Document:

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                                                                    Exhibit 10.1

Information denoted by [*] herein has been omitted pursuant to a request for
confidential treatment. This information has been filed separately with the
Securities and Exchange Commission.

                            KANA COMMUNICATIONS, INC.
    [KANA LOGO]             KANA ALLIANCE PROGRAM
                            ORIGINAL EQUIPMENT MANUFACTURER AGREEMENT

This OEM Agreement (the "Agreement") by and between Kana Communications, Inc.,
("Kana") a Delaware corporation having its principal place of business at 740
Bay Road, Redwood City, CA 94063, and ServiceWare Technologies, Inc. ("Kana
Alliance Program Member [APM]" or "ServiceWare"), a Delaware corporation having
its principal place of business at 333 Allegheny Avenue Oakmont, PA 15139, is
entered into as of the date last written below ("the Effective Date").

1.    Definitions.

      a.    Bundled Product is the product derived from the integration of the
            Software into APM's products.

      b.    Documentation is the Kana documentation made available in hard copy
            or in electronic form with the Products or otherwise under this
            Agreement.

      c.    End-Customer is an entity which has executed a valid license
            agreement for the use of Kana's Products under this Agreement.

      d.    Guidelines means the then-current Kana published program guidelines
            for the Kana Alliance Program that have been provided to APM in
            writing, and any updates or revisions thereto that Kana may provide
            to APM from time to time in writing.

      e.    Kana Qualification is the status granted to APM employees who
            successfully complete the training set forth in Section 9 hereof.

      f.    Products shall mean all Software and all related Documentation
            provided therewith.

      g.    Software is the machine readable (object code) version of the
            computer program for inbound email response (currently known as Kana
            Response) made generally commercially available by Kana, and any
            copies, updates to, or upgrades thereof. Kana reserves the right to
            make deletions, additions, substitutions and modifications to the
            Software in its sole discretion, subject to Section 19.

      h.    Territory is the world.

2.    License.

      a.    Subject to the terms of this Agreement Kana grants to APM a
            nontransferable, nonsublicensable, nonexclusive, limited license to
            use and reproduce the Products for the purposes of

            i.    integrating the Products with APM's products to create the
                  Bundled Product;

            ii.   sublicensing and distributing the Bundled Products in the
                  Territory in object code form only to End-Customers for use
                  only within the Territory;

            iii.  demonstrating the Bundled Products in object code form only to
                  potential End-Customers; and

            iv.   providing training for the Bundled Products to End-Customers.

      b.    Each Bundled Product licensed by APM that incorporates Software
            shall be distributed by APM only pursuant to a Sublicense Agreement
            to which the appropriate End-Customer is bound prior to access to
            the Software being granted to that End-Customer, and which contains
            terms and conditions at least as favorable to Kana as those set
            forth in Kana's Software License Agreement (a copy of which is
            attached hereto as Exhibit A). APM agrees that it shall either: (i)
            enforce the Sublicense Agreement in order to protect the rights of
            Kana hereunder, or (ii) in the event APM fails to enforce such
            Sublicense Agreement or protect Kana's rights hereunder, then to the
            extent legally permitted APM hereby assigns its rights under such
            Sublicense Agreement to Kana, but only to the extent necessary to
            protect Kana's rights hereunder.

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      c.    APM may utilize its authorized distributors or resellers solely for
            the purposes of distributing the Bundled Products provided that (i)
            such distributors and resellers are subject to restrictions
            substantially similar to those set forth in this OEM agreement, (ii)
            APM is responsible to Kana for all acts and omissions of such
            distributors and resellers with regard to the Software or Products,
            and (iii) with the exception of [*], such distributor and resellers
            are subject to the [*] limitation as set forth on the Pricing
            Schedule and may not distribute or resell any Product with greater
            than [*] seats without Kana written consent, which consent will not
            be unreasonably withheld.

      d.    No right is granted to APM hereunder to use the Products for APM's
            internal use (other than creating Bundled Product), or for any other
            use not expressly granted herein.

      e.    APM may not sublicense, distribute, or otherwise resell the Products
            or the Software on a standalone basis. The licenses granted herein
            are provided solely for the purposes of enabling APM to create and
            sublicense the Bundled Product.

      f.    Each party has concurrently licensed their respective products to
            the other party under separate license agreements: the Kana Master
            Software License Agreement (the "Kana SLA") and the ServiceWare
            Software License, Professional Services and Maintenance Agreement
            (the "ServiceWare SLA"). The licensor under each such agreement
            hereby agrees that products under such licenses may also be used by
            the licensee to support and fulfill its respective obligations under
            this Agreement, including to provide customer support under this
            Agreement and to develop the integrated Bundled Product.

      g.    Kana shall provide APM with the deliverables relating to the Product
            and identified on Exhibit _ within five days of the Effective Date.

3.    Proprietary Rights and Software Licensing.

      a.    Limitations. Except as otherwise expressly provided under this
            Agreement, APM shall have no right, and APM specifically agrees not
            to:

            i.    transfer or sublicense its license rights to any other person;
                  or

            ii.   decompile, decrypt, reverse engineer, disassemble or otherwise
                  reduce the Software to human-readable form.

      b.    Upgrades and Additional Copies. For purposes of this Agreement,
            Software shall include (and the terms and conditions of this
            Agreement shall apply to) any upgrades, updates, bug fixes or
            modified versions (collectively, "Upgrades") or backup copies of the
            Software licensed or provided to APM by Kana or an authorized
            distributor. Subject to APM's payment of the applicable maintenance
            fees, Kana shall provide APM with all Updates within thirty days
            after Kana makes such Updates generally available.. NOTWITHSTANDING
            ANY OTHER PROVISION OF THIS SOFTWARE LICENSE: (1) APM HAS NO LICENSE
            OR RIGHT TO USE ANY SUCH ADDITIONAL COPIES OR UPGRADES UNLESS APM,
            AT THE TIME OF ACQUIRING SUCH COPY OR UPGRADE, ALREADY HOLDS A VALID
            LICENSE TO THE ORIGINAL SOFTWARE; (2) USE OF UPGRADES IS LIMITED TO
            APM AS THE ORIGINAL END CUSTOMER LICENSEE OR TO END-CUSTOMERS WHO
            OTHERWISE HOLD A VALID LICENSE TO USE THE SOFTWARE WHICH IS BEING
            UPGRADED; AND (3) USE OF ADDITIONAL COPIES IS LIMITED TO BACKUP
            PURPOSES ONLY (UNLESS APPLICABLE LICENSE FEES ARE PAID).

4.    Ownership.

      a.    APM agrees that all Products furnished under this Agreement shall
            remain the sole and exclusive property, confidential information and
            trade secrets of Kana, and shall

            i.    not be reproduced or copied, in whole or in part, except as
                  necessary for use as authorized under this Agreement or unless
                  otherwise agreed to in writing by Kana;

            ii.   not be used to develop other software except as specifically
                  provided herein; and

            i.    To the extent that APM conceives, learns, or reduces to
                  practice any work of authorship, idea or know-how (whether or
                  not patentable) that is a derivative work, improvement or
                  modification of the Products in the course of performance
                  under this Agreement ("Work

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                  Product") shall be owned by APM, subject to Kana's title and
                  other rights in the Software and the Product, provided that
                  nothing in this Agreement shall prevent Kana from developing
                  any technology or products similar to, or the same as, Work
                  Product. Specifically, APM grants to Kana a world-wide
                  permanent, irrevocable, royalty-free, unlimited, fully
                  paid-up license to any Work Product, provided that APM shall
                  have no obligation to provide Kana with any such Work Product
                  except as specifically required by Kana to fulfill its
                  obligations to APM or the End-Customers under this Agreement;

            ii.   APM agrees not to assert, file or otherwise raise any claim or
                  action against Kana for the infringement of any rights of APM
                  in any Work Product; and

            iii.  To the extent that any Work Product includes the Software or
                  Product, or any portion thereof, APM shall treat such Work
                  Product as Proprietary Information of Kana and not disclose or
                  grant any rights in such Work Product to any third party
                  (except as otherwise permitted by this Agreement).

