Document:

Legal Services Fee Agreement

 Exhibit 10.32 
  
 LEGAL SERVICES FEE AGREEMENT 
  

This Legal Services Fee Agreement (this “Agreement”) is made and entered into effective as of the 26th day of October, 2005, by and among
Forgent Networks, Inc. and its wholly owned subsidiary Compression Labs, Inc. (collectively, the “Client”), and Susman Godfrey, LLP (the “Law Firm”). The Law Firm and the Client are sometimes collectively hereinafter referred to
as the “Parties.” Any one of the Parties may be sometimes hereinafter referred to as a “Party.” 
  
 This Agreement concerns litigation and licensing activities with respect to U.S. Patent No. 4,698,672 (the “‘672 Patent”), together
with any continuations, continuations-in-part, divisions and/or foreign counterparts of the ‘672 Patent. The Client is executing this Agreement for the purpose of retaining the Law Firm to represent it in connection with investigating and
asserting claims, including the filing and prosecution of lawsuits, against any other person who may be infringing the ‘672 Patent, including the enforcement of the ‘672 Patent in the civil actions identified in Exhibit A. Any such claim
as to which litigation is filed is referred to herein as a “Lawsuit.” The Client is also executing this Agreement for the purpose of retaining the Law Firm to represent it in connection with negotiating with infringers who are not parties
to any lawsuit relating to the enforcement of the ‘672 Patent to obtain and secure licensing or sublicensing agreements between the Client and infringers. Any such licensing or sublicensing agreements negotiated by the Law Firm will be referred
to herein as a “License Agreement,” and any negotiations for such License Agreements will be referred to herein as the “License Negotiations.” The Client is not engaging the Law Firm to market or commercialize its technologies to
non-infringers. The Client understands and acknowledges that patent infringement litigation often presents novel and difficult questions of both law and fact, and the acceptance of the engagement by the Law Firm in this matter may preclude
engagements by the Law Firm on other matters. However, notwithstanding anything else in this Agreement, Client agrees that Law Firm is not required to represent Client or anyone else in matters before the U.S. Patent and Trademark Office, such as
reexamination or reissue proceedings, or in matters involving the Federal Trade Commission. 
  
 SPECIAL DISCLOSURE. THE CLIENT ACKNOWLEDGES THAT IT WAS ADVISED TO RETAIN INDEPENDENT LEGAL COUNSEL TO REPRESENT THE CLIENT IN CONNECTION WITH THE NEGOTIATION AND EXECUTION OF THIS AGREEMENT. THE CLIENT FURTHER
ACKNOWLEDGES THAT IT WAS ADVISED THAT THE LAW FIRM HAS A CONFLICT OF INTEREST THAT PREVENTS IT FROM REPRESENTING THE CLIENT IN ANY WAY WITH RESPECT TO THE NEGOTIATION AND EXECUTION OF THIS AGREEMENT AND THAT THE LAW FIRM HAS NOT DONE SO. 

 
 NOW, THEREFORE, for and in consideration of the mutual agreements set
forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed by each Party, the Parties agree as follows: 
  
 1. Patents and Information Provided by Client. The Client agrees to
aid and support the prosecution of the Lawsuits and the Law Firm’s litigation and licensing efforts, and to provide the Law Firm with all information and documents known to or in the possession of the Client or any entities affiliated with the
Client relating to the ‘672 Patent, the Lawsuits, licensing efforts, or reasonably required in connection with performing Law Firm’s duties and obligations hereunder. 
  

 1 

 2. Client’s Patent Rights. The Client represents and warrants that, to the best of its
knowledge after reasonable investigation, the following is true: 
  

	 	(a)	Client owns the exclusive right to enforce all rights with respect to the ‘672 Patent, including, without limitation, the exclusive right to bring actions against others for
infringement of the ‘672 Patent, to license and sublicense the ‘672 Patent, 

  

	 	(b)	Client owns the exclusive right to collect all royalties, license fees, profits or other revenue or valuable consideration to be paid or exchanged by anyone else for the right to
use the ‘672 Patent, 

  

	 	(c)	The ‘672 Patent is valid and enforceable, 

  

	 	(d)	The adverse parties in the Lawsuits identified in Exhibit “A” infringe the ‘672 Patent, and 

  

	 	(e)	Client has previously made reasonable efforts to disclose to Law Firm all material known facts, allegations, opinions or analysis of counsel, and potential prior art material to the
validity, invalidity, enforceability, unenforceability, infringement, or non-infringement of the ‘672 Patent. 

  
 In addition, the Client agrees to continue to timely pay all maintenance fees due on the ‘672 Patent. 
  
 3. Contingent Fee Compensation to Law Firm. 
  

	 	(a)	For services rendered pursuant hereto, the Client hereby agrees to pay the Law Firm a contingent fee equal to thirty-three percent (33.00%) of all License Proceeds and
Litigation Proceeds. For purposes hereof, (i) “License Proceeds” shall mean any revenues, including but not limited to, royalties or license fees, money or other valuable consideration received by the Client through, under or as a
result of any License Agreement and/or any License Negotiations, and (ii) “Litigation Proceeds” shall mean any recovery realized out of or collected from or in connection with any Lawsuit, either through settlement, compromise,
license or judgment, including, but not limited to, compensatory damages, release of any right to recover damages or enforce injunctive relief, exemplary damages, attorneys’ fees, prejudgment interest, and post judgment interest (whether
through trial or settlement of any Lawsuit). 

  

	 	(b)	The Law Firm will receive its percentage interest in the License Proceeds and Litigation Proceeds as they are paid to the Client or, at the election of the Client, based upon the
present value of the amount of money that is to be paid to the Client over time. If the Client chooses to waive any such future payments, it will pay the Law Firm an amount equal to the Law Firm’s interest in those payments as they otherwise
would have been made to the Client. The Parties agree that (i) the License Proceeds shall include the full fair market value of any non-monetary proceeds and shall not be reduced by any cross-license, cross-action, setoff or other payment by
Client, which shall be the sole responsibility of Client, and (ii) the Litigation Proceeds shall include the full fair market value of any non-monetary relief obtained or received directly by the Client or any related entity as a proximate
result of any Lawsuit, such as injunctive relief. The Law Firm’s contingent fees based on License Proceeds and Litigation Proceeds shall collectively be referred to herein as the “Contingent Attorneys’ Fees.”

  

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	 	(c)	The Client shall pay the Contingent Attorneys’ Fees to the Law Firm quarterly, on or before the 10th day of each succeeding fiscal quarter. With each such lump sum payment, the Client shall provide the Law Firm with a (i) detailed accounting of all
License Proceeds and Litigation Proceeds received by the Client during the immediately preceding fiscal quarter, and (ii) a calculation of the quarterly lump sum amount being tendered to the Law Firm. The Law Firm shall have 30 days following
its receipt of each quarterly payment and the accompanying detail within which to verify and/or object to the Client’s calculation of the quarterly payment amount. If the Law Firm fails to object to any quarterly calculation within such 30 day
period, the calculation and the payment received shall, absent fraud by the Client, be deemed to have been accepted by the Law Firm and shall be final. 

