Document:

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                                                                   EXHIBIT 10.20

                       DISTRIBUTION AND LICENSE AGREEMENT

   This Software Distribution License Agreement ("License Agreement") is made
effective as of April 9, 2001 ("Effective Date"), and is made by and between:

   Kana Communications, Inc., a Delaware corporation ("Kana") and Broadbase
Software, Inc., a Delaware corporation ("Broadbase").

   WHEREAS the parties wish to enter into a License Agreement to permit each of
the parties to distribute and otherwise exploit the Licensed Products of the
other (as hereinafter defined), the parties agree as follows:

   1. Definitions. As used in this License Agreement, the following terms shall
have the following meanings:

   "Broadbase Products" means all software owned by Broadbase, and such
software, products and services offered to third parties by Broadbase as of the
Effective Date, and any Updates or Upgrades to such software, products and
services, and new software, products and services offered for sale by
Broadbase, and all documentation associated therewith.

   "Broadbase Trademarks" means all trademarks and service marks registered to
Broadbase and all trademarks and service marks for which Broadbase has applied
for registration.

   "Derivative Work" means any modification, translation, port, adaptation,
extension, improvement, compilation, abridgment or other form in which the
Licensor's Licensed Products may be recast, transformed or adapted for use,
including but not limited to any form which would infringe any copyright to the
Licensor's Licensed Products but for the license granted herein.

   "Intellectual Property" shall mean any or all of the following and all
rights in, arising out of, or associated therewith: (i) all patents and
applications therefor and all reissues, divisions, renewals, extensions,
provisionals, continuations and continuations-in-part thereof; (ii) all
inventions (whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, know how, ideas and information,
designs, formulas, algorithms, processes, schematics, technology, technical
data, and all documentation relating to any of the foregoing; (iii) all
copyrights, copyrights registrations and applications therefor, and all other
rights corresponding thereto throughout the world; (iv) all industrial designs
and any registrations and applications therefor throughout the world; (v) all
trade names, URLs, logos, common law trademarks and service marks, trademark
and service mark registrations and applications therefor throughout the world;
(vi) all databases and data collections and all rights therein throughout the
world; (vii) all moral and economic rights of authors and

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inventors, however denominated, throughout the world, and (viii) any similar or
equivalent rights to any of the foregoing anywhere in the world.

   "Kana Products" means all software owned by Kana, and such software,
products and services offered to third parties by Kana as of the Effective
Date, and any Updates or Upgrades to such software, products and services, and
new software, products and services offered for sale by Kana during the term of
this License Agreement, and all documentation associated therewith.

   "Kana Trademarks" means all trademarks and service marks registered to Kana
and all trademarks and service marks for which Kana has applied for
registration.

   "Licensed Products" means the Broadbase Products and the Kana Products, as
the context requires.

   "Licensed Trademarks" means the Broadbase Trademarks and the Kana
Trademarks, as the context requires.

   "Merger Agreement" means the Agreement and Plan of Merger entered into as of
April 9, 2001, among Kana, Arrow Acquisition Corporation, and Broadbase.

   "Net Revenue" means each of Broadbase and Kana's invoiced license fees for
the other's Licensed Products less actual returns and applicable taxes or
similar charges imposed by governmental authorities.

   "Updates" means bug fixes, modifications, variations, or enhancements made
to the Licensor's Licensed Products without a significant change in the
functionality of the Licensor's Licensed Products, the packaging (other than to
indicate a change in the version number to the right of the decimal point).

   "Upgrades" means new releases and versions of the Licensor's Licensed
Products that include significant changes to functionality, new functionality,
new packaging or a change in the version number to the left of the decimal
point.

   2. Object Code License. Subject to the terms of this License Agreement, each
party (the "Licensor") hereby grants to the other (the "Licensee"), a world-
wide, nontransferable, nonexclusive, royalty-bearing license under all the
Licensor's Intellectual Property to use, copy, distribute, display and perform
the Licensor's Licensed Products, including but not limited to the right to
sublicense the Licensor's Licensed Products to the Licensee's affiliates, or
sublicense or distribute the Licensor's Licensed Products through multiple
layers of distribution on a stand-alone basis or as integrated or bundled with
their own products or technology or the products or technology of others. Each
Licensee may sublicense the Licensor's Licensed Products by permitting bona
fide distributors and resellers to sell user licenses for the Licensor's
Licensed Products, by permitting duplication and distribution of the Licensor's
Licensed Products by OEMs, and by permitting users to duplicate the Licensor's
Licensed Products in connection with

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site licenses and similar transactions, provided that each sublicense is made
only pursuant to a valid sublicense agreement that provides substantially
similar protections to Licensor as Licensor's standard license agreement. Each
Licensee shall consult in advance with its respective Licensor in the event that
it wishes to enter into site licenses, OEM License Agreements or other
arrangements or license agreements that provide for unlimited numbers of seats
of the Licensor's Licensed Products to be distributed or sold for a single price
or otherwise allow any third party to create copies of the Licensor's Licensed
Products, and shall not enter into any such arrangements without the Licensor's
concurrence, which concurrence will not be unreasonably withheld or delayed.
Failure to object to any request for concurrence for such arrangement within ten
(10) business days of such request shall be deemed concurrence. Licensee may
modify and may authorize its licensees to modify the documentation for the
Licensor's Licensed Products and distribute such modified documentation with the
Licensor's Licensed Products, provided that each party or its licensees must
retain all the other party's copyright, trademark and similar notices in such
documentation, provided that notwithstanding the terms of this Agreement,
Licensor shall have no liability to Licensee or any third party with respect to
any such modified documentation. 3. Delivery. Within five (5) days of the
Effective Date, the Licensor shall deliver to the Licensee, in a form or medium
agreed by the parties, a reproducible form of the master versions of the then
current version of the Licensor's Licensed Products.

   4. Source Code License. Each Licensor shall place the source code for the
Licensor's Licensed Products in escrow with such escrow agent as agreed by the
parties, pursuant to the terms of an escrow agreement, a form of which is
attached as Exhibit A. A party's source code shall be released from escrow (the
"Releasing Party") to the other party (the "Beneficiary") upon the occurrence
of one of the following release conditions with respect to the Releasing Party:

   (i) if the Releasing Party:

    (a) becomes the debtor in a voluntary petition under the United States
      Bankruptcy Code;

    (b) commences any proceeding for relief from or adjustment of its debts
      (including without limitation by consenting to or otherwise
      permitting the entry of an order for relief in an involuntary case
      under the United States Bankruptcy Code);

    (c) requests, consents to or permits the appointment of a receiver for
      all or substantially all of its assets; or

    (d) files any court proceeding seeking its liquidation and the winding
      up of its affairs;

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   (ii) if the Releasing Party:

    (a) becomes the alleged debtor in an involuntary petition under the
      United States Bankruptcy Code if such petition or proceeding is not
      dismissed within ninety (90) days of filing;

    (b) has filed against it any involuntary proceeding for relief from or
      adjustment of its debts, or requesting the appointment of a receiver
      for all or substantially all of its assets; or

    (c) becomes the subject of any involuntary proceeding for the
      liquidation of the party and the winding up of its affairs if such
      petition or proceeding, in each case, is not dismissed within ninety
      (90) days of filing;

   (iii) if the Releasing Party makes a general assignment for the benefit of
its creditors, or enters into a composition of creditors; or

   (iv) if the Releasing Party adopts necessary board and, if required,
stockholder resolutions for dissolution, liquidation and winding up of its
affairs.

   (v) if the Releasing Party ceases to operate or do business, without there
being a successor; or

   (vi) if the Releasing Party fails to provide maintenance or support of its
Licensed Products in accordance with the standard terms and conditions for such
support, where such failure renders the Licensed Products materially unusable
causing a substantial adverse impact to the business of the Beneficiary and
which failure is not cured within forty-five (45) days of written notice from
the Beneficiary of such failure.

   Subject to the terms of this License Agreement, the Licensor hereby grants
to the Licensee, a world-wide, nontransferable, nonexclusive, royalty-free
license under all Intellectual Property to use, modify, or copy the source code
for Licensor's Licensed Products, create Derivative Works and improvements from
the source code for the Licensor's Licensed Products, and/or distribute such
Derivative Works in object code form.

   5. Restrictions. Each Licensee agrees that under no circumstance shall it,
or shall it cause or permit any third party to, (a) distribute or allow others
to distribute the Licensor's Licensed Products except as contemplated by this
License Agreement, (b) reproduce, modify or copy the Licensor's Licensed
Products and associated documentation except as contemplated by this License
Agreement, or as permitted by the Licensor in writing, or (c) reverse assemble,
reverse compile or reverse engineer the Licensor's Licensed Products, or
otherwise attempt to discover any of the Licensor's Licensed Products source
code or underlying Confidential Information, except as contemplated in Section
4 of this License Agreement. The parties reserve all rights not expressly
granted in this License Agreement.

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   6. Ownership of Licensed Products and Derivative Works. As between the
parties, title to and ownership of the Licensor's Licensed Products, and all
Intellectual Property therein, any accompanying printed materials and all
copies and portions thereof shall be and at all times remain in the Licensor.
As between the parties, title to and ownership of the Derivative Works of the
Licensor's Licensed Products created by or on behalf of the Licensee, and all
Intellectual Property therein, any accompanying printed materials and all
copies and portions thereof shall be and at all times remain in the Licensee
creating such Derivative Works, subject to the Licensor's rights to the
Licensor's Licensed Products. Notwithstanding the foregoing, nothing herein
shall restrict Licensor's rights with respect to such Derivative Works to the
extent that they are retained in the memory of Licensor's employees or agents.

