

     For value received, the undersigned promises to pay to Evolve Software,
Inc., a Delaware corporation (the "Company"), or order, at its principal office
the principal sum of $750,000 with interest thereof at the rate of 6.62% per
annum, compounded annually, on the unpaid balance of the principal sum. Said
principal and any accrued but unpaid interest shall be due on the earlier to
occur of the fourth anniversary of the date of this Note, thirty (30) days after
termination other than for death or disability, and one year after termination
for death or disability.

     This Note is subject to the terms of a Restricted Stock Purchase Agreement,
dated July___, 2000.  This Note is secured by a pledge of the Company's Common
Stock under the terms of a Security Agreement of even date herewith and is
subject to all the provisions thereof.

     The holder of this Note shall have full recourse against the undersigned
personally for failure to pay the Note as and when due.

     The principal is payable in lawful money of the United States of America.
The privilege is reserved to prepay any portion of the Note at any time.

     Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The maker waives presentment for payment, protest, notice of protest and notice
of non-payment of this Note.  This Note shall be governed by the laws of the
State of California as they apply to contracts entered into and wholly to be
performed within such state.





                               ______________________________
                               Douglas Sinclair

                                       13
<PAGE>

                                   EXHIBIT B
                                   ---------

                     ASSIGNMENT SEPARATE FROM CERTIFICATE


     FOR VALUE RECEIVED I, __________________________, hereby sell, assign and
transfer unto____________________________________________________ (__________)
shares of the Common Stock of Evolve Software, Inc. standing in my name of the
books of said corporation represented by Certificate No. _____ herewith and do
hereby irrevocably constitute and appoint Wilson, Sonsini, Goodrich & Rosati,
attorneys, to transfer the said stock on the books of the within named
corporation with full power of substitution in the premises.

     This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement between Evolve Software, Inc. and the undersigned dated
_________ ____, 2000.


Dated: _______________, _______



                                  __________________________________________
                                  (to be signed exactly as name is to appear
                                   on stock certificate)



INSTRUCTIONS:  Please do not fill in the blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase option," as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.

                                       14
<PAGE>

                                   EXHIBIT C
                                   ---------

                           JOINT ESCROW INSTRUCTIONS
                           -------------------------



                                 July __, 2000



Evolve Software, Inc.
615 Battery Street
San Francisco, CA 94111


     As Escrow Agent for both Evolve Software, Inc., a Delaware corporation (the
"Company"), and the undersigned purchaser of stock of the Company (the
"Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of the Restricted Stock Purchase
Agreement (the "Agreement") between the Company and the undersigned in
accordance with the following instructions:

     1.  In the event the Company and/or any assignee of the Company (referred
to collectively for convenience herein as the "Company") exercises the Company's
repurchase option set forth in the Agreement, the Company shall give to
Purchaser and you a written notice specifying the number of shares of stock to
be purchased, the purchase price and the time for a closing hereunder at the
principal office of the Company.  Purchaser and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.

     2.  At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, cancellation of indebtedness or some combination thereof) for the
number of shares of stock being purchased pursuant to the exercise of the
Company's repurchase option.

     3.  Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer

                                       15
<PAGE>

of, the securities. Subject to the provisions of this paragraph 3, Purchaser
shall exercise all rights and privileges of a shareholder of the Company while
the stock is held by you.

     4.  Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised, you
will deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's repurchase option,
provided that such shares have been fully paid for and do not secure an unpaid
promissory note or shares not fully paid for.  Within 90 days after cessation of
Purchaser's continuous employment by or consultancy with the Company or any
parent or subsidiary of the Company except for death or disability and within
one year after cessation for death or disability, you will deliver to Purchaser
a certificate or certificates representing the aggregate number of shares held
or issued pursuant to the Agreement and not purchased by the Company or its
assignees pursuant to exercise of the Company's repurchase option.

     5.  If at the time of termination of this escrow you should have in your
possession any documents, securities or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.

     6.  Your duties hereunder may be altered, amended, modified or revoked only
by a writing signed by all of the parties hereto.

     7.  You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties.
You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in
good faith, and any act done or omitted by you pursuant to the advice of your
own attorneys shall be conclusive evidence of such good faith.

     8.  You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In case you obey or comply with any such order, judgment or decree, you shall
not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.

     9.  You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.

     10.  You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.

                                       16
<PAGE>

     11.  You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.

     12.  Your responsibilities as Escrow Agent hereunder shall terminate if you
shall cease to be an officer or agent of the Company or if you shall resign by
written notice to each party.  In the event of any such termination, the Company
shall appoint a successor Escrow Agent.

     13.  If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.

     14.  It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities held
by you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.

     15.  Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
days' advance written notice to each of the other parties hereto.

