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EXHIBIT 10.1

CREDIT AGREEMENT

    THIS AGREEMENT is entered into as of June 15, 2001, by and between SABA
SOFTWARE, INC., a Delaware corporation ("Borrower"), and WELLS FARGO BANK,
NATIONAL ASSOCIATION ("Bank").

RECITALS

    Borrower has requested that Bank extend or continue credit to Borrower as
described below, and Bank has agreed to provide such credit to Borrower on the
terms and conditions contained herein.

    NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Bank and Borrower hereby agree as follows:

ARTICLE I
CREDIT TERMS

    SECTION 1.1.  LINE OF CREDIT.  

    (a)  Line of Credit.  Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances to Borrower from time to time up to and
including June 30, 2002, not to exceed at any time the aggregate principal
amount of Eight Million Dollars ($8,000,000.00) ("Line of Credit"), the proceeds
of which shall be used to finance Borrower's working capital requirements, for
general corporate purposes and, in the amount not to exceed $3,000,000.00
outstanding at any time, for capital expenditures. Borrower's obligation to
repay advances under the Line of Credit shall be evidenced by a promissory note
substantially in the form of Exhibit A attached hereto ("Line of Credit Note"),
all terms of which are incorporated herein by this reference.

    (b)  Letter of Credit Subfeature.  As a subfeature under the Line of Credit,
Bank agrees from time to time during the term thereof to issue or cause an
affiliate to issue standby letters of credit for the account of Borrower (each,
a "Letter of Credit" and collectively, "Letters of Credit"); provided however,
that the aggregate undrawn amount of all outstanding Letters of Credit shall not
at any time exceed Seven Hundred Fifty Thousand Dollars ($750,000.00). The form
and substance of each Letter of Credit shall be subject to approval by Bank, in
its reasonable discretion. No Letter of Credit shall have an expiration date
more than three hundred sixty-five (365) days beyond the maturity date of the
Line of Credit. The undrawn amount of all Letters of Credit shall be reserved
under the Line of Credit and shall not be available for borrowings thereunder.
Each Letter of Credit shall be subject to the additional terms and conditions of
the Bank's then standard form of Letter of Credit agreements, applications and
any related documents required by Bank in connection with the issuance thereof.
In the event that any provision of such Letter of Credit agreement, application
or related document is directly contradicted by the terms of this Agreement, the
terms of this Agreement shall control. Without limiting the foregoing, any
collateral granted to Bank or an affiliate of Bank under any such Letter of
Credit agreements, applications or related documents shall not extend to any
property of Borrower that is not Collateral under and as defined in this
Agreement or any security agreement as described in Sections 1.3 or 3.1 of this
Agreement. Each draft paid under a Letter of Credit, if not reimbursed by
Borrower on the honor date thereof, shall be deemed an advance under the Line of
Credit and shall be repaid by Borrower in accordance with the terms and
conditions of this Agreement applicable to such advances; provided however, that
if advances under the Line of Credit are not available, for any reason, at the
time any draft is paid, then Borrower shall immediately pay to Bank the full
amount of such draft, together with interest thereon from the date such draft is
paid to the date such amount is fully repaid by Borrower, at the rate of
interest that would have been applicable to advances under the Line of Credit if
the Line of Credit were available. In such event

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Borrower agrees that Bank, in its sole discretion, may debit any account
maintained by Borrower with Bank for the amount of any such draft.

    (c)  Borrowing and Repayment.  Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.

    SECTION 1.2.  INTEREST/FEES.  

    (a)  Interest.  The outstanding principal balance of the Line of Credit
shall bear interest at the rate of interest set forth in the Line of Credit
Note.

    (b)  Computation and Payment.  Interest shall be computed on the basis of a
360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in the Line of Credit Note.

