<PAGE>   1
                                                                  EXHIBIT 10.12

                               AMENDMENT NO. 1 TO
            SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

     This Amendment No. 1 to Series B Convertible Preferred Stock Purchase
Agreement ("AMENDMENT NO. 1") dated as of September 28, 1998 is entered into by
and among Sequoia Software Corporation, a Maryland corporation (the "COMPANY"),
the investors listed on Schedule I hereto (the "NEW INVESTORS"), Anthem
Capital, L.P., a Delaware limited partnership ("ANTHEM"). NEPA Venture Fund II,
L.P., a Pennsylvania limited partnership ("NEPA")(each of the foregoing parties
other than the Company being referred to individually as a "PURCHASER" and
collectively as the "PURCHASERS"). Mark A. Wesker ("WESKER") and Anil Sethi
("SETHI")(individually Wesker and Sethi being referred to as a "FOUNDER" and
collectively, the "FOUNDERS"), and Richard C. Faint, Jr. ("FAINT"), Kenneth E.
Homa ("HOMA") and David H. Hungerford ("HUNGERFORD").

                                    RECITALS

     A. Pursuant to the terms and conditions of that certain Series B
Convertible Preferred Stock Purchase Agreement dated as of July 28, 1998 (the
"STOCK PURCHASE AGREEMENT"), the Company previously issued and sold an
aggregate of 5,212,019 shares of the Company's authorized but unissued Series B
Convertible Preferred Stock ("SERIES B PREFERRED STOCK") at a per share price
of $0.6763. All capitalized terms not otherwise defined herein have the meaning
attributed to such terms in the Stock Purchase Agreement.

     B. Pursuant to the terms and conditions of the Stock Purchase Agreement,
the Company is permitted to sell up to 4,435,901 additional shares of Series B
Preferred Stock at a per share price of $0.6763.

     C. The Company now desires to sell 4,435,901 shares of Series B Preferred
Stock to the Flanders Language Valley Fund, C.V.A., a Belgian limited
partnership ("FLANDERS"), on the same terms and conditions as those contained
in the Stock Purchase Agreement.

     D. In connection with the sale by the Company to Flanders of such Series B
Preferred Stock, Flanders is required to become a party to the Stock Purchase
Agreement.

     IN CONSIDERATION OF the premises, mutual promises and covenants contained
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are here acknowledged, the parties hereto agree as
follows:

     1. Schedule I to the Stock Purchase Agreement is hereby amended to include
Flanders, as set forth in Attachment I hereto.

     2. Exhibit B to the Stock Purchase Agreement is hereby amended to include
Flanders as set forth in Attachment II hereto.

     3. Flanders hereby agrees to be bound by all the terms and conditions of
the Stock Purchase Agreement as though Flanders had been an original party to
the Stock Purchase
<PAGE>   2
Agreement identified as a "Purchaser" therein, and by executing this Amendment
No. 1, Flanders becomes a party thereto and is bound thereby.

     4. Each of the Company and the Founders hereby represents and warrants
that each of the representations and warranties made by such party in the Stock
Purchase Agreement, including exceptions thereto, are true and correct in all
material respects as of the date hereof, except as follows:

          (a) Schedules 3.2 and 3.4 are amended to read as set forth in
Attachment III and Attachment IV, respectively.

          (b) The term "BALANCE SHEET DATA" as defined in Section 3.9 of the
Stock Purchase Agreement is changed to June 30, 1998 for the purposes of the
Stock Purchase Agreement and this Amendment No. 1.

          (c) The term "FINANCIAL STATEMENTS" as defined in Section 3.9 of the
Stock Purchase Agreement is changed to refer to the unaudited balance sheet of
the Company as of the Balance Sheet Date and the related statements of
operations and cash flows for the six months then ended, as compiled by the
Company, for the purposes of the Stock Purchase Agreement.

          (d) Additional changes to the representations and warranties
contained in the Stock Purchase Agreement are set forth on the "Schedule of
Changes" attached hereto as Attachment V.