   7. Trademark License. Subject to the terms of this Agreement, each Licensor
hereby grants to the Licensee a world-wide, nontransferable, nonexclusive,
royalty-free license to use, copy, distribute and display the Licensor's
Licensed Trademarks, including the right to sublicense the use of such
trademarks through the multiple layers of distribution, solely in connection
with the licensing or other distribution of the Licensor's Licensed Products,
and in accordance with the Licensor's trademark usage guidelines provided to
the Licensee from time to time.

   8. Updates and Upgrades. At no cost to either party, other than as provided
in Section 9, each Licensor shall provide the Licensee with all Updates and
Upgrades as soon as such Updates and Upgrades are made generally available.

   9. Maintenance and Support. Each Licensor shall provide to the Licensee all
maintenance and support related to the Licensor's Licensed Products that is
offered to others on terms consistent with those generally offered to any other
person with respect to such maintenance and support.

   10. Royalties. Each Licensee shall pay to the Licensor royalties equal to
ten percent (10%) of Net Revenue from the distribution or other commercial
exploitation of the Licensor's Licensed Products on a stand-alone basis, and to
the extent that the Licensor's Licensed Products are bundled with the
Licensee's own products, Licensee shall pay to Licensor royalties equal to ten
percent (10%) of that portion of the Net Revenue for such bundled product that
is reasonably attributable to the Licensor's Licensed Products. No royalties
shall be payable with respect to Licensed Products that are used internally by
the Licensee or Beneficiary or its affiliates for non-revenue generating
activities, or made available to third parties for evaluation or promotional
purposes, provided that any such evaluation or promotional use shall not be for
a period more than thirty (30) days without Licensor's prior written consent.
Royalties payable pursuant to this Section 10 shall be calculated and paid, on
a quarterly basis, not more than thirty (30) days after the last day of the
fiscal quarter in which the Net Revenue giving rise to such royalties are
recognized.

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   11. Audit. Each party shall deliver to the other along with its payment of
royalties due for each quarter, a written report showing, in detail, its
calculation of royalties payable with respect to such quarter. Each party shall
keep, maintain and preserve for at least two (2) years following the quarter in
which the Net Revenue giving rise to royalties is recognized by such party,
accurate records relating to such royalties. Such records shall be Confidential
Information, but shall be available for inspection and audit as provided
herein. Each party shall have the right no more than once per calendar year to
have an independent public accountant, reasonably acceptable to the other,
examine the other party's relevant books, records and accounts for the purpose
of verifying the accuracy of payments made as required under this License
Agreement. Each party acknowledges and agrees that such accountant shall not
have access to the books, records, and accounts relating to other products or
services except as such books, records and accounts also directly relate to the
payments due hereunder. Each audit will be conducted at the audited party's
place of business, or other place agreed to by the parties, during the audited
party's normal business hours and with at least five (5) business days prior
written notice. Each party shall pay the fees and expenses of its auditor for
the examination; provided that should any examination disclose a greater than
five percent (5%) shortfall in the payments due for the period being audited,
the audited party shall pay the reasonable fees and expenses of the auditor for
that examination.

   12. Confidentiality.

   a. Each party ("Receiving Party") agrees to keep confidential and not
disclose or use except as contemplated by this License Agreement, confidential
information related to the other party's ("Disclosing Party") technology or
business that is provided to the Receiving Party in connection with this
License Agreement, the source code of any Kana Products and any other
information received from the Disclosing Party that is stamped or marked as
Confidential by the Disclosing Party, including without limitation, any
information disclosed orally that the Disclosing Party identifies as
confidential by written notice to the Receiving Party within thirty (30) days
of such disclosure, or information that would reasonably be expected to be
confidential from its context ("Confidential Information").

   b. "Confidential Information" shall not include information the Receiving
Party can document (a) is in or (through no improper action or inaction by the
Receiving Party or any affiliate, agent or employee) enters the public domain,
or (b) was rightfully in the Receiving Party's possession or known by it prior
to receipt from the Disclosing Party, or (c) was rightfully disclosed to the
Receiving Party by another person without restriction, or (d) was independently
developed by the Receiving Party by persons without access to such information
and without use of any Confidential Information of the Disclosing Party.

   c. Each party, with prior written notice to the Disclosing Party, may
disclose such Confidential Information required to be disclosed to a
governmental entity or agency, or pursuant to the lawful requirement or order
of a governmental entity or agency, provided that reasonable measures are taken
to guard against further disclosure,

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including without limitation, seeking appropriate confidential treatment or a
protective order, or assisting the other party to do so.

   d. The Receiving Party acknowledges and agrees that due to the unique nature
of the Disclosing Party's Confidential Information, there can be no adequate
remedy at law for any breach of its obligations hereunder, that any such breach
may allow the Receiving Party or third parties to unfairly compete with the
Disclosing Party resulting in irreparable harm to the Disclosing Party, and
therefore, that upon any such breach or any threat thereof, the Disclosing
Party shall be entitled to seek appropriate equitable relief in addition to
whatever remedies it might have at law. The Receiving Party will notify the
Disclosing Party in writing immediately upon the occurrence of any such
unauthorized release or other breach. Any breach of this Section 12 will
constitute a material breach of this License Agreement.

   13. Limited Warranty and Disclaimer. Each Licensor warrants that, for a
period of ninety (90) days from the date of delivery of the Licensor Licensed
Products, (a) the Licensor's Licensed Products shall perform substantially in
accordance with the documentation therefor, and (b) the media upon which the
Licensor's Licensed Products are provided to the Licensee shall be free from
defects in material and workmanship under normal use. This warranty covers only
problems reported to the Licensor during the warranty period. WARRANTY
DISCLAIMER: EXCEPT AS EXPRESSLY STATED HEREIN, EACH LICENSOR'S LICENSED
PRODUCTS ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF PERFORMANCE OR MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT. EACH LICENSEE BEARS ALL
RISK RELATING TO QUALITY AND PERFORMANCE OF THE LICENSOR'S LICENSED PRODUCTS.
The performance of each Licensor's Licensed Products varies with various
manufacturers' equipment with which it is used. Each Licensor does not warrant
that the Licensor's Licensed Products or the functions contained in the
Licensor's Licensed Products will meet the Licensee's requirements, operate
without interruption or be error free. The exclusive remedy for breach by each
Licensor of its limited warranty set forth above shall be replacement of any
defective Licensor's Licensed Product or medium upon its return to the Licensor
within the warranty period.

   14. Limitation of Remedies and Damages. EXCEPT FOR BREACHES OF SECTION 12
PERTAINING TO CONFIDENTIALITY AND THE INDEMNITY OBLIGATIONS IN SECTION 15,
NEITHER PARTY SHALL BE RESPONSIBLE OR LIABLE WITH RESPECT TO ANY SUBJECT MATTER
OF THIS LICENSE AGREEMENT OR TERMS AND CONDITIONS RELATED THERETO UNDER ANY
CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY (A) FOR LOSS OR
INACCURACY OF DATA OR COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR
TECHNOLOGY, OR (B) FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
INCLUDING, BUT NOT LIMITED TO LOSS OF REVENUES, LOSS OF PROFITS, BUSINESS
INTERRUPTION, LOSS OR INACCURACY OF DATA OR COST OF

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PROCUREMENT OF SUBSTITUTE GOODS, ARISING OUT OF THE USE OF OR INABILITY TO USE
THE LICENSED PRODUCTS, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES. EXCEPT FOR BREACHES OF SECTION 12 PERTAINING TO CONFIDENTIALITY
AND INDEMNITY OBLIGATIONS IN SECTION 15, IN NO EVENT WILL A PARTY'S LIABILITY
EXCEED THE TOTAL ROYALTIES PAID BY THE PARTIES PURSUANT TO THIS AGREEMENT.
NEITHER PARTY SHALL BE RESPONSIBLE FOR ANY MATTER BEYOND ITS REASONABLE CONTROL.
Because some jurisdictions do not allow the exclusion or limitation of liability
of consequential or incidental damages, the above limitation may not apply.

   15. Indemnity.

   a. Each party (the "Indemnifying Party") shall defend, indemnify and save
harmless the other, their respective affiliates, directors, officers,
employees, agents and independent contractors (the Indemnified Parties") from
any and all claims, costs, damages, and expenses (including but not limited to
reasonable attorney's fees) incurred by the Indemnified Parties that are
attributable to any claim, demand or cause of action asserting that any
Indemnifying Party's Licensed Product infringes any U.S. patent, copyright,
trademark or trade secret, provided that the Indemnified Parties tender sole
control of the defense and settlement of such claim to the Indemnifying Party
and reasonably cooperates in the defense thereof, provided that the Licensor
shall have no obligation hereunder to the extent that any such claim, cost,
damage or expense is based upon Licensee's use of a modified or superseded
Licensed Product.

   b. In the event of an occurrence of a Release Condition, and Beneficiary's
creation of any Derivative Works pursuant to the license granted in Section 4,
the Beneficiary shall defend, indemnify and save harmless the Releasing Party,
its affiliates, and their respective directors, officers, employees, agents and
independent contractors from any and all claims, costs, damages, and expenses
(including but not limited to reasonable attorney's fees) incurred by the
Releasing Party that are attributable to any claim, demand or cause of action
asserting that any Derivative Work created by the Beneficiary pursuant to the
license granted in Section 4 infringes any U.S. patent, copyright, trademark or
trade secret, provided that the Releasing Party tenders sole control of the
defense and settlement of such claim to the Beneficiary and reasonably
cooperates in the defense thereof.

   16. Termination. This License Agreement shall continue in effect for five
(5) years from the Effective Date ("Initial Term"), and shall renew
automatically for additional one year terms ("Renewal Term") unless either
party provides the other party with notice of termination of the Agreement at
least sixty (60) days prior to the end of the applicable Initial Term or
Renewal Term. A party not in default under this Agreement may terminate this
Agreement upon a material breach of this Agreement by the other party that is
not cured within thirty (30) days of the breaching party's receipt of notice of
such breach.