    (c)  Unused Commitment Fee.  Borrower shall pay to Bank a fee equal to
one-half percent (.50%) per annum (computed on the basis of a 360-day year,
actual days elapsed) on the average daily unused amount of the Line of Credit
(the undrawn amount of issued Letters of Credit reserved under the Line of
Credit shall be deemed usage for purposes of this calculation), which fee shall
be calculated on a 360 basis by Bank and shall be due and payable by Borrower
quarterly in arrears on the last day of each fiscal quarter, unless such day is
not a Business Day (as defined in the Line of Credit Note) in which case such
fee shall be payable on the next succeeding Business Day.

    (d)  Letter of Credit Fees.  Borrower shall pay to Bank (i) fees upon the
issuance of each Letter of Credit equal to one percent (1.00%) per annum
(computed on the basis of a 360-day year, actual days elapsed) of the face
amount thereof, and (ii) fees upon the payment or negotiation of each draft
under any Letter of Credit and fees upon the occurrence of any other activity
with respect to any Letter of Credit (including without limitation, the
transfer, amendment or cancellation of any Letter of Credit) determined in
accordance with Bank's standard fees and charges then in effect for such
activity.

    SECTION 1.3.  COLLATERAL.  

    As security for all indebtedness of Borrower to Bank subject hereto,
Borrower hereby grants to Bank security interests of first priority in all
Collateral under, and as defined in, the Security Agreements described in
Section 3.1(b) hereof and such other security agreements as Borrower may from
time to time execute and deliver in connection with this Agreement or the other
Loan Documents. The Collateral includes, without limitation, and Borrower hereby
grants to Bank a security interest of first priority, in all of Borrower's
accounts receivable and equipment and in Wells Capital Management account
number            (the "Securities Account") and all amounts and other financial
assets held therein.

    All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements and other documents as Bank shall
reasonably require, all in form and substance satisfactory to Bank. Borrower
shall reimburse Bank immediately upon demand for all costs and expenses incurred
by Bank in connection with any of the foregoing security, including without
limitation, filing and recording fees and costs of appraisals and audits.

ARTICLE II
REPRESENTATIONS AND WARRANTIES

    Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this Agreement.

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    SECTION 2.1.  LEGAL STATUS.  Borrower is a corporation, duly organized and
existing and in good standing under the laws of the State of Delaware, and is
qualified or licensed to do business (and is in good standing as a foreign
corporation, if applicable) in all jurisdictions in which such qualification or
licensing is necessary or desirable if the failure to so qualify or to be so
licensed could have a material adverse effect on Borrower.

    SECTION 2.2.  AUTHORIZATION AND VALIDITY.  This Agreement and each
promissory note, contract, instrument and other document required hereby or at
any time hereafter delivered to Bank in connection herewith (collectively, the
"Loan Documents") have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower, enforceable in accordance
with their respective terms.

    SECTION 2.3.  NO VIOLATION.  The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of Borrower, or result in any breach of or default under any contract,
obligation, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound.

    SECTION 2.4.  LITIGATION.  There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
condition (financial or otherwise), business, assets or operations of Borrower
other than those disclosed by Borrower to Bank in writing prior to the date
hereof.

