Document:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
     THEY  MAY  NOT  BE  SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE
     ABSENCE  OF  AN  EFFECTIVE  REGISTRATION  STATEMENT  RELATED  THERETO OR AN
     OPINION  OF  COUNSEL  REASONABLY  SATISFACTORY  TO  THE  COMPANY  THAT SUCH
     REGISTRATION  IS  NOT  REQUIRED  UNDER  THE  SECURITIES  ACT  OF  1933.

                                     WARRANT
                      To Purchase Shares of Common Stock of
                              Evolve Software, Inc.

THIS CERTIFIES that, for value received [______________], is entitled, upon the
terms and subject to the conditions hereinafter set forth, to purchase from
Evolve Software, Inc., a Delaware corporation (the "COMPANY"), that number of
fully paid and nonassessable shares of the Company's Common Stock, par value
$0.001 per share ("COMMON STOCK") at the purchase price per share as set forth
in Section 1 below ("EXERCISE PRICE").  The number of shares and Exercise Price
are subject to adjustment as provided in Section 10 hereof.

     Section  1.  Number  of  Shares;  Exercise  Price;  Term.
                  -------------------------------------------

      1.1 Subject to adjustments as provided herein, this Warrant is exercisable
          for up to [______________] shares (the "SHARES") of the Company's
          Common Stock for an aggregate purchase price of $[______________], or
          a purchase price of $1.00 per share.

     1.2  Subject to the terms and conditions set forth herein, this Warrant
          shall be exercisable during the term commencing on the date hereof and
          ending on the seventh anniversary of the date of this Warrant, and
          shall be void thereafter.

     Section 2. Title to Warrant. This Warrant and all rights hereunder are
                ----------------
          transferable, in whole or in part, at the office or agency of the
          Company by the holder hereof in person or by duly authorized attorney,
          upon surrender of this Warrant together with the Assignment Form
          annexed hereto properly endorsed.

     Section 3. Exercise or Conversion of Warrant.
                ---------------------------------

     3.1  The purchase rights represented by this Warrant are exercisable by the
          registered holder hereof, in whole or in part, at any time, or from
          time to time, during the term hereof as described in Section l above,
          by the surrender of this Warrant and the Notice of Exercise or
          Conversion annexed hereto duly completed and executed on behalf of the
          holder hereof, at the office of the Company in Emeryville, California
          (or such other office or agency of the Company as it may designate by
          notice in writing to the registered holder hereof at the address of
          such holder appearing on the books of the Company), and subject to
          Section 3.2 hereof, upon payment of the purchase price

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          of  the  shares  thereby  purchased in cash or check acceptable to the
          Company,  whereupon  the  holder  of this Warrant shall be entitled to
          receive  a  certificate  for the number of shares so purchased and, if
          this  Warrant  is  converted  in part, a new Warrant for the remaining
          portion  of  this  Warrant.

     3.2  Notwithstanding any provisions herein to the contrary, if the Fair
          Market Value (as hereinafter defined) is greater than the Exercise
          Price (at the date of calculation, as set forth below), in lieu of
          exercising this Warrant as hereinabove permitted, the holder may elect
          to convert this Warrant, in whole or in part, into shares of Common
          Stock equal to the value (as determined below) of the exercised
          portion of this Warrant by surrender of such portion of this Warrant
          for conversion at the office of the Company referred to in Section 3.1
          above, together with the Notice of Exercise or Conversion, in which
          event the Company shall issue to the holder that number of shares of
          Common Stock computed using the formula below and, if this Warrant is
          converted in part, a new Warrant for the remaining portion of this
          Warrant.

                               CS = WCS x (FMV-EP)
                                    --------------
                                       FMV

Where, for purposes of this Section 3.2

     CS   equals the number of shares of Common Stock to be issued to the holder

     WCS  equals the number of shares of Common Stock purchasable under the
          Warrant which are to be converted by the holder

     FMV  equals the Market Price, as defined in Section 10, of one share of the
          Company's  Common  Stock

     EP   equals the Exercise Price (as adjusted to the date of such
          calculation).

     3.3  The Company agrees that, upon exercise or conversion of this Warrant
          in accordance with the terms hereof, the shares so purchased shall be
          deemed to be issued to such holder as the record owner of such shares
          as of the close of business on the date on which this Warrant shall
          have been exercised or converted. The parties intend that in the event
          this Warrant is converted into shares of Common Stock pursuant to
          Section 3.2 above, the holder be entitled to "tack" the holding period
          of this Warrant to the holding period of the shares issued upon such
          conversion for purposes of the holding period requirements of Rule 144
          under the Securities Act of 1933, as amended (the "Securities Act").
          Certificates for shares purchased hereunder and, on partial exercise
          or conversion of this Warrant, a new Warrant for the unexercised
          portion of this Warrant shall be delivered to the holder hereof as
          promptly as practicable after the date on which this Warrant shall
          have been exercised or converted.

     3.4  The Company covenants that all shares which may be issued upon the
          exercise of rights represented by this Warrant will, upon exercise of
          the rights represented by this Warrant and payment of the Exercise
          Price or surrender of the appropriate number of

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<PAGE>
          Shares, be fully paid and nonassessable and free from all taxes, liens
          and charges in respect of the issue thereof (other than taxes in
          respect of any transfer occurring contemporaneously or otherwise
          specified herein).

     3.5  The Company will reserve and keep available free from preemptive
          rights, out of its authorized but unissued shares of Common Stock, the
          full number of Shares deliverable upon the exercise of this Warrant in
          full. The Company or, if appointed, a transfer agent (a "Transfer
          Agent") will be irrevocably authorized and directed at all times to
          reserve such number of authorized shares of Common Stock as are
          required for such purpose. The Company will keep a copy of this
          Warrant on file with each Transfer Agent. The Company will furnish
          such Transfer Agent with a copy of all notices of adjustments and
          certificates related thereto which are transmitted to the holder
          pursuant to Section 11 hereof.

     Section 4. No Fractional Shares or Scrip. No fractional shares or scrip
                -----------------------------
          representing fractional shares shall be issued upon the exercise or
          conversion of this Warrant. In lieu of any fractional share to which
          such holder would otherwise be entitled, such holder shall be
          entitled, at its option, to receive either (i) a cash payment equal to
          the excess of fair market value for such fractional share above the
          Exercise Price for such fractional share (as mutually determined by
          the Company and the holder) or (ii) a whole share if the holder
          tenders the Exercise Price for one whole share.

     Section 5. Charges, Taxes and Expenses. Issuance of certificates for shares
                ---------------------------
          upon the exercise or conversion of this Warrant shall be made without
          charge to the holder hereof for any issue or transfer tax or other
          incidental expense in respect of the issuance of such certificates,
          all of which taxes and expenses shall be paid by the Company, and such
          certificates shall be issued in the name of the holder of this Warrant
          or in such name or names as may be directed by the holder of this
          Warrant; provided, however, that in the event certificates for shares
          are to be issued in a name other than the name of the holder of this
          Warrant, this Warrant when surrendered for exercise or conversion
          shall be accompanied by the Assignment Form attached hereto duly
          executed by the holder hereof and the Notice of Exercise or Conversion
          duly completed and executed and stating in whose name and certificates
          are to be issued; and provided further, that such assignment shall be
          subject to applicable laws and regulations. Upon any transfer involved
          in the issuance or delivery of any certificates for shares of the
          Company's securities, the Company may require, as a condition thereto,
          the payment of a sum sufficient to reimburse it for any transfer tax
          incidental thereto.

     Section 6. No Rights as Shareholders. This Warrant does not entitle the
                -------------------------
          holder hereof to any voting rights, dividend rights or other rights as
          a shareholder of the Company prior to the exercise or conversion
          hereof.

     Section 7. Exchange and Registry of Warrant. The Company shall maintain a
               --------------------------------
          registry showing the name and address of the registered holder of this
          Warrant. This Warrant may be surrendered for exchange, transfer,
          exercise or conversion in accordance with its terms, at the office of
          the Company, and the Company shall be entitled to rely in all
          respects, prior to written notice to the contrary, upon such registry.

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<PAGE>
     Section 8. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt
                -------------------------------------------------
          by the Company of evidence reasonably satisfactory to it of the loss,
          theft, destruction or mutilation of this Warrant, and in case of loss,
          theft or destruction, of indemnity or security reasonably satisfactory
          to it, and upon reimbursement to the Company of all reasonable
          expenses incidental thereto, and upon surrender and cancellation of
          this Warrant, if mutilated, the Company will make and deliver a new
          Warrant of like tenor and dated as of such cancellation, in lieu of
          this Warrant.

     Section 9. Saturdays, Sundays, Holidays, etc. If the last or appointed day
               ----------------------------------
          for the taking of any action or the expiration of any right required
          or granted herein shall be a Saturday or a Sunday or shall be a legal
          holiday, then such action may be taken or such right may be exercised
          on the next succeeding day not a Saturday or a Sunday or a legal
          holiday.

     Section 10. Adjustment of Exercise Price. The Exercise Price and the number
                 ----------------------------
          of Warrant Shares issuable on Exercise of each Warrant are subject to
          adjustment from time to time as described in this Section 10. All
          calculations under this Section 10 will be made to the nearest
          one-hundredth of a cent or to the nearest one-hundredth of a share, as
          the case may be.