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   17. Nonassignability. Unless otherwise provided in this License Agreement,
neither the rights nor the obligations arising under this License Agreement are
assignable or transferable by either party without the other party's prior
written consent, and any such attempted assignment or transfer shall be deemed
an uncurable breach, permitting the non-breaching party to immediately
terminate the licenses and rights granted to the breaching party hereunder. For
the purposes of this Section 17, any change of control of a party shall be
deemed an assignment by such party.

   18. Execution of License Agreement, Controlling Law, Attorneys' Fee. This
License Agreement shall become effective as of the Effective Date and only upon
its execution by both Kana and Broadbase. This License Agreement shall be
governed by and construed in accordance with the laws of the State of
California without regard to the conflicts of law provisions thereof and
without regard to the United Nations Convention on the International Sales of
Goods. In any action to enforce this License Agreement the prevailing party
will be entitled to costs and attorneys' fees.

   19. Equitable Relief. The parties acknowledges and agrees that due to the
unique nature of Confidential Information, there can be no adequate remedy at
law for any breach of its obligations hereunder, that any such breach may allow
Receiving Party or third parties to unfairly compete with the Disclosing Party
resulting in irreparable harm to the Disclosing Party and, therefore, that upon
any such breach or threat thereof, the Disclosing Party shall be entitled to
seek injunctions and other appropriate equitable relief, in addition to
whatever remedies it may have at law.

   20. Notice. Any notice, report, approval or consent required or permitted
hereunder shall be in writing and will be deemed to have been effectively
given: (i) immediately upon personal delivery or facsimile transmission to the
parties to be notified, (ii) one (1) day after deposit with a commercial
overnight courier with tracking capabilities, or (iii) three (3) days after
deposit with the United States Postal Service, by registered or certified mail,
postage prepaid to the respective addresses of the parties as set forth above.

   21. Waiver. The waiver by either party of a breach of this License Agreement
or any right hereunder shall not constitute a waiver of any subsequent breach of
this License Agreement; nor shall any delay by either party to exercise any
right under this License Agreement operate as a waiver of any such right. If any
provision of this License Agreement shall be adjudged by any court of competent
jurisdiction to be unenforceable or invalid, that provision shall be limited or
eliminated to the minimum extent necessary so that this License Agreement shall
otherwise remain in full force and effect and enforceable.

   22. Basis of Bargain. EACH PARTY RECOGNIZES AND AGREES THAT THE WARRANTY
DISCLAIMERS AND LIABILITY AND REMEDY LIMITATIONS IN THIS LICENSE AGREEMENT ARE
MATERIAL BARGAINED FOR BASES OF THIS LICENSE AGREEMENT AND THAT THEY HAVE BEEN
TAKEN INTO ACCOUNT AND REFLECTED IN DETERMINING THE

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CONSIDERATION TO BE GIVEN BY EACH PARTY UNDER THIS LICENSE AGREEMENT AND IN THE
DECISION BY EACH PARTY TO ENTER INTO THIS LICENSE AGREEMENT.

   23. Entire License Agreement. This License Agreement constitutes the entire
License Agreement between the parties hereto related to the subject matter
hereof. Any modifications of this License Agreement must be in writing and
signed by both parties hereto.

   24. Independent Contractors. The parties to this Agreement are independent
contractors. There is no relationship of partnership, joint venture,
employment, franchise, or agency between the parties. Neither party will have
the power to bind the other or incur obligations on the other's behalf without
the other's prior written consent.

   25. Survival. Sections 5, 6, 10, 11, 12, 14, 13, 15, 18, 19, 20, 21, 22, 23,
24, and 25 shall survive any termination or expiration of this License
Agreement.

   26. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.

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   IN WITNESS WHEREOF, the parties hereto have executed this License Agreement
as of the Effective Date.

KANA COMMUNICATIONS, INC.                 BROADBASE SOFTWARE, INC.

/s/ James C. Wood                         /s/ Chuck Bay
-------------------------------------     -------------------------------------
By                                        By

James C. Wood                             Chuck Bay
_____________________________________     _____________________________________
Name (Print)                              Name (Print)

Chief Executive Officer                   Chief Executive Officer
_____________________________________     _____________________________________
Title                                     Title

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                                                                       EXHIBIT A

                            FORM OF ESCROW AGREEMENT

                    COMPREHENSIVE PREFERRED ESCROW AGREEMENT

                                 Account Number

   This Agreement is effective                   , 2001 among
("Escrow Agent"),           ("Depositor") and            ("Preferred
Beneficiary"), who collectively may be referred to in this Agreement as "the
parties."

   A. Depositor and Preferred Beneficiary have entered or will enter into a
distribution and license agreement regarding certain proprietary technology of
Depositor (referred to in this Agreement as "the License Agreement").

   B. Depositor desires to avoid disclosure of its proprietary technology
except under certain limited circumstances.

   C. The availability of the proprietary technology of Depositor is critical
to Preferred Beneficiary in the conduct of its business and, therefore,
Preferred Beneficiary needs access to the proprietary technology under certain
limited circumstances.

   D. Depositor and Preferred Beneficiary desire to establish an escrow with
Escrow Agent to provide for the retention, administration and controlled access
of the proprietary technology materials of Depositor.

   E. The parties desire this Agreement to be supplementary to the License
Agreement pursuant to 11 United States Bankruptcy Code, Section 365(n).

                              ARTICLE 1--DEPOSITS

   1.1 Obligation to Make Deposit. Upon the signing of this Agreement by the
parties, Depositor shall deliver to Escrow Agent the proprietary technology and
other materials ("Deposit Materials") required to be deposited by the License
Agreement or, if the License Agreement does not identify the materials to be
deposited with Escrow Agent, then such materials will be identified on an
Exhibit B1. If Exhibit B1 is applicable, it is to be prepared and signed by
Depositor and Preferred Beneficiary. Escrow Agent shall have no obligation with
respect to the preparation, signing or delivery of Exhibit B1.

   1.2 Identification of Tangible Media. Prior to the delivery of the Deposit
Materials to Escrow Agent, Depositor shall conspicuously label for
identification each document, magnetic tape, disk, or other tangible media upon
which the Deposit Materials are written or stored. Additionally, Depositor
shall complete Exhibit B2 to this Agreement by listing each such tangible media
by the item label description, the type of media and the quantity. The

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Exhibit B2 must be signed by Depositor and delivered to Escrow Agent with the
Deposit Materials. Unless and until Depositor makes the initial deposit with
Escrow Agent, Escrow Agent shall have no obligation with respect to this
Agreement, except the obligation to notify the parties regarding the status of
the deposit account as required in Section 2.2 below.

   1.3 Deposit Inspection. When Escrow Agent receives the Deposit Materials and
the Exhibit B2, Escrow Agent will conduct a deposit inspection by visually
matching the labeling of the tangible media containing the Deposit Materials to
the item descriptions and quantity listed on the Exhibit B2. In addition to the
deposit inspection, Preferred Beneficiary may elect to cause a verification of
the Deposit Materials in accordance with Section 1.6 below.

   1.4 Acceptance of Deposit. At completion of the deposit inspection, if
Escrow Agent determines that the labeling of the tangible media matches the
item descriptions and quantity on Exhibit B2, Escrow Agent will date and sign
the Exhibit B2 and mail a copy thereof to Depositor and Preferred Beneficiary.
If Escrow Agent determines that the labeling does not match the item
descriptions or quantity on the Exhibit B2, Escrow Agent will (a) note the
discrepancies in writing on the Exhibit B2; (b) date and sign the Exhibit B2
with the exceptions noted; and (c) mail a copy of the Exhibit B2 to Depositor
and Preferred Beneficiary. Escrow Agent's acceptance of the deposit occurs upon
the signing of the Exhibit B2 by Escrow Agent. Delivery of the signed Exhibit B2
to Preferred Beneficiary is Preferred Beneficiary's notice that the Deposit
Materials have been received and accepted by Escrow Agent.

   1.5 Depositor's Representations. Depositor represents as follows:

  a. Depositor lawfully possesses all of the Deposit Materials deposited with
    Escrow Agent;

  b. With respect to all of the Deposit Materials, Depositor has the right
    and authority to grant to Escrow Agent and Preferred Beneficiary the
    rights as provided in this Agreement;

  c. The Deposit Materials are not subject to any lien or other encumbrance;

  d. The Deposit Materials consist of the proprietary technology and other
    materials identified either in the License Agreement or Exhibit B1, as
    the case may be; and

  e. The Deposit Materials are readable and useable in their current form or,
    if any portion of the Deposit Materials is encrypted, the decryption
    tools and decryption keys have also been deposited.

   1.6 Verification. Escrow Agent shall perform a Level I verification of the
Deposit Materials upon the initial deposit and for each update. A verification
determines, in

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different levels of detail, the accuracy, completeness, sufficiency and quality
of the Deposit Materials. A Level I verification is defined as follows: Escrow
Agent will cause a technically qualified Escrow Agent employee to evaluate the
Deposit Materials in order to identify (a) the hardware and software
configurations reasonably necessary to maintain the Deposit Materials; (b) the
hardware and software configurations reasonably necessary to compile the Deposit
Materials; and (c) the compilation instructions. Escrow Agent will then prepare
and deliver to Depositor and Preferred Beneficiary a report describing the
information so identified. It shall be the responsibility of the Depositor, and
not Escrow Agent, to ensure that the Deposit Materials contain the information
so identified in Escrow Agent's report, as well as any other information that
may be required in the License Agreement.

   Preferred Beneficiary shall have the right, at Preferred Beneficiary's
expense, to cause higher levels of verification of any Deposit Materials.
Preferred Beneficiary shall notify Depositor and Escrow Agent of Preferred
Beneficiary's request for verification. Depositor shall have the right to be
present at the verification. If a verification is elected after the Deposit
Materials have been delivered to Escrow Agent, then only Escrow Agent, or at
Escrow Agent's election an independent person or company selected and
supervised by Escrow Agent, may perform the verification.