    SECTION 2.5.  CORRECTNESS OF FINANCIAL STATEMENT.  The financial statement
of Borrower dated February 28, 2001, a true copy of which has been delivered by
Borrower to Bank prior to the date hereof, (a) is complete and correct and
presents fairly the financial condition of Borrower, (b) discloses all
liabilities of Borrower that are required to be reflected or reserved against
under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance with
generally accepted accounting principles consistently applied. Since the date of
such financial statement there has been no material adverse change in the
financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a
security interest in or otherwise encumbered any of its assets or properties
except as follows (collectively, "Permitted Liens"): (i) liens in favor of Bank
or as otherwise permitted by Bank in writing; (ii) liens existing on the date of
this Agreement and listed on Schedule 2.5; (iii) liens for taxes, assessments,
levies or other governmental charges not yet delinquent or being contested in
good faith and by appropriate proceedings for which adequate reserves are being
maintained; (iv) carriers', warehousemen's, materialmen's and mechanics' and
other similar liens imposed by law arising in the ordinary course of business
which are not delinquent or which are being contested in good faith and by
appropriate proceedings for which adequate reserves are being maintained;
(v) liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security legislation and other liens to secure the performance and return
of money bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money) incurred in the ordinary course of business, whether
pursuant to statutory requirements, common law or consensual arrangements so
long as no such liens attach to any of the Collateral if any obligation secured
thereby is delinquent and so long as no foreclosure, sale or similar proceedings
have been commenced with respect to any such lien; (vi) liens (including in
respect of capital lease obligations) upon any property acquired or held by
Borrower to secure the purchase price of such property or indebtedness incurred
solely for the purpose of financing the acquisition of such property, so long as
(A) such lien extends only to the property acquired or financed and proceeds
(including insurance proceeds) thereof (B) such lien attaches to such property
concurrently with or within ninety (90) days after the acquisition thereof, and
(C) the principal amount of the indebtedness secured thereby does not exceed
100% of the cost of such property (vii) nonexclusive licenses and sublicenses
granted to others in the ordinary course of business that do not interfere in
any material respect with the conduct of Borrower's business or result in any
material diminution in the value of any Collateral;

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(viii) liens securing judgments, decrees or attachments in circumstances not
constituting an Event of Default, but excluding any lien in respect of any such
judgment, decree or attachment that remains undischarged for a period of more
than thirty (30) days during which execution is not stayed; (ix) liens in favor
of customs and review authorities arising as a matter of law to secure payments
of customs duties in connection with the importation of goods; and (x) in the
case of clauses (ii), (vi) and (vii) above, any renewals, extensions or
replacements thereof, provided that the property covered thereby is not
increased or expanded and any renewal, extension or replacement of the
obligations secured or benefited thereby is permitted by Section 5.2 and does
not increase the amount secured thereby.

    All Permitted Liens with respect to which Borrower has executed any
financing statement, security agreement, pledge or charge and that are existing
as of the date of this Agreement are listed on Schedule 2.5

    SECTION 2.6.  INCOME TAX RETURNS.  Borrower has no knowledge of any pending
assessments or adjustments of its income tax payable with respect to any year.

    SECTION 2.7.  NO SUBORDINATION.  There is no agreement, indenture, contract
or instrument to which Borrower is a party or by which Borrower may be bound
that requires the subordination in right of payment of any of Borrower's
obligations subject to this Agreement to any other obligation of Borrower.

    SECTION 2.8.  PERMITS, FRANCHISES.  Borrower possesses, and will hereafter
possess, all permits, consents, approvals, franchises and licenses required and
rights to all trademarks, trade names, patents, and fictitious names, if any,
necessary to enable it to conduct the business in which it is now engaged in
compliance with applicable law except to the extent such failure to possess, or
compliance with applicable law would not have a material adverse effect of the
condition (financial or otherwise), business, assets or operations of Borrower.

    SECTION 2.9.  ERISA.  Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.

    SECTION 2.10.  OTHER OBLIGATIONS.  Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.

    SECTION 2.11.  ENVIRONMENTAL MATTERS.  Except as disclosed by Borrower to
Bank in writing prior to the date hereof, Borrower is in compliance with all
applicable federal or state environmental, hazardous waste, health and safety
statutes, and any rules or regulations adopted pursuant thereto, which govern or
affect any of Borrower's operations and/or properties, including without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the
Federal Resource Conservation and Recovery Act of 1976, and the Federal Toxic
Substances Control Act, as any of the same may be amended, modified or
supplemented from time to time, except to the extent that any failure so to be
in compliance has not had and could not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), business,
assets or operations of the Borrower. None of the operations of Borrower is the
subject of any federal or state investigation evaluating whether any remedial
action involving a material expenditure is needed to respond to a release of any
toxic or hazardous waste or substance into the environment. To the best of
Borrower's knowledge, Borrower has no material contingent liability in
connection with any release of any toxic or hazardous waste or substance into
the environment.

