EXHIBIT 10.01

THIRD AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

This Third Amendment to Loan and Security Agreement is entered into as of
June 14, 2007 (the “Amendment”), by and among BRIDGE BANK (“Bank”), KANA
SOFTWARE, INC. (“Kana”) and EVERGANCE PARTNERS, LLC (“eVergance”; Kana and
eVergance are sometimes referred to individually as a “Borrower” and
collectively either as “Borrower” or “Borrowers”).

RECITALS

Kana and Bank are parties to that certain Amended and Restated Loan and Security
Agreement dated as of February 27, 2007, as amended from time to time including
by a Loan and Security Modification Agreement dated as of February 28, 2007 and
a Second Amendment to Loan and Security Agreement dated as of May 7, 2007 (the
“Agreement”). Kana has acquired eVergance. Kana and eVergance desire to be
coborrowers under the Agreement. The parties desire to amend the Agreement in
accordance with the terms of this Amendment.

NOW, THEREFORE, the parties agree as follows:

1. The following definitions in Section 1.1 are amended or added, as follows:

“Bridge Advance” means a cash advance or advances under Section 2.1(e).

“Credit Extension” means each Advance, Equipment Advance, Term Advance, Bridge
Advance, and any other extension of credit under this Agreement.

“Equipment Advances” means cash advances under Section 2.1(f).

“Equity Date” means the date that Borrower receives at least $15,000,000 of
proceeds after June 14, 2007 from the sale or issuance of its equity securities.

“Increase Date” means the date that Borrower signs an agreement on terms
reasonably acceptable to Bank with an investment bank, and Bank concludes a
satisfactory interview with that investment bank.

“Profitability” means Borrower’s net income after tax, net of the stock-based
compensation expense, depreciation and amortization expenses.

2. Section 2.1(e) is added to the Agreement, as follows:

(e) Bridge Advances.

(i) Subject to and upon the terms and conditions of this Agreement, Bank agrees
to make Bridge Advances to Borrower in an aggregate amount not exceed $1,500,000
before the Increase Date and an additional $500,000 of Bridge Advances after the
Increase Date.

(ii) Subject to Section 2.3(b), interest shall accrue from the date of each
Bridge Advance at a floating rate equal to the Prime Rate plus 1.75%, and shall
be payable monthly, on the first day of each month. Borrower will pay the entire
principal amount of the Bridge Advances, and all accrued but unpaid interest, on
September 30, 2007. Borrower may prepay all or any portion of the Bridge
Advances, without premium or penalty, but once repaid, Bridge Advances may not
be reborrowed.

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(iii) When Borrower desires to obtain a Bridge Advance, Borrower shall notify
Bank (which notice shall be irrevocable) by facsimile transmission to be
received no later than 3:30 p.m. Pacific time on the Business Day before the day
on which the Bridge Advance is to be made. Such notice shall be substantially in
the form of Exhibit C.

3. Section 2.1(f) is added to the Agreement to read as follows:

(f) Equipment Advances.

(i) Subject to and upon the terms and conditions of this Agreement, from
June 14, 2007 through March 14, 2008, Bank agrees to make Equipment Advances to
Borrower in an aggregate amount not exceed $1,000,000 before the Increase Date,
and an additional $1,000,000 after the Increase Date. Each Equipment Advance
shall not exceed 100% of the invoice amount of equipment and software approved
by Bank from time to time (which Borrower shall, in any case, have purchased
after March 14, 2007), excluding taxes, shipping, warranty charges, freight
discounts and installation expense (“Soft Costs”); provided however, that
Borrower may finance up to $450,000 of Soft Costs before the Equity Date, and a
total of $650,000, inclusive of that $450,000, thereafter.

(ii) Subject to Section 2.3(b), interest shall accrue from the date of each
Equipment Advance at a floating rate equal to the Prime Rate plus 1.25% before
the Equity Date, and the Prime Rate plus 0.25% thereafter. Any Equipment
Advances that are outstanding on March 14, 2008 shall be payable in 33 equal
monthly installments of principal, plus all accrued interest, beginning on
April 14, 2008 and continuing on the same day of each month thereafter until the
Equipment Advances have been repaid in full. Equipment Advances, once repaid,
may not be reborrowed. Borrower may prepay any Equipment Advances without
penalty or premium.

(iii) When Borrower desires to obtain an Equipment Advance, Borrower shall
notify Bank (which notice shall be irrevocable) by facsimile transmission to be
received no later than 3:30 p.m. Pacific time three Business Days before the day
on which the Equipment Advance is to be made. Such notice shall be substantially
in the form of Exhibit C. The notice shall be signed by a Responsible Officer or
its designee and include a copy of the invoice for any Equipment to be financed,
a list of the Equipment with Serial Numbers, and such other information as Bank
reasonably requests in respect of the financed Equipment.