  

	 	(d)	Anything herein to the contrary notwithstanding, the Law Firm shall not be entitled to receive, and the Client shall not be required to pay the Law Firm, any Contingent
Attorneys’ Fees under this Paragraph 3 or otherwise out of or with respect to the first $6 million of “Gross Recoveries” received by the Client on or after October 27, 2004, in recognition of Client’s existing obligations
under that certain Resolution Agreement, dated December 22, 2004. 

  
 4. Additional Monthly Fixed Fee Compensation to Law Firm. In addition to the Contingent Attorneys’ Fees referenced in paragraph 3 above, the Client shall also pay to Law Firm a fixed fee of one hundred and
sixteen thousand dollars ($116,000.00) per month (the “Fixed Fee”), each month until this Agreement terminates. The first such payment shall be due on November 1, 2005. If Client is unable to make payments to the Law Firm pursuant to
this paragraph, then at the election of the Law Firm, the fixed fee may be reduced to $50,000 per month and the Contingent Fee referenced in paragraph 3 above shall be increased to 38.5%. If Client is unable to pay the reduced fixed fee described in
the preceding sentence, then at the election of the Law Firm, the fixed fee may be reduced to $0 per month and the Contingent Fee referenced in paragraph 3 above shall be increased to 44%. 
  
 5. Client Payment of Enforcement Expenses. For purposes hereof,
“Enforcement Expenses” shall mean those third-party expenses reasonably incurred by Law Firm on the Client’s behalf hereunder (but only if approved by the Client in advance, either specifically or in periodic expense budgets),
including but not limited to, travel expenses, long distance calls, investigation fees, consultant fees, expert and witness fees, charts, photographs, deposition fees and costs, court costs, photocopying and other document reproduction costs,
postage charges, fax charges, on-line computer research. 
  
 Once
the Law Firm becomes entitled to receive Contingent Attorneys’ Fees with regard to a particular Lawsuit or Licensing Agreement, Enforcement Expenses relating to that particular Lawsuit or Licensing Agreement shall be reimbursed to the Client
out of any License Proceeds or Litigation Proceeds up to, but not to exceed, 20% of any such License Proceeds or Litigation Proceeds recovered from any person(s) at any one time relating to that particular Lawsuit or Licensing Agreement. For
example, if License Proceeds or Litigation Proceeds are recovered from a Licensing Negotiation or any Lawsuit from any person, then up to 20% of such total proceeds will be paid to the Client as reimbursement for Enforcement Expenses incurred, and
the remainder of the License Proceeds or Litigation Proceeds will be distributed to the Law Firm and the Client in accordance with the provisions of Paragraph 3(a) above. In the event that the total amount of License Proceeds or Litigation Proceeds
recovered with respect to a particular Licensing Negotiation or Lawsuit are insufficient to reimburse the Client fully for Reimbursable Enforcement Expenses, the Client agrees that the Client shall bear the unreimbursed portion of the Enforcement
Expenses and that the Law Firm shall not be liable for any Enforcement Expenses not reimbursed. 
  

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 Client also agrees, on or before November 1, 2005, to pay to Law Firm an initial cost deposit of
$25,000 to cover Enforcement Expenses. Law Firm will place those funds in an interest-bearing trust account. The cost deposit will be applied to Law Firm’s final statement for expenses, or, in Law Firm’s discretion, to any past due monthly
expense statement or invoice for fees. Client is obligated to maintain the cost deposit at its initial amount at all times. Upon the termination of this Agreement, Law Firm will promptly refund the balance, less payment of any fees or expenses
unpaid as of the date of Law Firm’s final bill. Law Firm’s agreement to provide legal representation in this matter is conditioned upon payment and maintenance of the requested cost deposit. In addition, SG retains the discretion to
request a supplemental cost deposit, over and above the cost deposit required prior to our commencement of the engagement, in the event of an increase in anticipated monthly expenses during the course of litigation. 
  
 6. Quarterly Budget. On or before the 5th day of the start of each quarter during the term hereof, the Law Firm shall prepare and provide to the Client a written budget
for that quarter for the Law Firm’s legal Enforcement Expenses under Paragraph 5. The Law Firm shall also notify Client of any anticipated material increases not reflected in the Quarterly Budget. 
  
 7. Court Award of Attorneys Fees or Costs. Where reasonably
appropriate under the circumstances in any Lawsuit, the Law Firm shall apply to the Court for such amount of compensation, costs, and litigation expenses, if any, as may reasonably be allowed to the Client by law (“Attorneys Fees and
Costs”). Any Attorneys Fees and Costs recovered under this paragraph shall be treated as Litigation Proceeds under this Agreement. 
  
 8. Defense of Counterclaims and Declaratory Judgment Actions. The Law Firm shall defend any action or counterclaim relating to the `672 patent
filed against the Client by a defendant in a Lawsuit or by any person with whom the Client has been engaged in License Negotiations, including but not limited to, any action or counterclaim for declaratory judgment of patent invalidity,
unenforceability or non-infringement relating to the ‘672 Patent, or for any other claim that is substantively related to the ‘672 Patent or Client’s rights therein, on the basis specified in Paragraphs 3, 4 and 5 above. To the extent
that any action, claim or counterclaim is asserted against the Client that does not fall within the scope of the preceding sentence, and the Client desires the Law Firm to defend the Client against such cause of action, the Law Firm and the Client
may agree to such representation on such terms as are mutually acceptable. 
  
 9. Law Firm Association of other Lawyers or Assignment. The Law Firm agrees to perform faithfully the duties imposed upon the Law Firm as attorneys for the Client in accordance herewith. The Law Firm may, at
the discretion and expense of the Law Firm, associate any other attorney, law firm or other entity, as allowed by law, in pursuing its duties and obligations hereunder, and may assign all or any part of its interest in the License Proceeds or
Litigation Proceeds to any other such entity, as allowed by law, provided that such assignment shall not relieve the Law Firm from its responsibility as legal counsel for the Client without Client’s prior written consent, nor shall such
assignment increase the cost to the Client of any Lawsuit or reduce the interest of the Client in the License Proceeds or Litigation Proceeds. Notwithstanding anything else in this Agreement, to the extent that Law Firm assigns work to be performed
on an hourly-rate basis by Monte Bond or Godwin Gruber LLP relating to Licensing Negotiations, License Agreements, Lawsuits, or investigation of potential claims to be asserted pursuant to this Agreement, and to the extent that such work is
performed from the date of execution of this agreement to February 13, 2006, Law Firm shall be responsible for paying 33% of such hourly-rate fees and Client shall be responsible for paying the remaining 67% of such fees, although Client’s
obligation to pay such fees to Monte Bond or Godwin Gruber shall be capped at $133,665.00. The Law Firm shall be responsible for retaining and paying local counsel, if any. Other than as set forth in this paragraph, the Law Firm shall not be
obligated to pay any fees to any other legal counsel or to assign any part of its interest in the License Proceeds or Litigation Proceeds to any other legal counsel or party. 
  

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 10. Assignment of ‘672 Patent or Any Rights Therein. The Law Firm and the Client acknowledge
and agree that the Client’s agreement to pay the Law Firm the Contingent Attorneys’ Fees hereunder is in no way a conveyance or assignment of any interest or rights to the ‘672 Patent. The Client retains the right to use the
technology in the ‘672 Patent and to make, have made, import, use, sell or offer for sale any equipment, device or apparatus and to practice any method covered by any claim of any of the ‘672 Patent, for the customers of the Client.