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ARTICLE III
CONDITIONS

    SECTION 3.1.  CONDITIONS OF INITIAL EXTENSION OF CREDIT.  The obligation of
Bank to make the initial extension of credit contemplated by this Agreement is
subject to the fulfillment to Bank's satisfaction of all of the following
conditions:

    (a)  Approval of Bank Counsel.  All legal matters incidental to the
extension of credit by Bank shall be satisfactory to Bank's counsel.

    (b)  Documentation.  Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:

(i)   This Agreement and each promissory note or other instrument required
hereby; (ii)   Security Agreement: Securities Account; (iii)   Securities
Account Control Agreement-WF Affiliate Intermediary; (iv)   Corporate
Resolution: Borrowing; (v)   Certificate of Incumbency; (vi)   Addendum to
Security Agreement: Securities Account; (vii)   Continuing Security Agreement:
Rights to Payment; (viii)   Security Agreement: Equipment; and (ix)   such other
documents as Bank may require under any other Section of this Agreement.

    (c)  Insurance.  Borrower shall have delivered to Bank evidence of insurance
coverage on all Borrower's property, in form, substance, amounts, covering risks
and issued by companies satisfactory to Bank, and where required by Bank, with
loss payable endorsements in favor of Bank.

    SECTION 3.2.  CONDITIONS OF EACH EXTENSION OF CREDIT.  The obligation of
Bank to make each extension of credit requested by Borrower hereunder (including
the initial extension) shall be subject to the fulfillment to Bank's
satisfaction of each of the following conditions:

    (a)  Compliance.  The representations and warranties contained herein and in
each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.

    (b)  Documentation.  Bank shall have received all additional documents which
may reasonably be required in connection with such extension of credit.

    (c)  Financial Condition.  There shall have been no material adverse change,
as determined by Bank, in the financial condition or business of Borrower, nor
any material decline, as reasonably determined by Bank, in the market value of
any material portion of the collateral required hereunder or a substantial or
material portion of the assets of Borrower. Bank acknowledges that Borrower is
not profitable and is in a negative cash flow position and that Borrower is not
expected to become profitable or to be in a positive cash flow position during
the term of this Agreement and Bank agrees that Borrower's continuing losses and
negative cash flow substantially as forecasted in public financial information
available as of the date of execution of this Agreement, and the effect on
Borrower's financial condition as a result thereof, shall not be deemed to be a
material adverse change in the financial condition or business of Borrower.
Without limiting the foregoing, Bank shall have no obligation to make any
extension of credit under this Agreement, including, without limitation to issue
any Letter of Credit, if on the date of the request therefore or the date of
such extension the amount held in the Securities Account is

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less than one hundred fifty percent (150%) of the Line of Credit (including all
used and unused amounts thereunder).

ARTICLE IV
AFFIRMATIVE COVENANTS

    Borrower covenants that so long as Bank remains committed to extend credit
to Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, unless Bank otherwise consents in writing:

    SECTION 4.1.  PUNCTUAL PAYMENTS.  Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein.

    SECTION 4.2.  ACCOUNTING RECORDS.  Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Bank, at any reasonable time, to inspect, audit
and examine such books and records, to make copies of the same, and to inspect
the properties of Borrower.

    SECTION 4.3.  FINANCIAL STATEMENTS.  Provide to Bank all of the following,
in form and detail satisfactory to Bank:

    (a) not later than 120 days after and as of the end of each fiscal year, an
audited financial statement of Borrower, prepared by a certified public
accountant acceptable to Bank,

    (b) not later than 45 days after and as of the end of each fiscal quarter, a
financial statement of Borrower, prepared by Borrower, to include balance sheet
and income statement;

    (c) from time to time such other information as Bank may reasonably request.

    SECTION 4.4.  COMPLIANCE.  Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business except
in each case where failure to do so does not have a material adverse effect on
the condition (financial or otherwise), business, assets or operations of
Borrower.

    SECTION 4.5.  INSURANCE.  Maintain and keep in force insurance of the types
and in amounts customarily carried in lines of business similar to that of
Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank's request schedules setting forth all
insurance then in effect.