            The parties anticipate that APM shall independently integrate the
            Product into the Bundled Product. Subject to such assumption, APM
            shall own the Bundled Products subject to Kana's title and other
            rights in the Software and the Product. Notwithstanding anything
            to the contrary Agreement, APM shall retain all title and other
            rights, and no license shall be granted, in the products of APM
            developed prior to the Effective Date or developed without use of
            the Products.

      b.    Trademarks, product markings and goodwill

            i.    APM acknowledges that the marks "Kana", "Kana CMS", Kana logo,
                  and all other valid trademarks, trade names or service marks
                  of Kana (the "Marks"), and all registrations thereof, are good
                  and valid and are solely and exclusively owned by Kana. APM
                  agrees that it will use and display the Marks only in the form
                  or for the purposes authorized by Kana in this Agreement. APM
                  further acknowledges that this Agreement does not grant APM
                  any right, title or interest in the Marks or goodwill
                  associated with Kana and the Software as represented and
                  symbolized by the Marks.

            ii.   APM agrees not to market any of the Software under any name
                  except such name therefor as is designated by Kana. APM shall
                  prominently display all such Marks (with an indication that
                  Kana is the owner and holder of the Mark(s)) in accordance
                  with such reasonable instructions as it may receive from time
                  to time from Kana, and shall use them as may be necessary in
                  the solicitation of orders for the Bundled Products during the
                  term of this Agreement. APM shall not knowingly take any
                  action, or fail to take any action, during the term of this
                  Agreement, which would adversely affect the validity or
                  enforceability of Kana's Marks.

            iii.  In order to preserve and protect the goodwill, reputation and
                  image of Kana and the Software, APM shall:

                  (1)   Not engage in any deceptive, misleading or unethical
                        practices, which are detrimental to Kana or the
                        Software;

                  (2)   Refrain from making any false, misleading or deceptive
                        representations with regard to Kana or the Software; and

                  (3)   Refrain from making any representations, warranties or
                        guarantees to End-Customers or prospective End-Customers
                        or other third parties with respect to the
                        specifications, features or capabilities of the Software
                        that are inconsistent with the literature or other
                        information approved, provided or prepared by Kana.

            iv.   Immediately following the expiration or termination of this
                  Agreement for any reason, APM shall discontinue use of the
                  aforementioned Marks and return, or dispose of, as Kana may
                  reasonably direct, any signs or other promotional displays
                  directly or indirectly referencing or relating to Kana and/or
                  any of the Software or Marks. If, after expiration or
                  termination of this Agreement, APM makes any further use of
                  the Marks, such use shall be deemed a breach of this Agreement
                  for which a remedy at law may not exist. In such case, Kana
                  shall be entitled to seek immediate injunctive relief from an
                  appropriate court.

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      c.    APM agrees that each copy of any Products, and all packaging media
            used for their distribution, shall include reproductions of the
            copyright notices and other proprietary legends of Kana as Kana
            designates, in computer object code format or otherwise, which
            accompany such items. APM shall not remove, efface or obscure any
            copyright notices or other proprietary notices or legends from any
            Kana materials provided herein.

5.    Proprietary Notices. APM agrees to maintain and reproduce all copyright
      and other proprietary notices on all copies, in any form, of the Software
      in the same form and manner that such copyright and other proprietary
      notices are included on the Software. Except as expressly authorized in
      this Agreement, APM shall not make any copies or duplicates or any
      Software without the prior written permission of Kana. APM may make such
      backup copies of the Software as may be necessary for APM's lawful use,
      provided APM affixes to such copies all copyright, confidentiality, and
      proprietary notices that appear on the original.

6.    Obligations of APM.

      a.    APM shall:

            i.    Integrate the Software into APM's products to create the
                  Bundled Product;

            ii.   Promote Kana, and promote and sublicense, install, support
                  and/or maintain (as hereinafter defined) the Software and the
                  Bundled Product;

            iii.  Inform current and potential End-Customers of new Software and
                  Bundled Product offerings, as well as of enhancements to
                  current Software;

            iv.   Include with the Software any and all documentation included
                  by Kana at time of shipment or as otherwise reasonably
                  required by Kana prior to the time of shipment;

            v.    Maintain reasonable demonstration units and facilities for
                  supporting, marketing and promotion of the Software and the
                  Bundled Product;

            vi.   Represent Kana and the Software in a professional, responsive
                  and favorable manner at all times;

            vii.  Provide installation, integration and other services to
                  End-Customers at professional standards;

            viii. Promptly transmit to Kana any current or potential
                  End-Customer complaints concerning Kana or the Software;

            ix.   Make professional and timely responses to prospective
                  End-Customer leads to the extent provided by Kana;

            x.    Use its reasonable efforts to inform Kana of any violations or
                  infringements under any agreement under which the Bundled
                  Products are distributed of which APM is aware;

            xi.   participate in reasonable relationship marketing activities
                  between Kana and APM as specified in the Guidelines including
                  but not limited to joint press releases and company logo
                  exchange;

            xii.  place the Kana logo and the "Powered by Kana" mark on APM's
                  website;

            xiii. allow Kana to use APM's name as a reference, including without
                  limitation, use of APM's name in (a) a press release that is
                  mutually agreed upon in writing, which agreement by APM shall
                  not be unreasonably withheld and (b) on other promotional
                  materials as the parties may agree;

            xiv.  not publish or otherwise distribute the results of any tests,
                  benchmarking or other analysis of the Products without Kana's
                  prior written consent;

            xv.   forthwith notify Kana if it becomes aware that the
                  arrangements contemplated by this Agreement are or likely to
                  be in breach of any laws or regulations;

            xvi.  have any of its personnel engaged in the sale and support of
                  the Software are certified by Kana pursuant to the section of
                  this Agreement entitled `TRAINING'; and

            xvii. Within thirty (30) days following the Effective Date of this
                  Agreement, prepare and provide to Kana a written forecast of
                  anticipated Software licenses under this Agreement for the
                  next

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                  twelve (12) months. APM shall prepare and provide an
                  updated forecast monthly thereafter. Such forecasts are not
                  binding on Kana or APM.

            xviii.

            xix.  During the term of this Agreement, APM agrees to provide Kana
                  with a discount on all consulting, implementation and similar
                  services for APM software licensed by Kana under the
                  ServiceWare SLA.

7.    Support. APM shall provide support to APM's End-Customers subject to the
      terms contained herein and subject to the terms at least as favorable to
      End-Customers as those contained within the Support Agreement attached
      hereto as Exhibit B.

8.    Obligations of Kana. Kana shall:

      a.    make Products available to APM, and for APM's use subject to the
            terms of this Agreement;

      b.    when planning joint marketing events with APM, make reasonable
            efforts to actively participate in such events, by, for example,
            giving talks, giving information to End-Customers, or helping
            organize such events; and

      c.    furnish to APM, at no charge, reasonable quantities of sales aids,
            product briefs, brochures, and similar literature and material
            normally made available to End-Customers.

      d.    Include APM as a "Premier Partner" in Kana's Partner Program and
            provide APM with all benefits related to such Partner category.

      e.    During the term of this Agreement, Kana agrees to provide APM with a
            discount on all consulting, implementation and similar services for
            Kana software licensed by APM under the Kana SLA.

9.    Training.

      a.    APM shall fulfill the reasonable training requirements as set forth
            in the Guidelines, which may be updated in a reasonable manner from
            time to time by Kana. In addition, APM shall agree to receive and/or
            attend additional sales or technical training as directed by Kana as
            reasonably necessary for APM to fulfill its obligations under this
            Agreement.

      b.    The parties shall jointly develop a training plan to allow APM to
            meet the foregoing obligations.

      c.    Kana shall provide APM with reasonable sales or product training at
            the discounts set forth in the Guidelines and this Agreement. APM
            shall bear all travel, lodging and other related expenses that its
            trainees may incur in attending these sessions.

      d.    In conjunction with APM, Kana will determine the need for
            specialized training. If the parties to the Agreement decide that
            such training is necessary, Kana will conduct these courses. Cost of
            the training shall be at Kana's then-current rates less the
            discounts as set forth in the Guidelines.

10.   Non-Exclusivity By Kana. Kana may appoint other companies to purchase,
      resell, license, sublicense, install, support, maintain and/or otherwise
      distribute one or more of its Software, including without limitation,
      those that may compete with APM. Kana reserves the sole and exclusive
      right to solicit, authorize, approve, disapprove or terminate any current
      or prospective reseller. Nothing in this Agreement shall be construed to
      prohibit Kana from selling, licensing, sublicensing, installing,
      supporting, maintaining and/or otherwise distributing its Software
      directly, indirectly, or through other channels.

11.   Non-Exclusivity By APM. APM may sell any software or products the
      functionality of which is substantially similar to that of any Software,
      and may sell any APM product without bundling it with Products.

12.   Limited Warranty.

      a.    Notwithstanding any other provision hereof, Kana's sole and
            exclusive warranty with respect to the Products sold hereunder are
            set forth in Kana's Limited Warranty Statement delivered with the
            Product and such limited warranty shall apply only to the Products
            and not to the Bundled Products. APM SHALL NOT MAKE ANY ADDITIONAL
            WARRANTY COMMITMENT,

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            WHETHER WRITTEN OR ORAL, ON KANA'S BEHALF. APM shall indemnify
            Kana for any warranties made in addition to Kana's standard
            warranty and for any misrepresentation of Kana's Products.

      b.    KANA DISCLAIMS ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING
            THOSE OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
            AGAINST INFRINGEMENT, OR ARISING FROM A COURSE OF DEALING, USAGE OR
            TRADE PRACTICE.

      c.    APM DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING THOSE
            OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR AGAINST
            INFRINGEMENT, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE
            PRACTICE.