   1.7 Deposit Updates. Unless otherwise provided by the License Agreement,
Depositor shall update the Deposit Materials within 10 days of each release of
a new version of the product which is subject to the License Agreement. Such
updates will be added to the existing deposit. All deposit updates shall be
listed on a new Exhibit B2 and the new Exhibit B2 shall be signed by Depositor.
Each Exhibit B2 will be held and maintained separately within the escrow
account. An independent record will be created which will document the activity
for each Exhibit B2. The processing of all deposit updates shall be in
accordance with Sections 1.2 through 1.6 above. All references in this
Agreement to the Deposit Materials shall include the initial Deposit Materials
and any updates.

   Escrow Agent shall notify Depositor in writing semi-annually of Depositor's
obligation to make updated deposits. Within 30 days of receipt of each such
notice, Depositor shall certify in writing to Escrow Agent that (a) it has made
the updated deposits as required in the immediately preceding paragraph; or (b)
there has not been a release of a new version of the product since the last
deposit. After the 30 days, Escrow Agent shall notify Preferred Beneficiary that
Escrow Agent has received (a) an updated deposit from Depositor; (b) a statement
from Depositor advising there has not been a release of a new version of the
product since the last deposit; or (c) no response from Depositor. Unlimited
deposit updates and two storage units are included in the fees for this
Agreement.

   1.8 Removal of Deposit Materials. The Deposit Materials may be removed
and/or exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Agreement.

                 ARTICLE 2--CONFIDENTIALITY AND RECORD KEEPING

<PAGE>

   2.1 Confidentiality. Escrow Agent shall maintain the Deposit Materials in a
secure, environmentally safe, locked facility which is accessible only to
authorized representatives of Escrow Agent. Escrow Agent shall have the
obligation to reasonably protect the confidentiality of the Deposit Materials.
Except as provided in this Agreement, Escrow Agent shall not disclose,
transfer, make available, or use the Deposit Materials. Escrow Agent shall not
disclose the content of this Agreement to any third party. If Escrow Agent
receives a subpoena or other order of a court or other judicial tribunal
pertaining to the disclosure or release of the Deposit Materials, Escrow Agent
will immediately notify the parties to this Agreement unless prohibited by law.
It shall be the responsibility of Depositor and/or Preferred Beneficiary to
challenge any such order; provided, however, that Escrow Agent does not waive
its rights to present its position with respect to any such order. Escrow Agent
will not be required to disobey any court or other judicial tribunal order.
(See Section 7.5 below for notices of requested orders.)

   2.2 Status Reports. Escrow Agent will issue to Depositor and Preferred
Beneficiary a report profiling the account history at least semi-annually.
Escrow Agent may provide copies of the account history pertaining to this
Agreement upon the request of any party to this Agreement.

   2.3 Audit Rights. During the term of this Agreement, Depositor and Preferred
Beneficiary shall each have the right to inspect the written records of Escrow
Agent pertaining to this Agreement. Any inspection shall be held during normal
business hours and following reasonable prior notice.

                   ARTICLE 3--GRANT OF RIGHTS TO ESCROW AGENT

   3.1 Title to Media. Depositor hereby transfers to Escrow Agent the title to
the media upon which the proprietary technology and materials are written or
stored. However, this transfer does not include the ownership of the
proprietary technology and materials contained on the media such as any
copyright, trade secret, patent or other intellectual property rights.

   3.2 Right to Make Copies. Escrow Agent shall have the right to make copies
of the Deposit Materials as reasonably necessary to perform this Agreement.
Escrow Agent shall copy all copyright, nondisclosure, and other proprietary
notices and titles contained on the Deposit Materials onto any copies made by
Escrow Agent. With all Deposit Materials submitted to Escrow Agent, Depositor
shall provide any and all instructions as may be necessary to duplicate the
Deposit Materials including but not limited to the hardware and/or software
needed.

   3.3 Right to Transfer Upon Release. Depositor hereby grants to Escrow Agent
the right to transfer the Deposit Materials to Preferred Beneficiary upon any
release of the Deposit Materials for use by Preferred Beneficiary in accordance
with Section 4.5. Except upon such a release or as otherwise provided in this
Agreement, Escrow Agent shall not transfer the Deposit Materials.

<PAGE>

                         ARTICLE 4--RELEASE OF DEPOSIT

   Escrow Agent shall release the Deposit Materials in accordance with the
procedures set forth in this agreement on the occurrence on any one of the
following:

   (i) if the Releasing Party:

    (a) becomes the debtor in a voluntary petition under the United States
      Bankruptcy Code;

    (b) commences any proceeding for relief from or adjustment of its debts
      (including without limitation by consenting to or otherwise
      permitting the entry of an order for relief in an involuntary case
      under the United States Bankruptcy Code);

    (c) requests, consents to or permits the appointment of a receiver for
      all or substantially all of its assets; or

    (d) files any court proceeding seeking its liquidation and the winding
      up of its affairs;

   (ii) if the Releasing Party:

    (a) becomes the alleged debtor in an involuntary petition under the
      United States Bankruptcy Code if such petition or proceeding is not
      dismissed within ninety (90) days of filing;

    (b) has filed against it any involuntary proceeding for relief from or
      adjustment of its debts, or requesting the appointment of a receiver
      for all or substantially all of its assets; or

    (c) becomes the subject of any involuntary proceeding for the
      liquidation of the party and the winding up of its affairs if such
      petition or proceeding, in each case, is not dismissed within ninety
      (90) days of filing;

   (iii) if the Releasing Party makes a general assignment for the benefit of
its creditors, or enters into a composition of creditors; or

   (iv) if the Releasing Party adopts necessary board and, if required,
stockholder resolutions for dissolution, liquidation and winding up of its
affairs.

   (v) if the Releasing Party ceases to operate or do business, without there
being a successor; or

<PAGE>

   (vi) if the Releasing Party fails to provide maintenance or support of its
Licensed Products in accordance with the standard terms and conditions for such
support, where such failure renders the Licensed Products materially unusable
causing a substantial adverse impact to the business of the Beneficiary and
which failure is not cured within forty-five (45) days of written notice from
the Beneficiary of such failure (collectively, "Release Conditions").

   4.2 Filing For Release. If Preferred Beneficiary believes in good faith that
a Release Condition has occurred, Preferred Beneficiary may provide to Escrow
Agent written notice of the occurrence of the Release Condition and a request
for the release of the Deposit Materials. Upon receipt of such notice, Escrow
Agent shall provide a copy of the notice to Depositor by commercial express
mail.

   4.3 Contrary Instructions. From the date Escrow Agent mails the notice
requesting release of the Deposit Materials, Depositor shall have five business
days to deliver to Escrow Agent contrary instructions. "Contrary Instructions"
shall mean the written representation by Depositor that a Release Condition has
not occurred or has been cured. Upon receipt of Contrary Instructions, Escrow
Agent shall send a copy to Preferred Beneficiary by commercial express mail.
Additionally, Escrow Agent shall notify both Depositor and Preferred
Beneficiary that there is a dispute to be resolved pursuant to the Dispute
Resolution section (Section 7.3) of this Agreement. Subject to Section 5.2,
Escrow Agent will continue to store the Deposit Materials without release
pending (a) joint instructions from Depositor and Preferred Beneficiary; (b)
resolution pursuant to the Dispute Resolution provisions; or (c) order of a
court.

   4.4 Release of Deposit. If Escrow Agent does not receive Contrary
Instructions from the Depositor, Escrow Agent is authorized to release the
Deposit Materials to the Preferred Beneficiary or, if more than one beneficiary
is registered to the deposit, to release a copy of the Deposit Materials to the
Preferred Beneficiary. However, Escrow Agent is entitled to receive any fees
due Escrow Agent before making the release. Any copying expense in excess of
$300 will be chargeable to Preferred Beneficiary. This Agreement will terminate
upon the release of the Deposit Materials held by Escrow Agent.

   4.5 Right to Use Following Release. Unless otherwise provided in the License
Agreement, upon release of the Deposit Materials in accordance with this
Article 4, Preferred Beneficiary shall have the right to use the Deposit
Materials for the sole purpose of exercising its rights pursuant to the License
Agreement. Preferred Beneficiary shall be obligated to maintain the
confidentiality of the released Deposit Materials.

                        ARTICLE 5--TERM AND TERMINATION

   5.1 Term of Agreement. The initial term of this Agreement is for a period of
     years from the effective date of the License Agreement. Thereafter, this
Agreement shall automatically renew from year-to-year unless (a) Depositor and
Preferred Beneficiary
<PAGE>

jointly instruct Escrow Agent in writing that the Agreement is terminated; or
(b) the Agreement is terminated by Escrow Agent for nonpayment in accordance
with Section 5.2.

   5.2 Termination for Nonpayment. In the event of the nonpayment of fees owed
to Escrow Agent, Escrow Agent shall provide written notice of delinquency to
all parties to this Agreement. Any party to this Agreement shall have the right
to make the payment to Escrow Agent to cure the default. If the past due
payment is not received in full by Escrow Agent within one month of the date of
such notice, then Escrow Agent shall have the right to terminate this Agreement
at any time thereafter by sending written notice of termination to all parties.
Escrow Agent shall have no obligation to take any action under this Agreement
so long as any payment due to Escrow Agent remains unpaid.

   5.3 Disposition of Deposit Materials Upon Termination. Upon termination of
this Agreement, Escrow Agent shall destroy, return, or otherwise deliver the
Deposit Materials in accordance with Depositor's instructions. If there are no
instructions, Escrow Agent may, at its sole discretion, destroy the Deposit
Materials or return them to Depositor. Escrow Agent shall have no obligation to
return or destroy the Deposit Materials if the Deposit Materials are subject to
another escrow agreement with Escrow Agent.