    SECTION 4.6.  FACILITIES.  Keep all material properties useful or necessary
to Borrower's business in good repair and condition, normal wear and tear
excepted, and from time to time make necessary repairs, renewals and
replacements thereto so that such properties shall be fully and efficiently
preserved and maintained.

    SECTION 4.7.  TAXES AND OTHER LIABILITIES.  Pay and discharge when due any
and all material indebtedness, obligations, assessments and taxes, both real or
personal, including without limitation federal and state income taxes and state
and local property taxes and assessments, except such (a) as Borrower may in
good faith contest or as to which a bona fide dispute may arise, and (b) for
which Borrower maintains with respect thereto adequate reserves in accordance
with generally accepted accounting principles.

    SECTION 4.8.  LITIGATION.  Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower with a claim in excess of
$1,000,000.00.

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    SECTION 4.9.  NOTICE TO BANK.  Promptly (but in no event more than five
(5) days after the occurrence of each such event or matter) give written notice
to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or
any condition, event or act which with the giving of notice or the passage of
time or both would constitute an Event of Default; (b) any change in the name or
the organizational structure of Borrower; (c) the occurrence and nature of any
Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
material funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain and
not immediately replaced by insurance policies meeting the requirements of this
Agreement, or any uninsured or partially uninsured loss through liability or
property damage, or through fire, theft or any other cause affecting Borrower's
property in excess of an aggregate of $1,000,000.00.

ARTICLE V
NEGATIVE COVENANTS

    Borrower further covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent:

    SECTION 5.1.  USE OF FUNDS.  Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article I hereof.

    SECTION 5.2.  OTHER INDEBTEDNESS.  Create, incur, assume or permit to exist
any indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except (a) the liabilities of Borrower to Bank, (b) any other
liabilities of Borrower existing as of, and disclosed to Bank prior to, the date
hereof, (c) any indebtedness or liability secured by Permitted Liens of the type
described in clause (vi) of Section 2.5, (d) any indebtedness to finance
insurance premiums or to finance trade payables, and (e) unsecured indebtedness
in an amount not to exceed in the aggregate $1,000,000 at any time outstanding.

    SECTION 5.3.  GUARANTIES.  Guarantee or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security for,
any liabilities or obligations of any other person or entity, except any of the
foregoing (a) in favor of Bank and (b) in respect of any indebtedness or other
liability of a wholly-owned subsidiary of Borrower to the extent that, if
Borrower were to be primarily obligated with respect to such guaranteed
liability, Borrower would be permitted to incur such indebtedness or other
liability pursuant to Section 5.2.

    SECTION 5.4.  MERGER, CONSOLIDATION, TRANSFER OF ASSETS.  Merge into acquire
or consolidate with any other entity, unless (i) Borrower is the surviving
entity, and (ii) Borrower's senior management that is in place prior to and
after the merger, acquisition or consolidation remains substantially intact
following the same; make any substantial change in the nature of Borrower's
business as conducted as of the date hereof; nor sell, lease, transfer or
otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business.

    SECTION 5.5.  PLEDGE OF ASSETS.  Mortgage, pledge, grant or permit to exist
a security interest in, or lien upon, all or any portion of Borrower's assets
now owned or hereafter acquired, except Permitted Liens.

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ARTICLE VI
EVENTS OF DEFAULT

    SECTION 6.1.    The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:

    (a) Borrower shall fail to pay when due any principal or interest, or to pay
within 10 days of the due date thereof any fees or other amounts payable under
any of the Loan Documents.

    (b) Any financial statement or certificate furnished to Bank in connection
with, or any representation or warranty made by or on behalf of Borrower under
this Agreement or any other Loan Document shall prove to be incorrect, false or
misleading in any material respect when furnished or made, or any default in the
performance of or compliance with Borrower's obligations and covenants under
Article 5 of this Agreement.

    (c) Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default shall
continue for a period of thirty (30) days from its occurrence.