  
 11. Termination of Engagement. 
  

	 	(a)	By the Law Firm. The Law Firm may at any time, at its option (and with Court approval in the case of any Lawsuit), with or without cause, terminate its representation of the
Client hereunder by providing not less than 90 days’ prior written notice to the Client. 

  

	 	(b)	By the Client. The Client may at any time, with or without cause, terminate the Law Firm’s representation of the Client hereunder by providing not less than 90
days’ prior written notice to the Law Firm. 

  

	 	(c)	Effect of Termination. Upon the termination of the Law Firm’s representation of the Client hereunder by either Party, this Agreement shall be terminated and shall no
longer be of any force or effect, and neither Party shall thereafter be liable to the other hereunder except as expressly provided herein. Notwithstanding the termination hereof, the Client shall compensate the Law Firm hereunder as follows:

  

	 	(1)	Except where Client has terminated this Agreement for cause, Client shall pay the Law Firm all compensation due under Paragraph 4 and all Enforcement Expenses due under Paragraph 5
through the effective date of termination (the “Termination Date”). Such amounts shall be paid in full within 30 days of Client’s receipt of final invoice. 

  

	 	(2)	With respect to any Contingent Attorneys’ Fees due as of or subsequent to the Termination Date with respect to Lawsuits or License Negotiations completed prior to the
Termination Date, the Client shall continue to pay the Law Firm such fees in accordance with the payment procedures prescribed in Paragraph 3 above. 

  

	 	(3)	 With respect to any Lawsuit or License Negotiation hereunder that is not completed prior to the Termination Date, but that is thereafter completed by the Client
with or without the assistance of replacement legal counsel, upon receipt of any License Proceeds or Litigation Proceeds with respect thereto, the Client shall pay the Law Firm its pro rata share of such proceeds. For purposes hereof, the Law
Firm’s “pro rata share” shall be (A) the total amount of the proceeds that otherwise would have been due and payable to the Law Firm hereunder relative to such Lawsuit or License Negotiation if this Agreement had remained in
effect through the date of Client’s receipt of the License Proceeds or Litigation Proceeds, multiplied by (B) a fraction, the numerator of which is equal to the Law Firm’s total billings (exclusive of Enforcement Expenses) for legal
services rendered (at its standard hourly rates applicable at the time) relative to such Lawsuit or License Negotiation during the period beginning on the Contingent Fee Start Date (as defined in paragraph 3(d) above) and ending on the Termination
Date, and the denominator of which is equal to the total billings 

  

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(exclusive of Enforcement Expenses) by all law firms (including the billings by the Law Firm) for legal services rendered relative to such Lawsuit or License
Negotiation during the period beginning on October 27, 2004 (or such later date as legal services relative to such Lawsuit or License Negotiation were commenced) and ending on the date such Law Suit or Licensing Negotiation is completed.

  
 12. Audit. As long as the Law Firm is
entitled to receive payments resulting from any License Proceeds or Litigation Proceeds, the Law Firm shall have the right to audit all financial records of the Client related to the receipt of any such proceeds. 
  
 13. Law Firm Authority to Act for Client. The Client authorizes the
Law Firm to try, negotiate, compromise, settle and receive for and in Client’s name, all compensation, damages or property to which Client may become entitled by reason of any License Agreement or Lawsuit. Client agrees not to enter into any
License Agreement or settle any Lawsuit without consultation with the Law Firm, and the Law Firm agrees not to enter into any License Agreement or settle any Lawsuit without the written consent of the Client. 
  
 14. No Representation or Warranty by Law Firm. Each Party specifically
recognizes that the other Party has made no representation or warranty whatsoever regarding the probable outcome of any Lawsuit and has in no way guaranteed the result or outcome of nor any recovery from the settlement or trail of any Lawsuit.

  
 15. Other Documents. The Parties agree to execute such
other documents as might be reasonably necessary or appropriate to consummate and implement the terms of this Agreement. 
  
 16. Client Option for Hourly Fees. The Client acknowledges that prior to signing this Agreement, the Client was given the option of retaining the
Law Firm to prosecute any Lawsuit on exclusively a normal hourly rate (plus costs and expenses incurred) basis but elected instead to retain the Law Firm to prosecute any Lawsuit pursuant to the terms and conditions of this Agreement. 
  
 17. Remedies for Breach. In the event that any Party hereto shall
breach any of the obligations imposed by this Agreement, then a non-breaching Party shall be entitled to pursue a claim for monetary damages as a result of such breach. No Party, however, shall be entitled to recover special, indirect, or
consequential damages, including lost profits, from any other Party. For purposes of this paragraph, if the Client breaches the Agreement, the compensation to which the Law Firm may be entitled under Paragraph 3 herein is not “special,
indirect, or consequential damages, including lost profits.” 
  
 18. Successors and Assigns. This Agreement is and shall be binding and inure to the benefit of the Parties, legal representatives, successors and assigns. 
  
 19. Governing Law. It is expressly understood and agreed that this Agreement shall be governed by, construed,
interpreted, and enforced in accordance with the laws of the State of Texas. 
  
 20. Legal Construction. In case any one or more of the provisions contained in this Agreement shall 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 thereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. 
  
 21. Waiver and Integration Clause. This Agreement constitutes the
entire agreement among the Parties and supersedes any prior understandings or written or oral agreement between the Parties respecting the subject matter of this Agreement, including specifically the Original Agreement. 

  

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This Agreement may not be modified or amended except by a subsequent agreement in writing signed by the Parties. The Parties may waive any of the conditions
contained herein or any of the obligations of any other party. Any such waiver shall be effective only if in writing and signed by the Party waiving such condition or obligation. 
  
 22. Counterparts. This Agreement may be executed in multiple counterparts, each one of which will be considered to be
an original. 
  
 23. State Bar Notice. The Texas State Bar
Act requires that Texas attorneys give notice to their clients that the State Bar of Texas investigates and prosecutes professional misconduct committed by Texas attorneys. Although not every complaint against or dispute with a lawyer involves
professional misconduct, the State Bar’s Office of the General Counsel will provide information about how to file a complaint by calling 1-800-932-1900 toll free. 
  
 24. Arbitration. Arbitration of Disputes. While we have no expectation that a problem will arise concerning the
fee(s) or other matters relating to this Agreement, should one develop, it is the Parties’ mutual desire that it be resolved expeditiously and economically. The Parties all recognize that arbitration will accomplish that result. Accordingly, in
the event of a disagreement or controversy between the Client, including it’s parents’, subsidiaries, affiliates, investors, employees, officers, directors, agents, principals, successors, and assigns, on the one hand and Law Firm,
including its partners, associates, attorneys, employees, agents, principals, successors, and assigns, on the other hand, concerning Law Firm’s representation of the Client, the performance of this Agreement, the fees due under this Agreement,
the Expenses due or to be reimbursed under this Agreement, the meaning of any part of this Agreement, the extent of the rights and obligations under this Agreement, any claim of breach of or termination of this Agreement, any claim of malpractice or
malfeasance, or any matter related to this Agreement or Law Firm’s relationship with Client, then it shall be resolved by binding arbitration which will be conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (“AAA”), but which will not be administered by the AAA. There will be three arbitrators on the panel, all of whom will be attorneys residing in Travis County, Texas. The arbitrators will be selected as follows: Law
Firm will select one arbitrator; the Client will select one arbitrator; and those two arbitrators will select the third arbitrator, but if one party fails or refuses to select an arbitrator or if the two party selected arbitrators cannot agree on
who should be selected, a state district judge of Travis County, Texas, will appoint the arbitrator(s) for the vacant position(s). The compensation of each arbitrator will be determined by agreement between Law Firm and Client, and the arbitrators,
and failing such agreement, the compensation will be based on the regular hourly rate or other fee regularly charged by the arbitrators for professional services. The decision of the arbitrators shall be final, and a judgment based on any award by
the arbitrators may be entered in any state civil district court in Travis County, Texas. The Parties hereby agree that this Agreement is performable in Travis County, Texas, and, in the unlikely event that there is any litigation or arbitration
concerning this Agreement, the Parties agree that they will not contest the personal jurisdiction or the venue of the state civil district courts in Travis County, Texas. The Parties agree that any arbitration under this section shall be conducted
in Travis County, Texas. 
  