   5.4 Survival of Terms Following Termination. Upon termination of this
Agreement, the following provisions of this Agreement shall survive:

  a. Depositor's Representations (Section 1.5);

  b. The obligations of confidentiality with respect to the Deposit
    Materials;

  c. The rights granted in the sections entitled Right to Transfer Upon
    Release (Section 3.3) and Right to Use Following Release (Section 4.5),
    if a release of the Deposit Materials has occurred prior to termination;

  d. The obligation to pay Escrow Agent any fees and expenses due;

  e. The provisions of Article 7; and

  f. Any provisions in this Agreement which specifically state they survive
    the termination or expiration of this Agreement.

                         ARTICLE 6--ESCROW AGENT'S FEES

   6.1 Fee Schedule. Escrow Agent is entitled to be paid its standard fees and
expenses applicable to the services provided. Escrow Agent shall notify the
party responsible for payment of Escrow Agent's fees at least 60 days prior to
any increase in fees. For any service not listed on Escrow Agent's standard fee
schedule, Escrow Agent will provide a quote prior to rendering the service, if
requested.

<PAGE>

   6.2 Payment Terms. Escrow Agent shall not be required to perform any service
unless the payment for such service and any outstanding balances owed to Escrow
Agent are paid in full. Fees are due upon receipt of a signed contract or
receipt of the Deposit Materials whichever is earliest. If invoiced fees are
not paid, Escrow Agent may terminate this Agreement in accordance with Section
5.2. Late fees on past due amounts shall accrue interest at the rate of one and
one-half percent per month (18% per annum) from the date of the invoice.

                       ARTICLE 7--LIABILITY AND DISPUTES

   7.1 Right to Rely on Instructions. Escrow Agent may act in reliance upon any
instruction, instrument, or signature reasonably believed by Escrow Agent to be
genuine. Escrow Agent may assume that any employee of a party to this Agreement
who gives any written notice, request, or instruction has the authority to do
so. Escrow Agent will not be required to inquire into the truth or evaluate the
merit of any statement or representation contained in any notice or document.
Escrow Agent shall not be responsible for failure to act as a result of causes
beyond the reasonable control of Escrow Agent.

   7.2 Indemnification. Depositor and Preferred Beneficiary each agree to
indemnify, defend and hold harmless Escrow Agent from any and all claims,
actions, damages, arbitration fees and expenses, costs, attorney's fees and
other liabilities ("Liabilities") incurred by Escrow Agent relating in any way
to this escrow arrangement unless such Liabilities were caused solely by the
negligence or willful misconduct of Escrow Agent.

   7.3 Dispute Resolution. Any dispute relating to or arising from this
Agreement shall be resolved by arbitration under the Commercial Rules of the
American Arbitration Association. Three arbitrators shall be selected. The
Depositor and Preferred Beneficiary shall each select one arbitrator and the
two chosen arbitrators shall select the third arbitrator, or failing agreement
on the selection of the third arbitrator, the American Arbitration Association
shall select the third arbitrator. However, if Escrow Agent is a party to the
arbitration, Escrow Agent shall select the third arbitrator. Unless otherwise
agreed by Depositor and Preferred Beneficiary, arbitration will take place in
Santa Clara County, California, U.S.A. Any court having jurisdiction over the
matter may enter judgment on the award of the arbitrator(s). Service of a
petition to confirm the arbitration award may be made by First Class mail or by
commercial express mail, to the attorney for the party or, if unrepresented, to
the party at the last known business address.

   7.4 Controlling Law. This Agreement is to be governed and construed in
accordance with the laws of the State of California, without regard to its
conflict of law provisions.

   7.5 Notice of Requested Order. If any party intends to obtain an order from
the arbitrator or any court of competent jurisdiction which may direct Escrow
Agent to take, or refrain from taking any action, that party shall:
<PAGE>

  a. Give Escrow Agent at least two business days' prior notice of the
    hearing;

  b. Include in any such order that, as a precondition to Escrow Agent's
    obligation, Escrow Agent be paid in full for any past due fees and be
    paid for the reasonable value of the services to be rendered pursuant to
    such order; and

  c. Ensure that Escrow Agent not be required to deliver the original (as
    opposed to a copy) of the Deposit Materials if Escrow Agent may need to
    retain the original in its possession to fulfill any of its other duties.

                         ARTICLE 8--GENERAL PROVISIONS

   8.1 Entire Agreement. This Agreement, which includes the Exhibits described
herein, embodies the entire understanding among the parties with respect to its
subject matter and supersedes all previous communications, representations or
understandings, either oral or written. Escrow Agent is not a party to the
License Agreement between Depositor and Preferred Beneficiary and has no
knowledge of any of the terms or provisions of any such Webpay Agreements.
Escrow Agent's only obligations to Depositor or Preferred Beneficiary are as
set forth in this Agreement. No amendment or modification of this Agreement
shall be valid or binding unless signed by all the parties hereto, except that
Exhibit B1 need not be signed by Escrow Agent, Exhibit B2 need not be signed by
Preferred Beneficiary and Exhibit B3 need not be signed.

   8.2 Notices. All notices, invoices, payments, deposits and other documents
and communications shall be given to the parties at the addresses specified in
the attached Exhibit B3. It shall be the responsibility of the parties to
notify each other as provided in this Section in the event of a change of
address. The parties shall have the right to rely on the last known address of
the other parties. Unless otherwise provided in this Agreement, all documents
and communications may be delivered by First Class mail.

   8.3 Severability. In the event any provision of this Agreement is found to
be invalid, voidable or unenforceable, the parties agree that unless it
materially affects the entire intent and purpose of this Agreement, such
invalidity, voidability or unenforceability shall affect neither the validity
of this Agreement nor the remaining provisions herein, and the provision in
question shall be deemed to be replaced with a valid and enforceable provision
most closely reflecting the intent and purpose of the original provision.

   8.4 Successors. This Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the parties. However, Escrow Agent
shall have no obligation in performing this Agreement to recognize any
successor or assign of Depositor or Preferred
<PAGE>

Beneficiary unless Escrow Agent receives clear, authoritative and conclusive
written evidence of the change of parties.

   8.5 Regulations. Depositor and Preferred Beneficiary are responsible for and
warrant compliance with all applicable laws, rules and regulations, including
but not limited to customs laws, import, export, and re-export laws and
government regulations of any country from or to which the Deposit Materials
may be delivered in accordance with the provisions of this Agreement.

_____________________________________     _____________________________________
Depositor                                 Preferred Beneficiary

By: _________________________________     By: _________________________________

Name: _______________________________     Name: _______________________________

Title: ______________________________     Title: ______________________________

Date: _______________________________     Date: _______________________________

                     Escrow Agent

                     By: _________________________________

                     Name: _______________________________

                     Title: ______________________________

                     Date: _______________________________

<PAGE>

                                                                      EXHIBIT B1

                           MATERIALS TO BE DEPOSITED

                                 Account Number

   Depositor represents to Preferred Beneficiary that Deposit Materials
delivered to Escrow Agent shall consist of the following:

-------------------------------------   ----------------------------------------
Depositor                                 Preferred Beneficiary

By: _________________________________     By: _________________________________

Name: _______________________________     Name: _______________________________

Title: ______________________________     Title: ______________________________

Date: _______________________________     Date: _______________________________

<PAGE>

                                                                      EXHIBIT B2

                        DESCRIPTION OF DEPOSIT MATERIALS

Depositor Company Name _________________________________________________________

Account Number _________________________________________________________________

Product Name __________________________________________________________ Version
 (Product Name will appear as the Exhibit B2 Name on Account History report)

DEPOSIT MATERIAL DESCRIPTION:

<TABLE>
<CAPTION>
                                     Label
                                  Description
                                    of Each
                                    Separate
 Quantity Media Type & Size           Item
 -------- -----------------       -----------
 <C>      <C>                     <S>
          Disk 3.50 or
 ---
          DAT tape     mm
 ---
          CD-ROM
 ---
          Data cartridge tape
 ---
          TK 70 or     tape
 ---
          Magnetic tape
 ---
          Documentation
 ---
          Other
 ---
</TABLE>

PRODUCT DESCRIPTION:

Environment ____________________________________________________________________

DEPOSIT MATERIAL INFORMATION:

Is the media or are any of the files encrypted? Yes / No
If yes, please include any passwords and the decryption tools.

Encryption tool name __________________________________________________ Version

Hardware required ______________________________________________________________

Software required ______________________________________________________________

Other required information _____________________________________________________

I certify for Depositor that the above described Escrow Agent has inspected and
accepted the above Deposit Materials have been transmitted to Escrow Agent:
materials (any exceptions are noted above):

Signature ___________________________     Signature ___________________________

Print Name __________________________     Print Name __________________________

Date ________________________________     Date Accepted _______________________

                                          Exhibit B2# _________________________
Send materials to: Escrow Agent

<PAGE>

                                                                      EXHIBIT B3

                              DESIGNATED CONTACT

                                Account Number

<TABLE>
<CAPTION>

<S>                                                <C>
Notices, deposit material returns and
communications to Depositor                        Invoices to Depositor should be
should be addressed to:                            addressed to:

Company Name: _______________________________      ______________________________________
Address: ____________________________________      ______________________________________
         ____________________________________      ______________________________________
         ____________________________________      ______________________________________
Contact: ____________________________________      Contact: _____________________________
Telephone: __________________________________      ______________________________________
Facsimile: __________________________________      P.O.#, if required: __________________

Pursuant to Section 1.6
Verification Contact: _______________________       Telephone: __________________________

Notices and communications to                       Invoices to Preferred Beneficiary
Preferred Beneficiary should be addressed to:       should be addressed to:

Company Name: _______________________________      ______________________________________
Address: ____________________________________      ______________________________________
         ____________________________________      ______________________________________
         ____________________________________      ______________________________________
Contact: ____________________________________      Contact: _____________________________
Telephone: __________________________________      ______________________________________
Facsimile: __________________________________      P.O.#, if required: __________________

Requests from Depositor or Preferred Beneficiary to change the designated contact should
be given in writing by the designated contact or an authorized employee of Depositor or
Preferred Beneficiary.