13.   Confidential Information.

      a.    Each party (the "Receiving Party") acknowledges that, during the
            term of this Agreement, it may receive from or on behalf of the
            other party (the "Disclosing Party"), confidential or proprietary
            information relating to the Disclosing Party ("Proprietary
            Information"). Such Proprietary Information shall belong solely to
            the Disclosing Party and includes, but is not limited to, this
            Agreement, trade secrets, know-how, inventions (whether or not
            patentable), techniques, processes, programs, ideas, algorithms,
            schematics, testing procedures, software design and architecture,
            computer code, internal documentation, design and function
            specifications, product requirements, problem reports, analysis and
            performance information, software documents, and other technical,
            business, product, marketing and financial information, plans and
            data. The Software and related documentation shall be deemed Kana's
            Proprietary Information.

      b.    During and after the term of this Agreement, the Receiving Party
            shall:

            i.    not use or disclose (except as expressly authorized by this
                  Agreement) Proprietary Information without the prior written
                  consent of the Disclosing Party.

            ii.   take all reasonable measures to maintain the Proprietary
                  Information in confidence, but no less care than the Receiving
                  Party uses to protect its own Proprietary Information of like
                  kind;

            iii.  disclose Proprietary Information only to those of its
                  employees and consultants as are necessary for purposes of
                  this Agreement, and only after such employees and contractors
                  have agreed in writing to be bound by obligations of
                  confidentiality substantially equivalent to those contained in
                  this Agreement;

      c.    Proprietary Information shall not include information that:

            i.    becomes public without breach of this Agreement by the
                  Receiving Party, its officers, directors, employees or agents;

            ii.   was previously in the Receiving Party's possession (in written
                  or other recorded form) with no obligation to maintain
                  confidentiality;

            iii.  was received by from a third party not under any obligation of
                  confidentiality to the Disclosing Party; or

            iv.   was developed by the Receiving Party's employees, agents,
                  contractors, and/or representatives independently of, and
                  without reference to, any Proprietary Information.

14.   Payment

      a.    APM shall pay to Kana the amounts, including the minimums, as set
            forth in Schedule A. All License and APM Fees are exclusive of
            shipping, taxes (other than taxes on Kana's income or net worth),
            duties and the like, which shall be paid by APM. All late payments
            shall be assessed a service charge of 1.5% per month to the extent
            allowed by law. For international shipments, outside the United
            States, APM will be responsible in advance for all applicable
            shipping charges, taxes, customs charges, duties, brokerage fees or
            common carrier charges.

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      b.    APM shall not be obligated to pay any compensation to any Kana
            reseller or distributor that may be entitled to a commission or
            other payment arising from sales of Products within the Territory.

15.   Term and Termination.

      a.    This Agreement shall commence on the Effective Date and continue
            until December 31, 2001 (the "Initial Term"), unless extended by
            written agreement of both parties or sooner terminated as set forth
            below.

Either party may, upon twenty (20) days written notice, terminate this Agreement
in the event (a) there is a change of ownership of the other party (i.e.
purchase or sale by one person or other entity) of fifty percent (50%) or more
of such party's market valuation to a competitor of the first party; or (b)
there is an acquisition or transfer of a controlling interest in the other party
to a competitor of the first party and (c) the other party makes a greater than
50% investment (including an acquisition) of a competitor of the first party.
For purposes of this Section, APM's competitors shall consist of [*] and [*],
and their respective affiliates

      b.    This Agreement may be terminated immediately by either party through
            written notice under any of the following conditions:

            i.    Either party ceases to carry on business as a going concern,
                  either party becomes the object of the institution of
                  voluntary or involuntary proceedings in bankruptcy or
                  liquidation (and such proceedings are not dismissed within
                  thirty (30) days), or a receiver is appointed with respect to
                  a substantial part of its assets.

            ii.   Either party breaches any of the material provisions of this
                  Agreement and fails to remedy such breach within thirty (30)
                  days after written notification by the other party of such
                  breach.

      c.

      d.    Upon termination of this Agreement, all rights and licenses granted
            hereunder shall terminate; provided, however, that any licenses
            granted to End-Customers prior to termination or expiration to use
            the Bundled Products shall survive termination or expiration. In
            addition, should APM terminate this Agreement during the Initial
            Term due to Section 15.b, then APM shall be entitled to a refund of
            all amounts paid for that portion of prepaid royalties and
            maintenance fees that are unused.

      e.    Additionally, upon termination, APM shall immediately return to Kana
            all Proprietary Information and data (including all copies thereof)
            of Kana then in APM's possession or custody or control including,
            without limitation:

            i.    All technical materials and business plans supplied by Kana;

            ii.   All manuals covering Products; and

            iii.  Any customer or prospect lists provided by Kana.

      f.    Additionally, upon termination, Kana shall immediately return to APM
            all Proprietary Information and data (including all copies thereof)
            of APM then in Kana's possession or custody or control including,
            without limitation:

            i.    All technical materials and business plans supplied by APM;

            ii.   All manuals covering APM's products; and

            iii.  Any customer or prospect lists provided by APM.

      g.    THE PARTIES AGREE IN THE EVENT OF TERMINATION OF THIS AGREEMENT FOR
            ANY REASON, NEITHER PARTY SHALL HAVE ANY RIGHTS TO DAMAGES OF ANY
            NATURE RELATED TO SUCH TERMINATION (BUT NOT LIMITING ANY CLAIM FOR
            DAMAGES A PARTY MIGHT HAVE ON ACCOUNT OF THE OTHER PARTY'S BREACH OF
            THIS AGREEMENT, EVEN IF THE BREACH GAVE RISE TO TERMINATION, SUCH
            LIABILITY BEING GOVERNED BY AND SUBJECT TO THE LIMITATIONS SET FORTH
            ELSEWHERE IN THIS AGREEMENT), SPECIFICALLY INCLUDING NO RIGHTS TO
            DAMAGES FOR COMMERCIAL SEVERANCE PAY, WHETHER BY WAY OF LOSS OF

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            FUTURE PROFITS, EXPENDITURES FOR PROMOTION OF ANY PRODUCTS, OR OTHER
            COMMITMENTS IN CONNECTION WITH THE BUSINESS AND GOOD WILL OF EITHER
            PARTY. EACH PARTY EXPRESSLY WAIVES AND RENOUNCES ANY CLAIM TO
            COMPENSATION OR INDEMNITIES FOR ANY TERMINATION OF A BUSINESS
            RELATIONSHIP.

16.   Audit.

      a.    APM shall keep full, true, and accurate records and accounts of all
            information relevant to APM's use of the Products and APM's
            obligations under this Agreement. APM shall make these records
            available for audit by Kana upon fifteen (15) days prior written
            notice, during regular business hours at APM`s principal place of
            business; provided that (i) any such audit shall be conducted in a
            manner to minimize any disruption to APM's business, (ii) no more
            than two such audits shall be conducted in any twelve month period,
            and (iii) all information obtained during such audit shall be the
            Proprietary Information of APM.

      b.    Kana shall have the right, at its reasonable discretion (subject to
            any confidentiality or other agreements between APM and
            End-Customer) to inspect any work undertaken or performed by APM
            related to the Products in order to determine that APM is complying
            with the terms of this Agreement; provided that (i) any such
            inspection shall be conducted in a manner to minimize any disruption
            to APM's business, (ii) no more than two such inspections shall be
            conducted in any twelve month period, and (iii) all information
            obtained during such inspections shall be the Proprietary
            Information of APM.

17.   Force Majeure. Neither party shall be liable for any delay or failure in
      performance due to events outside the defaulting party's reasonable
      control, including without limitation acts of God, earthquake, labor
      disputes, shortages of supplies, riots, war, fire, epidemics, or delays of
      common carriers or other circumstances beyond its reasonable control The
      obligations and rights of the excused party shall be extended on a day to
      day basis for the time period equal to the period of the excusable delay.

18.   Product Changes. Modifications which do not affect the form, fit, function
      or interface of a Product or which Kana reasonably deems necessary to
      comply with governmental regulations, to make the Product non-infringing
      with respect to any patent, copyright or other proprietary interest may be
      made at any time by Kana without prior notice to or consent of APM. Kana
      shall notify APM in writing of any Product changes other than those set
      forth in the previous sentence at least ninety (90) days prior to the
      effective date of the changes. Kana shall not make any change to Products
      during the term that would significantly reduce the functionality or
      change the interface for the Products.

19.   Compliance with Laws. APM shall obtain all licenses, permits and approvals
      required by any government and shall comply with all applicable laws,
      rules, policies and procedures including requirements applicable to the
      use of Products under telecommunications and other laws and regulations,
      of any government where the Products are to be sold, used or deployed by
      APM or its customers (collectively "Applicable Laws"). APM will indemnify
      and hold harmless Kana for any violation or alleged violation of any
      Applicable Laws APM. APM shall comply with all Applicable Laws. APM shall
      not act in any fashion or take any action or permit or authorize any
      action which will render Kana liable for a violation of the U.S. Foreign
      Corrupt Practices Act, which prohibits the offering, giving or promising
      to offer or give, directly or indirectly, money or anything of value to
      any official of a government, political party or instrumentality thereof
      in order to assist it or Kana in obtaining or retaining business. APM will
      not violate such act in connection with the sale or distribution of Kana
      Products and/or services. APM will notify Kana in writing if any of its
      owners, partners, principals, officers, and employees are or become during
      this term of this Agreement officials, officers or representatives of any
      government or political party or candidates for political office.