 25. Nonpayment. By your
execution of this engagement letter, you agree that we are relieved from the responsibility of performing any further work should you fail to pay any fees due hereunder, including paying the monthly fixed fee as referenced in paragraph 4 above, and
expenses (including bills for expenses received from third parties), or for supplemental cost deposits, within fifteen (15) days of receipt of statements for such fees and expenses, normally by the first of the month following receipt. In such
event, you agree that we may move to withdraw as your counsel in any case where we have made an appearance on your behalf, and that you will promptly execute any withdrawal motions required to accomplish this. 
  

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 26. Estimates. Client understands that any estimates provided by Law Firm of the magnitude
of the expenses that will be required at certain stages of any litigation asserting the cause of action are not precise, and that the kinds and amounts of expenses required are ultimately a function of many conditions over which Law Firm has little
or no control, particularly the extent to which the opposition files pretrial motions and engages in its own discovery. 
  
 27. Client’s Indemnity. Client agrees to indemnify and hold Law Firm harmless for any claims asserted by others to any portion of the
Lawsuit. 
  
 28. Joint and Several Obligation. It is
expressly agreed that each Client is jointly and severally liable for any obligation of any and all other clients. 
  
 29. No Guarantees. The Client hereby acknowledges that Law Firm has made no guarantees regarding the successful outcome of this matter and
all expressions about the outcome are only opinions. 
  

			
	FORGENT NETWORKS, INC.
		
	By:	 	 /s/ Richard N. Snyder

	 	 	Richard N. Snyder
	 	 	Chief Executive Officer
	
	COMPRESSION LABS, INC.
		
	By:	 	 /s/ Richard N. Snyder

	 	 	Richard N. Snyder
	 	 	Chief Executive Officer
	
	SUSMAN GODFREY, LLP
		
	By:	 	 /s/ David Marcus

	 	 	 David Marcus
 Partner

  

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 EXHIBIT A 
  
 U.S. District Court, Eastern District of Texas (Marshall Division) 2:04-cv-00158-DF. 
  
 Compression Labs Incorporated v. Agfa
Corporation; Apple Computer Incorporated; Axis Communications Incorporated; Canon USA Incorporated; Concord Camera Corporation; Creative Labs Incorporated; Eastman Kodak Company; Fuji Photo Film
USA Inc.; Fujitsu Computer Products of America Inc.; Gateway Incorporated; Hewlett-Packard Company; JASC Software, Inc.; JVC Americas Corporation; Kyocera Wireless Corporation;
Macromedia Incorporated; Matsushita Electric Corporation of America; Mitsubishi Digital Electronics America Inc.; Oce North America Incorporated; Onkyo USA Corporation; PalmOne Incorporated; Panasonic Communications Corporation
of America; Panasonic Mobile Communications Development Corporation of USA; Ricoh Corporation; Riverdeep Incorporated (d/b/a Broderbund); Savin Corporation; Thomson SA; Xerox Corporations; and Thomson Inc. 
  
 U.S. District Court, Eastern District of Texas (Marshall
Division) 2:04-cv-00159-DF. 
  
 Compression Labs
Incorporated v. Dell, Inc.; International Business Machines Corporation; and Toshiba America, Inc. 
  
 U.S. District Court, Eastern District of Texas (Marshall Division) 2:04-cv-00294-DF. 
  
 Compression Labs Incorporated v. Acer
America Corporation; Audio Vox Corporation; Audio Vox Communications Corporation; Audio Vox Electronics Corporation; BancTec, Incorporated; BenQAmerica Corporation; Color Dreams, Incorporated (d/b/a StarDot
Technologies); Google, Incorporated; ScanSoft, Incorporated; Sun Microsystems, Incorporated; TiVo, Incorporated; Veo, Incorporated; and Yahoo!, Incorporated 
  
 U.S. District Court, Eastern District of Texas (Marshall Division) 2:04-cv-00410-DF. 
  
 Compression Labs Incorporated v. Creo, Inc. And Creo Americas, Inc.

  

 -9- 

 U.S. District Court, District of Delaware (Wilmington Division) 04-cv-818. 

 
 Agfa Corp.; Dell Inc.; Gateway Inc.; Hewlett-Packard Co.; JVC
Americas Corporation; Macromedia, Inc.; Matsushita Electric Corp. of America; Mitsubishi Digital Elecs. Am. Inc.; Oce North America Inc.; Palmone Inc.; Ricoh Corp.; Riverdeep Inc.; Savin Corp.; Thomson Inc.; Apple Computer Inc.; Axis Comms Inc.;
Canon USA, Inc.; Eastman Kodak Co.; Fuji Photo Film USA; Fujitsu Computer Products of America, Inc.; International Business Machines Corp.; Jasc Software, Inc.; Toshiba America Consumer Products, LLC; and Xerox Corp. v. Compression Labs Inc.;
Forgent Networks, Inc.; and General Instrument Corp. 
  
 U.S. District Court, District of Delaware (Wilmington Division) 04-cv-918. 
  
 Yahoo Inc. v. Compression Labs Inc.; Forgent Networks Inc.; and General Instruments Corp. 
  
 U.S. District Court, District of Delaware
(Wilmington Division) 04-cv-1293. 
  
 Yahoo Inc. v.
Compression Labs Inc.; Forgent Networks Inc.; and General Instruments Corp. 
  
 U.S. District Court, California Northern District (San Francisco Division) 3 :04-cv-03 124-PJH. 
  
 Sun Microsystems, Inc. v. Compression Labs, Inc. 

 
 U.S. District Court, California Northern District
(Oakland Division) 3:04-cv-03934-PJH. 
  
 Google Inc.
v. Compression Labs Inc.,; Forgent Networks, Inc.; and General Instruments Corporation 
  

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 Before the Judicial Panel on Multidistrict Litigation 
 MDL Docket No. 1654. 
  
 In re Compression Labs, Inc., Patent Litigation 
  
 United States of America Federal Trade Commission 
 Nonpublic Investigation File No. 0310197. 
  

In The Matter Of Forgent Networks, Inc. 
  

 -11-Stock Purchase Warrant issued to NightWatch Capital Partners, LP

 EXHIBIT 10.01 
  
 THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN THE COMMON STOCK AND WARRANT PURCHASE AGREEMENT DATED AS OF SEPTEMBER 29, 2005, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO THE COMPANY IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. 
  
