Document:

EVOLVE SOFTWARE, INC.

	
 

	
CHANGE IN CONTROL AND SEVERANCE AGREEMENT

	
 

	
For

	
 

	
ARTHUR T. TAYLOR

	
 

	
            This Agreement (the "Agreement") is made effective as of June 21, 2002, by and between Evolve Software, Inc., a Delaware corporation (the "Company") and Arthur T. Taylor (the "Officer").

	
 

	
            Whereas, upon approval by the Company's Board of Directors, the Company will grant to Officer an option to purchase 1,250,000 shares of the Company's Common Stock (the "Officer's Option Shares"); 

	
 

	
            Whereas, the Company wishes to extend to Officer certain severance benefits upon a "Change in Control" (as defined below) of the Company; 

	
 

	
            Whereas, the Company also wishes to extend to Officer certain severance benefits in the event of his termination of employment by the Company without "Cause" (as defined below); and

	
 

	
            Whereas, Officer agrees to accept the benefits described herein with the understanding that he remains an at will employee.

	
 

	
            Now Therefore, in consideration of the covenants and with the intention of being legally obligated by the provisions set forth herein, the parties hereby agree as follows:

	
 

	
            1.         Definitions.  Certain terms herein as defined as follows:

	
 

	
                  (a)        "Change in Control" shall mean: the consummation of any one of the following events:  (i) a sale of all or substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation (other than a transaction the principal purpose of which is to change the state of incorporation of the Company or a transaction in which the voting securities of the Company are exchanged for beneficial ownership of at least fifty percent (50%) of the voting securities of the controlling acquiring corporation); (iii) a merger or consolidation in which the Company is the surviving corporation and less than fifty percent (50%) of the voting securities of the Company which are outstanding immediately after the consummation of such transaction are beneficially owned, directly or indirectly, by the persons who owned such voting securities immediately prior to such transaction; or (iv) the acquisition by any person, entity or group or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored by the Company or any parent or subsidiary of the Company) of the beneficial ownership of securities representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of directors.  Notwithstanding the above to the contrary, a Change of Control shall not be deemed to have occurred if any of the transactions or series of related transactions described above results in the acquisition of at least fifty percent (50%) of the combined voting power of the Company by any fund or funds managed by Warburg, Pincus & Co., or any related entity, or other current 5% or greater shareholder of the Company.

	
 

	
                  (b)        "Cause" shall mean:  (i) indictment or conviction of any felony or of any crime involving dishonesty; (ii) participation in any fraud or act of dishonesty against the Company; (iii) breach of your duties to the Company, including but not limited to unsatisfactory performance of your job duties; (iv) violation of Company policy which causes a material detriment to the Company; (v) intentional damage to any property of the Company; (vi) conduct by you which, in the good faith and reasonable determination of the Company, demonstrates gross unfitness to serve; or (vii) material breach of this offer or your Employment, Confidential Information and Invention Assignment Agreement.  

	
 

	
                  (c)        "Compensation" shall mean: (i) the Officer's then current base salary, less applicable deductions and withholdings; and, if applicable, (ii) the Officer's current quarter's management bonus, assuming performance of all quarterly bonus criteria, as determined by the Company in its sole discretion.

	 

	 	 	 

	 

	

	
 

	
                  (d)        "Good Reason" shall mean: with respect to the voluntary termination of the continuous service of the Officer: (i) a reduction of Officer's current quarter's rate of Compensation as in effect immediately prior to the Change in Control by greater than ten percent (10%), except to the extent the compensation of at least a majority of other officers of the Company have been similarly reduced; (ii) a failure to provide a package of welfare benefit plans that, taken as a whole, provide substantially similar benefits to those in which the Officer is entitled to participate immediately prior to the Change in Control (except that the Officer's contributions may be raised to the extent of any cost increases imposed by third parties) or any action by the Company or a successor to the Company that would adversely affect the Officer's participation or reduce the Officer's benefits under any of such plans; (iii) a significant change in the Officer's responsibilities, authority, titles or offices resulting in diminution of position, excluding for this purpose an isolated action not taken in bad faith that is remedied by the Company or a successor to the Company promptly after notice thereof is given by the Officer; or (iv) a request that the Officer relocate to a worksite that is more than fifty (50) miles from the Officer's prior worksite, unless the Officer accepts such relocation opportunity; provided, however, that upon the occurrence of the preceding event(s), Officer shall be deemed to have waived any rights to resign from employment for Good Reason and to any severance payment(s) or acceleration of his Officer's Option Shares if he does not notify the Chief Executive Officer, in writing, of his intention to resign within sixty (60) days after such event(s).