20.   Limited Warranties

      a.    Limited Software Warranty. Kana warrants that, for a period of sixty
            (60) days from the date of delivery of the Software to
            End-Customers., (a) the Software will perform substantially in
            accordance with the accompanying printed materials, and (b) the
            medium upon which the Software

                                  Page 8 of 14
<PAGE>   9

            is provided by Kana to End-Customer shall be free from defects in
            material and workmanship under normal use. This warranty covers
            only problems reported to Kana during the warranty period.

      b.    Warranty Tracking. It is APM's obligation to to track Software
            warranties for its End-Customers. Kana assumes no responsibility to
            monitor or inform APM of the tracking or expiration of applicable
            warranties for Software sold or licensed by APM; such responsibility
            is solely that of APM.

      c.    Exclusions From Warranties. KANA DOES NOT WARRANT THAT THE OPERATION
            OF ANY SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE. THE LIMITED
            WARRANTIES PROVIDED HEREIN ARE NON-TRANSFERABLE, CONTINGENT UPON THE
            PROPER INSTALLATION AND USE OF THE RESPECTIVE SOFTWARE IN ACCORDANCE
            WITH KANA'S SPECIFICATIONS, AND SUBJECT TO ALL LIMITATIONS AND
            RESTRICTIONS SET FORTH HEREIN. THESE WARRANTIES DO NOT APPLY TO ANY
            SOFTWARE THAT (i) IS IN AN OPERATING ENVIRONMENT THAT DOES NOT
            COMPLY WITH KANA'S PREVIOUSLY PUBLISHED SPECIFICATIONS; (ii) HAS
            BEEN REPAIRED OR MODIFIED BY PERSONS OTHER THAN KANA OR ITS
            AUTHORIZED TECHNICIANS; OR (iii) HAS BEEN DAMAGED OR RENDERED
            UNSERVICEABLE BY IMPROPER MAINTENANCE, ABUSE OR NEGLIGENCE ON THE
            PART OF OTHERS THAN KANA.

      d.    Limited Remedies Under Warranties. Subject to the restrictions and
            limitations contained herein, and within the applicable warranty
            period, Kana shall, at its sole option, repair or replace defective
            or nonconforming Software or components thereof; provided however,
            that Kana is notified in writing of the defect or nonconformity
            within the applicable warranty period. All replaced Software or
            components thereof shall become Kana's property. THIS LIMITED REMEDY
            CONSTITUTES APM'S SOLE AND EXCLUSIVE REMEDY UNDER THE LIMITED
            WARRANTIES.

      e.    Disclaimer of Other Warranties. THE EXPRESS WARRANTIES SET FORTH
            HEREIN ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
            INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE,
            MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WHICH ARE
            HEREBY SPECIFICALLY DISCLAIMED.

21.   Indemnification.

      a.    APM agrees, at its own expense, to defend or, at its option, to
            settle, any claim or action brought against Kana to the extent it is
            based on a claim that (i) APM has intentionally or recklessly
            misrepresented the Product, or (ii) an APM product as used within
            the scope of the license granted by APM infringes or violates any
            patent, copyright, trademark, or trade secret of a third party, and
            will indemnify and hold Kana harmless from and against any damages,
            costs and fees reasonably incurred (including reasonable attorneys'
            fees) that are attributable to such claim or action or which are
            assessed against Kana in a final judgment. Kana agrees that APM
            shall be released from the foregoing obligation unless Kana provides
            APM with: (i) prompt written notification of the claim or action
            provided that failure to provide such notice will relieve APM of its
            obligation only to the extent prejudiced thereby.; (ii) sole control
            and authority over the defense or settlement thereof; and (iii) all
            reasonably available information, assistance and authority to settle
            and/or defend any such claim or action. Notwithstanding the
            foregoing, APM shall have no liability hereunder based on (i) use of
            a superseded or modified release of the APM product, except for such
            alteration(s) or modification(s) which have been made by APM or
            under APM's direction, if such infringement would have been avoided
            by the use of a current unaltered release of the Software that Kana
            has provided to Customer, or (ii) the combination, operation, or use
            of any APM product with programs not furnished by APM if such
            infringement would have been avoided by the use of the APM product
            without such programs.

      b.    Kana agrees, at its own expense, to defend or, at its option, to
            settle, any claim or action brought against APM to the extent it is
            based on a claim that the Software or Product as used within the
            scope of this Agreement infringes or violates any patent, copyright,
            trademark, or trade secret of a third party, and will indemnify and
            hold APM harmless from and against any damages, costs and fees
            reasonably incurred (including reasonable attorneys' fees) that are
            attributable to such claim or action

                                       Page 9 of 14
<PAGE>   10

                  or which are assessed against APM in a final judgment. APM
                  agrees that Kana shall be released from the foregoing
                  obligation unless APM provides Kana with: (i) prompt written
                  notification of the claim or action provided that failure to
                  provide such notice will relieve Kana of its obligation only
                  to the extent prejudiced thereby; (ii) sole control and
                  authority over the defense or settlement thereof; and
                 (iii) all reasonably available information, assistance and
                  authority to settle and/or defend any such claim or action.
                  Notwithstanding the foregoing, Kana shall have no liability
                  hereunder based on (i) use of a superseded or modified release
                  of the Software, except for such alteration(s) or
                  modification(s) which have been made by Kana or under Kana's
                  direction, if such infringement would have been avoided by the
                  use of a current unaltered release of the Software that Kana
                  has provided to Customer, or (ii) the combination, operation,
                  or use of any Software furnished under this Agreement with
                  programs not furnished by Kana if such infringement would have
                  been avoided by the use of the Software without such programs.
                  In the event that an injunction is obtained against APM
                  prohibiting use of the Software by reason of Kana's
                  infringement of a patent, copyright or other intellectual
                  property right of any third party, Kana will, at its option
                  and expense, either (a) secure for APM the right to continue
                  using the Software; (b) replace or modify the Software to make
                  it non-infringing; or (c) direct APM to discontinue using the
                  Software, and provide APM with a refund of the fees paid
                  therefore, prorated over a five (5) year period from the
                  Effective Date.

            c.    THE FOREGOING INDEMNITIES REPRESENT THE SOLE REMEDY FOR EACH
                  INDEMNIFIED PARTY WITH RESPECT TO THE MATTERS COVERED BY SUCH
                  INDEMNITIES.

22.   Limitation of Liability. EXCEPT FOR CLAIMS ARISING UNDER SECTION 21,
      NOTWITHSTANDING ANYTHING ELSE HEREIN, ALL LIABILITY OF THE PARTIES AND
      THEIR SUPPLIERS UNDER THIS AGREEMENT OR OTHERWISE SHALL BE LIMITED TO THE
      MONEY PAID TO KANA UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTH
      PERIOD PRECEDING THE EVENT OR CIRCUMSTANCES GIVING RISE TO SUCH LIABILITY.
      THIS LIMITATION OF LIABILITY IS CUMULATIVE AND NOT PER INCIDENT. IN NO
      EVENT SHALL EITHER PARTY OR ITS SUPPLIERS BE LIABLE FOR ANY INCIDENTAL,
      SPECIAL, OR CONSEQUENTIAL DAMAGES, LOST PROFITS, OR LOST DATA, OR ANY
      OTHER INDIRECT DAMAGES, WHETHER ARISING IN CONTRACT, TORT (INCLUDING
      NEGLIGENCE) OR OTHERWISE, EVEN IF SUCH PARTY OR ITS SUPPLIERS HAVE BEEN
      INFORMED OF THE POSSIBILITY THEREOF.

23.   Notices. All notices required or permitted under this Agreement will be in
      writing and will be deemed given: (a) when delivered personally; (b) when
      sent by confirmed facsimile (followed by the actual document in air
      mail/air courier); (c) three (3) days after having been sent by registered
      or certified mail, return receipt requested, postage prepaid (or six (6)
      days for international mail); or (d) one (1) day after deposit with a
      commercial express courier specifying next day delivery (or two (2) days
      for international courier packages specifying 2-day delivery), with
      written verification of receipt. All communications will be sent to the
      addresses set forth on the cover sheet of this Agreement or such other
      address as may be designated by a party by giving written notice to the
      other party pursuant to this paragraph.

24.   General.

      a.    Choice of Law. The validity, interpretation, and performance of this
            Agreement shall be controlled by and construed under the laws of the
            State of Delaware, United States of America as if performed wholly
            within the state and without giving effect to the principles of
            conflict of law. The parties specifically disclaim the UN Convention
            on Contracts for the International Sale of Goods.

      b.    No Waiver. No waiver of rights under this Agreement by either party
            shall constitute a subsequent waiver of this or any other right
            under this Agreement.

      c.    Assignment. Neither this Agreement nor any rights under this
            Agreement, other than monies due or to become due, shall be assigned
            or otherwise transferred by either party (by operation of law or
            otherwise) without the prior written consent of the other party.
            This Agreement shall bind and inure to the benefit of the successors
            and permitted assigns of the parties.