     10.1 Antidilution Adjustments. Subject to Section 10.3, the following
          ------------------------
          adjustments shall be made:

     (a)  Common Stock Issued at Less than Market Value. If the Company issues
          or sells any Common Stock other than Excluded Stock (as defined in
          Section 10.4) without consideration or for consideration per share
          less than the Market Price (as defined in Section 10.4) (provided,
          however, that no sale of securities pursuant to a bona fide
          underwritten public offering will be deemed to be for less than Market
          Price), as of the day of such issuance or sale, the Exercise Price in
          effect immediately prior to each such issuance or sale will
          immediately (except as provided below) be reduced to the price
          determined by multiplying the Exercise Price, in effect immediately
          prior to such issuance or sale, by a fraction, (x) the numerator of
          which shall be the sum of (i) the number of shares of Common Stock
          issued and outstanding immediately prior to such issue, (ii) the
          number of shares of Common Stock issuable upon conversion of shares of
          Preferred Stock outstanding immediately prior to such issue, (iii) the
          number of shares of Common Stock issuable upon exercise of outstanding
          in-the-money Options and conversion of outstanding in-the-money
          Convertible Securities prior to such issue and (iv) the number of
          shares of Common Stock which the aggregate consideration received by
          the Company for the total number of such additional shares of Common
          Stock so issued or sold would purchase at the Market Price on the last
          trading day immediately preceding such issuance or sale and (y) the
          denominator of which shall be (i) the number of shares of Common Stock
          issued and outstanding immediately prior to such issue, (ii) the
          number of shares of Common Stock issuable upon conversion of shares of
          Preferred Stock outstanding immediately prior to such issue, (iii) the
          number of shares of Common Stock issuable upon exercise of outstanding
          in-the-money Options and conversion of outstanding in-the-money
          Convertible Securities prior to such issue, and (iv) the number of
          shares of Common Stock so issued or sold. In such event, the number of
          Shares issuable upon

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<PAGE>
          the exercise of this Warrant shall be increased to the number obtained
          by dividing (x) the product of (A) the number of Shares issuable upon
          the exercise of this Warrant before such adjustment, and (B) the
          Exercise Price in effect immediately prior to the issuance giving rise
          to this adjustment by (y) the new Exercise Price determined in
          accordance with the immediately preceding sentence. For the purposes
          of any adjustment of the Exercise Price and the number of Shares
          issuable upon exercise of each Warrant pursuant to this Section
          10.1(a), the following provisions shall be applicable:

     (1)  In the case of the issuance of Common Stock for cash, the amount of
          the consideration received by the Company shall be deemed to be the
          amount of the cash proceeds received by the Company for such Common
          Stock before deducting therefrom any discounts or commissions allowed,
          paid or incurred by the Company for any underwriting or otherwise in
          connection with the issuance and sale thereof.

     (2)  In the case of the issuance of Common Stock (otherwise than upon the
          conversion of any shares of capital stock or other securities of the
          Company) for a consideration in whole or in part other than cash,
          including securities acquired in exchange therefor (other than
          securities by their terms so exchangeable), the consideration other
          than cash shall be deemed to be the fair value thereof as determined
          by the Board of Directors, provided, however, that such fair value as
          determined by the Board of Directors shall not exceed the aggregate
          Market Price of the shares of Common Stock being issued as of the date
          the Board of Directors authorizes the issuance of such shares.

     (3)  In the case of the issuance of (A) options, warrants or other rights
          to purchase or acquire Common Stock (whether or not at the time
          exercisable) or (B) securities by their terms convertible into or
          exchangeable for Common Stock (whether or not at the time so
          convertible or exchangeable) or options, warrants or rights to
          purchase such convertible or exchangeable securities (whether or not
          at the time exercisable):

     (i)  the aggregate maximum number of shares of Common Stock deliverable
          upon exercise of such options, warrants or other rights to purchase or
          acquire Common Stock shall be deemed to have been issued at the time
          such options, warrants or rights are issued and for a consideration
          equal to the consideration (determined in the manner provided in
          Sections 10.1(a)(1) and (2)), if any, received by the Company upon the
          issuance of such options, warrants or rights plus the minimum purchase
          price provided in such options, warrants or rights for the Common
          Stock covered thereby;

     (ii) the aggregate maximum number of shares of Common Stock deliverable
          upon conversion of or in exchange for any such convertible or
          exchangeable securities, or upon the exercise of options, warrants or
          other rights to purchase or acquire such convertible or exchangeable
          securities and the subsequent conversion or exchange thereof, shall be
          deemed to have been issued at the time such securities were issued or
          such options, warrants or rights were issued and for a consideration
          equal to the consideration, if any, received by the Company for any
          such securities

                                        5
<PAGE>
          and related options, warrants or rights (excluding any cash received
          on account of accrued interest or accrued dividends), plus the
          additional consideration (determined in the manner provided in Section
          10.1(a)(1) and (2)), if any, to be received by the Company upon the
          conversion or exchange of such securities, or upon the exercise of any
          related options, warrants or rights to purchase or acquire such
          convertible or exchangeable securities and the subsequent conversion
          or exchange thereof;

     (iii) on any change in the number of shares of Common Stock deliverable
          upon exercise of any such options, warrants or rights or conversion or
          exchange of such convertible or exchangeable securities or any change
          in the consideration to be received by the company upon such exercise,
          conversion or exchange, but excluding changes resulting from the
          antidilution provisions thereof (to the extent comparable to the
          antidilution provisions contained herein), the Exercise Price and the
          number of Shares issuable upon exercise of this Warrant as then in
          effect shall forthwith be readjusted to such Exercise Price and number
          of Shares as would have been obtained had an adjustment been made upon
          the issuance of such options, warrants or rights not exercised prior
          to such change, or of such convertible or exchangeable securities not
          converted or exchanged prior to such change, upon the basis of such
          change;

     (iv) on the expiration or cancellation of any such options, warrants or
          rights (without exercise), or the termination of the right to convert
          or exchange such convertible or exchangeable securities (without
          exercise), if the Exercise Price and the number of Shares issuable
          upon exercise of this Warrant shall have been adjusted upon the
          issuance thereof, the Exercise Price and the number of Shares issuable
          upon exercise of this Warrant shall forthwith be readjusted to such
          Exercise Price and number of Shares as would have been obtained had an
          adjustment been made upon the issuance of such options, warrants,
          rights or such convertible or exchangeable securities on the basis of
          the issuance of only the number of shares of Common Stock actually
          issued upon the exercise of such options, warrants or rights, or upon
          the conversion or exchange of such convertible or exchangeable
          securities; and

     (v)  if the Exercise Price and the number of Shares issuable upon exercise
          of this Warrant shall have been adjusted upon the issuance of any such
          options, warrants, rights or convertible or exchangeable securities,
          no further adjustment of the Exercise Price and the number of Shares
          issuable upon exercise of this Warrant shall be made for the actual
          issuance of Common Stock upon the exercise, conversion or exchange
          thereof; provided, however, that no increase in the Exercise Price
          shall be made pursuant to subclauses (i) and (ii) of this Section
          10.1(a)(3).

               Notwithstanding anything to the contrary in this Section 10.1(a),
no adjustment will be required in respect of issuances of Common Stock (or
options to purchase Common Stock) pursuant to stock options granted prior to the
date hereof.

                                        6
<PAGE>
     (b)  Certain Repurchases of Common Stock. In case the Company effects a Pro
          -----------------------------------
          Rata Repurchase (as defined in Section 10.4) of Common Stock, then the
          Exercise Price shall be reduced to the price determined by multiplying
          the Exercise Price in effect immediately prior to the effective date
          of such Pro Rata Repurchase by a fraction of which the numerator shall
          be (x) the product of (A) the number of shares of Common Stock
          outstanding immediately before such Pro Rata Repurchase (after giving
          effect to the conversion of all outstanding in-the-money Convertible
          Securities and the exercise of all outstanding in-the-money Options)
          and (B) the Market Price of a share of Common Stock on the trading day
          immediately preceding the first public announcement by the Company or
          any of its Affiliates of the intent to effect such Pro Rata
          Repurchase, minus (y) the aggregate purchase price of the Pro Rata
          Repurchase, and of which the denominator shall be the product of (x)
          the number of shares of Common Stock outstanding immediately prior to
          such Pro Rata Repurchase (after giving effect to the conversion of
          outstanding all in-the-money Convertible Securities and the exercise
          of all outstanding in-the-money Options) minus the number of shares of
          Common Stock so repurchased and (y) the Market Price per share of
          Common Stock on the trading day immediately preceding the first public
          announcement of such Pro Rata Repurchase. In such event, the number of
          Shares issuable upon the exercise of this Warrant shall be increased
          to the number obtained by dividing (x) the product of (A) the number
          of Shares issuable upon the exercise of this Warrant before such
          adjustment, and (B) the Exercise Price in effect immediately prior to
          the Pro Rata Repurchase giving rise to this adjustment by (y) the new
          Exercise Price determined in accordance with the immediately preceding
          sentence.

     (c)  Business Combinations. Subject to Section 12 hereof, in case of any
          ---------------------
          Change of Control (as defined in Section 10.4) or reclassification of
          Common Stock (other than a reclassification of Common Stock referred
          to in Section 10.1(d)), the Shares issued or issuable upon exercise of
          this Warrant after the date of such Change of Control or
          reclassification will be exchangeable for the number of shares of
          stock or other securities or property (including cash) to which the
          Shares issuable (at the time of such consolidation, merger, sale,
          lease or conveyance) upon exercise of this Warrant immediately prior
          to such Change of Control or reclassification would have been entitled
          upon such Change of Control or reclassification; and in any such case,
          if necessary, the provisions set forth herein with respect to the
          rights and interests thereafter of the holder shall be appropriately
          adjusted so as to be applicable, as nearly as may reasonably be, to
          any shares of stock or other securities or property thereafter
          deliverable on the exercise of this Warrant. In determining the kind
          and amount of stock, securities or the property receivable upon
          consummation of such Change of Control, if the holders of Common Stock
          have the right to elect the kind or amount of consideration receivable
          upon consummation of such Change of Control, then the holder shall
          have the right to make a similar election upon exercise of this
          Warrant with respect to the number of shares of stock or other
          securities or property which the holder will receive upon exercise of
          this Warrant.

     (d)  Stock Splits, Subdivisions, Reclassifications or Combinations. If the
          -------------------------------------------------------------
          Company shall (1) declare a dividend or make a distribution on its
          Common Stock in shares of

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<PAGE>
          Common Stock, (2) subdivide or reclassify the outstanding shares of
          Common Stock into a greater number of shares, or (3) combine or
          reclassify the outstanding Common Stock into a smaller number of
          shares, the number of Shares issuable upon exercise of this Warrant at
          the time of the record date for such dividend or distribution or the
          effective date of such subdivision, combination or reclassification
          shall be proportionately adjusted so that the holder after such date
          shall be entitled to purchase the number of Shares which such holder
          would have owned or been entitled to receive after such date had this
          Warrant been exercised immediately prior to such date. In such event
          the Exercise Price in effect at the time of the record date for such
          dividend or distribution or the effective date of such subdivision,
          combination or reclassification shall be adjusted to the number
          obtained by dividing (x) the product of (A) the number of Shares
          issuable upon the exercise of this Warrant before such adjustment and
          (B) the Exercise Price in effect immediately prior to the issuance
          giving rise to this adjustment by (y) the new number of shares
          issuable upon exercise of the Warrant determined pursuant to the
          immediately preceding sentence.