	
 

	
            2.         Change in Control Severance.  If the Officer's employment with the Company is terminated within twelve (12) months after any Change in Control either (a) by the Company or a successor to the Company for any reason other than for Cause or (b) by the Officer for Good Reason, and on the conditions that Officer first executes and delivers to the Company a general release in a form satisfactory to the Company and continues to abide by his obligations to the Company under his Employment, Confidential Information and Invention Assignment Agreement, then (i) the Officer shall be entitled to receive an amount equal to twelve (12) months of Compensation, less applicable deductions and withholdings, paid in monthly or quarterly installments or in a single lump sum payment as determined solely by the Company; and (ii) the vesting of all the unvested Officer's Option Shares shall be immediately and automatically accelerated  as follows:  (A) if the Change of Control occurs within one year after the date on which the Officer's employment with the Company commenced (the "Start Date"), fifty percent (50%) of the Officer's Option Shares that are unvested on the date of the Change of Control shall become vested; (B) if the Change of Control occurs after the first anniversary of the Start Date and on or before the second anniversary of the Start Date, seventy-five percent (75%) of the Officer's Option Shares that are unvested on the date of the Change of Control shall become vested; and (C) if the Change of Control occurs at any time after the second anniversary of the Start Date, one hundred percent (100%) of the Officer's Option Shares that are unvested on the date of the Change of Control shall become vested.  Except as otherwise set forth in this Paragraph, the terms and conditions of the Company's 2000 Stock Plan and the applicable Notice of Grant of Stock Option and Stock Option Agreement shall remain in full force and effect.  In addition, Officer acknowledges that any portion of the Officer's Option Shares that originally may have been intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code may no longer qualify as incentive stock options if the terms of this Paragraph are triggered.  In the event of a Change in Control, the references herein to the "Company" shall be deemed to refer to any successor to the Company.

	
 

	
            3.         Termination Without Cause Severance.  In the event that the Officer's employment with the Company is terminated either (a) by the Company for any reason other than for Cause or (b) by the Officer for Good Reason, and on the conditions that Officer first executes and delivers to the Company a general release in a form satisfactory to the Company and continues to abide by his obligations to the Company under his Employment, Confidential Information and Invention Assignment Agreement, then the Officer shall be entitled to receive an amount equal to twelve (12) months of Compensation, less applicable deductions and withholdings, paid in monthly or quarterly installments or in a single lump sum payment as determined solely by the Company.  Notwithstanding the terms of this Paragraph, in the event there is a Change of Control and Officer's employment is terminated by the Company without Cause or by the Officer for Good Reason, the Officer shall only be entitled to the severance benefits described in Paragraph 2 above.  

	
 

	
            4.         Parachute Payments. 

	
 

	
                  (a)        If any payment, distribution or other benefit payable by the Company to or for the benefit of Officer (whether pursuant to the terms of this Agreement or otherwise) (a "Payment") (i) constitutes a "parachute payment" with respect to Officer within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), or any comparable successor provisions, and (ii) but for this Section 3(a) would be subject to the excise tax imposed by Section 4999 of the Code, or any comparable successor provisions (the "Excise Tax"), then such Payment shall be either: 

	 

	 	 	 

	 

	

	
 

	
                        (i)          provided to Officer in full, or 

	
 

	
                        (ii)        provided to Officer as to such lesser extent which would result in no portion of such Payment being subject to the Excise Tax,

whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by Officer, on an after-tax basis, of the greatest amount of aggregate Payments, notwithstanding that all or some portion of such Payments may be taxable under the Excise Tax.  Unless the Company and Officer otherwise agree in writing, any determination required under this Section 3(a) shall be made in writing in good faith by a nationally recognized accounting firm which is then serving as the Company's independent auditors (the "Accountants").  If more than one type of Payment would be subject to the Excise Tax, the Accountants shall determine in their sole discretion which Payment or Payments to reduce pursuant to this Section 3(a), unless and to the extent the Accountants determine that giving Officer the choice of which benefits to reduce would not undermine the intent of this Section 3(a) by subjecting such Payments to the Excise Tax, in which case Officer shall be given the choice of which Payments to reduce.  The Company agrees to use reasonable efforts to cause the Accountants to make a determination as to the effect of giving Officer such choice.  If Officer is given such choice but does not provide written identification to the Company of which Payments he chooses to reduce within ten (10) days of his receipt of notice of the Accountants' determination that he has been given such choice, then the Accountants shall select the Payments to be reduced.