     5. The Company agrees to use commercially reasonable efforts in good faith
to invest in the Flanders region of Belgium. The nature, amount and timing of
such investment will be discussed by the Company with Flanders following the
Second Closing.

     6. The Company agrees to pay the reasonable attorneys fees up to a maximum
of $15,000 of counsel to Flanders in connection with their negotiation and
review of this Amendment No. 1 and the related documents and the closing of the
transactions contemplated thereby.

     7. The Company agrees to use best efforts to cause within ten days of the
Second Closing all of its employees who have executed Stock Restriction
Agreements or Exempt Employees Stock Restriction Agreements to amend such
agreements to include all of the New Investors in the defined term "Investor"
as defined in and for the purposes of such agreements.

     8. This Amendment No. 1 shall in all respects be governed by, and
construed and enforced in accordance with, the laws of the State of Maryland.

     9. No term of the Stock Purchase Agreement which is not specifically
amended in this Amendment No. 1 shall be affected hereby, and those terms of
the Stock Purchase Agreement which are not specifically amended herein remain
in full force and effect as written in the original Stock Purchase Agreement.

     10. General


             Amendment No. 1 to Stock Purchase Agreement -- Page 2
<PAGE>   3
     (a) Any party's failure to enforce any provision or provisions of this
Amendment No. 1 shall not in any way be construed as a waiver of any such
provision or provisions, nor shall such failure to enforce prevent that party
thereafter from enforcing each and every other provision of this Amendment No.
1. The rights granted to the parties herein are cumulative and shall not
constitute a waiver of any party's right to assert all other legal remedies
available to it under the circumstances.

     (b) This Amendment No. 1 may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which when taken together shall
constitute one and the same instrument. The parties agree that the execution and
delivery to the Company by facsimile of the page of this Amendment No. 1
containing the space for the signature of such party shall bind the party to the
terms hereof with the same effect as if such party had delivered to each other
party hereto a complete counterpart copy of this Amendment No. 1 bearing the
original, manual signature of the party.

     (c) Each of the undersigned parties agrees upon request to execute any
further documents or instruments necessary or desirable to carry out the
purposes or intent of this Amendment No. 1 or the Stock Purchase Agreement.

     IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
day and year first above written.


                                        SEQUOIA SOFTWARE CORPORATION


                                        By: /s/ RICHARD C. FAINT JR.
                                            -----------------------------
                                        Title: CEO
                                               --------------------------

                                        /s/ Mark A. Wesker
                                        ---------------------------------
                                        Mark A. Wesker

                                        /s/ Anil Sethi
                                        ---------------------------------
                                        Anil Sethi

                                        ANTHEM CAPITAL, L.P.
                                        By: Anthem Capital Partners, L.P.,
                                            General Partner
                                        By: Anthem Capital Partners, Inc.,
                                            General Partner


                                        By: /s/ WILLIAM M. GUST II
                                            ------------------------------



             Amendment No. 1 To Stock Purchase Agreement -- Page 3

<PAGE>   4
                         NEPA VENTURE FUND II, L.P.
                         By:  NEPA II Management Corporation, General
                              Partner

                         By: /s/ MARK BENSON
                             ---------------------------

                         /s/ RICHARD C. FAINT, JR.
                         -------------------------------
                         Richard C. Faint, Jr.

                         /s/ KENNETH E. HOMA
                         -------------------------------
                         Kenneth E. Homa

                         /s/ DAVID S. HUNGERFORD
                         -------------------------------
                         David S. Hungerford



                         NELSON BUNKER HUNT TRUST ESTATE-
                         TRUST B


                         By:/s/ F.C. VICKERS
                            ----------------------------
                            F.C. Vickers, Trustee



                         LYDA BUNKER HUNT TRUST - MARY
                         HUDDLESTON

                         By:/s/ MIRO VRANAC, JR.
                            ----------------------------
                            Miro Vranac, Jr., Trustee

                         /s/ MARY HUNT HUDDLESTON
                         -------------------------------
                         Mary Hunt Huddleston


                         O'BRYAN COMMUNITY PROPERTY TRUST

                         By: /s/ FRANK O'BRYAN
                            ----------------------------
                            Frank O'Bryan, Trustee


              Amendment No. 1 To Stock Purchase Agreement - Page 4

<PAGE>   5
                                                 FLANDERS LANGUAGE VALLEY FUND,
                                                 C.V.A.