                                  Page 10 of 14
<PAGE>   11

      d.    Severability. In the event that any of the terms of this Agreement
            become or are declared to be illegal or otherwise unenforceable by
            any Court of competent jurisdiction, such term(s) shall be null and
            void and shall be deemed deleted from this Agreement. All remaining
            terms of this Agreement shall remain in full force and effect.

      e.    Attorneys' Fees. In any suit or proceeding relating to this
            Agreement, the prevailing party will have the right to recover from
            the other its reasonable costs and reasonable fees and expenses of
            attorneys, accountants, and other professionals incurred in
            connection with the suit of proceeding, including costs, fees and
            expenses upon appeal, separately from and in addition to any other
            amount included in such judgment. This provision is intended to be
            severable from the other provisions of this Agreement, and shall
            survive and not be merged into any such judgment.

      f.    No Agency. This Agreement does not create any agency, partnership,
            joint venture or franchise relationship. Neither party has the right
            or authority to, and shall not, assume or create any obligation of
            any nature whatsoever on behalf of the other party or bind the other
            party in any respect whatsoever.

      g.    During the term of this Agreement, neither party shall, directly or
            indirectly, solicit to hire any employee of the other party that is
            involved in the integration, implementation and other worked
            associated with this Agreement, except with the prior written
            consent of such other party; provided, however, that neither party
            shall be prevented from (i) soliciting to hire employees through
            classified advertising or (ii) hiring any employee of the other so
            long as such hiring was not initially solicited, directly or
            indirectly, by the proposed hiring party.

      h.    Survival. Sections 3.a, 13, , 15.e, , 21, 22, 23 and 24 shall
            survive the termination of this Agreement.

      i.    Sole Agreements. This Agreement, the Kana SLA and the ServiceWare
            SLA represent the complete agreement between the parties hereto
            concerning the subject matter of this Agreement, the Kana SLA and
            the ServiceWare SLA and replaces any prior oral or written
            communications between the parties. There are no conditions,
            understandings, agreements, representations, or warranties,
            expressed or implied, which are not specified herein. This Agreement
            may only be modified by a written document executed by the parties
            hereto. Any orders accepted or Products delivered by Kana after the
            date of this Agreement is signed by APM but before the Effective
            Date, shall upon the Effective Date be deemed covered by the terms
            and conditions of this Agreement, except for any deviations in
            price.

                                      Page 11 of 14
<PAGE>   12

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed. Each party warrants and represents that its respective signatories
whose signatures appear below have been and are on the date of signature duly
authorized to execute this Agreement.

Kana Communications, Inc. ("Kana")        Serviceware Technologies, Inc. ("APM")

/s/ Franklin P. Huang                     /s/ Mark Finkel
----------------------------------        --------------------------------------
Authorized Signature                      Authorized Signature

Franklin P. Huang                         Mark Finkel
----------------------------------        --------------------------------------
Name                                      Name

September 22, 2000                        September 22, 2000
----------------------------------        --------------------------------------
Date                                      Date

Kana Communications, Inc.                 Serviceware Technologies, Inc.
740 Bay Road                              333 Allegheny Avenue
Redwood City, CA 94063                    Oakmont, PA 15139
Attention:  General Counsel               Attn:  Corporate Counsel
Facsimile:  (650) 474-8507                Facsimile:  (412) 826-0577

                                  Page 12 of 14
<PAGE>   13

                                   Schedule A
                             Payments and Royalties

                                  KANA PRODUCT

Products Covered. Only the Kana Response product is available under the terms of
this OEM Agreement. Upon signing, Kana shall promptly provide ServiceWare with a
Master Disk of the Kana Response product from which ServiceWare may make
additional copies for use under the terms of this Agreement. License keys shall
be requested separately from Kana pursuant to a process to be established
between the parties.

         Provided ServiceWare is current on maintenance and support payments,
Kana shall provide additional Master Disks shortly after updates to the
applicable Kana Product are made generally available.

                             OEM PRICING AND PAYMENT

1.       QUARTERLY ROYALTY. Within seven (7) days following the end of each
calendar quarter beginning with the quarter ended September 31, 2000,
ServiceWare shall pay Kana a royalty (the "Quarterly Royalty") equal to [*]
percent ([*]%) of the gross license revenue, as recognized in accordance with
ServiceWare's then standard accounting procedures, for the eService Suite
product line (and excluding other product lines such as RightAnswers.com) of
ServiceWare for the quarter just ended (the "ServiceWare Gross License
Revenue"). The Quarterly Royalty shall be calculated as follows:

         Quarterly Royalty = [*]% times (ServiceWare Gross License Revenue minus
         [*])

         (The definition of [*] is set forth below under "Seat Limitation/[*])

         Such Quarterly Royalty shall be accompanied by a report detailing the
amounts of all transactions involving Kana and Bundled Products to support the
Quarterly Royalty calculation, including the quantities and pricing and
application of the Initial and other guaranteed Orders, and such other
information as Kana may reasonably request.

II.      SEAT LIMITATION/ [*]. Except as set forth in this Section II,
ServiceWare may not sublicense or otherwise distribute more than [*] seats of
any Kana Product to any single End-Customer. In order to accommodate any
End-Customer that desires more than [*] seats of any Kana Product, the following
pricing shall apply:

         a. For each additional seat above [*] for any End-Customer ("[*]"),
ServiceWare shall pay to Kana a royalty equal to [*] percent ([*]%) of the then
applicable territorial list price for the seat (the "[*]"). Such payment shall
be made no later than the earlier of (i) forty-five (45) days after the
draw-down of the seats from Master Disk and (ii) the date of payment of the
Quarterly Royalty in which such seats are reflected.

         b. "[*]" shall mean the revenue that ServiceWare recognizes from the
sublicense of the applicable [*]; provided however, that in calculating the [*],
any discounts or premiums applied to the [*] shall be consistent with other
discounts/premiums provided to the applicable End-Customer.

III.     MINIMUM COMMITMENT. ServiceWare agrees that Kana shall receive at
least $[*] in revenue under this Agreement on or prior to June 15, 2001 (the
"Minimum Commitment").

                                  Page 13 of 14
<PAGE>   14

         A.       INITIAL ORDER. Effective the signing of this OEM Agreement,
                  ServiceWare hereby orders $[*] of Kana Products under the
                  Master Disk. Such $[*] shall be non-refundable (except as
                  expressly set forth in the Agreement) and shall be paid
                  immediately upon signing. This Initial Order may be used by
                  ServiceWare to satisfy any End-Customer orders (whether a
                  Quarterly Royalty order or a [*] order) for a period of twelve
                  (12) months following the effective date of the Initial Order,
                  and shall be credited against any Quarterly Royalty or a [*]
                  due for orders placed within such twelve months.

         B.       SECOND ORDER. Effective June 15, 2001, ServiceWare hereby
                  orders $[*] Kana Products under the Master Disk. Such $[*]
                  shall be non-refundable (except as expressly set forth in the
                  Agreement) and shall be paid on June 15, 2001. This Second
                  Order may be used by ServiceWare to satisfy any End-Customer
                  orders (whether a Quarterly Royalty order or a [*] order) for
                  a period of twelve (12) months following the effective date of
                  the Second Order, and shall be credited against any Quarterly
                  Royalty or a [*] due for orders placed within such twelve
                  months.

IV.      SUPPORT FEES.

         ServiceWare agrees to provide Level 1 and 2 support to End-Customers.
Kana shall provide Level 3 support as well as updates and upgrades are provided
under this OEM Agreement in accordance with the "Support Schedule.". The fees
("Support Fees") for such maintenance and support services shall equal [*]
percent ([*]%) of the royalties, calculated and paid as follows:

         1.       For the Initial Order, a Support Fee equal to [*]% of the
                  Initial Order (ie, $[*]) shall be due with thirty (30) days of
                  the Initial Order. Such Support Fee shall cover support for
                  the Initial Order from the Effective Date through December 31,
                  2001.

         2.       For the Second Order, a Support Fee equal to [*]% of the $[*]
                  Order prorated for the remainder of 2001 (i.e. $[*]) shall be
                  paid within thirty (30) days of the Second Order and shall
                  cover support through December 31, 2001.

         3.       To the extent that the prepaid licenses are exceeded and
                  additional licenses are required the same mechanism will apply
                  whereby Kana will provide 90 days at no charge and then bill
                  at a prorated amount until the end of the Initial Term of
                  December 31, 2001.

After December 31, 2001, should the parties agree to extend or renew the
Agreement, Serviceware can renew maintenance for the entire amount of licenses
purchased at the rate of [*]% annually.

                                  Page 14 of 14
<PAGE>   15
                        [KANA COMMUNICATIONS, INC. LOGO]

                            KANA COMMUNICATIONS, INC.
                        MASTER SOFTWARE LICENSE AGREEMENT

This Software License Agreement ("Agreement") is effective as of ______________,
200__ ("Effective Date"), and is made by and between: KANA COMMUNICATIONS, INC.,
a Delaware corporation , with its principal place of business at 740 Bay Road,
Redwood City, California 94063 ("KANA") and, SERVICEWARE TECHNOLOGIES, INC., a
Delaware corporation, with its principal offices at 333 Allegheny Avenue,
Oakmont, Pennsylvania, 15139 ("CUSTOMER").