	
 

	
                  (b)        If notwithstanding a reduction described in this Section 3(a), the Internal Revenue Service (the "IRS") determines that Officer is liable for the Excise Tax as a result of the receipt of one or more Payments, the Officer shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in the event that Officer challenges the final IRS determination, a final judicial determination, a portion of the Payment or Payments equal to the "Repayment Amount."  The Repayment Amount with respect to the Payment or Payments shall be the smallest such amount, if any, as shall be required to be paid to the Company so that Officer's net after-tax proceeds with respect to the Payments (after taking into account the payment of the Excise Tax an all other applicable taxes imposed on such Payments) shall be maximized.  The Repayment Amount with respect to the Payments shall be zero if a Repayment Amount of more than zero would not result in Officer's net after-tax proceeds with respect to all Payments being maximized.  If the Excise Tax is not eliminated pursuant to this paragraph, Officer shall pay the Excise Tax.

	
 

	
                  (c)        Notwithstanding any other provision of this Section 3, if (i) there is a reduction in one or more Payments as described in this Section 3 (the amount of such reduction, the "Reduction Amount"), (ii) the IRS later determines that Officer is liable for the Excise Tax with respect to such Reduction Amount or a related amount notwithstanding such reduction, (iii) in the opinion of the Accountants, the payment by the Company to Officer of all or a portion of such Reduction Amount, coupled with the payment by Officer of the related taxes (including but not limited to income taxes, Excise Taxes and any related interest or penalties) would result in the maximization of Officer's net after-tax proceeds with respect to all Payments, and (iv) Officer pays the Excise Tax, then the Company shall pay to Officer the Reduction Amount (less applicable withholding), without duplication of any amounts theretofore paid to Officer, contemporaneously with or as soon as reasonably practicable after Officer pays the Excise Tax so and to the extent that Officer's net after-tax proceeds with respect to the Payments are maximized.

	
 

	
                  (d)        For purposes of making the calculations and determinations required by this Section 3, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code and other applicable legal authority.  The Company and Officer shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make any determination or calculation under this Section 3.  The Company shall bear all costs the Accountants may reasonably incur in connection with any determinations and calculations contemplated by this Section 3.

	 

	 	 	 

	 

	

	
 

	
            5.         Return of Materials.  At the termination of the Officer's employment by the Company, the Officer will promptly return to the Company, and will not take with or use, all items of any nature that belong to the Company, and all materials (in any form, format, or medium) containing or relating to the Company's business. 

	
 

	
            6.         At Will Employment.  Nothing in this Agreement alters or amends the Officer's status as an at will employee.  As an at will employee either the Officer or the Company can terminate the Officer's employment relationship with or without advance notice, with or without cause.

	
 

	
            7.         Entire Agreement.  This Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between the Officer and the Company with regard to this subject matter.  The Officer enters into this Agreement voluntarily and without reliance upon any promise, warranty or representation, written or oral, other than those expressly contained herein.  This Agreement supersedes any other such promises, warranties, representations or agreements, including any agreement for severance benefits in the Offer Letter dated June 21, 2002 (the "Offer Letter") or otherwise made.  This Agreement does not, however, supersede or modify the Officer's Employment, Confidential Information and Invention Assignment Agreement or the terms of the Offer Letter (other than any offer of severance benefits), and to the extent of a conflict between such other agreements and this Agreement the terms of such other agreements shall prevail.  This Agreement may not be amended or modified except by a written instrument signed by Officer and a duly authorized officer of the Company. 

	
 

	
            8.         Enforceability.  If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement, and the Agreement, including the invalid or unenforceable provisions, should be enforced insofar as possible to achieve the intent of the parties. 