                                                 By: /s/ PHILIP VERMEULIN
                                                    ---------------------------
                                                 Title: CEO, FLV Management N.V.
                                                        -----------------------









              Amendment No. 1 To Stock Purchase Agreement - Page 5


<PAGE>   6

                                  ATTACHMENT 1

                                   Schedule 1


NEW INVESTORS                                INVESTMENT

Nelson Bunker Hunt Trust Estate - Trust B    $1,450,000

Lyda Bunker Hunt Trust - Mary Huddleston       $500,000

Mary Hunt Huddleston                            $50,000

O'Bryan Community Property Trust               $500,000

Flanders Language Valley Fund, C.V.A.        $3,000,000

Total for New Investors                      $5,500,000




  Amendment No. 1 to Stock Purchase Agreement - Page 1

<PAGE>   7



                                 ATTACHMENT II

                                   Exhibit B


<TABLE>
<CAPTION>
                                          Number of Shares of      Aggregate
                                          Series B Convertible      Purchase
Investor Name and Address               Preferred Stock Purchased    Price
-------------------------               -------------------------  ---------
<S>                                     <C>                        <C>
Anthem Capital, L.P.                         1,010,290             $  683,259.60
16 South Calvert Street
Suite 800
Baltimore, Maryland 21202-1305

NEPA Venture Fund II, L.P.                     505,145             $  341,629.29
8230 Boone Boulevard
Suite 347
Vienna, Virginia  22182

Nelson Bunker Hunt Trust Estate-             2,144,019             $1,450,000.00
Trust B
Attn: F. C. Vickers, Trustee
5949 Sherry Lane, Suite 1720
Dallas, Texas  75225

Lyda Bunker Hunt Trust-                        739,317             $  500,000.00
Mary Huddleston
Attn: Miro Vranac, Jr., Trustee
5949 Sherry Lane, Suite 1720
Dallas, Texas  75225

Mary Hunt Huddleston                            73,931             $   50,000.00
5949 Sherry Lane, Suite 1500
Dallas, Texas  75225

O'Bryan Community Property                     739,317             $  500,000.00
Trust
610 Newport Center Drive
Suite 530
Newport Beach, CA  92660

Flanders Language Valley Fund,               4,435,901             $3,000,000.00
C.V.A.
Patteelstraat 24
8900 leper.Belgium

Totals                                       9,647,920             $6,524,888.89
</TABLE>


                                      -1-
<PAGE>   8
                                  Attachment V
                                       To
        Amendment No. 1 to Series B Convertible Stock Purchase Agreement

                              Schedule Of Changes
                              -------------------

     The following changes are made to the representations and warranties set
forth in Section 3 of the Series B Convertible Preferred Stock Purchase
Agreement dated as of July 28, 1998:

     3.2  Capitalization. On the date of Amendment No. 1 (and prior to the
Second Closing):

     (i) the authorized capital stock of the Company consists of (A) 33,000,000
shares of Common stock. $0.001 par value per share, of which 10,149,614 shares
are issued and outstanding, and (B) 17,712,920 shares of Preferred Stock,
$0.001 par value per share;

     (ii) a total of 8,065,000 shares of Preferred Stock of the Company are
designated Series A Convertible Preferred Stock and 8,064,877 shares of Series
A Convertible Preferred Stock are to be issued and outstanding; and

     (iii) a total of 9,647,920 shares of Preferred Stock are designated as
Series B Convertible Preferred Stock and 5,212,019 shares of Series B
Convertible Preferred Stock are issued and outstanding.


     3.3  Subsidiaries. As of August 19, 1998, the Company has a wholly owned
Irish subsidiary, Eloquent Computers Limited (name change to Sequoia Software
Europe Limited is pending) in Dublin, Ireland. To date, this subsidiary has
been created but not funded by the Company.