Severance Agreement - Ariba Inc. and Robert M. Calderoni


                               Severance Agreement

         This Agreement is entered into as of July 18, 2001, by and between
Robert M. Calderoni (the "Employee") and Ariba, Inc., a Delaware corporation
(the "Company").

         1.  Termination Benefits.

         (a) Severance Pay. If the Company at any time terminates the Employee's
employment with the Company for a reason other than Cause or Permanent
Disability, or if the Employee resigns for Good Reason within 12 months after a
Change in Control (as defined in the Ariba, Inc. 1999 Equity Incentive Plan),
then the Employee shall be entitled to receive severance payments from the
Company for a period of 12 months following the termination of his employment
(the "Continuation Period"). Such severance payments shall be made in accordance
with the Company's standard payroll procedures. The annual rate of such
severance payments shall be equal to the sum of (i) the Employee's base salary
at the annual rate in effect at the time of the termination of his employment
plus (ii) the most recent annual bonus paid to the Employee. In addition to any
other remedies that may be available to the Company, severance payments shall
cease immediately if the Employee fails to comply with the covenants set forth
in Section 2 below.

         (b) Acceleration of Vesting. If the Company at any time terminates the
Employee's employment with the Company for a reason other than Cause or
Permanent Disability, then the Employee shall be entitled to have the vested
portion of all of his equity in the Company determined after adding 12 months to
his actual period of Service. For this purpose, the Employee's equity in the
Company shall consist of all options to purchase shares of the Company's Common
Stock and all restricted shares of the Company's Common Stock held by the
Employee at the time of the termination of his employment.

         (c) Definition of "Cause." For all purposes under this Agreement,
"Cause" shall mean any intentional misconduct that materially injures the
Company or adversely affects the business or affairs of the Company or any
parent or subsidiary in a material manner. The foregoing shall not be deemed an
exclusive list of all acts or omissions that the Company may consider as grounds
for the termination of the Employee's employment without Cause.

         (d) Definition of "Good Reason." For all purposes under this Agreement,
"Good Reason" shall mean (i) a change in the Employee's position with the
Company that materially reduces his level of responsibility, (ii) a reduction in
his level of compensation (including base salary, fringe benefits and
participation in bonus or incentive programs) or (iii) a relocation of his place
of employment by more than 50 miles, provided and only if such change, reduction
or relocation is effected by the Company without his consent.

         (e) Definition of "Permanent Disability." For all purposes under this
Agreement, "Permanent Disability" shall mean that the Employee, at the time
notice is given, has failed to perform the duties of his position with the
Company for a period of not less than 90



consecutive days (or such longer period as may be required by law) as the result
of his incapacity due to physical or mental injury, disability or illness.

         (f) General Release. Any other provision of this Agreement
notwithstanding, Subsections (a) and (b) above shall not apply unless the
Employee (i) has executed a general release (in a form prescribed by the
Company) of all known and unknown claims that he may then have against the
Company or persons affiliated with the Company and (ii) has agreed not to
prosecute any legal action or other proceeding based upon any of such claims.

         2.  Covenants.

         (a) Non-Solicitation. During his employment with the Company and during
the Continuation Period (if any), the Employee shall not directly or indirectly,
personally or through others, solicit or attempt to solicit the employment of
any employee of the Company or any of the Company's affiliates, whether on the
Employee's own behalf or on behalf of any other person or entity. The term
"employment" for purposes of this Subsection (a) means to enter into an
arrangement for services as a full-time or part-time employee, independent
contractor, agent or otherwise. The Employee and the Company agree that this
provision is reasonably enforced as to any geographic area in which the Company
conducts its business.

         (b) Non-Competition. The Employee agrees that, during his employment
with the Company and during the Continuation Period (if any), he shall not:

             (i)   Directly or indirectly, individually or in conjunction with
    others, engage in activities that compete with the Company or work for any
    entity that is part of the Company's Market;

             (ii)  Solicit, serve, contract with or otherwise engage any
    existing or prospective customer, client or account of the Company on behalf
    of any entity that is part of the Company's Market; or

             (iii) Cause or attempt to cause any existing or prospective
    customer, client or account of the Company to divert from, terminate, limit
    or in any manner modify, or fail to enter into, any actual or potential
    business relationship with the Company. The Employee and the Company agree
    that this provision is reasonably enforced with reference to any geographic
    area in which the Company maintains any such relationship.

For purposes of this Subsection (b), the Company's "Market" shall mean (i) all
companies that derive their revenue primarily from e-procurement software sales
and (ii) the companies listed on Exhibit A attached hereto. The Employee and the
                                 ---------
Company agree that the Company's Market is global in scope.

         (c) Cooperation and Non-Disparagement. The Employee agrees that, during
the Continuation Period, he shall cooperate with the Company in every reasonable
respect and shall use his best efforts to assist the Company with the transition
of his duties to his

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successor. The Employee further agrees that, during the Continuation Period, he
shall not in any way or by any means disparage the Company, the members of the
Company's Board of Directors or the Company's officers and employees.

         (d) Disclosure. The Employee agrees that, during the Continuation
Period, he shall inform any new employer or other person or entity with whom the
Employee enters into a business relationship, before accepting employment or
entering into a business relationship, of the existence of this Section 2.