Contracts, Deposit Materials and notices to        Invoice inquiries and fee remittances
Escrow Agent should be addressed to:               to Escrow Agent should be addressed
                                                   to:

Escrow Agent                                       Escrow Agent
</TABLE><PAGE>

                                                                   EXHIBIT 10.21

                           REVOLVING LOAN AGREEMENT

   THIS REVOLVING LOAN AGREEMENT (this "Agreement"), dated as of April 9,
2001, by and between KANA COMMUNICATIONS, INC., a Delaware corporation
("Borrower"), and BROADBASE SOFTWARE, INC., a Delaware corporation ("Lender");

                                  WITNESSETH:

   A. Concurrently with the execution of this Agreement, Borrower, Lender and
Arrow Acquisition Corp., a Delaware corporation and a wholly owned subsidiary
of Borrower ("Merger Sub"), are entering into an Agreement and Plan of Merger
of even date herewith (the "Merger Agreement") that provides for the merger of
Merger Sub with and into Lender (the "Merger"). Pursuant to the Merger, shares
of common stock of Lender, $0.001 par value per share, will be converted into
shares of common stock of Borrower, $0.001 par value per share, subject to the
terms and conditions set forth in the Merger Agreement. Capitalized terms used
but not defined herein shall have the meanings set forth in the Merger
Agreement.

   B. As a material inducement to enter into the Merger Agreement, Borrower
desires Lender to make available, and Lender is willing to make available, a
revolving credit facility to Borrower of up to an aggregate principal amount
of Twenty Million Dollars ($20,000,000) (the "Facility").

   NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and to induce Lender to extend credit to Borrower,
the parties agree as follows:

   1. Definitions.

   1.1 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

     "Advance" means an advance of funds to Borrower pursuant to this
     Agreement; provided that the aggregate principal amount of all
     outstanding Advances shall not exceed at any one time Twenty Million
     Dollars ($20,000,000).

     "Advance Date" means the date on which an Advance is made.

     "Authority" means the government of the United States of America, any
     other nation or any political subdivision thereof, whether state or
     local, and any agency, authority, instrumentality, regulatory body,
     court, central bank or other entity exercising executive, legislative,
     judicial, taxing, regulatory or administrative powers or functions of or
     pertaining to government.

     "Business Day" means a weekday on which commercial banks are open for
     business in San Francisco, California.

                                       1

<PAGE>
     "Default" or "default" means any of the events specified in Section 5.1.

     "Default Rate" means the "default rate" of interest per annum specified
     in the Note.

     "Effective Date" means the date of this Agreement.

     "GAAP" means generally accepted accounting principles as in effect in
     the United States from time to time.

     "Loan" means an Advance under this Agreement.

     "Loan Documents" means this Agreement, the Notes, the Advance requests,
     and all other documents and instruments now or hereafter evidencing,
     describing, guaranteeing or securing the Obligations contemplated hereby
     or delivered in connection herewith, as they may be modified.

     "Maturity Date" means the first anniversary of the date of this Agreement,
     provided, that (i) if prior to such date the Merger Agreement is terminated
     by Borrower pursuant to Section 7.1(i) thereof as a result of a willful
     breach by Lender, or pursuant to Section 7.1(f) thereof, then the Maturity
     Date shall be the first anniversary of the date of such termination, (ii)
     if prior to such first anniversary the Merger Agreement is terminated by
     either Borrower or Lender pursuant to Section 7.1(a) or (e) or (g) or (h),
     then the Maturity Date shall be the date 30 days after the effective date
     of such termination, and (iii) if Borrower shall execute a definitive
     agreement for a Parent Acquisition then the Maturity Date shall be 30 days
     after the date of such agreement.

     "Note" has the meaning given the term in Section 2.4.

     "Obligations" means all obligations and liabilities of Borrower to
     Lender under the Loan Documents, including, without limitation, the
     Loans, together with all interest accruing thereon.

     "Person" means any natural person, corporation, unincorporated
     organization, trust, joint-stock company, joint venture, association,
     company, limited or general partnership, limited liability company, any
     government or any agency or political subdivision of any government, or
     any other entity or organization.

     "Prime Rate" means, for any day, the rate of interest per annum quoted
     by the Wall Street Journal on that date as the prime rate in effect;
     each change in the Prime Rate shall be effective from and including the
     date such change is quoted by the Wall Street Journal as being
     effective.

     "Subsidiary" means any corporation, partnership or other entity in which
     a Person, directly or indirectly, owns more than fifty percent (50%) of
     the stock, capital or income interests, or other beneficial interests,
     or which is effectively controlled by such Person.

                                       2

<PAGE>

     "Termination Date" means the earlier to occur of (i) the Effective Time
     of the Merger, or (ii) the effective date of any termination of the
     Merger Agreement.

   1.2 Financial Terms. All financial terms used herein shall have the meanings
assigned to them under U.S. GAAP unless another meaning shall be specified.

   1.3 Construction. Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in the Merger Agreement. Reference to
Sections and Schedules herein shall be construed as referring to the Sections
and Schedules of this Agreement, unless otherwise stated.

   2. The Revolving Loan Credit Facility.

   2.1 Availability Period. Subject to the terms of this Agreement the Lender
grants to the Borrower a committed revolving credit facility made available for
Advances from the Effective Date until the earlier of (i) the Termination Date
and (ii) the Maturity Date. The Lender shall deposit $20,000,000 representing
the Facility into an escrow account (the "Escrow"). The Lender and the
Borrowers shall use their commercially reasonable efforts to appoint the escrow
agent and to finalize the terms governing the Escrow and providing for the
funding of Advances from such Escrow in accordance with the terms of this
Agreement, within two weeks from the date of this Agreement.

   2.2 Advances. Lender shall make each Advance to Borrower on the Advance Date
and in the amount as set forth in the borrowing request delivered in accordance
with Section 2.3; provided that (a) no more than one Advance shall be made in
any week, (b) unless otherwise agreed in writing between the chief executive
officers of the Borrower and Lender, the aggregate principal amount of Advances
(including the Advance to be made pursuant to any such borrowing request) shall
not exceed in any week the sum of (i) the aggregate amount of cash payroll
expense of Borrower and related withholding in such week plus (ii) up to $2.5
million to fund additional expenses to be paid in such week and which are
identified in reasonable detail in the related borrowing request, less (iii)
the excess of Borrower's and its Subsidiaries' cash and cash equivalents at the
time of such borrowing request (as determined under GAAP) over $1,000,000; and
(d) in no event shall the aggregate principal amount of all outstanding
Advances exceed $20,000,000.

   In the event that a Company Triggering Event shall have occurred the
Borrower shall be entitled, notwithstanding anything to the contrary in this
section, to drawdown the entire amount of the Facility and to request the
release of all remaining funds in the Escrow.

   2.3 Advance Requests. To obtain an Advance, Borrower shall submit a
borrowing request in writing, to the attention of Lender's Treasurer or Chief
Financial Officer, which request must be received by Lender no later than 12:00
noon Pacific time on a Business Day that is at least one (1) Business Day
before the Advance Date.

                                       3

<PAGE>

   2.4 Promissory Note. The Advances shall be evidenced by and payable in
accordance with the terms of the promissory note, in the form attached hereto
as Exhibit A, dated the date of this Agreement from Borrower to Lender (as
amended, modified, supplemented, restated or renewed from time to time, the
"Note") and shall be repayable in accordance with the terms of the Note and
this Agreement.

   2.5 Interest; Repayment of Advances.

       (a) Each Advance shall accrue interest on the outstanding principal
balance of such Advance at a rate equal to the higher of (i) a rate per annum
equal to Prime Rate plus two per cent (2%) and (ii) the Applicable Federal
Reserve Rate as published by the United States Treasury Department, from the
date of such Advance until such Advance has been paid in full.

       (b) Each Advance shall mature, and the principal amount thereof and all
interest and other amounts payable under the Loan Documents shall be due and
payable, on the Maturity Date.

       (c) At the option of the Borrower, on delivering 10 days' prior written
notice of prepayment to the Lender, the principal amount of any Advance may be
prepaid in whole at any time, or in part from time to time, without penalty or
premium, together with interest thereon accrued through the date of such
prepayment. Each partial prepayment of any Advance shall first be applied to
interest accrued through the date of prepayment and then to principal. Any
Advance voluntarily prepaid by the Borrower hereunder may be reborrowed subject
to the terms and conditions of this Agreement.

       (d) Borrower unconditionally promises to make each required payment of
principal of and interest on the Loans in lawful money of the United States by
wire transfer in immediately available funds to an account designated in
writing by Lender. Whenever any payment of principal of, or interest on, the
Loans shall be due on a day which is not a Business Day, the date for payment
thereof shall be extended to the next succeeding Business Day, and such
extension of time shall be included in the computation of interest or fees, as
the case may be.

       (e) All amounts payable by Borrower pursuant to the Loan Documents shall
be payable without notice or demand and without set-off or counterclaim.

   2.6 Overdue Amounts. Any payments required pursuant to any Loan Document not
made as and when due shall bear interest from the date due until paid to Lender
at the Default Rate, in Lender's discretion.

   2.7 Calculation of Interest. All interest under the Notes or hereunder shall
be calculated on the basis of a 365/366-day year for the actual days during
which such amounts are outstanding.

                                       4

<PAGE>

   2.8 Taxes. Any and all payments by or on account of any Obligation of
Borrower hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Taxes (excluding franchise Taxes and
Taxes on net income and foreign Taxes); provided that if Borrower shall be
required to deduct any such Taxes from such payments, then (a) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section), Lender receives an amount equal to the sum it would have received had
no such deductions been made, (b) Borrower shall make such deductions and (c)
Borrower shall pay the full amount deducted to the relevant Authority in
accordance with applicable law.