 Right to Purchase 
 74,329 Shares of 
 Common Stock, 
 par value $0.001 
 per share 
  
 STOCK PURCHASE WARRANT 
  
 THIS CERTIFIES THAT, for value received, NightWatch Capital Partners, LP (the “Holder”) or its registered assigns, is entitled to purchase from Kana Software, Inc., a Delaware corporation (the
“Company”), at any time or from time to time during the period specified in Paragraph 2 hereof, 74,329 fully paid and nonassessable shares of the Company’s common stock, par value $.001 per share (the “Common Stock”) at
an exercise price of $1.966 per share (the “Exercise Price”). The term “Warrant Shares,” as used herein, refers to the shares of Common Stock purchasable hereunder. The Warrant Shares and the Exercise Price are subject to
adjustment as provided in Paragraph 4 hereof. The term Warrants means this Warrant issued to the Holder pursuant to that certain Common Stock and Warrant Purchase Agreement, dated September 29, 2005, by and among the Company and the Buyers
listed on the execution page thereof (the “Purchase Agreement”). 
  
 This Warrant is subject to the following terms, provisions, and conditions: 
  
 1. Manner of Exercise; Issuance of Certificates; Payment for Shares. (a) Subject to the provisions hereof, this Warrant may be
exercised by the Holder, in whole or in part, by the physical surrender of this Warrant, together with a completed exercise agreement in the form attached hereto (the “Exercise Agreement”), to the Company during normal business hours on
any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holder), and upon (i) payment to the Company in cash, by certified or official bank check or
by wire transfer for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder is not then registered pursuant to an effective 

 
registration statement under the Securities Act of 1933, as amended (the “1933 Act”), delivery to the Company of a written notice of an election to
effect a “Cashless Exercise” (as defined in Section 11(c) below) for the Warrant Shares specified in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued to the Holder or such holder’s designee, as
the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered, the completed Exercise Agreement shall have been delivered, and payment shall have been made for such shares (or an election
to effect a Cashless Exercise has been made) as set forth above. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, certificates for the Warrant Shares shall be
dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding two (2) Trading Days (as defined in the Purchase Agreement) after such exercise (the “Warrant Share Delivery Date”) or, at the
request of the Holder (provided that a registration statement under the Securities Act providing for the resale of the Warrant Shares is then in effect), issued and delivered to the Depository Trust Company account on the Holder’s behalf via
the Deposit Withdrawal Agent Commission System within a reasonable time, not exceeding two (2) Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the holder of the shares of Warrant Stock so purchased
as of the date of such exercise. The certificates so delivered shall be in such denominations as may be requested by the Holder and shall be registered in the name of such holder or such other name as shall be designated by such holder. If this
Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the holder a new Warrant representing the number of shares with
respect to which this Warrant shall not then have been exercised. 
  
 (b) In addition to any other rights available to the Holder, if the Company fails to deliver to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise by the Warrant Share Delivery Date in
Paragraph 1(b), and if after such second Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of
the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at
issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such
exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In, together with applicable confirmations
and other evidence reasonably requested by the Company. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof. 
  

 2 

 2. Period of Exercise. This Warrant is exercisable at any time or from time to time on or
after April 25, 2006 (six months following the Closing Date) and before 5:00 p.m., New York City time on the fifth (5th) anniversary of the date of issuance of the Warrant (the “Issue Date”) pursuant to the Purchase Agreement
(the “Exercise Period”), after which the portion of this Warrant not exercised prior thereto shall be and become void. 
  
 3. Certain Agreements of the Company. The Company hereby covenants and agrees as follows: 
  
 (a) Shares to be Fully Paid. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued, fully paid, and nonassessable and free from all taxes, liens, and charges with respect to the issue thereof. 
  
 (b) Reservation of Shares. During the Exercise Period, the Company shall at all times have authorized, and
reserved for the purpose of issuance upon exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. 
  

(c) Listing. The Company shall promptly secure the listing of the shares of Common Stock issuable upon exercise of the Warrant upon each
national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance upon exercise of this Warrant) and shall maintain, so long as any other shares of Common
Stock shall be so listed, such listing of all shares of Common Stock from time to time issuable upon the exercise of this Warrant; and the Company shall so list on each national securities exchange or automated quotation system, as the case may be,
and shall maintain such listing of, any other shares of capital stock of the Company issuable upon the exercise of this Warrant if and so long as any shares of the same class shall be listed on such national securities exchange or automated
quotation system. 
  
 (d) Certain Actions
Prohibited. The Company will not, by amendment of its charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be
requested by the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant. Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (ii) will take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant. 
  
 (e) Successors and Assigns. This Warrant and the rights and obligations evidenced hereby will be binding upon any entity succeeding to the
Company by merger, consolidation, or acquisition of all or substantially all the Company’s assets (the “Company’s 

  

 3 

 
Successor”) and, subject to applicable securities laws, the permitted assigns of the Holder. Nothing in t his Warrant shall be construed to give any
Person other than the Company, the Company’s Successor, the Holder and the permitted assigns of the Holder any legal or equitable right, remedy or cause of action under this Warrant. 
  
 4. Antidilution Provisions. During the Exercise Period, the Exercise Price and the number of Warrant Shares
shall be subject to adjustment from time to time as provided in this Paragraph 4. 
  
 In the event that any adjustment of the Exercise Price as required herein results in a fraction of a cent, such Exercise Price shall be rounded up to the nearest cent. 
  
 (a) Adjustment of Exercise Price and Number of Shares upon Issuance of
Common Stock. Except as otherwise provided in Paragraphs 4(c) and 4(e) hereof, if and whenever on or after the Issue Date of this Warrant, the Company issues or sells, or in accordance with Paragraph 4(b) hereof is deemed to have issued or
sold, any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the greater of (1) 80% of
the Market Price (as hereinafter defined) (a “Market Price Adjustment”) and (2) the then effective Exercise Price (an “Exercise Price Adjustment”) on the date of issuance (or deemed issuance) of such Common Stock (a
“Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Exercise Price will be reduced to a price determined by multiplying the Exercise Price in effect immediately prior to the Dilutive Issuance by a fraction, (i) the
numerator of which is an amount equal to the sum of (x) the number of shares of Common Stock actually outstanding immediately prior to the Dilutive Issuance, plus (y) the quotient of the aggregate consideration, calculated as set forth in
Paragraph 4(b) hereof, received by the Company upon such Dilutive Issuance divided by the greater of (1) in the case of a Market Price Adjustment, 80% of the Market Price and (2) in the case of an Exercise Price Adjustment, the Exercise
Price in effect immediately prior to the Dilutive Issuance, and (ii) the denominator of which is the total number of shares of Common Stock Deemed Outstanding (as defined below) immediately after the Dilutive Issuance; provided that the
Exercise Price will in no event be reduced below the Purchase Price (as defined in the Purchase Agreement). 
  