	
 

	
            9.         Binding Nature.  This Agreement will be binding upon and inure to the benefit of the personal representatives and successors of the respective parties hereto. 

	
 

	
            10.      Governing Law; Exclusive Forum.  This Agreement shall be governed in all respects by the laws of the State of California as such laws are applied to agreements between California residents entered into and performed entirely in California.  Officer agrees and acknowledges that any controversy arising out of or relating to this Agreement or the breach thereof, or any claim or action to enforce this Agreement or portion thereof, or any controversy or claim requiring interpretation of this Agreement must be brought in a forum located within Alameda County, California.  No such action may be brought in any forum outside Alameda County, California.  Any action brought in contravention of this Paragraph by one party is subject to dismissal at any time and at any stage of the proceedings by the other, and no action taken by the other in defending, counter claiming or appealing shall be construed as a waiver of this right to immediate dismissal.  A party bringing an action in contravention of this Paragraph shall be liable to the other party for the costs, expenses and attorney's fees incurred in successfully dismissing the action or successfully transferring the action to the state or federal courts located in Alameda County, California.  

	
 

	
            11.      Severability.  In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 

	
 

	
            12.      Restricted Activities.  The Officer agrees that during the period of the Officer's employment by the Company the Officer will not, without the Company's express written consent, engage in any employment or business activity other than the Officer's employment by the Company.  The Officer agrees further that for the period of the Officer's employment by the Company and for at least one (1) year after the date of termination of Officer's employment by the Company, the Officer will not, either directly or indirectly, solicit or attempt to solicit any employee, consultant or independent contractor of the Company to terminate his or her relationship with the Company to become an employee, consultant or independent contractor to or for any other person or entity.  The Officer agrees further that for the period of the Officer's employment Officer will not solicit the business of any client or customer of the Company (other than on behalf of the Company).

	 

	 	 	 

	 

	

	
 

	
            In Witness Whereof, the parties have executed this agreement as of the date first set forth above.

	
 

	
Evolve Software, Inc.                                                                Officer

	
 

	
 

	
 

	
By:          /s/ Linda Zecher                                                   By:          /s/ Arthur T. Taylor                             

	
Linda Zecher                                                                                        Arthur T. Taylor    

	
Chief Executive Officer                                                                       Chief Financial Officer and Vice PresidentEVOLVE SOFTWARE, INC.

	
 

	
AMENDED AND RESTATED 2002 NONSTATUTORY STOCK OPTION PLAN

	
 

	
     1.             Purposes of the Plan.  The purposes of this Nonstatutory Stock Option Plan are:

	
 

	
 
	
	
to attract and retain the best available personnel for positions of substantial responsibility, 

	
 
	
	to provide additional incentive to Service Providers, and

	
 
	
	to promote the success of the Company's business.

	
                    Options granted under the Plan will be Nonstatutory Stock Options.

	
 

	
     2.             Definitions.  As used herein, the following definitions shall apply:

	
 

	
                    (a)           "Administrator" means the Board or any of its Committees as shall be administering the Plan, in accordance with Section 4 of the Plan.

	
 

	
                    (b)           "Applicable Laws" means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Options are, or will be, granted under the Plan.

	
 

	
                    (c)           "Board" means the Board of Directors of the Company.

	
 

	
                    (d)           "Code" means the Internal Revenue Code of 1986, as amended.

	
 

	
                    (e)           "Committee"  means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan.

	
 

	
                    (f)            "Common Stock" means the Common Stock of the Company.

	
 

	
                    (g)           "Company" means Evolve Software, Inc., a Delaware corporation.

	
 

	
                    (h)           "Consultant" means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.

	
 

	
                    (i)            "Director" means a member of the Board.

	
 

	
                    (j)            "Disability" means total and permanent disability as defined in Section 22(e)(3) of the Code.

	
 

	
                    (k)           "Employee" means any person, including Officers, employed by the Company or any Parent or Subsidiary of the Company.  A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.  Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company.

	
 

	
                    (l)            "Exchange Act" means the Securities Exchange Act of 1934, as amended.

	
 

	
                    (m)          "Fair Market Value" means, as of any date, the value of Common Stock determined as follows:

	
 

	 

	 	 	 

	 

	

	
                                     (i)            If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

	
 

	
                                     (ii)           If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

	
 

	
                                     (iii)          In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator.