   2.9 Term. This Agreement shall become effective upon acceptance by Lender
and shall continue in full force and effect so long as any Obligation (other
than inchoate Obligations) is outstanding.

   2.10 Conditions Precedent to Borrowing. In addition to any other
requirement set forth in this Agreement, Lender will not be required to make
any Advances under this Agreement unless and until the following conditions
shall have been satisfied:

      (a) Loan Documents. Borrower shall have executed and delivered this
Agreement and the Note.

      (b) SVB Facility. The Borrower shall have delivered to Lender a written
waiver and consent letter and, if required by Silicon Valley Bank, an
intercreditor agreement, each in a form reasonably satisfactory to the Lender
executed by Silicon Valley Bank consenting to the Borrower incurring the
indebtedness hereunder. The Lender shall use its commercially reasonable
efforts to conclude any such intercreditor agreement which is required by
Silicon Valley Bank as soon as practicable.

   3. Representations and Warranties. In order to induce Lender to enter into
this Agreement and to make the Loans provided for herein, Borrower hereby
represents and warrants (all of which shall survive the execution and delivery
of the Loan Documents and all of which shall be deemed made as of the date
hereof and as of each Advance Date) that:

   3.1 Valid Existence and Power. Borrower is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization
and is duly qualified or licensed to transact business in all places where the
failure to be so qualified could reasonably be expected to have a Material
Adverse Effect on Borrower; and Borrower and each other Person which is a
party to any Loan Document (other than Lender) has the corporate power and
authority to conduct its business and to make and perform the Loan Documents
executed by it and the transactions contemplated thereby, and all such
documents will constitute the legal, valid and binding obligations of
Borrower, enforceable in accordance with their respective terms, subject only
to bankruptcy and similar laws affecting creditors' rights generally and
general principals of equity.

                                       5

<PAGE>

   3.2 Authority. The execution, delivery and performance thereof by the
Borrower of any Loan Document and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate
action of the Borrower, and do not and will not conflict with or violate any
provision of law or regulation, or any writ, order or decree of any court or
Authority or any provision of the governing instruments of the Borrower, and
(except with respect to the Borrowers existing credit facilities) do not and
will not, with the passage of time or the giving of notice, result in a breach
of, or constitute a default or require any consent under, or impair the
Borrower's rights under, or result in the creation of any Lien upon any
property or assets of Borrower pursuant to, any law, regulation, or any
material instrument, document or agreement to which any of Borrower is a party
or by which any of Borrower or its respective properties may be subject, bound
or affected.

   3.3 Compliance with Covenants; No Default. No Default has occurred and is
continuing, and the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, and the funding of the Loan will
not cause a Default.

   4. Covenants of Borrower. Borrower covenants and agrees that from the date
of the initial Advance and until payment in full of the Obligations (except
inchoate Obligations), except as otherwise set forth in the Merger Agreement
or this Agreement, it:

   4.1 Use of Loan Proceeds. Shall use the proceeds of Advances to pay cash
payroll expense and related withholding, and other expenses that are
identified in reasonable detail in the related borrowing request.

   4.2 Inspections. Shall permit inspections, at such times and in such manner
as may be reasonably requested by Lender and at Borrower's expense, all
records and financial information related thereto and the properties of
Borrower as Lender may deem reasonably necessary or desirable from time to
time. All information obtained pursuant to this section shall be subject to
the Confidentiality Agreement.

   4.3 Maintenance of Existence and Rights. Shall preserve and maintain its
corporate existence, authorities to transact business and shall use its
commercially reasonable efforts to preserve and maintain its Intellectual
Property necessary to the conduct of its business.

   4.4 Fundamental Changes. Shall not, nor shall it permit any Subsidiary to,
merge into or consolidate with any other Person (other then Borrower) or
liquidate or dissolve, other than as contemplated by the Merger Agreement.

   5. Default/Indemnification.

   5.1 Events of Default. Each of the following shall constitute a Default:

       (a) Borrower shall fail to pay any principal of any Loan when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise and such failure shall continue
unremedied for a period of five (5) days; or

                                       6

<PAGE>
       (b) Borrower shall fail to pay any interest on any Loan or any fee or
any other amount payable under this Agreement or any other Loan Document, when
and as the same shall become due and payable, and such failure shall continue
unremedied for a period of five (5) days; or

       (c) There shall occur any default by Borrower in any of the covenants
contained in this Agreement which is not cured within thirty (30) days of
notice of such default from Lender; or

       (d) Any representation or warranty made by Borrower in any Loan Document
shall prove to have been untrue or incorrect in any material respect when made;
or

       (e) Borrower shall voluntarily dissolve, liquidate or terminate
operations or apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, intervenor, liquidator or
similar official of a substantial part of its assets, admit in writing its
inability, or be generally unable, to pay its debts as the debts become due,
make a general assignment for the benefit of its creditors, commence a
voluntary case under any bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it
in an involuntary case under any bankruptcy, insolvency, receivership or
similar law now or hereafter in effect, or take any corporate action for the
purpose of effecting any of the foregoing; or

       (f) An involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of Borrower or its debts, or of a substantial part of its assets,
under any bankruptcy, insolvency, receivership or similar law now or hereafter
in effect, or (ii) the appointment of a receiver, custodian, trustee,
intervenor, liquidator or similar official for Borrower or for a substantial
part of its assets, and, in any such case, such proceeding or petition shall
not have been dismissed within sixty (60) days of the commencement or filing,
as the case may be, thereof; or an order for relief, judgment or decree shall
be entered by any court of competent jurisdiction or other competent authority
approving or ordering any of the foregoing actions.

       (g) Remedies. If any Default shall occur and be continuing, Lender shall
have no further obligation to make Advances to Borrower and may, at its option,
without notice and without demand, declare any or all Obligations to be
immediately due and payable (if not earlier demanded), terminate its obligation
to make Advances to Borrower, bring suit against Borrower to collect the
Obligations, exercise any remedy available to Lender hereunder at law or in
equity and take any action or exercise any remedy provided herein or in any
other Loan Document or under applicable law or in equity. No remedy shall be
exclusive of other remedies or impair the right of Lender to exercise any other
remedies.

   5.2 Application of Payments. Any payments made by Borrower pursuant to this
Agreement shall be paid to and applied as follows: first, to the costs and
expenses, including reasonable attorneys' fees and expenses, incurred by Lender
in connection with the exercise of
                                       7

<PAGE>
Lender's rights and remedies hereunder; secondly, to the interest due upon any
of the Obligations; and thirdly, to the principal amount of the Obligations.

   5.3 Indemnification. Borrower shall indemnify Lender, and each Related Party
(except affiliates) of Lender (each such person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (a) any Loan or the use of the proceeds therefrom, (b) the
performance by Borrower of its obligations under any of the Loan Documents or
(c) upon an Event of Default occurring and continuing, the enforcement by the
Lender of its rights and remedies thereunder; excluding Taxes and losses,
claims, damages, liabilities and related expenses arising as a result of the
negligence or willful misconduct of any Indemnitee and excluding consequential
or punitive losses or damages.

   6. Miscellaneous.

   6.1 No Waiver, Remedies Cumulative. No failure on the part of Lender or
Borrower to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and are in addition to any other remedies provided by
law, in equity, any Loan Document or otherwise.

   6.2 Survival of Agreement. All covenants, agreements, representations and
warranties made by Borrower herein and in any other Loan Document shall survive
the making of the Loans hereunder and the execution and delivery of the Notes,
regardless of any investigation made by Lender or on its behalf, and shall
continue in full force and effect so long as any Obligation (other than
inchoate Obligations) is outstanding, and there exists any commitment to lend
by Lender to Borrower.

   6.3 Notices. Any notice or other communication hereunder or under any other
Loan Document to any party hereto or thereto shall be made in the manner
specified in the Merger Agreement.

   6.4 Governing Law. This Agreement and the Loan Documents shall be deemed
contracts made under the laws of the State of California and shall be governed
by and construed in accordance with the laws of said state (excluding its
conflict of laws provisions if such provisions would require application of the
laws of another jurisdiction).

   6.5 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of Borrower and Lender, and their respective successors
and assigns; provided that no party may assign this Agreement or any other Loan
Document without the express written consent of the other, and any such
assignment made without such consent will be void.

                                       8

<PAGE>

   6.6 Amendment. This Agreement may be amended by the parties hereto at any
time by execution of an instrument in writing signed on behalf of each of
Lender and Borrower.

   6.7 Entire Agreement. This Agreement, the other Loan Documents and the
Merger Agreement (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the Confidentiality Agreement
shall continue in full force and effect until the Closing and shall survive any
termination of this Agreement, and (b) are not intended to confer upon any
other person any rights or remedies hereunder.

   6.8 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.

   6.9 Waiver of Jury Trial. EACH OF LENDER AND BORROWER HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ACTIONS OF LENDER OR BORROWER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

   6.10 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute but one and the same instrument.

   6.11 No Usury. Regardless of any other provision of this Agreement, the Note
or in any other Loan Document, if for any reason the effective interest should
exceed the maximum lawful interest, the effective interest shall be deemed
reduced to, and shall be, such maximum lawful interest, and (a) the amount
which would be excessive interest shall be deemed applied to the reduction of
the principal balance of the Note and not to the payment of interest, and (b)
if the Loan evidenced by the Note have been or is thereby paid in full, the
excess shall be returned to the party paying same, such application to the
principal balance of the Note or the refunding of excess to be a complete
settlement and acquittance thereof.