     (e)  Other Distributions. In case the Company shall fix a record date for
          the making of a distribution to all holders of shares of its Common
          Stock (1) of shares of any class other than its Common Stock or (2) of
          evidence of indebtedness of the Company or any subsidiary or (3) of
          assets, or (4) of warrants or similar rights (in each case excluding
          any dividends or distribution referred to in Section 10.1(d)), in each
          such case the Exercise Price in effect on the record date will be
          reduced by an amount equal, in the case of a distribution in cash, to
          the amount thereof payable per share of the Common Stock, or in the
          case of any other distribution, to the fair value thereof per share of
          the Common Stock as determined by the Board of Directors. Such
          reductions shall take effect on the record date for such distribution.
          In such event, the number of Shares issuable upon the exercise of this
          Warrant shall be increased to the number obtained by dividing (x) the
          product of (A) the number of Shares issuable upon the exercise of this
          Warrant before such adjustment, and (B) the Exercise Price in effect
          immediately prior to the issuance giving rise to this adjustment by
          (y) the new Exercise Price determined in accordance with the
          immediately preceding sentence. In the event that such distribution is
          not so made, the Exercise Price and the number of Shares issuable upon
          exercise of this Warrant then in effect shall be readjusted, effective
          as of the date when the Board determines not to distribute such
          shares, evidences of indebtedness, assets, rights or warrants, as the
          case may be, to the Exercise Price that would then be in effect and
          the number of Warrant Shares that would then be issuable upon exercise
          of this Warrant if such record date and distribution had not been
          fixed.

     (f)  No adjustment in the Exercise Price or the number of Warrant Shares
          issuable upon the exercise of each Warrant is required if the amount
          of the adjustment is less than $0.01 or one-hundredth (1/100th) of a
          share, as the case may be; provided, however, that any adjustments
          which by reason of this Section 10.1(f) are not required to be made
          will be carried forward and given effect in any subsequent adjustment.

     (g)  For the purposes of this Section 10.1, the term "shares of Common
          Stock" shall include (1) the class of stock designated as the Common
          Stock of the Company at the

                                        8
<PAGE>
          date hereof or (2) any other class of stock resulting from successive
          changes or reclassifications of such shares consisting solely of
          changes in par value, or from no par value to par value.

     (h)  Notwithstanding the foregoing, in any case which this Section 10.1
          provides that an adjustment becomes effective immediately after a
          record date for an event, the Company may defer until the occurrence
          of such event (1) issuing to the holder of any Warrant exercised or
          converted after such record date and before the occurrence of such
          event the additional securities issuable upon such exercise or
          conversion after giving effect to such adjustment and (2) paying to
          the holder any amount in cash in lieu of any fraction pursuant to
          Section 4.

     (i)  If the Company takes any action affecting the Common Stock, other than
          action described in this Section 10.1, which in the opinion of the
          Board of Directors of the Company would materially adversely affect
          the conversion rights of the holder of the Warrants, the Exercise
          Price for the Warrants and/or the number of Warrant Shares received
          upon exercise of the Warrant may be adjusted, to the extent permitted
          by law, in such manner, if any, and at such time, as such Board may
          determine in good faith to be equitable in the circumstances.

     10.2 Voluntary Adjustment by the Company. The Company may at its option, at
          -----------------------------------
          any time during the term of the Warrants, reduce the then current
          Exercise Price or increase the number of Shares for which the Warrant
          may be exercised to any amount deemed appropriate by the Board of
          Directors of the Company; provided, however, that if the Company
          elects to make such adjustment, such adjustment will remain in effect
          for at least a 15-day period, after which time the Company may, at its
          option, reinstate the Exercise Price or number of Shares in effect
          prior to such reduction, subject to any interim adjustments pursuant
          to Section 10.1.

     10.3 Miscellaneous. Except as provided in Section 10.1, no adjustment in
          -------------
          respect of any dividends or other payments or distributions made to
          holders of securities issuable upon exercise of Warrants will be made
          during the term of a Warrant or upon the exercise of a Warrant. To the
          extent (but only to the extent) that the holder's rights hereunder
          have been protected by the holder's exercise (at holder's election and
          reasonable allocation) of its preemptive rights under any Preemptive
          Rights Agreement or similar agreement between the Company and the
          holder hereof, no adjustments will be made to the Exercise Price or
          the number of Warrant Shares.

     10.4 Definitions. For purposes hereof, the following terms shall have the
          -----------
          following meanings:

               "Change of Control" means (A) (i) the Corporation's sale of all
               or substantially all of its business, assets or property
               (including intellectual property) or (ii) any transaction or
               series of related transactions resulting in a reorganization,
               merger, or consolidation (whether or not the Corporation is the
               entity surviving such transaction) in which holders of all voting
               equity securities of the Corporation immediately prior to such
               transaction will hold

                                        9
<PAGE>
               (by reason of their holdings in the Corporation) less than 50% of
               the voting equity securities of the Corporation or other entity
               surviving such transaction or (B) a transaction or series of
               related transactions in which a person or group (as defined in
               Rule 13d-5(b)(1) under the Securities Exchange Act of 1934 (the
               "Exchange Act")) (excluding Warburg Pincus Private Equity VIII,
               L.P. and its affiliates) acquires beneficial ownership (as
               determined in accordance with Rule 13d-3 under the Exchange Act)
               of more than 50% of the voting equity securities of the
               Corporation.

               "Convertible Securities" means shall mean any evidences of
               indebtedness, shares (other than Common Stock and Series A
               Preferred Stock) or other securities convertible into or
               exchangeable for Common Stock.

               "Excluded Stock" means shares of Common Stock issued or issuable:
               (i) upon conversion of shares of Series A Preferred Stock of the
               Company, and upon the issuance of Options, including exercise or
               conversion of Convertible Securities subject to such Options,
               issued or issuable pursuant to the terms of the agreement or
               agreements governing initial issuance and sale of Series A
               Preferred Stock, or upon exercise or conversion of Options or
               Convertible Securities outstanding as of the date hereof; (ii) to
               officers, directors or employees of, or consultants to, the
               Company pursuant to a stock grant, option plan or purchase plan
               or other stock incentive program, including without limitation
               sales of shares to such persons pursuant to restricted stock
               purchase agreements approved by the Board of Directors; (iii) as
               a dividend or distribution on the Series A Preferred Stock or in
               connection with any stock split, stock dividend or similar
               transaction; (iv) in connection with (1) equipment lease
               financing transactions with institutions regularly engaged in
               equipment leasing or (2) bank lending, if such transactions are
               approved by the Board of Directors, and such issuance is not
               principally for the purpose of raising additional equity capital
               for the Company; provided however that the number of shares of
               Common Stock so excluded in any fiscal year of the Company shall
               not exceed 0.5% of the number of shares of Common Stock
               outstanding (determined as of the date of issuance of such shares
               of Common Stock), after giving effect to the conversion of all
               outstanding shares Series A Preferred Stock and other
               "in-the-money" (as such term is defined below) securities
               convertible into Common Stock unless such grants are approved by
               a majority of the Series A Directors present and voting; (v)
               securities issued to customers or joint venture partners or in
               connection with other strategic alliances approved by the Board
               of Directors including a majority of the Series A Directors
               present and voting which involve the grant of licenses or
               localization, distribution, OEM, bundling, manufacturing or
               resale rights with respect to the Company's products or
               technology; (vi) securities issued pursuant to the acquisition of
               another corporation by the Company by merger, purchase of
               substantially all of the assets of the other corporation, or
               other reorganization approved by the Board of Directors including
               a majority of the Series A Directors present and voting; (vii) by
               way of dividend or other

                                       10
<PAGE>
               distribution on shares of Common Stock excluded from the
               definition of Additional Shares of Common Stock by the foregoing
               clauses (i), (ii), (iii), (iv), (v) or (v) or on shares of Common
               Stock so excluded, provided that such issuance is made (x)
               pursuant to obligations of the Company established in connection
               with the original issuance of such securities or (y) to all
               holders of the Company's capital stock in proportion to the
               number of shares held.

               "In-the-money" Options and Convertible Securities shall be deemed
               to include all securities exercisable for or convertible into
               shares of Common Stock with a fair market value equal to or
               greater than the fair market value of the consideration which
               must be paid or which must be foregone to effect such exercise or
               conversion.

               "Market Price" means, with respect to a particular security, on
               any given day, the average of the daily closing prices for 10
               consecutive trading days ending on the trading day prior to the
               day in question or, in case no such reported sale takes place on
               such day, the average of the last closing bid and asked prices
               regular way, in either case on the principal national securities
               exchange on which the applicable security is listed or admitted
               to trading, or if not listed or admitted to trading on any
               national securities exchange, (1) the average of the daily
               closing prices for 10 consecutive trading days commencing on the
               5th trading day prior to the day in question reported by the
               NASDAQ Stock Market if such security is traded over-the-counter
               and quoted in the NASDAQ Stock Market, or (2) if such security is
               so traded, but not so quoted, the average of the closing reported
               bid and asked prices of such security as reported by the NASDAQ
               Stock Market or any comparable system, or (3) if such security is
               not listed on the NASDAQ Stock Market or any comparable system,
               the average of the closing bid and asked prices as furnished by
               two members of the National Association of Securities Dealers,
               Inc. selected from time to time by the Company for that purpose.
               If such security is not listed and traded in a manner that the
               quotations referred to above are available for the period
               required hereunder, the Market Price per share of Common Stock
               shall be deemed to be the fair value per share of such security
               as determined in good faith by the Board of Directors of the
               Company.

               "Options" means rights, options or warrants to subscribe for,
               purchase or otherwise acquire either Common Stock or Convertible
               Securities.