	
 

	
                    (n)           "Notice of Grant" means a written or electronic notice evidencing certain terms and conditions of an individual Option grant.  The Notice of Grant is part of the Option Agreement.

	
 

	
                    (o)           "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

	
 

	
                    (p)           "Option" means a nonstatutory stock option granted pursuant to the Plan, that is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

	
 

	
                    (q)           "Option Agreement" means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant.  The Option Agreement is subject to the terms and conditions of the Plan.

	
 

	
                    (r)            "Optioned Stock" means the Common Stock subject to an Option.

	
 

	
                    (s)           "Optionee" means the holder of an outstanding Option granted under the Plan.

	
 

	
                    (t)            "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code.

	
 

	
                    (u)           "Plan" means this Amended and Restated 2002 Nonstatutory Stock Option Plan.

	
 

	
                    (v)           "Service Provider" means an Employee, Consultant or Director.

	
 

	
                    (w)          "Share" means a share of the Common Stock.

	
 

	
                    (x)            "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code.

	
 

	
     3.             Stock Subject to the Plan.  Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares which may be optioned and sold under the Plan is 3,500,000 Shares.  The Shares may be authorized, but unissued, or reacquired Common Stock.  

	
 

	
                    If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated).

	
 

	
     4.             Administration of the Plan.

	
 

	 

	 	 	-2- 

	 

	

	
                    (a)           Administration.  The Plan shall be administered by (i) the Board or (ii) a Committee, which committee shall be constituted to satisfy Applicable Laws. 

	
 

	
                    (b)           Powers of the Administrator.  Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:

	
 

	
                                     (i)            to determine the Fair Market Value of the Common Stock;

	
 

	
                                     (ii)           to select the Service Providers to whom Options may be granted hereunder;

	
 

	
                                     (iii)          to determine whether and to what extent Options are granted hereunder;

	
 

	
                                     (iv)          to determine the number of shares of Common Stock to be covered by each Option granted hereunder;

	
 

	
                                     (v)           to approve forms of agreement for use under the Plan;

	
 

	
                                     (vi)          to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder.  Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option  or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

	
 

	
                                     (vii)         to reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option shall have declined since the date the Option was granted;

	
 

	
                                     (viii)        to institute an Option Exchange Program;

	
 

	
                                     (ix)           to construe and interpret the terms of the Plan and awards granted pursuant to the Plan;

	
 

	
                                     (x)            to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws;

	
 

	
                                     (xi)           to modify or amend each Option (subject to Section 14(b) of the Plan), including the discretionary authority to extend the post-termination exercisability period of Options longer than is otherwise provided for in the Plan;

	
 

	
                                     (xii)          to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option previously granted by the Administrator;

	
 

	
                                     (xiii)         to determine the terms and restrictions applicable to Options;

	
 

	
                                     (xiv)        to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld.  The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined.  All elections by an Optionee to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; and

	
 

	 

	 	 	-3- 

	 

	

	
                                     (xv)         to make all other determinations deemed necessary or advisable for administering the Plan.

	
 

	
                    (c)           Effect of Administrator's Decision.  The Administrator's decisions, determinations and interpretations shall be final and binding on all Optionees and any other holders of Options.

	
 

	
     5.             Eligibility.  Options may be granted to Service Providers; provided, however, that notwithstanding anything to the contrary contained in the Plan, Options may not be granted to Officers and Directors.

	
 

	
     6.             Limitation.  Neither the Plan nor any Option shall confer upon an Optionee any right with respect to continuing the Optionee's relationship as a Service Provider with the Company, nor shall they interfere in any way with the Optionee's right or the Company's right to terminate such relationship at any time, with or without cause.

	
 

	
     7.             Term of Plan.  The Plan shall become effective upon its adoption by the Board.  It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 14 of the Plan. 

	
 

	
     8.             Term of Option.  The term of each Option shall be stated in the Option Agreement. 

	
 

	
     9.             Option Exercise Price and Consideration.

	
 

	
                    (a)           Exercise Price.  

	
 

	
                                     (i)          With respect to Shares granted to a Service Provider who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be not less than 110% of the Fair Market Value per Share on the date of grant.  