    (d) Any default in the payment or performance of any material obligation, or
any defined event of default, under the terms of any material contract or
instrument (other than any of the Loan Documents) pursuant to which Borrower has
incurred any debt or other liability to any person or entity, including Bank.

    (e) The filing of a notice of judgment lien in excess of $1,000,000 against
Borrower; or the recording of any abstract of judgment against Borrower in
excess of $1,000,000 in any county in which Borrower has an interest in real
property; or the service of a notice of levy and/or of a writ of attachment or
execution, or other like process, against the Securities Account or against any
material portion (as determined by Bank) of any other Collateral or against any
material portion of the assets of Borrower; or the entry of a judgment against
Borrower that is not discharged, satisfied, vacated or stayed pending appeal
within 30 days.

    (f)  Borrower shall become insolvent, or shall suffer or consent to or apply
for the appointment of a receiver, trustee, custodian or liquidator of itself or
all or any material portion of its property, or shall generally fail to pay its
debts as they become due, or shall make a general assignment for the benefit of
creditors; Borrower shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time ("Bankruptcy Code"), or under
any state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against
Borrower which continues undismissed for 60 days, or Borrower shall file an
answer admitting the jurisdiction of the court and the material allegations of
any involuntary petition; or Borrower shall be adjudicated a bankrupt, or an
order for relief shall be entered against Borrower by any court of competent
jurisdiction under the Bankruptcy Code or any other applicable state or federal
law relating to bankruptcy, reorganization or other relief for debtors.

    (g) There shall exist or occur any event or condition which Bank in good
faith believes impairs, or is substantially likely to impair, either the
Collateral Value of the Securities Account or the prospect of payment or
performance by Borrower of its obligations under any of the Loan Documents;
provided that, Borrower's continuing losses and negative cash flow substantially
as forecasted in public financial information available as of the date of
execution of this Agreement, and the effect on Borrower's financial condition as
a result thereof, shall not be deemed to be such an event or condition.

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    (h) The dissolution or liquidation of Borrower; or Borrower, or any of its
directors, stockholders or members, shall take action seeking to effect the
dissolution or liquidation of Borrower.

    (i)  The sale, transfer, hypothecation, assignment or encumbrance, whether
voluntary, involuntary or by operation of law, without Bank's prior written
consent, of all or any part of or interest in any real property collateral
required hereby.

    SECTION 6.2.  REMEDIES.  Upon the occurrence of any Event of Default:
(a) all indebtedness of Borrower under each of the Loan Documents, any term
thereof to the contrary notwithstanding, shall at Bank's option and without
notice become immediately due and payable without presentment, demand, protest
or notice of dishonor, all of which are hereby expressly waived by each
Borrower; (b) the obligation, if any, of Bank to extend any further credit under
any of the Loan Documents shall immediately cease and terminate; and (c) Bank
shall have all rights, powers and remedies available under each of the Loan
Documents, or accorded by law, including without limitation the right to resort
to any or all security for any credit subject hereto and to exercise any or all
of the rights of a beneficiary or secured party pursuant to applicable law. All
rights, powers and remedies of Bank may be exercised at any time by Bank and
from time to time after the occurrence of an Event of Default, are cumulative
and not exclusive, and shall be in addition to any other rights, powers or
remedies provided by law or equity.

ARTICLE VII
MISCELLANEOUS

    SECTION 7.1.  NO WAIVER.  No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

    SECTION 7.2.  NOTICES.  All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

BORROWER:   SABA SOFTWARE, INC.
2400 Bridge Parkway
Redwood Shores, CA 94065
Facsimile No: (650) 581-2545
BANK:
 
WELLS FARGO BANK, NATIONAL ASSOCIATION
Peninsula Regional Commercial Banking Office
400 Hamilton Avenue
Palo Alto, CA 94301
Facsimile No: (650) 328-0814

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

    SECTION 7.3.  COSTS, EXPENSES AND ATTORNEYS' FEES.  Borrower shall pay to
Bank within 10 days of written demand therefore the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys' fees (to
include outside counsel fees and all allocated costs of Bank's in-house
counsel), expended or incurred by Bank in connection with (a) the negotiation

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and preparation of this Agreement and the other Loan Documents, Bank's continued
administration hereof and thereof, and the preparation of any amendments and
waivers hereto and thereto, (b) the enforcement of Bank's rights and/or the
collection of any amounts which become due to Bank under any of the Loan
Documents, and (c) the prosecution or defense of any action in any way related
to any of the Loan Documents, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.