               "Pro Rata Repurchases" means any purchase of shares of Common
               Stock by the Company or any Affiliate (as defined in the
               Preferred Stock Purchase Agreement) thereof, other than Warburg
               Pincus Private Equity VIII, L.P. or any of its affiliates,
               pursuant to any tender offer or exchange offer subject to Section
               13(e) of the Exchange Act, or pursuant to any other offer
               available to substantially all holders of Common Stock, whether
               for cash, shares of capital stock of the Company, other
               securities of the Company, evidences of indebtedness of the
               Company or any other person or any other property (including,
               without limitation, shares of capital stock, other securities or

                                       11
<PAGE>
               evidences of indebtedness of a subsidiary of the Company), or any
               combination thereof, effected while this Warrant is outstanding;
               provided, however, that "Pro Rata Repurchase" shall not include
               any purchase of shares by the Company or any Affiliate thereof
               made directly or indirectly in accordance with the requirements
               of Rule 10b-18 as in effect under the Exchange Act; and provided
               further that "Pro Rata Purchase" shall not include any
               reclassification or combination of Common Stock referred to in
               Section 10.1(d). The "effective date" of a Pro Rata Repurchase
               shall mean the date of acceptance of shares for purchase or
               exchange under any tender or exchange offer which is a Pro Rata
               Repurchase or the date of purchase with respect to any Pro Rata
               Repurchase that is not a tender or exchange offer.

               "Series A Directors" means directors of the Company elected by
               holders of Series A Preferred Stock of the Company voting as a
               separate class; provided however that commencing at such time as
               no director elected by holders of Series A Preferred Stock of the
               Company voting as a separate class continues to serve on the
               Board of Directors, "Series A Directors" shall be deemed to refer
               to all directors of the Company.

     Section 11. Notice of Adjustments; Notices. Whenever the Exercise Price or
                 ------------------------------
          number of shares purchasable hereunder shall be adjusted pursuant to
          Section 10 hereof, the Company shall issue a certificate signed by its
          Chief Financial Officer setting forth, in reasonable detail, the event
          requiring the adjustment, the amount of the adjustment, the method by
          which such adjustment was calculated and the Exercise Price and number
          of shares purchasable hereunder after giving effect to such
          adjustment, and shall cause a copy of such certificate to be mailed
          (by first class mail, postage prepaid) to the holder of this Warrant
          and to the Transfer Agent.

     Section 12. Change of Control.
                  -----------------

     (a)  Exchange Right. In the event of a Trigger Date (as defined in Exhibit
          --------------
          A) the Company shall promptly notify the holder of the occurrence
          thereof. In lieu of the application of Section 10.1(c), the holder may
          in its sole discretion elect by delivering written notice to the
          Company together with this Warrant after the occurrence of an
          Initiation Date (as defined in Exhibit A) to cause the Company to
          purchase this Warrant, in whole or in part, at a valuation based on a
          computation of the option value of the Warrant using Black-Scholes
          option valuation and making the assumptions described in the
          Black-Scholes methodology described in Exhibit A (the "Exchange
          Right"). The Company's obligation to purchase this Warrant pursuant to
          this Section shall be conditioned, and shall occur, upon the
          consummation of a Change of Control.

     (b)  Payment in Common Stock. In the event of a Change of Control of the
          -----------------------
          type described in clause (A) of the definition of Change of Control,
          at the election of the Company all or any portion of such purchase
          price may be paid in Common Stock (valued as set forth in Exhibit A),
          provided the Company has ensured that the Common Stock paid in
          exchange for this Warrant (including any securities issued in

                                       12
<PAGE>
          respect of such Common Stock in the Change of Control) shall be freely
          tradable on a national stock exchange or the Nasdaq National Market by
          the holder pursuant to an effective registration statement under the
          Securities Act, or pursuant to Rule 144 or Rule 145 under the
          Securities Act without volume restrictions under applicable securities
          laws or under contract. Except as set forth in the foregoing sentence,
          the Company may pay the purchase price for the exchange of this
          warrant in Common Stock only with the written consent of the holder
          hereof.

     Section 13.  Miscellaneous.
                  -------------

     13.1 Governing Law. This Warrant shall be binding upon any successors or
          -------------
          assigns of the Company. This Warrant shall constitute a contract under
          the laws of Delaware and for all purposes shall be construed in
          accordance with and governed by the laws of said state, without giving
          effect to the conflict of laws principles.

     13.2 Restrictions. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
          ------------
          SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
          PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
          STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL, REASONABLY
          SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
          UNDER THE SECURITIES ACT OF 1933.

     13.3 Attorney's Fees. In any litigation, arbitration or court proceeding
          ---------------
          between the Company and the holder relating hereto, the prevailing
          party shall be entitled to reasonable attorneys' fees and expenses
          incurred in enforcing this Warrant.

     13.4 Amendments. This Warrant may be amended and the observance of any term
          ----------
          of this Warrant may be waived only with the written consent of the
          Company and Warburg or its successor in interest.

     13.5 Notice.  Any  notice  required  or permitted hereunder shall be deemed
          ------
         effectively  given  upon personal delivery to the party to be notified
          or upon deposit with the United States Post Office, by certified mail,
          postage  prepaid  and  addressed  to  the  party to be notified at the
          address  indicated  below  for such party, or at such other address as
          such  other  party  may  designate  by ten-day advance written notice.

                                       13
<PAGE>
     IN WITNESS WHEREOF, Evolve Software, Inc. has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated:  _____________  ____,  2001

                                     EVOLVE  SOFTWARE,  INC.

                                     By:

                                     Title:     _______________________________

WARRANT  HOLDER:

_______________________

_______________________

_______________________

By:

Title:  ___________________________________

<PAGE>
                        NOTICE OF EXERCISE OR CONVERSION
                        --------------------------------

To:  Evolve  Software,  Inc.

     1.   (a)    The  undersigned  hereby  irrevocably  elects  to  exercise the
Warrant,  represented  by the attached Warrant, to purchase ___ shares of Common
Stock  (the  "Shares")  as  provided  for therein and upon confirmation from the
Company  that  such  shares  of Common Stock will be issued, agrees that it will
tender  in payment for such shares of Common Stock payment of the purchase price
in  full  in  the  form of a wire transfer of immediately available funds to the
order of Evolve Software, Inc. in the amount of $_______, all in accordance with
the  terms  of  the  Warrant.

          (b)  The undersigned hereby irrevocably elects to convert its right to
acquire  ___  Shares  under the attached Warrant, pursuant to Section 3.2 of the
Warrant.

          (c) The undersigned hereby irrevocably elects to exercise the Exchange
Right pursuant to Section 12 of the attached Warrant and to cause the Company to
purchase  the  Warrant  in  accordance  with  Section  12  thereof.

          [Strike paragraphs that do not apply.]

     2.     Except in the case of paragraph (c), above, the undersigned requests
that  a certificate for such Shares be registered in the name of _______________
whose  address is _______________ and that such certificate will be delivered to
__________________  whose  address  is  ____________________.  If said number of
Shares  is  less  than  all of the Shares purchasable hereunder, the undersigned
requests  that  a  new  Warrant representing the right to purchase the remaining
balance of the Shares be registered in the name of ____________ whose address is
____________  and  that  such  warrant  will  be  delivered to ___________ whose
address  is  ______________.

     3.     If the Shares are being acquired for cash, the Shares to be received
by  the  undersigned upon exercise of the Warrant are being acquired for its own
account,  not  as  a  nominee  or  agent,  and  not  with  a  view  to resale or
distribution  of  any part thereof, and the undersigned has no present intention
of  selling, granting any participation in, or otherwise distributing the same.
The  undersigned  further  represents  that  it  does  not  have  any  contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation  to such person or to any third person, with respect to the Stock.
The  undersigned  believes  it  has  received  all  the information it considers
necessary  or  appropriate  for  deciding  whether  to  purchase  the  Shares.

     4.     The  undersigned  understands  that  the Shares are characterized as
"restricted  securities"  under the federal securities laws inasmuch as they are
being acquired from the Company in trans-actions not involving a public offering
and  that  under  such  laws  and  applicable regulations such securities may be
resold  without  registration  under the Securities Act of 1933, as amended (the
"Act"),  only  in  certain  limited  circumstances.  In  this  connection,  the
undersigned  represents  that  it is familiar with SEC Rule 144, as presently in
effect,  and  understands the resale limitations imposed thereby and by the Act.

<PAGE>
     5.     The  undersigned  understands  the instruments evidencing the Shares
may  bear  one  or  all  of  the  following  legends:

          (a)  "THESE  SECURITIES  HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
          ACT  OF  1933.  THEY  MAY  NOT  BE  SOLD, OFFERED FOR SALE, PLEDGED OR
          HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
          RESPECT  TO  THE  SECURITIES  UNDER  SUCH ACT OR AN OPINION OF COUNSEL
          SATISFACTORY  TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR
          UNLESS  SOLD  PURSUANT  TO  RULE  144  OF  SUCH  ACT."

          (b)  Any  legend  required  by  applicable  state  law.

Dated:  ____________________

        ____________________
        (Insert Employer Identification
        Number  of  Holder)

                                      Signature  ______________________

                                      Note:  Signature  must  conform  in  all
                                             respect  to  name  of  holder  as
                                             specified  on  the  face  of  the
                                             Warrant  in  every  particular,
                                             without  alteration  or enlargement
                                             or  any  change  whatsoever, unless
                                             the  Warrant  has  been  assigned.

<PAGE>
                                 ASSIGNMENT FORM
                                 ---------------

         (To assign the foregoing Warrant, execute this form and supply
        required information. Do not use this form to purchase shares.)

     FOR  VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are  hereby  assigned  to

                       _________________________________
                                 (Please  Print)

whose  address  is     _________________________________

                       _________________________________
                                 (Please  Print)

                                        Dated:_________________,_____.

       Holder's  Signature: __________________________________________

         Holder's  Address: __________________________________________

                            __________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it
appears  on  the  face  of the Warrant, without alteration or enlargement or any
change whatever, and must be guaranteed by a bank or trust company.  Officers of
corporations  and  those  acting in a fiduciary or other representative capacity
should  file  proper  evidence  of  authority  to  assign the foregoing Warrant.

<PAGE>
                                   EXHIBIT A:
                                CHANGE OF CONTROL

SECTION 1:  CERTAIN DEFINITIONS:
--------------------------------

"Trigger Date" shall mean, as determined by the Company, in connection with a
Change of Control, the earliest of the following dates: (i) the date of the
definitive documentation for such event; (ii) the date the Board of Directors
recommends that the stockholders tender their shares into a tender or exchange
offer that would result in a Change in Control or (iii) if none of the foregoing
has yet occurred, the Initiation Date.

"Initiation Date" shall mean, in connection with any Change of Control, (i) the
date that is the later of the date of shareholder or regulatory approval, if
such approvals are required, (ii) in connection with a tender or exchange offer,
the date that the minimum tender condition and all other material conditions to
such offer have been satisfied or (iii) if none of the foregoing has yet
occurred, the occurrence of a Change of Control.