Whereas, Customer wishes to obtain a license to use the software product
identified in Schedule A and associated documentation provided by Kana under
this Agreement (collectively, the "Software"); the parties agree as follows:

1. License.

a.   Subject to the terms of this Agreement, and upon execution by Customer of
     this Agreement and an Order, Kana grants to Customer a nonexclusive,
     perpetual (except as provided in Section 8 of this Agreement),
     nontransferable, nonsublicensable, license to allow the maximum number of
     Users to access and use the Software solely for Customer's business
     operations in the designated Territory and only in accordance with the
     standard documentation supplied with the Software by Kana or as otherwise
     agreed to by the parties , subject to Schedule A.

b.   User means each unique person or automated program that is enabled to
     access the Software. Territory shall be the United States unless otherwise
     specified in Schedule A. Order means the document substantially in the form
     of Schedule D hereto, by which Customer orders Software, Maintenance,
     Support, and/or Services, which shall be in a form of an addendum to this
     Agreement and signed by both Customer and Kana.

c.   Upon execution by Kana and Customer of additional Orders, and subject to
     Customer being in compliance with its obligations under this Agreement,
     Customer agrees to pay the additional License Fee and Maintenance Fees
     therefor, and Kana agrees to license additional Software to Customer, or to
     increase the maximum number of Users authorized for any particular
     Software. The prices set forth on Schedule A expire as set forth on
     Schedule A.

2. Ownership of Software. As between the parties, title to and ownership of the
Software, all proprietary rights therein, any accompanying printed materials and
all copies and portions thereof shall be and at all times remain in Kana and its
third party licensors. The Software and accompanying printed materials are
protected by copyright, trademark and trade secret laws and international treaty
provisions. Nothing in this Agreement shall grant to Customer any ownership or
title to the Software.

3. Customer Obligations. Customer agrees that it shall not, nor shall it permit
any third party to, (a) distribute, rent, sell or otherwise transfer the
Software to any third party, provided that Customer may allow its third party
consultants to use the Software solely to support Customer's use of the Software
as provided herein, but only to the extent such consultants have executed an
agreement with Customer which provides at least as much protection for Kana as
the terms of this Agreement; (b) use the Software for the benefit of any third
party in a service bureau or outsourcing capacity; (c) reverse assemble, reverse
compile or reverse engineer the Software, or otherwise attempt to discover any
Software source code or underlying Proprietary Information (as defined below);
(d) remove, efface or obscure any copyright notices, logos or other proprietary
notices or legends in the Software (whether Kana's or its third party partners)
or from any Kana materials; (e) export or re-export, or allow the export or
re-export of any Proprietary Information (as defined below) or any copy or
direct product thereof in violation of any restrictions, laws or regulations;
(f) copy the Software except as expressly permitted in this Agreement for
Customer's use and for a reasonable number of copies of the Software for
Customer's non-production back-up or archival purposes; or (g) use the Software
for delivering UCE. "UCE" means any unsolicited commercial electronic mail
message that was sent without the recipient previously registering with or
transacting with the sender. Customer shall comply with all applicable laws and
restrictions and

<PAGE>   16

regulations of the United States or any foreign agency or authority.

4. Confidentiality. Each party acknowledges that, during the term of this
Agreement, it (the "Receiving Party") may receive from or on behalf of the other
party (the "Disclosing Party"), information relating to the Disclosing Party
("Proprietary Information"). Such Proprietary Information shall belong solely to
the Disclosing Party and includes, but is not limited to, the terms of this
Agreement (but not the existence of this Agreement), trade secrets and other
technical, business, product, computer programs, marketing and financial
information, development plans and any data not previously known that should
reasonably be considered confidential or proprietary. The Software shall be
deemed Kana's Proprietary Information. During and after the term of this
Agreement, the Receiving Party shall: (i) not use (except as expressly
authorized by this Agreement) or disclose Proprietary Information without the
prior written consent of the Disclosing Party; (ii) take all reasonable measures
to maintain the Proprietary Information in confidence; and (iii) disclose
Proprietary Information only to those of its employees and consultants who have
a confidentiality obligation in writing to the Receiving Party and who are
necessary for the use expressly licensed hereunder. Proprietary Information
shall not include information that: (i) becomes public without breach of this
Agreement by the Receiving Party, its officers, directors, employees or agents;
(ii) was previously in the Receiving Party's possession (in written or other
recorded form) with no obligation to maintain confidentiality; (iii) was
received from a third party not under any obligation of confidentiality to the
Disclosing Party; or (iv) was developed by the Receiving Party's employees,
agents, contractors, and/or representatives independently of, and without
reference to, any Proprietary Information.

5. Services. Kana may provide professional services including customizations,
modifications, or additions to the Software (as provided in a Statement of Work
("SOW"), agreed to in writing by the parties) training (as described in Schedule
C hereto) and installation for the Software (collectively, the "Services").
Services may be amended from time to time by mutual agreement of the parties on
a written request ("Change Request"). To the extent that any work of authorship,
or invention derived from or directly relating to the Software is developed in
the course of performance under this Agreement either party ("Work Product")
Customer shall own such Work Product provided however that (i) Customer grants
to Kana an unlimited, world-wide permanent, irrevocable, royalty-free, fully
paid-up license to such Work Product (except to the extent that Work Product
includes any technology of Customer not acquired from Kana under this
Agreement); (ii) Customer agrees not to raise any claim or action against Kana
for the infringement of any rights of Customer in such Work Product(except to
the extent that Work Product includes any technology of Customer not acquired
from Kana under this Agreement); and (iii) to the extent that such Work Product
contains or reflects any Proprietary Information of Kana, Customer shall treat
such Work Product as Proprietary Information of Kana and not disclose such Work
Product to any third party. Notwithstanding anything to the contrary in this
Section 5, the provisions of this Section 5 shall not extend to any output,
reports or campaigns created, any screen modifications or rules established by
Customer in using the Software. Kana warrants that, for a period of thirty (30)
days from the date of delivery to Customer of any Work Product that such Work
Product will conform to the specifications provided in the relevant SOW.
Warranty support for any Work Product, will be provided by the Kana Consulting
group, and will be available only during regular business hours.

6. License Fee; Payment; Audit. Customer shall pay the license fee for the
Software licensed in an Order as set forth in Schedule A hereto ("License Fee").
Customer shall pay the fee for any Services provided as set forth in an Order as
set forth in Schedule A hereto("Services Fee"). Customer shall reimburse Kana
for all reasonable out-of-pocket expenses actually incurred by Kana in
performance of the installation and training services. Unless otherwise provided
herein, fifty percent (50%) of all payments of all License Fees, Services Fees
and expenses are due and payable immediately upon the execution of the
applicable Order, and the remaining fifty percent (50%) is due and payable
thirty (30) days after the date of Kana's invoice. All payments hereunder shall
be made in U.S. Dollars in the United States. All such Fees are non-refundable
and are exclusive of shipping, taxes, duties and the like, which shall be paid
by Customer. All late payments shall be assessed a service charge of 1.5% per
month to the extent allowed by law. Customer shall keep, maintain and preserve
accurate records relating to Customer's obligations hereunder. Such records
shall be maintained as confidential, but shall be available for inspection and
audit as provided herein. Kana shall have the right upon, five days prior
written notice, to have an independent auditor examine Customer's relevant,
records and use of the Software for the purpose of verifying Customer's
compliance with its obligations under this Agreement. Kana shall pay the fees
and expenses of the auditor for the examination; provided that should any
examination disclose a greater than five percent (5%) shortfall in the payments
due Kana for the period being audited, Customer shall pay the reasonable fees
and expenses of the auditor for that examination.

                                  Page 2 of 5
<PAGE>   17

7. Maintenance. Maintenance for the Software, and all upgrades and new versions
thereof, shall be provided to Customer pursuant to the Maintenance terms set
forth in Schedule B hereto.

8. Termination. The license granted herein is effective unless terminated as
provided in Schedule A or as otherwise terminated herein:

a.   Termination by Customer. Customer may terminate this Agreement at any time
     upon written notice to Kana, provided that such termination will not limit
     Customer's payment obligations hereunder to the extent arising prior to
     such termination.

b.   Termination by Kana. Kana may terminate this agreement if Kana determines
     that (i) Customer has materially breached the terms of this Agreement; and
     (ii) Customer fails to cure that breach within thirty (30) days of Kana's
     notice to Customer. Notwithstanding the foregoing, Kana may immediately
     terminate this Agreement if it is determined that Customer has failed to
     materially comply with the terms and conditions Sections 3 (c) or 4 of this
     Agreement.

c.   Effect of Termination. Upon termination of this Agreement, all licenses and
     rights granted hereunder shall terminate, Customer will cease all use of
     the Software, and Customer shall immediately return to Kana, the Software,
     all duplicates, and any Proprietary Information, together with any and all
     documents, notes and other materials relating to the Software, including,
     without limitation, all copies and extracts of the foregoing and all
     documentation and copies thereof, along with a signed written statement
     certifying that Customer has returned to Kana, and is no longer in
     possession of, any Software, duplicates, related documentation or any
     copies, portions or derivatives of any of the foregoing. Upon termination,
     Sections 2, 3, 4, , 5, 6, 8.c, 10, 13, and 14 will otherwise survive and
     remain in effect.