 Unless the Company either (a) is permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is
listed or traded to issue shares of Common Stock upon exercise or otherwise pursuant to the Warrants in excess of the Maximum Share Amount (as defined below) or (b) has obtained stockholder approval of the issuance of the Common Stock upon
exercise or otherwise pursuant to the Warrants in excess of the Maximum Share Amount in accordance with applicable law and the rules and regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with
jurisdiction over the Company or any of its securities (the “Stockholder Approval”), in no event shall the total number of shares of Common Stock issued the Holder upon exercise or otherwise pursuant to the Warrants (including any shares
of capital stock or rights to acquire shares of capital stock issued by the Company which are aggregated or integrated (including (i) the Purchased Shares (as defined in the Purchase Agreement), (ii) the shares of Common Stock issued to
the Holder pursuant to the Common Stock and Warrant Purchase Agreement, dated June 25, 2005, by and among the Company, the Holder and the other purchasers named therein (the “Initial Purchase 

  

 4 

 
Agreement”) and (iii) the number of shares of Common Stock issuable upon exercise of or otherwise pursuant to warrants to purchase Common Stock
issued pursuant to the Initial Purchase Agreement) issued to the Holder pursuant to the Purchase Agreement) with the Common Stock issued or issuable upon exercise or otherwise pursuant to the Warrants for purposes of any such rule or regulation)
exceed the maximum number of shares of Common Stock that the Company can so issue pursuant to any rule of the principal securities market on which the Common Stock trades (the “Maximum Share Amount”) which shall be equal to 5,848,101
(19.99% of the total shares of Common Stock outstanding on June 30, 2005, excluding shares issuable pursuant to the Initial Purchase Agreement), subject to equitable adjustments from time to time for stock splits, stock dividends,
combinations, capital reorganizations and similar events relating to the Common Stock occurring after the Issue Date. In the event that the sum of (x) the aggregate number of shares of Common Stock actually issued upon exercise or otherwise
pursuant to the Warrants and any shares of capital stock or rights to acquire shares of capital stock issued by the Company which are aggregated or integrated with the Common Stock issued or issuable upon exercise or otherwise pursuant to the
Warrants for purposes of any such rule or regulations (including the Purchased Shares (as defined in the Purchase Agreement) issued to the Holder pursuant to the Purchase Agreement) plus (y) the aggregate number of shares of Common Stock
that remain issuable upon exercise or otherwise pursuant to the Warrants at the then effective Exercise Price and any shares of capital stock or rights to acquire shares of capital stock issued by the Company which are aggregated or integrated with
the Common Stock issued or issuable upon exercise or otherwise pursuant to the Warrants for purposes of any such rule or regulations, represents at least one hundred percent (100%) of the Maximum Share Amount (the “Triggering Event”),
the Company will use its reasonable best efforts to seek and obtain Stockholder Approval (or obtain such other relief as will allow conversions hereunder in excess of the Maximum Share Amount) as soon as practicable following the Triggering Event.

  
 (b) Effect on Exercise Price of Certain Events.
For purposes of determining the adjusted Exercise Price under Paragraph 4(a) hereof, the following will be applicable: 
  
 (i) Issuance of Rights or Options. If the Company in any manner issues or grants any warrants, rights or options, whether or
not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as “Options”) and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the greater of (1) the Market Price and (2) the Exercise
Price on the date of issuance or grant of such Options, then the maximum total number of shares of Common Stock issuable upon the exercise of all such Options will, as of the date of the issuance or grant of such Options, be deemed to be outstanding
and to have been issued and sold by the Company for such price per share for purposes of this Section 4. For purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon the exercise of such
Options” is determined by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the exercise of all such 

  

 5 

 
Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable). No further adjustment to the Exercise Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options. 
  
 (ii) Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the greater of (1) the Market Price and (2) the Exercise Price on the date of issuance of such Convertible
Securities, then the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities will, as of the date of the issuance of such Convertible Securities, be deemed to be outstanding and to
have been issued and sold by the Company for such price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the
total amount, if any, received or receivable by the Company as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the
conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible
Securities. No further adjustment to the Exercise Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities. 
  
 (iii) Change in Option Price or Conversion Rate. If there is a change at any time in
(i) the amount of additional consideration payable to the Company upon the exercise of any Options; (ii) the amount of additional consideration, if any, payable to the Company upon the conversion or exchange of any Convertible Securities;
or (iii) the rate at which any Convertible Securities are convertible into or exchangeable for Common Stock (other than under or by reason of provisions designed to protect against dilution), the Exercise Price in effect at the time of such
change will be readjusted to the Exercise Price which would have been in effect at such time had such Options or Convertible Securities still outstanding provided for such changed additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold. 
  
 (iv) Treatment of Expired Options and Unexercised Convertible Securities. If, in any case, the total number of shares of Common Stock issuable upon exercise of any Option or upon conversion or exchange of any Convertible
Securities is not, in fact, issued and the rights to exercise such Option or to convert or exchange such Convertible Securities shall have expired or terminated, the Exercise Price then in effect 

  

 6 

 
will be readjusted to the Exercise Price which would have been in effect at the time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such expiration or termination (other than in respect of the actual number of shares of Common Stock issued upon exercise or conversion thereof), never been issued. 
  
 (v) Calculation of Consideration Received. All
calculations under this Paragraph 4 shall be made to the nearest cent or nearest 1/100th of a share, as applicable. If any Common Stock, Options or Convertible Securities are issued, granted or sold for cash, the consideration received therefor
for purposes of this Warrant will be the amount received by the Company therefor, before deduction of reasonable commissions, underwriting discounts or allowances or other reasonable expenses paid or incurred by the Company in connection with such
issuance, grant or sale. In case any Common Stock, Options or Convertible Securities are issued or sold for a consideration part or all of which shall be other than cash, the amount of the consideration other than cash received by the Company will
be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Company will be the Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition, merger or consolidation in which the Company is the surviving corporation, the amount of consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving corporation as is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined in good
faith by the Board of Directors of the Company. 
  
 (vi) Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise Price will be made (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on
the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented
in the future, so long as the issuance of such stock or options is approved by a majority of the independent members of the Board of Directors of the Company or a majority of the members of a committee of independent directors established for such
purpose; (iii) upon the issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is
not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to
appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or
exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock
occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an 

  

 7 

 
adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the
Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger,
purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty
percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or
affiliates thereof) in Common Stock or warrants of the Company. 
  
 (c) Subdivision or Combination of Common Stock. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable
hereunder into a greater number of shares, then, after the date of record for effecting such subdivision, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time combines (by
reverse stock split, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable hereunder into a smaller number of shares, then, after the date of record for effecting such combination, the Exercise Price
in effect immediately prior to such combination will be proportionately increased. 
  
 (d) Adjustment in Number of Shares. Upon each adjustment of the Exercise Price pursuant to the provisions of this Paragraph 4, the number of shares of Common Stock issuable upon exercise of this Warrant
shall be adjusted by multiplying (x) a number equal to the Exercise Price in effect immediately prior to such adjustment by (y) the number of shares of Common Stock issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price. 
  