SECTION 2:  CHANGE OF CONTROL PURSUANT TO A MERGER OR ACQUISITION
-----------------------------------------------------------------

In the event of a Change of Control as a result of a merger or acquisition of
the Company, the following terms shall have the meanings set forth below:

"Acquiror" shall  mean the third-party that has entered into such definitive
documentation with the Company or that has commenced such a tender or exchange
offer

"Acquiror's Share Price" shall mean the average of the Acquiror's closing stock
prices for the 10 trading day period immediately preceding the Initiation Date.

"Company Stock Price", for purposes of this Section 2, shall mean the average of
the Company's closing stock prices for the 10 trading day period immediately
preceding the Initiation Date.

In the event of a Change of Control as a result of a merger or acquisition of
the Company, the computation of the value of the Warrant shall use the
Black-Scholes calculation methods using the following assumptions:

          1) Volatility of the closing sales price of the Common Stock for the
          260-trading day period ending on the Trigger Date as reported by
          Bloomberg;
          2) Dividend Yield of 0.00%;
          3)  Interest  Rate  of  5.50%;
          4) Exercise price will be the Exercise Price as adjusted and then in
          effect for the Warrant at the time of the Trigger Date;
          5) Term of the Warrant will be the remaining term of the Warrant from
          the Trigger Date to the stated expiration date of the Warrant; and
          6) The underlying security price for purposes of the Black-Scholes
          model will be calculated as follows:

<PAGE>
               a) In the event of an "all cash" deal, the cash per share offered
               to holders of the Company's Common Stock by the Acquiror;
               b) In the event of an "all stock" deal:
                         x) in the event of a fixed exchange ratio transaction,
                         the price per share of the Company's Common Stock
                         arrived at by multiplying the Acquiror's Stock Price by
                         the number of Acquiror's shares being offered for 1
                         share of the Company's Common Stock;
                         y) in the event of a fixed value transaction, the value
                         offered by the Acquiror for 1 share of the Company's
                         Common Stock.
               c) In the event of a transaction contemplating various forms of
               consideration for each share of the Company's Common Stock, the
               cash portion, if any, shall be valued as per paragraph a) above;
               the stock portion shall be valued as per paragraph b) above, and
               any other forms of consideration shall be valued by the Company
               in good faith, without applying any discounts to such
               consideration; provided, that in the event the Company's
               stockholders are offered a choice of consideration, the value
               offered per share shall be deemed the aggregate value of all
               consideration offered for all of the outstanding shares of the
               Company's Common Stock, divided by the total number of
               outstanding shares of the Company's Common Stock.

SECTION 3:  OTHER CHANGE OF CONTROL EVENTS
------------------------------------------

In all other Change of Control events, the computation of the option value of
each Warrant shall use the Black-Scholes calculation methods using the following
assumptions:

          1) Volatility of the closing sales price of the Common Stock for the
          260-trading day period ending on the Trigger Date as reported by
          Bloomberg;
          2) Dividend Yield of 0.00%;
          3) Interest Rate of 5.50%;
          4) Exercise price will be the Exercise Price as adjusted and then in
          effect for the Warrant at the time of the Change of Control Event ;
          5) Term of the Warrant will be the remaining term of the Warrant from
          the Change in Control Event Date to the stated expiration date of the
          Warrant; and
          6) The underlying security price for purposes of the Black-Scholes
          model will be calculated using the average of the closing market price
          of the Company's Common Stock for the ten (10) trading days commencing
          immediately after the date of the Change in Control event (for
          purposes of this Section 3, "Company Stock Price").

SECTION 4: EXERCISABILITY; FORM OF PAYMENT
------------------------------------------

The holder can exercise the Exchange Right at any time during the ten (10)
business days following the Initiation Date and the Company shall provide
written notice to the holder immediately upon occurrence of the Initiation Date.
In the event the Company elects to exchange the Warrant for shares of Common
Stock of the Company pursuant to Section 12(b) thereof, the holder will receive
that number of shares of Common Stock arrived at by dividing the value of the
Warrant, as

<PAGE>
determined above, by the Company Stock Price, determined in accordance with
Section 2 or Section 3, as applicable.

SECTION 5: GENERAL
------------------

Upon a calculation of the value of the Warrant based on the Black-Scholes
computations above, such value will not be discounted in any way.  If the holder
disputes the valuation of the Warrant, the Company and the holder will choose a
mutually agreeable investment banking or appraisal firm to compute the valuation
of the Warrant using the guidelines above, and such valuation shall be final.
The fees and expenses of such firm shall be borne equally by the Company and the
holder.

<PAGE>CERTIFICATE OF DESIGNATION OF SERIES A
                                 PREFERRED STOCK

                                       of

                              EVOLVE SOFTWARE, INC.

                     Pursuant to Section 151 of the General
                    Corporation Law of the State of Delaware

     I, the undersigned duly authorized officer of Evolve Software, Inc., a
corporation organized and existing under the General Corporation Law of the
State of Delaware (the "Corporation"), in accordance with the provisions of
Section 103 thereof, and pursuant to Section 151 thereof, do hereby certify:

     That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Corporation (the "Certificate of
Incorporation"), the Board of Directors of the Corporation on September 21,
2001, adopted the following resolution creating a series of 2,800,000 shares of
Series A Preferred Stock, par value $0.001 per share:

     RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of its Certificate of
Incorporation, a series of Preferred Stock of the Corporation be and it hereby
is created, that the shares of such series shall be designated as Series A
Preferred Stock (the "Series A Preferred Stock"), that the number of shares
constituting such series shall be 2,800,000 and that the designation and amount
thereof and the preferences and relative, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as set forth herein.

     For purposes of this Certificate of Determination and the Certificate of
Incorporation, (i) any series of Preferred Stock of the Corporation entitled to
dividends, liquidation and redemption preference on a parity with the Series A
Preferred Stock shall be referred to as "Parity Preferred Stock," (ii) any
series of Preferred Stock ranking senior to the Series A Preferred Stock and
Parity Preferred Stock with respect to dividends, liquidation preference or
redemption shall be referred to as "Senior Stock," and (iii) the Common Stock
and any series of Preferred Stock ranking junior to the Series A Preferred Stock
and Parity Preferred Stock with respect to dividends, liquidation preference and
redemption shall be referred to as "Junior Stock."  As of the date of this
Certificate of Determination there is not outstanding any Parity Preferred Stock
or Senior Stock.

     The rights, privileges and other terms of the Series A Preferred Stock
shall be as follows:

          (1)  Dividends.  In the event that the Corporation shall declare a
               ---------
distribution on the Common Stock payable in securities of other persons,
evidences of indebtedness issued by the Corporation or other persons, assets
(including cash dividends) or options or rights to purchase any such securities
or evidences of indebtedness, then in each such case the holders of Series A
Preferred Stock shall be entitled to a proportionate share of any such
distribution as though such holders of Series A Preferred Stock were the holders
of the number of shares of Common Stock of the Corporation into which their
respective shares of Series A Preferred Stock are convertible pursuant

                                      - 1 -
<PAGE>
to Section 3(a) hereof as of the record date fixed for the determination of the
holders of Common Stock of the Corporation entitled to receive such
distribution.

          (2)  Liquidation Preference.
               ----------------------

               (a)  In the event of any liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary:

                    (i)  After setting apart or paying in full the preferential
amounts due to any holders of Senior Stock, the holders of the Series A
Preferred Stock and any Parity Preferred Stock shall be entitled to receive,
prior and in preference to any distribution of any of the assets or surplus
funds of the Corporation to the holders of the Junior Stock, by reason of their
ownership thereof, an amount equal to their full liquidation preference, which
in the case of the Series A Preferred Stock shall be $10.00 per share (as
adjusted for any stock-splits or dividends in kind), which amount shall increase
at a rate of 8.00% per annum, compounded quarterly, commencing on the date of
issuance of each such share, plus any declared but unpaid dividends on such
shares (the "Series A Liquidation Preference").  If, upon occurrence of such
event the assets and funds thus distributed among the holders of the Series A
Preferred Stock and any Parity Stock shall be insufficient to permit the payment
to such holders of the full preferential amount, then after setting apart or
paying in full the preferential amounts due to holders of Senior Stock the
entire assets and funds of the Corporation legally available for distribution
shall be distributed among the holders of the Series A Preferred Stock and
Parity Stock in proportion to the number of shares and the respective
liquidation preferences of Series A Preferred Stock and Parity Stock held by
each such holder.

     After payment has been made to the holders of the Series A Preferred Stock
and any Parity Stock of their respective Liquidation Preferences, the holders of
the Junior Stock shall be entitled to receive the remaining assets of the
Corporation as set forth in the Certificate of Incorporation or any certificate
of designation defining the liquidation preference of any such Junior Stock, or
otherwise in proportion to the number of shares of Junior Stock held by each
such holder.

               (b)  For purposes of this paragraph 2, a liquidation, dissolution
or winding up of the Corporation shall be deemed to be occasioned by, and to
include, (A) (i) the Corporation's sale of all or substantially all of its
business, assets or property (including intellectual property) or (ii) any
transaction or series of related transactions resulting in a reorganization,
merger, or consolidation (whether or not the Corporation is the entity surviving
such transaction) in which holders of all voting equity securities of the
Corporation immediately prior to such transaction will hold (by reason of their
holdings in the Corporation) less than 50% of the voting equity securities of
the Corporation or other entity surviving such transaction or (B) a transaction
or series of related transactions in which a person or group (as defined in Rule
13d-5(b)(1) under the Securities Exchange Act of 1934 (the "Exchange Act"))
(excluding Warburg Pincus Private Equity VIII, L.P. and its affiliates) acquires
beneficial ownership (as determined in accordance with Rule 13d-3 under the
Exchange Act) of more than 50% of the voting equity securities of the
Corporation (in each case, a "Change of Control Transaction"); provided however
that in the event of a Change of Control Transaction which occurs prior to the
fifth anniversary of the issuance of any share of Series A Preferred Stock, the
Series A Liquidation Preference associated with such share shall be computed as
if such Change of Control Transaction occurred on the fifth anniversary of the
issuance of such

                                      - 2 -
<PAGE>
share; and, provided further, that in the event of a Change of Control
Transaction, if the amount that would have been received by holders of Series A
Preferred Stock had the full amount of the Series A Liquidation Preference per
share (calculated in accordance with this paragraph) been converted into Common
Stock prior to the Change of Control Transaction (the "As-Converted Amount")
exceeds the amount which would have been received in respect of each share of
Series A Preferred Stock absent such conversion, then each holder of Series A
Preferred will be entitled to receive the As-Converted Amount of each share of
Series A Preferred Stock.