	
 

	
                                     (ii)         With respect to Shares granted to any other Service Provider, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant. 

	
 

	
                                     (iii)        Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value on the date of grant pursuant to a merger or other corporate transaction.

	
 

	
                    (b)           Waiting Period and Exercise Dates.  At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions which must be satisfied before the Option may be exercised.

	
 

	
                    (c)           Form of Consideration.  The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment.  Such consideration may consist entirely of:

	
 

	
                                     (i)            cash;

	
 

	
                                     (ii)           check;

	
 

	
                                     (iii)          promissory note;

	
 

	
                                     (iv)          other Shares, provided Shares acquired from the Company, (A) have been owned by the Optionee for more than six (6) months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised;

	
 

	
                                     (v)           consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;

	
 

	 

	 	 	-4- 

	 

	

	
                                     (vi)          a reduction in the amount of any Company liability to the Optionee, including any liability attributable to the Optionee's participation in any Company-sponsored deferred compensation program or arrangement;

	
 

	
                                     (vii)         such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or

	
 

	
                                     (viii)        any combination of the foregoing methods of payment.

	
 

	
     10.           Exercise of Option.

	
 

	
                    (a)           Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement.  Except in the case of Options granted to Officers, Directors, and Consultants, Options shall become exercisable at a rate of no less than 20% per year over five (5) years from the date the Options are granted.  An Option may not be exercised for a fraction of a Share.

	
 

	
                                     An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised.  Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan.  Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse.  Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan.

	
 

	
                                     Exercising an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

	
 

	
                    (b)           Termination of Relationship as a Service Provider.  If an Optionee ceases to be a Service Provider, such Optionee may exercise his or her Option within thirty (30) days of termination, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement).  If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan.  If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

	
 

	
                    (c)           Disability of Optionee.  If an Optionee ceases to be a Service Provider as a result of the Optionee's Disability, the Optionee may exercise his or her Option within six (6) months of termination, or such longer period of time as specified in the Option Agreement, to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement).  If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan.  If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

	
 

	
                    (d)           Death of Optionee.  If an Optionee dies while a Service Provider, the Option may be exercised within six (6) months following Optionee's death, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement) by the Optionee's designated beneficiary, provided such beneficiary has been designated prior to Optionee's death in a form acceptable to the Administrator.  If no such beneficiary has been designated by the Optionee, then such Option may be exercised by the personal representative of the Optionee's estate or by the person(s) to whom the Option is transferred pursuant to the Optionee's will or in accordance with the laws of descent and distribution.  If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan.  If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

	
 

	 

	 	 	-5- 

	 

	

	
     11.           Non-Transferability of Options.  Unless determined otherwise by the Administrator, Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee, only by the Optionee.  If the Administrator in its sole discretion makes an Option transferable, such Option may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of the Securities Act.

	
 

	
     12.           Adjustments, Dissolution or Liquidation or Change in Control. 

	
 

	
                    (a)           Adjustments.  In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, may (in its sole discretion) adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Option.

	
 

	
                    (b)           Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction.  The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until ten (10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable.  In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated.  To the extent it has not been previously exercised, an Option will terminate immediately prior to the consummation of such proposed action.

	
 

	
                    (c)           Merger or Asset Sale.  In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the Company, each outstanding Option shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the Option, the Optionee shall fully vest in and have the right to exercise the Option as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable.  If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Optionee in writing or electronically that the Option shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period.  For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for each Share of Optioned Stock, immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets.

	
 

	 

	 	 	-6- 

	 

	

	
     13.           Date of Grant.  The date of grant of an Option shall be, for all purposes, the date on which the Administrator makes the determination granting such Option, or such other later date as is determined by the Administrator.  Notice of the determination shall be provided to each Optionee within a reasonable time after the date of such grant.

	
 

	
     14.           Amendment and Termination of the Plan.

	
 

	
                    (a)           Amendment and Termination.  The Board may at any time amend, alter, suspend or terminate the Plan.  

	
 

	
                    (b)           Effect of Amendment or Termination.  No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company.  Termination of the Plan shall not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to options granted under the Plan prior to the date of such termination.