         3.  Employment at Will.

         The Employee's employment with the Company shall be "at will," meaning
that either the Employee or the Company shall be entitled to terminate the
Employee's employment at any time and for any reason, with or without Cause. Any
contrary representations that may have been made to the Employee shall be
superseded by this Agreement. This Agreement shall constitute the full and
complete agreement between the Employee and the Company on the "at will" nature
of the Employee's employment, which may only be changed in an express written
agreement signed by the Employee and a duly authorized officer of the Company.

         4.  Successors.

         (a) Company's Successors. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.

         (b) Employee's Successors. This Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

         5.  Arbitration.

         (a) Scope of Arbitration Requirement. The parties hereby waive their
rights to a trial before a judge or jury and agree to arbitrate before a neutral
arbitrator any and all claims or disputes arising out of this Agreement and any
and all claims arising from or relating to the Employee's employment with the
Company, including (but not limited to) claims against any current or former
employee, director or agent of the Company, claims of wrongful termination,
retaliation, discrimination, harassment, breach of contract, breach of the
covenant of good faith and fair dealing, defamation, invasion of privacy, fraud,
misrepresentation, constructive discharge or failure to provide a leave of
absence, claims regarding commissions, stock options or bonuses, infliction of
emotional distress or unfair business practices, or any tort or tort-like causes
of action.

         (b) Exceptions. The foregoing notwithstanding, the following are the
only claims that may be resolved in any appropriate forum (including courts of
law) as required by

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applicable laws then in effect: (i) claims concerning workers' compensation
benefits, (ii) claims concerning unemployment insurance and (iii) claims
concerning the validity, infringement or (b) enforceability of any trade secret,
patent right, copyright or any other trade secret or intellectual property held
or sought by either the Employee or the Company (whether or not arising under
the Proprietary Information and Inventions Agreement between the Employee and
the Company).

         (c) Procedure. The arbitrator's decision shall be written and shall
include the findings of fact and law that support the decision. The arbitrator's
decision shall be final and binding on both parties, except to the extent
applicable law allows for judicial review of arbitration awards. The arbitrator
may award any remedies that would otherwise be available to the parties if they
were to bring the dispute in court. The arbitration shall be conducted in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association; provided, however that the arbitrator
shall allow the discovery authorized by the California Arbitration Act or the
discovery that the arbitrator deems necessary for the parties to vindicate their
respective claims or defenses. The arbitration shall take place in Santa Clara
County or, at the Employee's option, the county in which the Employee primarily
worked with the Company at the time when the arbitrable dispute or claim first
arose.

         (d) Costs. The parties shall share the costs of arbitration equally,
except that the Company shall bear the cost of the arbitrator's fee and any
other type of expense or cost that the Employee would not be required to bear if
he were to bring the dispute or claim in court. Both the Company and the
Employee shall be responsible for their own attorneys' fees, and the arbitrator
may not award attorneys' fees unless a statute or contract at issue specifically
authorizes such an award.

         6.  Miscellaneous Provisions.

         (a) Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Employee, mailed
notices shall be addressed to him at the home address that he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary and Chief Executive Officer.

         (b) Modifications and Waivers. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by an authorized officer of
the Company (other than the Employee). No waiver by either party of any breach
of, or of compliance with, any condition or provision of this Agreement by the
other party shall be considered a waiver of any other condition or provision or
of the same condition or provision at another time.

         (c) Withholding Taxes. All payments made under this Agreement shall be
subject to reduction to reflect taxes or other charges required to be withheld
by law.

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         (d) Choice of Law and Severability. This Agreement is executed by the
parties in the State of California and shall be interpreted in accordance with
the laws of such State (except their provisions governing the choice of law). If
any provision of this Agreement (d) becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction by reason of the scope, extent or duration of
its coverage, then such provision shall be deemed amended to the extent
necessary to conform to applicable law so as to be valid and enforceable or, if
such provision cannot be so amended without materially altering the intention of
the parties, then such provision shall be stricken and the remainder of this
Agreement shall continue in full force and effect. Should there ever occur any
conflict between any provision contained in this Agreement and any present or
future statue, law, ordinance or regulation contrary to which the parties have
no legal right to contract, then the latter shall prevail but the provision of
this Agreement affected thereby shall be curtailed and limited only to the
extent necessary to bring it into compliance with applicable law. All the other
terms and provisions of this Agreement shall continue in full force and effect
without impairment or limitation.

         (e) No Assignment. This Agreement and all rights and obligations of the
Employee hereunder are personal to the Employee and may not be transferred or
assigned by the Employee at any time. The Company may assign its rights under
this Agreement to any entity that assumes the Company's obligations hereunder in
connection with any sale or transfer of all or a substantial portion of the
Company's assets to such entity.

         (f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.


                                            /s/ Robert M. Calderoni
                                            ------------------------------



                                            Ariba, Inc.

                                            By: /s/ Keith Krach
                                                ---------------------------
                                            Title: Chief Executive Officer
                                                   -----------------------


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                                    EXHIBIT A

                                List of Companies

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