9. Warranties.

a.   Software Warranty. Kana warrants that, for a period of sixty (60) days from
     the date of each Order (i) the Software identified in such Order will
     materially perform in accordance with the accompanying documentation; (ii)
     the medium upon which the Software is provided by Kana to Customer shall be
     free from defects in material and workmanship under normal use; and (iii)
     the Software is designed to be used prior to, during, and after the year
     2000 and that it will operate during such time periods without error
     relating to date data which represent or reference different centuries or
     more than one century. Notwithstanding the foregoing, Customer acknowledges
     and agrees that the Software does not identify or remedy Year 2000 problems
     in third party operating systems or other applications not included in the
     Software and that the Software operates with the date information it
     receives. The foregoing Year 2000 Compliance Warranty shall not apply to
     Year 2000 problems caused by such external sources. Customer's sole and
     exclusive remedy for any breach of the foregoing Warranty shall be to have
     Kana modify such Software to correct the defect giving rise to such breach
     within a reasonable period, not to exceed an additional sixty (60) days
     from Kana's receipt of written notification of such defect from Customer
     ("Cure Period"). If, within said Cure Period, Kana determines that it is
     unable to modify the defective Software in such a way as to correct said
     defect, then Kana may terminate the License of such Software Product by
     giving written notice thereof to Customer within ten (10) days following
     the end of the Cure Period. In such event, Customer shall be entitled to a
     refund, upon the return of the Software to Kana, of any License Fee paid by
     Customer for such Software together with any unused, prepaid Maintenance
     Fees paid by Customer to Kana for such Software Products. Customer is not
     entitled to receive updates, releases and new versions of the Software
     under Kana's warranty obligations hereunder

b.   Disclaimer. EXCEPT AS EXPRESSLY STATED HEREIN, THE SOFTWARE AND ANY RELATED
     SERVICES ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
     IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF PERFORMANCE,
     NONINFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.

10. Limitation of Remedies and Damages. ANY LIABILITY OF KANA WILL BE LIMITED TO
PRODUCT REPLACEMENT OR, IF REPLACEMENT IS INADEQUATE OR IS IMPRACTICAL, TO
REFUND OF THE LICENSE AND MAINTENANCE FEES. NEITHER PARTY SHALL BE RESPONSIBLE
OR LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS 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

                                  Page 3 of 5
<PAGE>   18

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 PROCUREMENT OF SUBSTITUTE GOODS, ARISING OUT OF THE USE OF OR
INABILITY TO USE THE SOFTWARE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL EITHER PARTY'S LIABILITY EXCEED
THE AMOUNT PAID BY CUSTOMER FOR THE SOFTWARE. THE FOREGOING IS NOT HOWEVER
INTENDED TO LIMIT THE LIABILITY OF EITHER PARTY ARISING AS A RESULT OF, (a) THE
NEGLIGENT ACTS OF EMPLOYEES OF SUCH PARTY WHICH ARE UNRELATED TO THE USE OR
PERFORMANCE OF THE SOFTWARE PRODUCT, AND WHICH RESULT IN PERSONAL INJURY OR
PROPERTY DAMAGE, OR (b) THE BREACH OF EITHER PARTY'S CONFIDENTIAL OR PROPRIETARY
INFORMATION, INTENTIONAL OR OTHERWISE, WHICH IS DETERMINED TO BE INCURABLE.
Because some jurisdictions do not allow the exclusion or limitation of liability
of consequential or incidental damages, the above limitation may not apply.

11. Government Use. If Customer is a unit or agency of the government, or
acquiring the Software with government funds, the software and documentation are
provided subject to Kana's standard commercial license; provided, however, that
for any contracts with non-defense agencies subject to the FAR, the Government
shall have the rights set forth in subparagraph (c) of FAR 52.227-19,
"Commercial Computer Software-Restricted Rights," as applicable.

12. Intentionally omitted.

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

14. Miscellaneous. This Agreement is not assignable or transferable by Customer,
and any such attempted assignment or transfer shall be void and without effect.
This Agreement shall become effective as of the Effective Date and only upon its
execution by both Kana and Customer. Each party will be and act as an
independent contractor and not as an agent or partner of, or joint venturer
with, the other party for any purpose related to this Agreement or the
transactions contemplated by this Agreement, and neither party by virtue of this
Agreement will have any right, power or authority to act or create any
obligation, expressed or implied, on behalf of the other party. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to the conflicts of law provisions thereof and without
regard to the United Nations Convention on the International Sales of Goods.
Venue for proceedings initiated against Kana shall be in San Mateo County,
California, and venue for proceedings initiated against Customer shall be
Allegheny County, Pennsylvania. In any action to enforce this Agreement the
prevailing party will be entitled to costs and attorneys' fees. Any notice
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. The waiver by either party of a breach of this Agreement or any
right hereunder shall not constitute a waiver of any subsequent breach of this
Agreement; nor shall any delay by either party to exercise any right under this
Agreement operate as a waiver of any such right. If any provision of this
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 Agreement shall otherwise remain in full
force and effect and enforceable. This Agreement constitutes the entire
agreement between the parties hereto related to the subject matter hereof, and
any and all written or oral agreements are expressly cancelled. Any
modifications of this Agreement must be in writing and signed by both parties
hereto. Invoices, acknowledgements, purchase orders and other similar documents
relating to products or services subject to this Agreement shall be binding only
with respect to quantities ordered, the particular type of products or services
ordered. Pre-printed purchase order terms and any other additional terms, and
any terms in conflict with this Agreement, shall be void and of no effect.
Notwithstanding anything else to the contrary in this Agreement, neither party
shall be responsible for any matter beyond its reasonable control.

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

                                  Page 4 of 5
<PAGE>   19

KANA COMMUNICATIONS, INC.

By __________________________________

_____________________________________
Name  (Print)

_____________________________________
Title

CUSTOMER

By _________________________________

_____________________________________
Name  (Print)

_____________________________________
Title

                                  Page 5 of 5
<PAGE>   20

                        [KANA COMMUNICATIONS, INC. LOGO]

                                   SCHEDULE B

               KANA COMMUNICATIONS, INC. MAINTENANCE SUPPORT TERMS

Kana Communications, Inc. ("Kana") will provide Maintenance Support (as
described below) for the Software (licensed in Schedule A to Customer's Software
License Agreement).

1. SUPPORT

Kana shall make available the following Maintenance Support for the Software to
Customer upon payment by Customer to Kana of the associated Maintenance Fee.
Maintenance Support shall include (i) World Wide Web based support to cause the
Software to perform in accordance with its documentation in all material
respects, (ii) telephone support services for diagnosis of problems or
performance deficiencies of the Software and cause the Software Product(s) to
perform in accordance with the documentation in all material respects, available
to Customer during Kana's normal business hours, defined as 6:00 AM through 6:00
PM pacific time (excluding holidays and weekends), (iii) distribution of
upgrades and bug fixes as are distributed generally by Kana at no additional
charge to Kana's other software maintenance customers for such Software, and
(iv) Kana will use diligent efforts to cure, as described below, reported and
reproducible errors in the Software. Kana utilizes the following four (4)
severity levels to categorize reported problems:

SEVERITY 1 CRITICAL BUSINESS IMPACT

The impact of the reported deficiency is such that the Customer is unable to
either use the Software or reasonably continue work using the Software. Kana
will commence work on resolving the deficiency within one (1) hour of
notification and will engage staff continuously until a resolution is achieved.

SEVERITY 2 SIGNIFICANT BUSINESS IMPACT

The impact of the reported deficiency is such that important features of the
Software are not working properly while other areas of the Software are not
impacted, and such deficiency has created a significant, negative impact on the
Customer's productivity or service level. Kana will commence work on resolving
the deficiency within two (2) hours of notification and will engage staff during
business hours until an acceptable resolution is achieved.

SEVERITY 3 SOME BUSINESS IMPACT

The impact of the reported deficiency is such that important features of the
Software are unavailable, but an alternative solution is available or
non-essential features of the Software are unavailable with no alternative
solution. The customer impact, regardless of product usage, is minimal loss of
operational functionality or implementation resources. Kana will commence work
on resolving the deficiency within one (1) business day of notification and will
engage staff during business hours until an acceptable resolution is achieved.

SEVERITY 4 MINIMAL BUSINESS IMPACT

The impact of the reported deficiency is such that Customer submits a Software
information request, software enhancement or documentation clarification which
has no operational impact. The implementation or use of the Software by the
Customer is continuing and there is no negative impact on productivity. Kana
will provide an initial response regarding the request within one (1) business
day.

With respect to severity one (1) reported deficiencies, Kana may, with the
concurrence of the Customer, elect to send senior support or development staff
to the Customer location to accelerate problem resolution. Kana will be
responsible for the costs associated with this escalated problem resolution if
the problem is determined to be related to supported Software. Kana may, in its
sole discretion, offer 24x7 Premium Support for any Software to Customer. In the
event that Customer elects to purchase such Premium Support for any Software,
Customer shall be entitled to receive telephone support for Severity 1 (Critical
Business Impact) problems for such Software 24 hours per day, 365 days per year.