	
 

	
     15.           Conditions Upon Issuance of Shares.

	
 

	
                    (a)           Legal Compliance.  Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

	
 

	
                    (b)           Investment Representations.  As a condition to the exercise of an Option the Company may require the person exercising such Option  to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

	
 

	
     16.           Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

	
 

	
     17.           Reservation of Shares.  The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

	
 

	
     18.           Stockholder Approval.  The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted.  Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws.

	
 

	
     19.           Information to Optionees and Purchasers.  The Company shall provide to each Optionee and to each individual who acquires Shares pursuant to the Plan, not less frequently than annually during the period such Optionee or purchaser has one or more Options outstanding, and, in the case of an individual who acquires Shares pursuant to the Plan, during the period such individual owns such Shares, copies of annual financial statements.  The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information.

	
 

	 

	 	 	-7- 

	 

	

	
     20.           Limitation.  The Company shall not issue any Option if the issuance of such Option would cause the aggregate of all shares of the Company's capital stock underlying all issued and outstanding Options and stock purchase rights (whether or not issued under the Plan) to exceed 30% (or such higher percentage approved by the Company's securityholders in accordance with Section 260.140.45 of Title 10 of the California Code of Regulations) of the Company's issued and outstanding capital stock (with shares of preferred stock being counted on an as if converted to common stock basis); provided, however, that this prohibition shall terminate and be of no further force or effect at such time as the Company shall become a "listed corporation" within the meaning of Section 301.5 of the California Corporations Code.

	 

	 

	 	 	-8- 

	 

	

	
EVOLVE SOFTWARE, INC.

	
 

	
AMENDED AND RESTATED 2002 NONSTATUTORY STOCK OPTION PLAN

	
 

	
STOCK OPTION AGREEMENT

	
 

	
              Unless otherwise defined herein, the terms defined in the Amended and Restated 2002 Nonstatutory Stock Option Plan shall have the same defined meanings in this Stock Option Agreement.

	
 

	
I.              NOTICE OF STOCK OPTION GRANT

	
 

	
               Name:

	
 

	
               Address:

	
 

	
               The undersigned Optionee has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

	
 

	
               Date of Grant                                                                                                                                                

	
 

	
               Vesting Commencement Date                                                                                                                    

	
 

	
               Exercise Price per Share                                      $                                                                                      

	
 

	
               Total Number of Shares Granted                                                                                                               

	
 

	
               Total Exercise Price                                              $                                                                                      

	
 

	
               Type of Option:                                                    Nonstatutory Stock Option

	
 

	
               Term/Expiration Date:                                                                                                                                  

	
 

	
               Vesting Schedule:

	
 

	
               This Option shall be exercisable, in whole or in part, according to the following vesting schedule:

	
 

	
               [25% of the Shares subject to the Option shall vest twelve months after the Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date, subject to Optionee continuing to be a Service Provider on such dates.]

	
 

	 

	 	 	 

	 

	

	
               Termination Period:

	
 

	
               This Option shall be exercisable for three (3) months after Optionee ceases to be a Service Provider.  Upon Optionee's death or Disability, this Option may be exercised for one (1) year after Optionee ceases to be a Service Provider.  In no event may Optionee exercise this Option after the Term/Expiration Date as provided above.

	
 

	
II.            AGREEMENT

	
 

	
               1.             Grant of Option.  The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant (the "Optionee"), an option (the "Option") to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the "Exercise Price"), and subject to the terms and conditions of the Plan, which is incorporated herein by reference.  Subject to Section 14(b) of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.

	
 

	
               2.             Exercise of Option.

	
 

	
                              (a)           Right to Exercise.  This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement.

	
 

	
                              (b)           Method of Exercise.  This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit A (the "Exercise Notice") which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares.  This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price.

	
 

	
                              No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise complies with Applicable Laws.  Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares.

	
 

	
               3.             Method of Payment.  Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee:

	
 

	
                              (a)           cash or check;

	
 

	
                              (b)           consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or 

	
 

	
                              (c)           surrender of other Shares which, (i) in the case of Shares acquired from the Company, either directly or indirectly, have been owned by the Optionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares.

	
 

	
               4.             Restrictions on Exercise.  This Option may not be exercised until such time as the Plan has been approved by the shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Law.