 (e) Consolidation, Merger or Sale. In case of any consolidation of the Company with, or merger of the Company into any other corporation, or in case of any sale or conveyance of all or substantially all
of the assets of the Company other than in connection with a plan of complete liquidation of the Company, then as a condition of such consolidation, merger or sale or conveyance, adequate provision will be made whereby the holder of this Warrant
will have the right (and such right will continue for the remainder of the Exercise Period) to acquire and receive upon exercise of this Warrant in lieu of the shares of Common Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for the number of shares of Common Stock immediately theretofore acquirable and receivable upon exercise of this Warrant had such
consolidation, merger or sale or conveyance not taken place. In any such case, the Company will make appropriate provision to insure that the provisions of this Paragraph 4 hereof will thereafter be applicable as nearly as may be in relation to any
shares of stock or securities thereafter deliverable upon the exercise of this Warrant. The Company will not effect any consolidation, merger or sale or conveyance unless prior to the consummation thereof, the successor or acquiring entity (if other
than the Company) and, if an entity different from the successor or acquiring entity, the entity whose capital stock or assets the holders of the Common Stock of the Company are entitled to receive as a result of such consolidation, merger or sale
or conveyance, 

  

 8 

 
assumes by written instrument the obligations under this Paragraph 4 and the obligations to deliver to the holder of this Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the holder may be entitled to acquire. In the event the Company effects any consolidation, merger or sale or conveyance of substantially all of its assets prior to the end of the
Exercise Period, this Warrant will become, at the option of the Holder, immediately exercisable. 
  
 (f) Distribution of Assets. In case the Company shall declare or make any distribution of its assets (including cash) to holders of Common
Stock as a partial liquidating dividend, by way of return of capital or otherwise, then, after the date of record for determining stockholders entitled to such distribution, but prior to the date of distribution, the holder of this Warrant shall be
entitled upon exercise of this Warrant for the purchase of any or all of the shares of Common Stock subject hereto, to receive the amount of such assets which would have been payable to the holder had such holder been the holder of such shares of
Common Stock on the record date for the determination of stockholders entitled to such distribution. 
  
 (g) Notice of Adjustment. Upon the occurrence of any event which requires any adjustment of the Exercise Price, then, and in each such case,
the Company shall give notice thereof to the holder of this Warrant, which notice shall state the Exercise Price resulting from such adjustment and the increase or decrease in the number of Warrant Shares purchasable at such price upon exercise,
setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Such calculation shall be certified by the chief financial officer of the Company. 
  
 (h) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price in effect at the time such adjustment is otherwise required to be made, but any such lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any adjustments so carried forward, shall amount to not less than 1% of such Exercise Price. 
  

(i) No Fractional Shares. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant. If the exercise of
this Warrant would result in a fractional share of Common Stock, such fractional share shall be paid in cash in an amount equal to such fraction multiplied by the closing price of one Warrant Share as reported by the applicable principal trading
market on the date of exercise. 
  
 (j) Other
Notices. In case at any time: 
  
 (i) the
Company shall declare any dividend upon the Common Stock payable in shares of stock of any class or make any other distribution (including dividends or distributions payable in cash out of retained earnings) to the holders of the Common Stock;

  
 (ii) the Company shall offer for subscription
pro rata to the holders of the Common Stock any additional shares of stock of any class or other rights; 
  

 9 

 (iii) there shall be any capital reorganization of the Company, or reclassification of
the Common Stock, or consolidation or merger of the Company with or into, or sale of all or substantially all its assets to, another corporation or entity; or 
  

(iv) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; 
  
 then, in each such case, the Company shall give to the holder of this Warrant (a) notice
of the date on which the books of the Company shall close or a record shall be taken for determining the holders of Common Stock entitled to receive any such dividend, distribution, or subscription rights or for determining the holders of Common
Stock entitled to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up and (b) in the case of any such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up, notice of the date (or, if not then known, a reasonable approximation thereof by the Company) when the same shall take place. Such notice shall also specify the date on which the holders of Common Stock shall
be entitled to receive such dividend, distribution, or subscription rights or to exchange their Common Stock for stock or other securities or property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be. Such notice shall be given at least 20 days prior to the record date or the date on which the Company’s books are closed in respect thereto. Failure to give any such notice or any defect therein
shall not affect the validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv) above. 
  
 (k) Certain Events. If any event occurs of the type contemplated by the adjustment provisions of this Paragraph 4 but not expressly provided
for by such provisions, the Company will give notice of such event as provided in Paragraph 4(g) hereof, and the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and the number of shares of Common Stock
acquirable upon exercise of this Warrant so that the rights of the Holder shall be neither enhanced nor diminished by such event. 
  
 (l) Certain Definitions. 
  
 (i) “Common Stock Deemed Outstanding” shall mean the number of shares of Common Stock actually outstanding (not
including shares of Common Stock held in the treasury of the Company), plus (x) in the case of a Dilutive Issuance pursuant to Paragraph 4(b)(i) hereof, the maximum total number of shares of Common Stock issuable upon the exercise of Options
issued or granted in such Dilutive Issuance, as of the date of such issuance or grant of such Options, if any, and (y) in the case of a Dilutive Issuance pursuant to Paragraph 4(b)(ii) hereof, the maximum total number of shares of Common Stock
issuable upon conversion or exchange of Convertible Securities issued or granted in such Dilutive Issuance, as of the date of issuance of such Convertible Securities, if any. 
  
 (ii) “Market Price,” as of any date, means (i) the average of the last reported
sale prices for the shares of Common Stock on the Nasdaq National Market (“Nasdaq”) for the five (5) trading days immediately preceding such date as reported by Bloomberg Financial Markets or an equivalent reliable reporting service
mutually 

  

 10 

 
acceptable to and hereafter designated by the holder of this Warrant and the Company (“Bloomberg”), or (ii) if Nasdaq is not the principal
trading market for the shares of Common Stock, the average of the last reported sale prices on the principal trading market for the Common Stock during the same period as reported by Bloomberg, or (iii) if market value cannot be calculated as
of such date on any of the foregoing bases, the Market Price shall be the fair market value as reasonably determined in good faith by (a) the Board of Directors of the Company or, at the option of a majority-in-interest of the holders of the
outstanding Warrants by (b) an independent investment bank of nationally recognized standing in the valuation of businesses similar to the business of the Company. The manner of determining the Market Price of the Common Stock set forth in the
foregoing definition shall apply with respect to any other security in respect of which a determination as to market value must be made hereunder. 
  
 (iii) “Common Stock,” for purposes of this Paragraph 4, includes the Common Stock, par value $0.001 per share, and
any additional class of stock of the Company having no preference as to dividends or distributions on liquidation, provided that the shares purchasable pursuant to this Warrant shall include only shares of Common Stock, par value $0.001 per share,
in respect of which this Warrant is exercisable, or shares resulting from any subdivision or combination of such Common Stock, or in the case of any reorganization, reclassification, consolidation, merger, or sale of the character referred to in
Paragraph 4(e) hereof, the stock or other securities or property provided for in such Paragraph. 
  
 5. Issue Tax. The issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the holder
of this Warrant or such shares for any issuance tax or other costs in respect thereof, provided, however, the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant. 
  
 6. No Rights or Liabilities as a Shareholder. This Warrant shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company. No provision of this Warrant, in the absence of affirmative action
by the Holder to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of such holder for the Exercise Price or as a shareholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company. 
  
 7. Transfer, Exchange, and Replacement of Warrant. 
  
 (a) Restriction on Transfer. This Warrant and the rights granted to the Holder are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed assignment in the
form attached hereto, and funds sufficient to pay any transfer taxes payable upon the making of such transfer, at the office or agency of the Company referred to in Paragraph 7(e) below, provided, however, that any transfer or assignment shall
be subject to all applicable securities laws, the conditions set forth in Paragraph 7(f) hereof and to the applicable provisions of the Purchase Agreement. Until due presentment for registration of transfer on the books of the Company, the Company
may treat the registered Holder as the owner and Holder for all purposes, and the Company shall not be affected by any notice to the contrary. 