               (c)  In any of such events, if the consideration received by the
Corporation is other than cash, its value will be deemed its fair market value
as determined by the Board of Directors in the good faith exercise of its
reasonable business judgment.  Any securities shall be valued as follows:

                    (i)  Securities not subject to restrictions on free
marketability:

                         (1)  If traded on a securities exchange or through
Nasdaq National Market System, the value shall be deemed to be the average of
the closing prices of the securities on such exchange over the thirty-day period
ending three (3) days prior to the closing;

                         (2)  If actively traded over-the-counter, the value
shall be deemed to be the average of the closing bid or sale prices (whichever
is applicable) over the thirty-day period ending three (3) days prior to the
closing; and

                         (3)  If there is no active public market, the value
shall be the fair market value thereof, as determined (x) by agreement between
the Corporation and the holder of a majority of the outstanding shares of Series
A Preferred Stock or (y) in the absence of such agreement, by the Board of
Directors in the good faith exercise of its reasonable business judgment (after
consultation with a mutually acceptable financial advisor in the event such fair
market value is expected in good faith by a majority of the Board of Directors
or a majority of the Series A Directors to exceed $1,000,000).

                    (ii)  The method of valuation of securities subject to
restrictions on free marketability (other than restrictions arising solely by
virtue of a stockholder's status as an affiliate or former affiliate) shall be
to make an appropriate discount from the market value determined as above in
(i)(1), (2) or (3) to reflect the approximate fair market value thereof, as
determined (x) by agreement between the Corporation and the holder of a majority
of the outstanding shares of Series A Preferred Stock or (y) in the absence of
such agreement, by the Board of Directors in the good faith exercise of its
reasonable business judgment (after consultation with a mutually acceptable
financial advisor in the event such fair market value is expected in good faith
by a majority of the Board of Directors or a majority of the Series A Directors
to exceed $1,000,000).

          (3)  Conversion.  The holders of the Series A Preferred Stock shall
               ----------
have conversion rights as follows (the "Conversion Rights"):

               (a)  Right to Convert and Automatic Conversion.
                    -----------------------------------------

                    (i)  Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, into such number of fully paid
and nonassessable shares of Common

                                      - 3 -
<PAGE>
Stock as is determined by dividing the Series A Liquidation Preference of such
share (computed as of the date of conversion), by the Series A Conversion Price,
determined as hereinafter provided, in effect at the time of conversion.  The
Series A Conversion Price shall initially be equal to $0.50.  The Conversion
Price shall be subject to adjustment as hereinafter provided.

                    (ii)  Each share of Series A Preferred Stock shall
automatically be converted into shares of Common Stock at the then effective
applicable Conversion Price at the earlier of (i)  the delivery of notice of
automatic conversion by Company to all holders of Series A Preferred Stock,
provided that such notice may not be given (A) prior to the fifth anniversary of
the first date of issuance of Series A Preferred Stock, and (B) unless closing
sales price of the Corporation's Common Stock during regular trading hours was
$5.00 or more (as adjusted for stock-splits, stock dividends and similar events)
for thirty (30) consecutive trading days ending not more than ten (10) days
prior to the date of such notice, or (ii) at the election of the holders of a
majority of the outstanding shares of the Series A Preferred Stock.

               (b)  Mechanics of Conversion.  No fractional shares of Common
                    -----------------------
Stock shall be issued upon conversion of Series A Preferred Stock.  In lieu of
any fractional share to which a holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the fair market
value of a share of the Common Stock as determined by the Board of Directors in
accordance with Section 2 (c) hereof.  Before any holder of Series A Preferred
Stock shall be entitled to convert the same into full shares of Common Stock, he
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or of any transfer agent for the Series A Preferred
Stock and shall give written notice to the Corporation at such office that he
elects to convert the same.  The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A
Preferred Stock, a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled as aforesaid and a check
payable to the holder in the amount of any cash amounts payable as the result of
a conversion into a fractional share of Common Stock.  Except as set forth in
the following sentence, such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series A Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date.  In the event of an automatic conversion pursuant
to Section 3(a)(ii), the outstanding shares of Series A Preferred Stock shall be
converted automatically without any further action by the holder of such shares
and whether or not the certificates representing such shares are surrendered to
the Corporation or the transfer agent for such Series A Preferred Stock; and the
Corporation shall not be obligated to issue certificates evidencing the shares
of Common Stock issuable upon such automatic conversion unless the certificates
evidencing such Series A Preferred stock are either delivered to the Corporation
or the transfer agent for such Series A Preferred Stock as provided above, or
the holder notifies the Corporation or the transfer agent for such Series A
Preferred stock that such certificates have been lost, stolen or destroyed and
executes an agreement satisfactory to the corporation to indemnify the
corporation from any loss incurred by it in connection with such certificates.
The Corporation shall, as soon as practicable thereafter, issue and deliver to
such address as the holder may direct, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled.

                                      - 4 -
<PAGE>
               (c)  Adjustments to Conversion Price for Diluting Issues.
                    ---------------------------------------------------

                    (i)  Special Definitions.  For purposes of this Section 3,
                         -------------------
the following definitions shall apply:

                         (1)  "Options" shall mean rights, options or warrants
                               -------
to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.

                         (2)  "Convertible Securities" shall mean any evidences
                               ----------------------
of indebtedness, shares (other than Common Stock and Series A Preferred Stock)
or other securities convertible into or exchangeable for Common Stock.

                         (3)  "Additional Shares of Common Stock" shall mean all
                               ---------------------------------
shares of Common Stock issued (or, pursuant to Section 3(c)(iii), deemed to be
issued) by the Corporation after the first issuance of shares of Series A
Preferred Stock (the "Original Issue Date") other than shares of Common Stock
issued or issuable:

                              (A)  upon conversion of shares of Series A
Preferred Stock, upon the issuance of Options, including exercise or conversion
of Convertible Securities subject to such Options, issued or issuable pursuant
to the terms of the agreement or agreements governing initial issuance and sale
of Series A Preferred Stock, or upon exercise or conversion of Options or
Convertible Securities outstanding as of the date hereof;

                              (B)  to officers, directors or employees of, or
consultants to, the Corporation pursuant to a stock grant, option plan or
purchase plan or other stock incentive program, including without limitation
sales of shares to such persons pursuant to restricted stock purchase agreements
(collectively, the "Plans") approved by the Board of Directors;
(D)
                              (C)  as a dividend or distribution on the Series A
Preferred Stock or in connection with any stock split, stock dividend or similar
transaction;

                              (D)  in connection with (1) equipment lease
financing transactions with institutions regularly engaged in equipment leasing
or (2) bank lending, if such transactions are approved by the Board of
Directors, and such issuance is not principally for the purpose of raising
additional equity capital for the Corporation; provided however that the number
of shares of Common Stock so excluded in any fiscal year of the Company shall
not exceed 0.5% of the number of shares of Common Stock outstanding (determined
as of the date of issuance of such shares of Common Stock), after giving effect
to the conversion of all outstanding shares Series A Preferred Stock and other
"in-the-money" (as such term is defined in paragraph 3(c)(iv) below) securities
convertible into Common Stock unless such grants are approved by a majority of
the Series A Directors present and voting;

                              (E)  securities issued to customers or joint
venture partners or in connection with other strategic alliances approved by the
Board of Directors including a majority of the Series A Directors present and
voting which involve the grant of licenses or localization, distribution, OEM,
bundling, manufacturing or resale rights with respect to the Corporation's
products or technology; and

                                      - 5 -
<PAGE>
                              (F)  securities issued pursuant to the acquisition
of another corporation by the Corporation by merger, purchase of substantially
all of the assets of the other corporation, or other reorganization approved by
the Board of Directors including a majority of the Series A Directors present
and voting; and

                              (G)  by way of dividend or other distribution on
shares of Common Stock excluded from the definition of Additional Shares of
Common Stock by the foregoing clauses (A), (B), (C), (D), (E) or (F) or on
shares of Common Stock so excluded, provided that such issuance is made (x)
pursuant to obligations of the Corporation established in connection with the
original issuance of such securities or (y) to all holders of the Corporation's
capital stock in proportion to the number of shares held.

                    (ii)  No Adjustment of Conversion Price:  No adjustment in
                          ---------------------------------
the Series A Conversion Price shall be made in respect of the issuance or deemed
issuance (pursuant to Section 3(c)(iii) below) of Additional Shares of Common
Stock unless the consideration per share (determined in accordance with
paragraph 3(c)(v)) for an Additional Share of Common Stock issued or deemed to
be issued by the Corporation is or would be less than the Series A Conversion
Price in effect on the date of, and immediately prior to such issue or deemed
issue.  No adjustment in the Series A Conversion Price shall be made pursuant to
paragraph (iv) below as a result of any stock dividend or subdivision which
causes an adjustment in the Conversion Price pursuant to Section 3(d) below.

                    (iii)  Deemed Issue of Additional Shares of Common Stock.
                           -------------------------------------------------
In the event the Corporation at any time or from time to time after the Original
Issue Date shall issue any Options or Convertible Securities which are excisable
for or convertible into Additional Shares of Common Stock or shall fix a record
date for the determination of holders of any class of securities entitled to
receive any such Options or Convertible Securities, then the maximum number of
shares (as set forth in the instrument relating thereto without regard to any
provisions contained therein for a subsequent adjustment of such number) of
Common Stock issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue or, in case such a record date shall have
been fixed, as of the close of business on such record date, provided that in
any case in which Additional Shares of Common Stock are deemed to be issued:

                              (A)  no further adjustment in the Series A
Conversion Price shall be made upon the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of such Options or
conversion or exchange of such Convertible Securities;

                              (B)  if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Corporation, or increase or
decrease in the number of shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof, the Series A Conversion Price computed upon the
original issue thereof (or upon the occurrence of a record date with respect
thereto), and any subsequent adjustments based thereon, shall, upon any such
increase

                                      - 6 -
<PAGE>
or decrease becoming effective, be recomputed to reflect such increase or
decrease insofar as it affects such Options or the rights of conversion or
exchange under such Convertible Securities; and

                              (C)  no readjustment pursuant to clause (B) above
shall have the effect of increasing the Series A Conversion Price to an amount
which exceeds the lower of (i) such Conversion Price on the original adjustment
date, or (ii) the Conversion Price that would have resulted from any issuance of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date.