   6.12 Representations and Warranties of the Lender. By its execution of or
acceptance of this Agreement, the Lender represents and warrants to the
Borrower that the Lender: (i) has acquired the Note for its own account for
investment and not with a view to any resale or other distribution of the Note
in a transaction constituting a public offering or otherwise requiring
registration under the Securities Act or in a transaction that would result in

                                       9

<PAGE>

noncompliance with applicable state securities laws; (ii) has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and the risks of its acquisition of this Note and credit extensions
to the Borrower, (iii) is an accredited investor as such term is defined in
Rule 501 of Regulation D under the Securities Act, and (iv) understands that
the Note has not been, and will not be, registered under the Securities Act or
any state securities laws.

                                      10

<PAGE>

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

                                          LENDER:

                                          BROADBASE SOFTWARE, INC.

                                          By: /s/ Chuck Bay
                                             ----------------------------------
                                          Name: Chuck Bay
                                          Title: Chief Executive Officer

                                          BORROWER:

                                          KANA COMMUNICATIONS, INC.

                                          By: /s/ James C. Wood
                                             ----------------------------------
                                          Name: James C. Wood
                                          Title: Chief Executive Officer

                                      11

<PAGE>

                                                                       EXHIBIT A

                     [FORM OF CONVERTIBLE PROMISSORY NOTE]

   THIS CONVERTIBLE PROMISSORY NOTE (THIS "NOTE") HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (AS AMENDED THE "SECURITIES ACT") AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR,
IF REQUIRED BY THE ISSUER OF THIS NOTE, AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER OF THIS NOTE THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT.

                           KANA COMMUNICATIONS, INC.

                          CONVERTIBLE PROMISSORY NOTE

                                                                   April 9, 2001
                                                           Palo Alto, California

   For value received, the receipt and sufficiency of which are hereby
acknowledged, KANA COMMUNICATIONS, INC., a Delaware corporation ("Borrower"),
hereby promises to pay to the order of BROADBASE SOFTWARE, INC., a Delaware
corporation ("Lender"), the aggregate unpaid sum of all Advances made by the
Lender to the Borrower, together with accrued interest thereon to be computed
on each Advance from the date of its disbursement, pursuant to the terms and
conditions of the Agreement (as defined below).

   This Promissory Note (the "Note") is the Note issued under, and entitled to
the benefits of, the Revolving Loan Agreement by and between Borrower and
Lender dated as of April 9, 2001 (said agreement, as the same may be amended,
restated or supplemented from time to time, being herein called the
"Agreement"), and the other Loan Documents, the terms and conditions of which
are made a part hereof to the same extent and with the same effect as if fully
set forth herein. Capitalized terms not defined in this Note shall have the
respective meanings assigned to them in the Agreement. This Note is entitled to
the benefit of the rights provided in the Loan Agreement.

   Interest on the outstanding principal balance under this Note is payable at
the rate equal (i) to Prime Rate plus two (2%) per annum (the "Interest Rate"),
or (ii) under the circumstances contemplated by the Agreement, at the Interest
Rate plus two percent (2%) per annum (the "Default Rate"), compounded quarterly,
in immediately available United States Dollars at the time and in the manner
specified in the Agreement. The outstanding principal and interest under

                                      A-1
<PAGE>

this Note shall be immediately due and payable on the Maturity Date (unless this
Note shall have been previously converted, at Lender's option, as provided
below). Payments received by Lender shall be applied first to the payment of
accrued, but unpaid interest on this Note and then to the reduction of the
unpaid principal balance of this Note.

   The Lender is authorized to endorse the amount and the date on which each
Advance is made, the maturity date therefore, each payment of principal with
respect thereto, and the date and amount of the conversion of any principal or
interest of any Loan that is converted into shares of Borrower's Common Stock,
on Schedule A hereto and made a part hereof, or on continuations thereof which
shall be attached hereto and made a part hereof; which recordation will
constitute prima facie evidence of the accuracy of the information so endorsed
on Schedule A; provided, that any failure to endorse such information on such
schedule or continuation thereof shall not in any manner affect any obligation
of the Borrower under the Agreement and this Note.

   At the option of Borrower, upon prior notice as provided in the Agreement,
the principal amount of this Note may be prepaid in whole or in part from time
to time, without penalty or premium, together with interest thereon accrued
through the date of such prepayment. Each partial prepayment of this Note shall
first be applied to interest accrued through the date of prepayment and then to
principal.

   To the fullest extent permitted by applicable law, Borrower waives: (a)
presentment, demand and protest, and notice of presentment, dishonor, intent to
accelerate, acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all of the Obligations,
the Loan Documents or this Note, and (b) any bond or security that might be
required by any court prior to allowing Lender to exercise any of its remedies.

   The Lender may elect at any time after the date ninety (90) days after April
17, 2001, at its sole option and effective as of the close of business on the
date of delivery of written notice of conversion to the Borrower, to convert
all or any part of the outstanding principal of and accrued interest on this
Note into that number of fully paid and nonassessable shares of Borrower's
Common Stock that is equal to the dollar amount of the principal and accrued
interest indebtedness being converted, divided by $1.10 (the "Conversion
Price"); provided, that the Conversion Price will automatically, equitably and
proportionally be adjusted to reflect any subdivision (stock split),
combination (reverse stock split), stock dividend or other recapitalization
affecting the Borrower's Common Stock; provided, further, that in no event
shall Lender be entitled to convert this Note into a total number of shares of
Common Stock that exceeds that number of shares which is equal to 19.9% of the
Borrower's total issued and outstanding shares of Common Stock as of the date
of such conversion, less such number of shares of Common Stock (if any) that
are then held by Lender and that were (A) purchased by Lender from any
officers, directors or substantial shareholders (as defined by the National
Association of Securities Dealers) of Borrower or (B) acquired by Lender upon
exercise of options under that certain Company Stock Option Agreement dated as
of April 9, 2001 between Lender and Borrower (the "Company Stock Option
Agreement"), including any shares with respect to which Lender has exercised
such option but which have not yet been delivered to

                                     A-2

<PAGE>
Lender or (C) otherwise acquired (or other securities convertible into Common
Stock of the Borrower otherwise acquired) by the Lender from the Borrower, or
any officers, directors or substantial shareholders (as defined by the National
Association of Securities Dealers) of Borrower, in connection with the
transactions represented by this Note or the Merger Agreement (as defined in the
Agreement); and provided, further, that Lender shall not be entitled to convert
this Note at any time upon or following a Change of Control of Lender (as
defined below). In the event that the Lender exercises its options under the
Company Stock Option Agreement (and provided that no Change of Control shall
have occurred) the Lender shall be entitled to satisfy the exercise price of
such options through the cancellation of the principal indebtedness and accrued
interest outstanding hereunder. Any such satisfaction of the option exercise
price shall be made on a dollar for dollar basis with the amount of the
outstanding principal and interest so cancelled.

   A "Change of Control" of Lender shall mean any of the following transactions
(other than in a transaction involving Borrower): (i) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Lender pursuant to which the stockholders of the
Lender immediately preceding such transaction hold less than 50% of the
aggregate equity interests in the surviving or resulting entity of such
transaction (or the parent thereof), (ii) a sale or other disposition by the
Lender of assets representing in excess of 50% of the aggregate fair market
value of the Lender's business immediately prior to such sale, or (iii) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by Lender), directly or indirectly, of beneficial
ownership or a right to acquire beneficial ownership of shares representing in
excess of 50% of the voting power of the then outstanding shares of capital
stock of the Lender.

   Lender agrees to surrender this Note to the Borrower for cancellation
following conversion of this Note and/or repayment of all principal and accrued
interest outstanding under this Note.

   The Borrower shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of this Note, such number of its Common Stock as shall
from time to time be sufficient to effect the conversion of this Note; and if at
any time the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the conversion of this Note the Borrower will take such
corporate action as may be necessary to increase its authorized but unissued
shares of Common Stock or other securities issuable upon conversion of this Note
as shall be sufficient for such purpose.

   Upon Lender's election to convert any of the outstanding principal of or
accrued interest on this Note, Borrower, at its expense, will as soon as
practicable cause to be issued in the name of and delivered to Lender, a
certificate or certificates for the number of fully paid and nonassessable
shares of Borrower's Common Stock to which Lender is entitled upon such
conversion. No fractional shares will be issued upon any conversion of this
Note or any part hereof. If, upon any conversion of this Note, a fraction of a
share would otherwise result, then Borrower will pay Lender an amount of cash
equal to the fair market value of one share of the type and class of Borrower's
capital stock issuable to Lender upon such conversion (determined

                                      A-3
<PAGE>

in accordance with the Conversion Price applicable at the time of such
conversion), multiplied by the fraction of a share of stock to which Lender
would otherwise be entitled.

   The Borrower will not, by amendment of its Certificate of Incorporation or
Bylaws, or through reorganization, consolidation, merger, dissolution, issue or
sale of securities, sale of assets or any other voluntary action, willfully
avoid or seek to avoid the observance or performance of any of the terms of
this Note. Without limiting the generality of the foregoing, the Borrower will
take all such action as may be necessary or appropriate in order that the
Borrower may duly and validly issue fully paid and nonassessable shares of
Common Stock upon any conversion of this Note.

   This Note and the obligations of Borrower and the rights of Lender shall be
governed by and construed in accordance with the internal substantive laws of
the State of California without giving effect to the choice of laws rules
thereof.

                                      A-4

<PAGE>
   IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first above written.

                                          KANA COMMUNICATIONS, INC.

                                          By: ________________________________
                                          Name: ______________________________
                                          Title: _____________________________

                                      A-5
<PAGE>

                                                              Schedule A to Note
                                                              ------------------

                      ADVANCES AND REPAYMENT OF ADVANCES
                      ----------------------------------

                     (2)              (3)            (4)
                   Amount          Maturity    Amount of Repaid      (5)
     (1)             of            Date of       or Converted      Notation
     Date          Advance         Advance         Advance          Made By
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