  

 11 

 
Notwithstanding anything to the contrary contained herein, the registration rights described in Paragraph 8 are assignable only in accordance with the
provisions of that certain Registration Rights Agreement, dated as of September 29, 2005, by and among the Company and the other signatories thereto (the “Registration Rights Agreement”). 
  
 (b) Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Holder at the office or agency of the Company referred to in Paragraph 7(e) below and presentation of a written notice specifying the names and denominations in which new Warrants are to be
issued, signed by the holder or its agent or attorney, for new Warrants of like tenor representing in the aggregate the right to purchase the number of shares of Common Stock which may be purchased hereunder, each of such new Warrants to represent
the right to purchase such number of shares as shall be designated by the Holder at the time of such surrender. 
  
 (c) Replacement of Warrant. Upon request and receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, the Company will execute and deliver, in lieu thereof, a new
Warrant of like tenor and dated as of such cancellation or, in the case of any such mutilation, upon surrender and cancellation of this Warrant by Holder, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like
tenor and dated as of such cancellation. 
  
 (d)
Cancellation; Payment of Expenses. Upon the surrender of this Warrant in connection with any transfer, exchange, or replacement as provided in this Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company shall
pay all taxes (other than securities transfer taxes) and all other expenses (other than legal expenses, if any, incurred by the Holder or transferees) and charges payable in connection with the preparation, execution, and delivery of Warrants
pursuant to this Paragraph 7. 
  
 (e) Register. The
Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holder), a register for this Warrant, in which the Company shall record the name and address of the person
in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant. 
  
 (f) Exercise or Transfer Without Registration. This Warrant shall only be exercised, transferred, or exchanged in compliance with
Section 2.6 of the Purchase Agreement. The first holder of this Warrant, by taking and holding the same, represents to the Company that such holder is acquiring this Warrant for investment and not with a view to the distribution thereof.

  
 8. Registration Rights. The Holder of this
Warrant (and certain assignees thereof) is entitled to the benefit of such registration rights in respect of the Warrant Shares as are set forth in Section 2 of the Registration Rights Agreement. 
  

 12 

 9. Notices. All notices, requests, and other communications required or permitted to be
given or delivered hereunder to the holder of this Warrant shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to such
holder at the address shown for such holder on the books of the Company, or at such other address as shall have been furnished to the Company by notice from such holder. All notices, requests, and other communications required or permitted to be
given or delivered hereunder to the Company shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to the office of the Company
at 181 Constitution Drive, Menlo Park, California 94025, Attention: Chief Financial Officer, or at such other address as shall have been furnished to the holder of this Warrant by notice from the Company. Any such notice, request, or other
communication may be sent by facsimile, but shall in such case be subsequently confirmed by a writing personally delivered or sent by certified or registered mail or by recognized overnight mail courier as provided above. All notices, requests, and
other communications shall be deemed to have been given either at the time of the receipt thereof by the person entitled to receive such notice at the address of such person for purposes of this Paragraph 9, or, if mailed by registered or certified
mail or with a recognized overnight mail courier upon deposit with the United States Post Office or such overnight mail courier, if postage is prepaid and the mailing is properly addressed, as the case may be. 
  
 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS). BOTH PARTIES IRREVOCABLY CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE STATE COURTS LOCATED IN DELAWARE WITH RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY AND IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER
PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
OR IN ANY OTHER LAWFUL MANNER. 
  
 11.
Miscellaneous. 
  
 (a) Amendments.
This Warrant and any provision hereof may only be amended by an instrument in writing signed by the Company and the Holder. 
  

 13 

 (b) Descriptive Headings. The descriptive headings of the several paragraphs of this
Warrant are inserted for purposes of reference only, and shall not affect the meaning or construction of any of the provisions hereof. 
  
 (c) Cashless Exercise. Notwithstanding anything to the contrary contained in this Warrant, if the resale of the Warrant Shares by the holder
is not then registered pursuant to an effective registration statement under the 1933 Act, this Warrant may be exercised by presentation and surrender of this Warrant to the Company at its principal executive offices with a written notice of the
holder’s intention to effect a cashless exercise, including a calculation of the number of shares of Common Stock to be issued upon such exercise in accordance with the terms hereof (a “Cashless Exercise”). In the event of a Cashless
Exercise, the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where: 
  
 (A) = the Closing Price on the Trading Day immediately preceding the date of such election; 
  
 (B) = the Exercise Price of this Warrant, as adjusted; and 
  
 (X) = the number of Warrant Shares issuable upon exercise of
this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise. 
  
 (d) Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holder of this
Warrant by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Warrant, that the holder of this Warrant shall be entitled, in addition to all other available remedies in law or in equity, to an injunction or injunctions to prevent or cure any
breaches of the provisions of this Agreement and to enforce specifically the terms and provisions of this Warrant, without the necessity of showing economic loss and without any bond or other security being required. 
  
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 
  

 14 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized
officer. 
  

			
	KANA SOFTWARE, INC.
		
	 By:
	 	 /s/ John M. Thompson

	 Name:
	 	John Thompson
	 Title:
	 	 Executive Vice President & Chief Financial
 Officer

	
	 Dated as of October 25, 2005

  

 15 

 FORM OF EXERCISE AGREEMENT 
  
 Dated:
                         , 200     
  
 To: KANA SOFTWARE, INC. 
  
 The undersigned, pursuant to the provisions set forth in the within Warrant,
hereby agrees to purchase              shares of Common Stock covered by such Warrant, and makes payment herewith in full therefor at the price per share provided by such Warrant in
cash or by certified or official bank check in the amount of, or, if the resale of such Common Stock by the undersigned is not currently registered pursuant to an effective registration statement under the Securities Act of 1933, as amended, by
surrender of securities issued by the Company (including a portion of the Warrant) having a market value (in the case of a portion of this Warrant, determined in accordance with Section 11(c) of the Warrant) equal to
$            . Please issue a certificate or certificates for such shares of Common Stock in the name of and pay any cash for any fractional share to: 
  

			
	 Name:
	 	  

			
	 Signature:
	 	  

	 Address:
	 	  

	  

	  

	  
 Note:
	 	  
 The above signature should correspond exactly with the name on the
face of the within Warrant.

  
 and, if said number of shares of
Common Stock shall not be all the shares purchasable under the within Warrant, a new Warrant is to be issued in the name of said undersigned covering the balance of the shares purchasable thereunder less any fraction of a share paid in cash. By its
delivery of this Exercise Notice, the undersigned represents and warrants to the Company that it is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended. 

 FORM OF ASSIGNMENT 
  
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers all the rights of the undersigned under the within
Warrant, with respect to the number of shares of Common Stock covered thereby set forth hereinbelow, to: 
  

					
	 Name of Assignee

	  	 Address

	  	 No of Shares

  
  
 , and hereby irrevocably constitutes and appoints             as agent and attorney-in-fact to transfer
said Warrant on the books of the within-named corporation, with full power of substitution in the premises. 
  
 Dated:                          , 200     
  

	
	 In the presence of:

	  
  

  

			
	 Name:
	 	  

			
	 Signature:
	 	  

	  
 Title of Signing
Officer or Agent (if any):

	  

			
		
	 Address:
	 	  

	  

	
	Note: The above signature should correspond exactly with the name on the face of the within Warrant, without alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

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