                    (iv)  Adjustment of Conversion Price Upon Issuance of
                          -----------------------------------------------
Additional Shares of Common Stock.  Except as set forth in (e) below, in the
---------------------------------
event the Corporation shall issue Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to paragraph
3(c)(iii)) without consideration or for a consideration per share less than the
Series A Conversion Price in effect on the date of and immediately prior to such
issue, then and in such event, such Conversion Price shall be reduced,
concurrently with such issue, to a price (calculated to the nearest cent) which
shall be determined by multiplying such Conversion Price by a fraction, the
numerator of which shall be the sum of (i) the number of shares of Common Stock
issued and outstanding immediately prior to such issue, (ii) the number of
shares of Common Stock issuable upon conversion of the Preferred Stock
outstanding immediately prior to such issue, (iii) the number of shares of
Common Stock issuable upon exercise of outstanding in-the-money Options and
conversion of outstanding in-the-money Convertible Securities and (iv) the
number of shares of Common Stock which the aggregate consideration received by
the Corporation for the total number of Additional Shares of Common Stock so
issued would purchase at such Conversion Price; and the denominator of which
shall be the sum of (1) the number of shares of Common Stock issued and
outstanding immediately prior to such issue, (2) the number of shares of Common
Stock issuable upon conversion of the Preferred Stock outstanding immediately
prior to such issue, (3) the number of shares of Common Stock issuable upon
exercise of outstanding in-the-money Options and conversion of outstanding
in-the-money Convertible Securities and (4) the number of such Additional Shares
of Common Stock so issued.  "In-the-money" Options and Convertible Securities
shall be deemed to include all securities exercisable for or convertible into
shares of Common Stock with a fair market value equal to or greater than the
fair market value of the consideration which must be paid or which must be
foregone to effect such exercise or conversion.

                    (v)  Determination of Consideration.  For purposes of this
                         ------------------------------
paragraph 3(c), the consideration received by the Corporation for the issue of
any Additional Shares of Common Stock shall be computed as follows:

                         (1)  Cash and Property.  Such consideration shall:
                              -----------------

                              (A)  insofar as it consists of cash, be computed
at the aggregate amount of cash received by the Corporation excluding amounts
paid or payable for accrued interest or accrued dividends;

                              (B)  insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such issue, as
determined by the Board of Directors in the good faith exercise of its
reasonable business judgment; and

                                      - 7 -
<PAGE>
                              (C)  in the event Additional Shares of Common
Stock are issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (A) and (B) above, as
determined by the Board of Directors in the good faith exercise of its
reasonable business judgment.

                         (2)  Options and Convertible Securities.  The
                              ----------------------------------
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to paragraph 3(c)(iii),
relating to Options and Convertible Securities, shall be determined by dividing

                              (x)  the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities by

                              (y)  the maximum number of shares of Common Stock
(as set forth in the instrument relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.

               (d)  Adjustments for Stock Dividends, Subdivisions, Combinations,
                    ------------------------------------------------------------
or Consolidations.  In the event the Corporation shall pay a stock dividend on
-----------------
the Common Stock, or the outstanding shares of Common Stock shall be subdivided,
combined or consolidated, by reclassification or otherwise, into a greater or
lesser number of shares of Common Stock, the Series A Conversion Price in effect
immediately prior to such subdivision or combination shall, concurrently with
the effectiveness of such subdivision, combination or consolidation, be
proportionately adjusted.

               (e)  Additional Adjustments.
                    ----------------------

                    (i)  Adjustment of Conversion Price Upon Issuance of
                         -----------------------------------------------
Additional Shares of Common Stock in Connection with Vivant! Acquisition.  In
------------------------------------------------------------------------
the event this Corporation, as of the earlier of (A) July 31, 2002, (B) the date
of conversion of the Series A Preferred Stock into shares of Common Stock
pursuant to this Section 3, and (C) the date of any liquidation, dissolution or
winding up of the Corporation as defined in Section 2 hereof, shall have issued
an aggregate number of shares of Common Stock (net of any shares issued and
subsequently cancelled by the Corporation) in connection with the Corporation's
acquisition of the assets of Vivant! Corporation  pursuant Sections 3.2 or
3.3(b) of the Asset Acquisition Agreement dated as of May 22, 2001 (the "Vivant
Agreement") that, together with any shares of Common Stock already issued
pursuant to the Vivant! Agreement as of the date of the filing of this
Certificate of Designation, exceeds 2,078,254 shares of Common Stock (as
adjusted for stock splits, stock dividends, stock combinations and the

                                      - 8 -
<PAGE>
like), then and in such event, the Series A Conversion Price shall be reduced as
set forth in paragraph (iii) hereof.

                    (ii)  Adjustment of Conversion Price Upon Payment of Certain
                          ------------------------------------------------------
Amounts.  In the event this Corporation shall pay, directly or indirectly,
-------
consideration of more than $1,000,000 in the aggregate (such amount, including
the initial $1,000,000, an "Excess Payment") (A) pursuant to a settlement
agreement or a final and binding award of damages by a court or arbitrator with
respect to an Eligible Claim (as defined below) involving payment of
consideration by the Corporation (net of any consideration received by the
Corporation in connection with such Eligible Claim from third parties including
insurance carriers, co-defendants and adverse parties) in excess of $100,000 but
not more than $1,000,000, (B) pursuant to a settlement agreement or a final and
binding award of damages by a court or arbitrator with respect to an Eligible
Claim involving payment by the Corporation of consideration (net of any
consideration received by the Corporation in connection with such Eligible Claim
from third parties including insurance carriers, co-defendants and adverse
parties) in an amount in excess of $1,000,000 (a "Major Damage Award"), (C) all
out-of-pocket fees and expenses (including out-of-pocket expenses of
investigation and attorneys fees and expenses) paid by the Company in connection
with the defense of an Eligible Claim which results in a Major Damage Award and
(D) in payment by the Corporation of any federal or state taxes arising out of
the forgiveness of indebtedness of employees or former employees of the Company
that was incurred in connection with the acquisition of any of the Company's
securities, then and in such event the Series A Conversion Price shall be
reduced as set forth in paragraph (iii) hereof.  For purposes hereof, "Eligible
Claim" shall mean any action, suit, or proceeding threatened in writing or
commenced prior to or within 12 months following the filing of this Certificate
of Designation based on a claim relating to or arising out of either (a) the
conduct of the Company's business, which claim is based on alleged facts and
circumstances that would constitute a breach of the representations and
warranties of the Corporation set forth in Section 3 of that certain Series A
Preferred Stock Purchase Agreement dated as of September 23, 2001 among the
Corporation and certain purchasers of shares of Series A Preferred Stock (the
"Series A Agreement") disregarding the qualifications or modifications to such
representations and warranties contained in Sections 3.7 and 3.13 of the
Schedule of Exceptions to the Series A Agreement, or (b) a misstatement or
alleged misstatement of a material fact, or omission or alleged omission to
state a material fact, in connection with the purchase or sale, or failure to
purchase or sell, any of the Corporation's securities; provided that the
                                                       --------
material facts or circumstances of the claims described in paragraphs (a) and
(b) occurred prior to the date of the filing of the Certificate of Designation.

                    (iii)  Adjustment Formula.  In each event that adjustment to
                           ------------------
the Series A Conversion Price is required under Paragraph (i) or (ii) above, the
Series A Conversion Price then in effect shall be reduced, concurrently with
such event, to a price (calculated to the nearest cent) which shall be
determined by multiplying such Conversion Price by a fraction, the numerator of
which shall be one, and the denominator of which shall be the sum of one plus a
fraction, the numerator of which shall be the New Share Number and the
denominator of which shall be the sum of (1) the number of shares of Common
Stock issued and outstanding immediately prior to such issue and (2) the number
of shares of Common Stock issuable upon exercise of outstanding Options and
conversion of outstanding Convertible Securities, but excluding all shares of
Common Stock issuable upon conversion of Series A Preferred Stock outstanding or
issuable upon conversion of outstanding warrants therefor and shares of Common
Stock issuable upon exercise of Warrants therefor that were issued in connection
with the issuance of shares of Series A Preferred Stock.  For

                                      - 9 -
<PAGE>
purposes hereof, the New Share Number shall equal (A) in the case of any
adjustment required under paragraph (i) the number of shares of Common Stock so
issued, and (B) in the case of any adjustment required by paragraph (ii) the sum
of (x) the number of shares of Common Stock actually issued, to the extent the
Excess Payment is made in Common Stock, and (y) the value of the Excess Payment,
to the extent it is not paid in Common Stock, divided by the value of the
Corporation's Common Stock on the date of payment (determined in accordance with
Paragraph 2(c)(i)).

               (f)  No Impairment.  Unless approved in accordance with Section
                    -------------
(5) hereof the Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation but will at all times in good faith
assist in the carrying out of all the provisions of this Section 3 and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of the Series A Preferred Stock against
impairment.

               (g)  Notices of Record Date.  In the event that the Corporation
                    ----------------------
shall propose at any time:

                    (i)  to declare any dividend or distribution upon its Common
Stock, whether in cash, property, stock or other securities, whether or not a
regular cash dividend and whether or not out of earnings or earned surplus;

                    (ii)  to offer for subscription pro rata to the holders of
any class or series of its stock any additional shares of stock of any class or
series or other rights;

                    (iii)  to effect any reclassification or recapitalization of
its Common Stock outstanding involving a change in the Common Stock; or

                    (iv)  to merge with any other corporation (other than a
merger in which the Company is the surviving entity and the holders of the
outstanding voting equity securities of the Corporation immediately prior to
such merger hold more than fifty percent (50%) of the voting power of the
surviving entity immediately following such merger), or sell, lease or convey
all or substantially all its property or business, or to liquidate, dissolve or
wind up;

then, in connection with each such event, the Corporation shall send to the
holders of the Series A Preferred Stock:

                         (1)  at least twenty (20) days' prior written notice of
the date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
Stock shall be entitled thereto) or for determining rights to vote in respect of
the matters referred to in (iii) and (iv) above; and

                         (2)  in the case of the matters referred to in (iii)
and (iv) above, at least twenty (20) days' prior written notice of the date when
the same shall take place (and specifying the date on which the holders of
Common Stock shall be entitled to exchange their Common Stock for securities or
other property deliverable upon the occurrence of such event).