	
 

	
               5.             Non-Transferability of Option.  This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee.  The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

	
 

	 

	 	 	-2- 

	 

	

	
               6.             Term of Option.  This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option.

	
 

	
               7.             Tax Consequences.  Set forth below is a brief summary as of the date of this Option of some of the federal tax consequences of exercise of this Option and disposition of the Shares.  THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

	
 

	
                              (a)           Exercise of NSO.  There may be a regular federal income tax liability upon the exercise of an NSO.  The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price.  If Optionee is an Employee or a former Employee, the Company will be required to withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.

	
 

	
                              (b)           Disposition of Shares.  If Shares are held for at least one (1) year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.  

	
 

	
               8.             Withholding Taxes.  Optionee agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements applicable to the Option exercise.  Optionee acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.

	
 

	
               9.             Entire Agreement; Governing Law.  The Plan is incorporated herein by reference.  The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee's interest except by means of a writing signed by the Company and Optionee.  This agreement is governed by the internal substantive laws but not the choice of law rules of California.

	
 

	
               10.           No Guarantee of Continued Service.  OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

	
 

	
               Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof.  Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option.  Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option.  Optionee further agrees to notify the Company upon any change in the residence address indicated below.

	
 

	 

	 	 	-3- 

	 

	

	
OPTIONEE                                                                                            EVOLVE SOFTWARE, INC.

	
 

	
                                                                                                                                                                                                                      

	
Signature                                                                                               By

	
 

	
                                                                                                                                                                                                                      

	
Print Name                                                                                             Title

	
 

	
                                                                                                

	
                                                                                                

	
Residence Address

	 

	 

	 	 	-4- 

	 

	

	
EXHIBIT A

	
 

	
EVOLVE SOFTWARE, INC.

	
 

	
AMENDED AND RESTATED 2002 NONSTATUTORY STOCK OPTION PLAN

	
 

	
EXERCISE NOTICE

	
 

	
 

	
 

	
Evolve Software, Inc.

	
1400 65th Street, Suite 100

	
Emeryville, California 94608

	
Attention: [__________]

	
 

	
               1.     Exercise of Option.  Effective as of today, _____________, _____, the undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase ________________ shares of the Common Stock (the "Shares") of Evolve Software, Inc. (the "Company") under and pursuant to the Amended and Restated 2002 Nonstatutory Stock Option Plan (the "Plan") and the Stock Option Agreement dated ____________, ____ (the "Option Agreement").

	
 

	
               2.     Delivery of Payment.  Optionee herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in connection with the exercise of the Option.

	
 

	
               3.     Representations of Optionee.  Optionee acknowledges that Optionee has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

	
 

	
               4.     Rights as Shareholder.  Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option.  The Shares shall be issued to the Optionee as soon as practicable after the Option is exercised in accordance with the Option Agreement.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in Section 12 of the Plan.

	
 

	
               5.     Tax Consultation.  Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's purchase or disposition of the Shares.  Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

	
 

	
               6.     Successors and Assigns.  The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

	
 

	
               7.     Interpretation.  Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Optionee or by the Company forthwith to the Administrator which shall review such dispute at its next regular meeting.  The resolution of such a dispute by the Administrator shall be final and binding on all parties.

	
 

	
               8.     Governing Law; Severability.  This Exercise Notice is governed by the internal substantive laws but not the choice of law rules, of California.

	
 

	 

	 	 	 

	 

	

	
               9.     Entire Agreement.  The Plan and Option Agreement are incorporated herein by reference.  This Exercise Notice, the Plan, the Option Agreement and the Investment Representation Statement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee's interest except by means of a writing signed by the Company and Optionee.

	
 

	
 

	
 

	
Submitted by:                                                                                       Accepted by:

	
 

	
OPTIONEE                                                                                            EVOLVE SOFTWARE, INC.

	
 

	
 

	
 

	
                                                                                                                                                                                                                      

	
Signature                                                                                               By

	
 

	
                                                                                                                                                                                                                       

	
Print Name                                                                                             Title

	
 

	
Address:                                                                                                Address:

	
                                                                                                                1400 65th Street, Suite 100

	
                                                                                                                Emeryville, California 94608

	
 

	
 

	
                                                                                                                                                                                                                      

	
                                                                                                                Date Received

	
 

	 

	 	 	-2-

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