4. The following sentence is added to Section 2.2: “If at any time the aggregate
Credit Extensions exceed $10,000,000, Borrowers will pay the amount of such
excess to Bank. Unless otherwise agreed by Bank, such payment shall be deemed to
be made on account of the Advances.”

5. From and after the Equity Date, the Advances shall bear interest at a
floating rate equal to one quarter of one percent above the Prime Rate, and the
Term Advances shall bear interest at a floating rate equal to three quarters of
one percent (0.75%) above the Prime Rate.

6. On October 1, 2007, Borrower will pay Bank a fee equal to $183,333.333 plus
$16,666.67 for each week thereafter that any portion of the Bridge Advances
remains outstanding, such additional weekly fee to be earned as of 9:00 a.m.
Pacific time on Monday of each week.

7. Sections 6.7, 6.8 and 6.9 are amended to read as follows:

6.7 Adjusted Quick Ratio. Effective June 30, 2007 through August 31, 2007,
Borrower shall maintain, measured monthly, a ratio of (a) the sum of (i) Cash in
which Bank has a first priority perfected security interest plus (ii) Permitted
Investment plus (iii) Accounts to (b) Current Liabilities plus (to the extent
not already included therein) all Indebtedness to Bank less Deferred Revenue, of
at least 1.0 to 1.0 through August 31, 2007, and at least 1.50 to 1.00
thereafter.

6.8 Profitability. Beginning with the quarter ending June 2007 and each quarter
thereafter, Borrower shall maintain a Profitability of not less than One Dollar
($1.00).

6.9 Debt Service Coverage. Borrower shall maintain, measured quarterly beginning
with the quarter ending September 30, 2007, a ratio of annualized EBITDA (net of
stock-based compensation) divided by the current portion of all long-term
Indebtedness plus annualized interest expense of at least 1.50 to 1.00.

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8. Section 6.12 is added to the Agreement to read as follows;

6.12 Equity Milestone. In lieu of compliance with Sections 6.7, 6.8 and 6.9 for
all measurement periods before (but not including) September 30, 2007, Borrower
may sell its equity securities in an underwritten offering pursuant to a
registration statement on Form S-1 filed under the Securities Act of 1933, as
amended, provided Borrower receives proceeds from such offering in an amount at
least equal to 12 months liquidity.

9. Before including any accounts receivable of eVergance in any Borrowing Base,
Borrowers shall deliver to Bank copies of UCC terminations or other evidence
reasonably satisfactory to Bank that Bank has a first priority security interest
in the personal property of eVergance.

10. Bank acknowledges that Borrower intends to use the proceeds of the Term
Advance to support the acquisition of another company. Bank will consider
approval of such transaction(s) on a case-by-case basis, and agrees that its
approval shall not be unreasonably withheld.

11. A new Article 13 is hereby added to the Agreement to read as follows:

13. CO-BORROWERS.

(a) Co-Borrowers. Each reference in the Agreement to “Borrower” shall mean and
refer to Kana and eVergance. Without limiting the generality of the foregoing,
eVergance grants Bank a security interest in the Collateral to secure the
Obligations. Borrowers are jointly and severally liable for the Obligations and
Bank may proceed against one Borrower to enforce the Obligations without waiving
its right to proceed against the other Borrower. This Agreement and the Loan
Documents are a primary and original obligation of each Borrower and shall
remain in effect notwithstanding future changes in conditions, including any
change of law or any invalidity or irregularity in the creation or acquisition
of any Obligations or in the execution or delivery of any agreement between Bank
and any Borrower. Each Borrower shall be liable for existing and future
Obligations as fully as if all of the Credit Extensions were advanced to such
Borrower. Bank may rely on any certificate or representation made by any
Borrower as made on behalf of, and binding on, all Borrowers, including without
limitation Advance Request Forms and Compliance Certificates. Each Borrower
appoints each other Borrower as its agent with all necessary power and authority
to give and receive notices, certificates or demands for and on behalf of both
Borrowers, to act as disbursing agent for receipt of any Advances on behalf of
each Borrower and to apply to Bank on behalf of each Borrower for Advances, any
waivers and any consents. This authorization cannot be revoked, and Bank need
not inquire as to one Borrower’s authority to act for or on behalf of another
Borrower.

(b) Subrogation and Similar Rights. Notwithstanding any other provision of this
Agreement or any other Loan Document, each Borrower irrevocably waives, until
all obligations are paid in full and Bank has no further obligation to make
Credit Extensions to Borrower, all rights that it may have at law or in equity
(including, without limitation, any law subrogating the Borrower to the rights
of Bank under the Loan Documents) to seek contribution, indemnification, or any
other form of reimbursement from any other Borrower, or any other Person now or
hereafter primarily or secondarily liable for any of the Obligations, for any
payment made by the Borrower with respect to the Obligations in connection with
the Loan Documents or otherwise and all rights that it might have to benefit
from, or to participate in, any security for the Obligations as a result of any
payment made by the Borrower with respect to the Obligations in connection with
the Loan Documents or otherwise. Any agreement providing for indemnification,
reimbursement or any other arrangement prohibited under this Section shall be
null and void. If any payment is made to a Borrower in contravention of this
Section, such Borrower shall hold such payment in trust for Bank and such
payment shall be promptly delivered to Bank for application to the Obligations,
whether matured or unmatured.