                                     - 10 -
<PAGE>
     Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holders of Series A Preferred Stock at the address for
each such holder as shown on the books of the Corporation and shall be deemed
given when so mailed.

               (h)  Recapitalization.  If at any time or from time to time there
                    ----------------
shall be a merger, consolidation, recapitalization or similar transaction of the
Corporation (other than a transaction treated as a liquidation for purposes of
Section 2 or a subdivision or combination as set forth in Section 3(d))
provision shall be made so that the holders of the Series A Preferred Stock
shall thereafter be entitled to receive upon conversion of the Series A
Preferred Stock the number of shares of stock or other securities or property of
the Corporation or any successor thereto to which a holder of Common Stock
deliverable upon conversion of each share of such series would have been
entitled on such transaction.  In any such case, appropriate adjustment shall be
made in the application of the provisions of this Section 3 with respect to the
rights of the holders of the Series A Preferred Stock after the such transaction
to the end that the provisions of this Section 3 (including adjustment of the
Series A Conversion Price then in effect and the number of shares purchasable
upon conversion of the Series A Preferred Stock) shall be applicable after such
transaction as nearly equivalent as may be practicable.

               (i)  Adjustments for Other Distributions.  In the event the
                    -----------------------------------
Corporation at any time, or from time to time, makes or fixes a record date for
the determination of holders of Common Stock entitled to receive any
distribution payable in securities of the Corporation other than shares of
Common Stock and other than as otherwise adjusted in this Section 3, then and in
each such event provision shall be made so that the holders of the Series A
Preferred Stock shall receive upon the date of such distribution, the amount of
securities of the Corporation which they would have received had their Series A
Preferred Stock, been converted into Common Stock on such date.

               (j)  Certificates as to Adjustments.  Upon the occurrence of each
                    ------------------------------
adjustment or readjustment of the Series A Conversion Price pursuant to this
paragraph 3, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of such Series A Preferred Stock a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based.  The Corporation shall, upon the
written request at any time of any holder of the Series A Preferred Stock,
furnish or cause to be furnished to such holder a like certificate setting forth
(1) such applicable adjustments and readjustments, (2) the applicable Series A
Conversion Price at the time in effect, and (3) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of such holder's Preferred Stock.  Any certificate
sent to the holders of the Series A Preferred Stock pursuant to this Section
3(i) shall be signed by an officer of the Corporation.

                    (k)  Reservation of Shares Issuable Upon Conversion.  The
                         ----------------------------------------------
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A Preferred Stock, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series A Preferred Stock; and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of the Series
A Preferred Stock, the Corporation will take such corporate

                                     - 11 -
<PAGE>
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose.

               (l)  Issue and Transfer Taxes.  The Corporation will pay any and
                    ------------------------
all documentary stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of shares of Common Stock on conversion of the Series A
Preferred Stock pursuant hereto; provided that the Corporation shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issue or delivery of shares of Common Stock in a name other than that of
the holder of the Series A Preferred Stock to be converted and no such issue or
delivery will be made unless and until the person requesting such issue or
delivery has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been
paid.

          (4)  Voting Rights and Directors.
               ---------------------------

               (a)  Except as otherwise required by law, or as otherwise set
forth herein, the holders of Series A Preferred Stock and the holders of Common
Stock shall be entitled to notice of any stockholders' meeting and to vote as a
single class upon any matter submitted to the stockholders for a vote, as
follows: (i) each holder of Series A Preferred Stock shall have one vote for
each full share of Common Stock into which the Series A Preferred Stock would be
convertible as of the Original Issue Date, subject to adjustment for stock
dividends, subdivisions, combinations or consolidations pursuant to Section 3(d)
hereof, and (ii) the holders of Common Stock shall have one vote per share of
Common Stock.

               (b)  As long as the number of outstanding shares of Series A
Preferred Stock is not less than 75% of the aggregate number of shares of Series
A Preferred Stock issued by the Corporation, the holders of such shares of
Series A Preferred Stock shall vote as a separate class to elect three (3)
directors of the Corporation.  The foregoing number of directors to be elected
by holders of the Series A Preferred Stock voting as a separate class (the
"Series A Directors") shall be reduced as follows: (i) to two (2) directors if
(A) the number of outstanding shares of Series A Preferred Stock is less than
75%, but not less than 50%, of the aggregate number of shares of Series A
Preferred Stock issued by the Corporation, or (B) if less than 500,000 shares of
Series A Preferred Stock are issued and sold by the Corporation after the
initial issuance date of the Series A Preferred Stock upon exercise of stock
purchase warrants issued by the Corporation to Warburg Pincus Private Equity
VIII, L.P. concurrently with such initial issuance (the "Warrants") prior to
expiration of such Warrants, (ii) to one (1) director if the number of
outstanding shares of Series A Preferred Stock is less than 50%, but not less
than 25%, of the aggregate number of shares of Series A Preferred Stock issued
by the Corporation, and (iii) to zero (0) if the number of outstanding shares of
Series A Preferred Stock is less than 25% of the aggregate number of shares of
Series A Preferred Stock issued by the Corporation.  Immediately upon any event
causing such a reduction in the number of Series A Directors, the term of the
Series A Director with the shortest remaining term of office shall thereupon
automatically cease and such resulting vacancy shall be filled by a new director
appointed by a majority of the directors who are not Series A Directors.  One of
the three initial Series A Directors shall be appointed to each of the three
classes of directors of the Corporation (Class I, Class II and Class III).  In
the case of a vacancy (other than a vacancy caused by a reduction in the number
of Series A Directors as set forth above) in the office of a director occurring
among directors elected by the holders of Series A Preferred Stock pursuant to
this Section 4(b), the remaining directors so elected by Series A Preferred
Stock (or if there is no such

                                     - 12 -
<PAGE>
director remaining, the holders of a majority of the Series A Preferred Stock),
may elect a successor or successors to hold office for the unexpired term of the
director or directors whose places shall be vacant.  Any director who shall have
been elected by the holders of Series A Preferred Stock or by any directors so
elected as provided in the immediately preceding sentence may be removed during
the aforesaid term of office, with or without cause, by the affirmative vote of
holders of the Series A Preferred Stock, given either at a special meeting of
such stockholders duly called for that purpose or pursuant to a written consent
of stockholders, and any vacancy thereby created may be filled by an affirmative
vote of holders of Series A Preferred Stock represented at the meeting or
pursuant to the written consent.  All directors other than the Series A
Directors shall be elected by the holders of Common Stock and the holders of
Series A Preferred Stock, voting together as a single class.

               (c)  Any action which the holders of Series A Preferred Stock are
authorized to take at a duly called annual or special meeting of stockholders
may in lieu thereof be taken by means of a written consent of such holders.

          (5)  Protective Provisions.  In addition to any other rights provided
               ---------------------
by law, so long as at least 50% of the shares of Series A Preferred Stock issued
by the Corporation remain outstanding, the Corporation and its subsidiaries
shall not without first obtaining the affirmative vote or written consent of the
holders of not less than a majority of the outstanding shares of Series A
Preferred Stock, voting together as a single class, on an as-converted to Common
Stock basis:

                    (i)  amend or repeal any provision of, or add any provision
to, this Certificate of Designation;

                    (ii)  authorize or issue any shares of any class or series
of Senior Stock or any bonds, debentures, notes or other obligations convertible
into or exchangeable for, or having option rights to purchase, any shares of
Senior Stock of the Corporation;

                    (iii)  issue any bonds, debentures or notes or incur similar
debt obligations, other than trade debt in the ordinary course of business;

                    (iv)  consummate a Change of Control Transaction, unless the
aggregate value received for, or realizable in respect of, all outstanding
shares of Series A Preferred Stock, determined in accordance with Section 2(c)
hereof, as a result of such sale or other transaction or series of transactions
exceeds an amount equal to $10.00 per share (as adjusted for stock splits and
dividends in kind) multiplied by the number of shares of Series A Preferred
outstanding (the "Aggregate Cash Purchase Price"), plus an amount sufficient to
result in an overall internal rate of return (IRR) on the Aggregate Cash
Purchase Price, taking into account for purposes of calculating such overall IRR
any differences in the dates of issuance of such outstanding shares;

                    (v)  pay any dividend on any shares of Junior Stock, or
repurchase or redeem any such shares of Junior Stock except for repurchases of
unvested shares of Junior Stock at cost from employees, directors, consultants
and other service providers.

                    (vi)  repurchase any outstanding shares of stock of the
Corporation, except for (i) repurchase of shares held by employees of the
Corporation pursuant to repurchase agreements approved by the Board of Directors
and (ii) redemption of shares of Preferred Stock;

                                     - 13 -
<PAGE>
                    (vii)  amend the Bylaws of the Corporation to increase the
authorized number of directors of the Corporation to more than eight (8).

                    (viii)  authorize or issue any shares of any class or series
of Parity Preferred Stock or any bonds, debentures, notes or other obligations
convertible into or exchangeable for, or having option rights to purchase, any
shares of Parity Preferred Stock of the Corporation provided however that this
clause (viii) shall terminate and shall be without further effect if the
Warrants are not exercised to purchase 500,000 or more shares of Series A
Preferred Stock prior to the six-month anniversary of the date of first issuance
of Series A Preferred Stock or of any security convertible into Series A
Preferred Stock.

          (6)  Status of Converted Stock.  In the event any shares of Series A
               -------------------------
Preferred Stock shall be converted pursuant to Section 3 hereof, the shares so
converted shall be canceled and shall not be issuable by the Corporation.

          (7)  Residual Rights.  All rights accruing to the outstanding shares
               ---------------
of the Corporation not expressly provided for to the contrary herein shall be
vested in the Common Stock.

                                     - 14 -
<PAGE>
     IN WITNESS WHEREOF, Evolve Software, Inc. has caused this Certificate of
Designation to be executed by John Bantleman, its President, this _____ day of
October, 2001.

                                       EVOLVE SOFTWARE, INC.

                                       ---------------------------------------
                                       John Bantleman, President

<PAGE>

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