     COMPANY:       Evolve Software, Inc.
                    615 Battery Street, Suite 400
                    San Francisco, CA 94111

     PURCHASER:     Douglas Sinclair
                    _______________
                    _______________

     ESCROW AGENT:  John Bantleman
                    c/o Evolve Software, Inc.
                    615 Battery Street, Suite 400
                    San Francisco, CA 94111

     16.  By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Agreement.

                                       17
<PAGE>

     17.  This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.

     18.  These Joint Escrow Instructions shall be governed by, and construed
and enforced in accordance with, the laws of the State of California.

                         Very truly yours,

                         Evolve Software, Inc.


                         By: ______________________________________


                         Title: _____________________________________


                         Purchaser

                         __________________________________________
                         (Signature)

                         __________________________________________
                         (Print or type name)


ESCROW AGENT:

_______________________________________
President

                                       18
<PAGE>

                                   EXHIBIT D
                                   ---------

                              SECURITY AGREEMENT

     This Security Agreement is made as of July ___, 2000 between Evolve
Software, Inc., a Delaware corporation ("Pledgee"), Douglas Sinclair
("Pledgor"), and John Bantleman, President of Pledgee, as the holder of the
Securities pledged hereunder ("Pledgeholder").

                                   Recitals
                                   --------

     Pursuant to Pledgor's purchase of Shares under the Restricted Stock
Purchase Agreement dated July___, 2000 (the "Agreement"), between Pledgor and
Pledgee, and Pledgor's election under the terms of the Agreement to pay for such
shares with Pledgor's promissory note (the "Note"), Pledgor has purchased
1,000,000 shares of Pledgee's Common Stock (the "Stock") at a price of $0.75 per
share, for a total purchase price of $750,000.  The Note and the obligations
thereunder are as set forth in Exhibit A to the Agreement.

     NOW, THEREFORE, it is agreed as follows:

     1.  Creation and Description of Security Interest.  In consideration of the
         ---------------------------------------------
transfer of the Stock to Pledgor under the Agreement, Pledgor, pursuant to the
California Commercial Code, hereby pledges all of such Shares (herein sometimes
referred to as the "Collateral") represented by certificate number ___, duly
endorsed in blank or with an executed stock power or powers, and herewith
delivers said certificate to Pledgeholder, who shall hold said certificate
subject to the terms and conditions of this Security Agreement.

     The pledged stock (together with an executed blank stock assignment or
assignments for use in transferring all or a portion of the Stock to Pledgee if,
as and when required pursuant to this Security Agreement) shall be held by
Pledgeholder as security for the repayment of the Note, and any extensions or
renewals thereof, to be executed by Pledgor pursuant to the terms of the
Agreement, and Pledgeholder shall not encumber or dispose of such Shares except
in accordance with the provisions of this Security Agreement.

     2.   Pledgor's Representations and Covenants.  To induce Pledgee to enter
          ---------------------------------------
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:

          (a)  Payment of Indebtedness.  Pledgor will pay the principal sum of
               -----------------------
the Note secured hereby, and interest thereon, at the time and in the manner
provided in the Note.

          (b)  Encumbrances.  The Stock is free of all other encumbrances,
               ------------
defenses and liens (other than restrictions on transfer imposed by applicable
securities laws), except for (i) Pledgee's rights to repurchase Shares pursuant
to Section 3 of the Agreement and (ii) the pledge of the Stock

                                       19
<PAGE>

hereunder as security for payment of the Note, and Pledgor will not further
encumber the Stock without the prior written consent of Pledgee.

          (c)  Margin Regulations.  In the event that Pledgee's Common Stock is
               ------------------
now or later becomes margin-listed by the Federal Reserve Board and Pledgee is
classified as a "lender" within the meaning of the regulations under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G"), Pledgor agrees to
cooperate with Pledgee in making any amendments to the Note or providing any
additional collateral as may be necessary to comply with such regulations.

     3.   Voting Rights.  During the term of this pledge and so long as all
          -------------
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Stock pledged
hereunder.

     4.   Stock Adjustments.  In the event that during the term of the pledge
          -----------------
any stock dividend, reclassification, readjustment or other changes are declared
or made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Stock originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.

     5.  Options and Rights.  In the event that, during the term of this pledge,
         ------------------
subscription Options or other rights or options shall be issued in connection
with the pledged Shares, such rights, Options and options shall be the property
of Pledgor and, if exercised by Pledgor, all new stock or other securities so
acquired by Pledgor as it relates to the pledged Shares then held by
Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Stock pledged.

     6.  Default.  Pledgor shall be deemed to be in default of the Note and of
         -------
this Security Agreement in the event:

          (a) Payment of principal or interest on the Note shall be delinquent
for a period of 10 days or more; or

          (b) Pledgor fails to perform any of the covenants set forth in the
Agreement or contained in this Security Agreement for a period of 10 days after
written notice thereof from Pledgee.