(c) Waivers of Notice. Each Borrower waives, to the extent permitted by law,
notice of acceptance hereof; notice of the existence, creation or acquisition of
any of the Obligations; notice of an Event of Default except as set forth
herein; notice of the amount of the Obligations outstanding at any time; notice
of any adverse change in the financial condition of any other Borrower or of any
other fact that might increase the Borrower’s risk; presentment for payment;
demand; protest and notice thereof as to any instrument; and all other notices
and demands to which the Borrower would otherwise be entitled by virtue of being
a co-borrower or a surety. Each Borrower waives any defense arising from any
defense of any other Borrower, or by reason of the cessation from any cause
whatsoever of the liability of any other Borrower. Bank’s failure at any time to
require strict performance by any Borrower of any provision of the Loan
Documents shall not waive, alter or diminish any right of Bank thereafter to
demand strict compliance and performance therewith. Each Borrower also waives
any defense arising

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from any act or omission of Bank that changes the scope of the Borrower’s risks
hereunder. Each Borrower hereby waives any right to assert against Bank any
defense (legal or equitable), setoff, counterclaim, or claims that such Borrower
individually may now or hereafter have against another Borrower or any other
Person liable to Bank with respect to the Obligations in any manner or
whatsoever.

(d) Subrogation Defenses. Until all Obligations are paid in full and Bank has no
further obligation to make Credit Extensions to Borrower, each Borrower hereby
waives any defense based on impairment or destruction of its subrogation or
other rights against any other Borrower and waives all benefits which might
otherwise be available to it under California Civil Code Sections 2809, 2810,
2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433 and California Code of Civil
Procedure Sections 580a, 580b, 580d and 726, as those statutory provisions are
now in effect and hereafter amended, and under any other similar statutes now
and hereafter in effect.

(e) Right to Settle, Release.

(1) The liability of Borrowers hereunder shall not be diminished by (i) any
agreement, understanding or representation that any of the Obligations is or was
to be guaranteed by another Person or secured by other property, or (ii) any
release or unenforceability, whether partial or total, of rights, if any, which
Bank may now or hereafter have against any other Person, including another
Borrower, or property with respect to any of the Obligations.

(2) Without notice to any given Borrower and without affecting the liability of
any given Borrower hereunder, Bank may (i) compromise, settle, renew, extend the
time for payment, change the manner or terms of payment, discharge the
performance of, decline to enforce, or release all or any of the Obligations
with respect to any other Borrower by written agreement with such other
Borrower, (ii) grant other indulgences to another Borrower in respect of the
Obligations, (iii) modify in any manner any documents relating to the
Obligations with respect to any other Borrower by written agreement with such
other Borrower, (iv) release, surrender or exchange any deposits or other
property securing the Obligations, whether pledged by a Borrower or any other
Person, or (v) compromise, settle, renew, or extend the time for payment,
discharge the performance of, decline to enforce, or release all or any
obligations of any guarantor, endorser or other Person who is now or may
hereafter be liable with respect to any of the Obligations.

12. Exhibit E to the Agreement is replaced by Exhibit E attached hereto.

13. Unless otherwise defined, all initially capitalized terms in this Amendment
shall be as defined in the Agreement. The Agreement, as amended hereby, shall be
and remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof. Borrower
ratifies and reaffirms the continuing effectiveness of all agreements entered
into in connection with the Agreement.

14. Borrower represents and warrants that the representations and warranties
contained in the Agreement are true and correct as of the date of this
Amendment, and that no Event of Default has occurred and is continuing.

15. This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument.

16. As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:

(a) this Amendment, duly executed by Borrower;

(b) an officer’s certificate of each Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this Amendment;

(c) a UCC financing statement for eVergance;

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(d) a fee equal to $15,000 on account of the Bridge Advances and $10,000 on
account of the Equipment Advances, both of which shall be non-refundable, and an
amount equal to all Bank Expenses incurred through the date of this Amendment;
and

(e) such other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

KANA SOFTWARE, INC. By:  

/s/ Michael S. Fields

Title:   Chief Executive Officer EVERGANCE PARTNERS, LLC By:  

/s/ Chad Wolf

Its Manager / Managing Member By:  

Chad Wolf

Title:   President BRIDGE BANK By:  

/s/ Dan Pistone

Title:   Senior Vice President