    SECTION 7.4.  SUCCESSORS, ASSIGNMENT.  This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interest hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights
and benefits under each of the Loan Documents at any time that an Event of
Default exists and otherwise at any time on or after 60 days notice to Borrower.
In connection therewith, Bank may disclose all documents and information which
Bank now has or may hereafter acquire relating to any credit subject hereto,
Borrower or its business, or any collateral required hereunder, provided that
such entity agrees to be subject to any confidentiality agreements applicable
hereto to the same extent as Bank.

    SECTION 7.5.  ENTIRE AGREEMENT; AMENDMENT.  This Agreement and the other
Loan Documents constitute the entire agreement between Borrower and Bank with
respect to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof and thereof. This Agreement may be amended or modified only in writing
signed by each party hereto.

    SECTION 7.6.  NO THIRD PARTY BENEFICIARIES.  This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

    SECTION 7.7.  TIME.  Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.

    SECTION 7.8.  SEVERABILITY OF PROVISIONS.  If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.

    SECTION 7.9.  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.

    SECTION 7.10.  GOVERNING LAW.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California.

    SECTION 7.11.  ARBITRATION.  

    (a)  Arbitration.  The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise arising out of or relating
to in any way (i) the loan and related Loan Documents which are the subject of
this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for additional
credit.

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    (b)  Governing Rules.  Any arbitration proceeding will (i) proceed in a
location in California selected by the American Arbitration Association ("AAA");
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the "Rules"). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. §91 or any
similar applicable state law.

    (c)  No Waiver of Provisional Remedies, Self-Help and Foreclosure.  The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

    (d)  Arbitrator Qualifications and Powers.  Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of California or a neutral retired judge of the
state or federal judiciary of California, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of California and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

    (e)  Discovery.  In any arbitration proceeding discovery will be permitted
in accordance with the Rules. All discovery shall be expressly limited to
matters directly relevant to the dispute being arbitrated and must be completed
no later than 20 days before the hearing date and within 180 days of the filing
of the dispute with the AAA. Any requests for an extension of the discovery
periods, or any discovery disputes, will be subject to final determination by
the arbitrator upon a

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showing that the request for discovery is essential for the party's presentation
and that no alternative means for obtaining information is available.

    (f)  Class Proceedings and Consolidations.  The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.

    (g)  Payment Of Arbitration Costs And Fees  The arbitrator shall award all
costs and expenses of the arbitration proceeding.

    (h)  Real Property Collateral; Judicial Reference.  Notwithstanding anything
herein to the contrary, no dispute shall be submitted to arbitration if the
dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such dispute is not submitted to arbitration, the dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

    (i)  Miscellaneous.  To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

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

SABA SOFTWARE, INC., a Delaware corporation   WELLS FARGO BANK, NATIONAL
ASSOCIATION
By:
 
/s/ Terry Carlitz

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By:
 
/s/ Eric C. Houser

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Eric C. Houser
Vice President Name:   Terry Carlitz

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        Title:   Chief Financial Officer

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QuickLinks

CREDIT AGREEMENT
RECITALS
ARTICLE I CREDIT TERMS
ARTICLE II REPRESENTATIONS AND WARRANTIES
ARTICLE III CONDITIONS
ARTICLE IV AFFIRMATIVE COVENANTS
ARTICLE V NEGATIVE COVENANTS
ARTICLE VI EVENTS OF DEFAULT
ARTICLE VII MISCELLANEOUS