     In the case of an event of Default, as set forth above, Pledgee shall have
the right to accelerate payment of the Note upon notice to Pledgor, and Pledgee
shall thereafter be entitled to pursue its remedies under the California
Commercial Code.

                                       20
<PAGE>

     7   Release of Collateral.  Subject to any applicable contrary rules under
         ---------------------
Regulation G, there shall be released from this pledge a portion of the pledged
Shares held by Pledgeholder hereunder upon payments of the principal of the
Note.  The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.  Notwithstanding the foregoing, upon any release
of pledged Shares hereunder any such Shares which shall continue to constitute
Unreleased Shares as defined in the Agreement shall continue to be held in
escrow pursuant to Sections 3 and 5 of the Agreement.

     8   Withdrawal or Substitution of Collateral.  Pledgor shall not sell,
         ----------------------------------------
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.

     9   Term.  The within pledge of Shares shall continue until the payment of
         ----
all indebtedness secured hereby, subject to the provisions for prior release of
a portion of the Collateral as provided in paragraph 7 above.

     10  Insolvency.  Pledgor agrees that if a bankruptcy or insolvency
         ----------
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.

     11  Pledgeholder Liability.
         ----------------------

         (a) Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder unless Pledgeholder is proved to have acted
in bad faith.  Any act done or omitted pursuant to the advice of legal counsel,
other than an act or omission involving gross or wilful negligence, shall be
deemed to be done or omitted in good faith.

         (b) Pledgeholder shall be entitled to employ such legal counsel and
other experts as Pledgeholder may deem necessary properly to advise Pledgeholder
in connection with its obligations hereunder, and Pledgeholder may rely upon the
advice of such counsel.  Such counsel's reasonable fees and costs shall be borne
50% by Pledger and 50% by Pledgee.

         (c) It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by Pledgeholder hereunder, Pledgeholder is authorized and
directed to retain in Pledgeholder's possession without liability to anyone all
or any part of said securities until such disputes shall have been settled
either by mutual written agreement of the parties concerned or by a final order,
decree or judgment of the arbitrator provided for in Section 9 of the Agreement
or of a court of competent jurisdiction after the time for appeal has expired
and no appeal has been perfected, but Pledgeholder shall be under no duty
whatsoever to institute or defend any such proceedings.

                                       21
<PAGE>

     In addition, upon any dispute Pledgeholder should be entitled to engage
legal counsel, one-half of whose fees and expenses shall be borne by Pledgor and
one-half by Pledgee.

     12   Invalidity of Particular Provisions.  Pledgor and Pledgee agree that
          -----------------------------------
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.

     13   Successors or Assigns.  Pledgor and Pledgee agree that all of the
          ---------------------
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.

     14   Governing Law.  This Security Agreement shall be interpreted and
          -------------
governed under the laws of the State of California.

                                       22
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

"PLEDGOR"                 By:  __________________________________

                               __________________________________
                               Print Name

                     Address:  __________________________________

                               __________________________________


"PLEDGEE"                      Evolve Software, Inc.
                               a Delaware corporation


                          By:  __________________________________

                       Title:  __________________________________


"PLEDGEHOLDER"                 __________________________________
                               President of Pledgee

                                       23
<PAGE>

                         ELECTION UNDER SECTION 83(b)
                         ----------------------------
                     OF THE INTERNAL REVENUE CODE OF 1986
                     ------------------------------------

  The undersigned taxpayer hereby elects, pursuant to the above-referenced
Federal Tax Code, to include in taxpayer's gross income for the current taxable
year, the amount of any compensation taxable to taxpayer in connection with his
receipt of the property described below:

1. The name, address, taxpayer identification number and taxable year of the
   undersigned are as follows:

NAME:
TAXPAYER:   Douglas Sinclair             SPOUSE:_____________________

ADDRESS:    _____________________
            _____________________

IDENTIFICATION NO.:
TAXPAYER:   _____________________        SPOUSE:_____________________

TAXABLE YEAR:  2000

2. The property with respect to which the election is made is described as
   follows: 1,000,000 shares (the "Stock") of the Common Stock of Evolve
   Software, Inc. (the "Company").

3. The date on which the property was transferred is: July __, 2000

4. The property is subject to the following restrictions:

   The Stock may be repurchased by the Company, or its assignee, on certain
events. This right lapses with regard to a portion of the Stock over time.

5. The fair market value at the time of transfer, determined without regard to
   any restriction other than a restriction which by its terms will never lapse,
   of such property is:
                               $750,000

6. The amount (if any) paid for such property is:
                               $750,000

   The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property.  The transferee of such property is the person
performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked
--------------------------------------------------------------------------
except with the consent of the Commissioner.
-------------------------------------------

Dated:______________________        ____________________________
                                    Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated:______________________        ____________________________
                                    Spouse of Taxpayer

                                       24