                           Kana Communications, Inc.
                     Software Support and Maintenance Terms
                                     Page 1

<PAGE>   21

2. UPGRADES

So long as Customer has met all of its obligations hereunder (including, without
limitation, its obligation to pay the Maintenance Fee for the then current
term), Kana will provide the Customer with patches, updates, releases and new
versions of the Software along with other generally available technical
material. These maintenance materials including the Software may not be used to
increase the licensed number of versions or copies of the Software. The Customer
agrees not to transfer any prior version of the Software to any third party. All
patches, updates, release and new versions shall be considered part of the
Software and shall be subject to the license agreement related to the Software.
Kana shall be responsible only for correcting errors in the Software. Errors
attributable to Kana shall be those that are reproducible by Kana, through the
use of reasonable efforts, on Software that has not been modified or operated in
a manner not approved by Kana. Kana is not required to provide any Maintenance
Support services relating to problems arising out of (i) Customer's failure to
implement supported versions of the Software that are provided to Customer under
this Agreement; (ii)changes to the operating system or environment except as
permitted under the documentation provide with the Software; (iii) any
alterations of or additions to the Software performed by parties other than Kana
or at the direction of Kana; (iv) use of the Software in a manner for which it
was not designed, as set forth in documentation provided with the Software; (v)
accident, negligence, or misuse of the Software by a party other than Kana; (vi)
introduction of data into any database used by the Software by any means other
than the use of the Software; or (vii) use of the Software on equipment or in
connection with third party software other than for which it was designed and
licensed for use on. If it is determined that the problem was not related to the
supported Software, and Customer requests Kana to do further work, then Customer
hereby agrees to pay reasonable travel and lodging expenses in addition to
Kana's standard consulting rates. Unless otherwise agreed to by the parties,
travel time will be charged at consulting rates.

3. CUSTOMER OBLIGATIONS

Customer shall (i) obtain appropriate training for the Software as set forth in
Schedule C; (ii) shall retain a reasonably qualified database administrator
("DBA") and shall ensure that such DBA is trained on the Kana Software; (iii)
shall retain a reasonably qualified system administrator and shall ensure that
such system administrator is trained on the Kana Software and on any third party
products and platforms that are part of the configured environment for the
Software; (iv) have all Designated Contacts (as defined below) trained on the
Kana Software as set forth in Schedule C; and (v) allow Kana remote access to
Customer's computers running the Software solely for the purposes of providing
support and maintenance as provided herein, at times and for durations that are
mutually agreeable to the parties.

4. WARRANTY

Kana will undertake all reasonable efforts to provide technical assistance under
this agreement and to rectify or provide solutions to problems where the
Software does not materially function as described in the Software
documentation, but Kana does not guarantee that the problems will be solved or
that any item will be error-free. These terms are only applicable to Kana
Software running under the environments specified in the release notes for that
product. Kana shall make available Maintenance Support for the then current and
preceding major release of the Software, provided that Kana may discontinue any
Software and stop offering support for any such Software twelve (12) months
after such discontinuance. THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER
WARRANTIES, CONDITIONS OR PROMISES TO CUSTOMER OR ANY THIRD PARTY, EXPRESS OR
IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR ARISING BY STATUTE, LAW, COURSE OF DEALING, CUSTOM AND
PRACTICE OR TRADE USAGE. EXCEPT AS PROVIDED ABOVE, THE SERVICES AND MAINTENANCE
ARE PROVIDES "AS IS".

5. PAYMENT

Pursuant to the terms of the Software License Agreement, Customer shall pay the
maintenance fee for the Maintenance Support ("Maintenance Fee") as set forth in
Schedule A to the Software License Agreement, provided, however, that the
Maintenance Fee for the initial Maintenance Term for any Software shall be due
and payable with the License Fee for such Software. The Maintenance Fee for each
renewal term shall be at the then current rates for Maintenance Support of the
Software and shall be due on or before the renewal date.

                           Kana Communications, Inc.
                     Software Support and Maintenance Terms
                                     Page 2

<PAGE>   22

6. TERM

The Maintenance Term for the Software shall commence on the Effective Date of
the Software License Agreement and shall run for a one (1) year period, with
automatic renewal for one-year periods on each anniversary of the Effective
Date, unless either party provides written notice of termination within sixty
(60) days prior to such anniversary date. Any current Maintenance Term may be
terminated by Kana for non-payment or material breach which continues uncured by
Customer within the cure period outlined in the License Agreement. All
Maintenance Fees paid or due are non-refundable unless Kana has materially
breached the maintenance terms and has failed to cure the breach after 30 days
written notice, in which case the prorated portion of any prepaid unused
Maintenance Fee would be refundable. Termination of Maintenance shall not
terminate Customer's rights to use the Software as provided in the license
Agreement.

7. GENERAL

Times by which Kana will perform under this agreement shall be postponed
automatically to the extent that Kana is prevented from meeting them by causes
beyond its reasonable control. Kana shall have no obligation to respond to
requests for maintenance for Customer from anyone other than the following
Designated Contacts and such requests shall not apply to determining Kana's
response time:

Contact 1
Name:

-------------------------
Telephone #:

-------------------------
E-mail Address:

----------------------
Contact 2
Name:

------------------------
Telephone #:

-------------------------
E-mail Address:

----------------------

During the term of this agreement, the Customer may delete and add Designated
Contacts by sending notification in writing on Customer's letter head and
addressed to Kana's Director of Support. Kana may rely on such notice to make
the change.

                           Kana Communications, Inc.
                     Software Support and Maintenance Terms
                                     Page 3

<PAGE>   23

                        [KANA COMMUNICATIONS, INC. LOGO]

                                   SCHEDULE C
                   KANA COMMUNICATIONS, INC. TRAINING OPTIONS

THE KANA KNOWLEDGE CENTER

The Kana Knowledge Center offers premier instructional programs. The programs
will be made for the fees provided on Schedule A to the Master License
Agreement, or, if no fees are provided, at Kana's standard training fees.

LEARNING TRACKS

Based on your work experience and responsibility, learning tracks provide a
suggested path for all training participants. Our learning tracks are divided
into five categories, End User, Technical/Environmental, Functional, Developer,
and Architect.

------------------ -------------------------------------------------------------
TRACK              TRACK DESCRIPTION
------------------ -------------------------------------------------------------
End User           Who is the End User?
                   An End User or individual who uses Kana products on a daily
                   basis. For example, the Customer Service Agent who uses Kana
                   Response to answer email or the Marketing Manager that sends
                   out direct mail from Kana Connect.

                   What is the End User Track?
                   The End User track provides comprehensive training to these
                   individuals, thereby providing them with the knowledge and
                   tools to effectively perform their job.
------------------ -------------------------------------------------------------
Functional         Who is the Functional User?
                   The Functional User is typically the individual who performs
                   analysis and solution design. The Functional User will
                   receive a strong understanding of the product and all
                   administration and configuration associated to that product.
                   They will also learn the product workflow and content design.

                   What is the Functional Track?
                   Understanding an organization's business environment and how
                   the Kana solution can support and improve the organization,
                   is the main objective behind the Functional track. Through
                   these courses, Functional Users will learn to design and
                   implement an efficient and effective solution for their
                   clients.
------------------ -------------------------------------------------------------
Technical/         Who is the Technical User?
Environmental      Technical Users will learn how to prepare the environment for
                   an install as well as complete the installation and
                   configuration of all administration modules. They will also
                   learn how to handle system-related administration, including
                   modifying registry keys, server parameters, and settings. The
                   Technical User should be familiar with the OS, Internet
                   protocols, database administration, and SQL.

                   What is the Technical Track?
                   A well-trained Technical User will optimize system
                   performance and processing, thereby reducing costs resulting
                   from poor system performance. In addition, as your business
                   grows and changes the Technical User will be become an
                   invaluable asset when your solution requires advanced
                   configuration. The technical track will provide the knowledge
                   and tools necessary to conduct this level of support.
------------------ -------------------------------------------------------------
Developer          Who is the Developer?
                   The Developer is typically called the Integrator or the
                   Applications Developer. The Developer will learn to develop
                   and implement integration scenarios and customization models
                   on the Kana product.

                   The Application Developer should have extensive experience
                   with a programming language like Java, Visual Basic, or C++.
                   Knowledge of Active Server Pages is also important. In
                   addition, they should be comfortable with SQL as well as
                   database applications, including the use of Views.

                   What is the Developer Track?
                   Training provided through the Developer track prepares the
                   Developer to extend the product functionality through
                   customizations and integration to best suit an organization's
                   unique business requirements.
------------------ -------------------------------------------------------------
Architect          Who is the Architect?
                   The architect will provide system design plans and project
                   scope. The architect should have several years of development
                   experience, as well as expertise in project management and
                   application scope and design. They should have a good
                   understanding of all underlying technologies.

                   What is the Architect Track?
                   By providing extensive, diverse training on all aspects of
                   the product, this track will provide the architect with the
                   knowledge to design an integrated and customized Kana
                   Solution.
------------------ -------------------------------------------------------------

<PAGE>   24

COURSES

----------------------------- --------------------------------------------------
COURSE BY KANA PRODUCT        COURSE DESCRIPTION
----------------------------- --------------------------------------------------
KANA RESPONSE
----------------------------- --------------------------------------------------
Installation,                 This is the core module for understanding Kana
Configuration &               Response from a technical perspective and having
Troubleshooting               the ability to install, configure, and
                              troubleshoot the solution.

                              Appropriate audience: Technical/Environmental and
                              Architect
----------------------------- --------------------------------------------------
Kana Data Model               Understanding the Kana Data Model is critical for
                              reports administrators as well as administrators
                              needing to access data directly from our database.
                              This course provides a detailed look at our data
                              model, including foreign key relationships, views,
                              and stored procedures.

                              Appropriate audience: Technical/Environmental,
                              Architect, and Developer
----------------------------- --------------------------------------------------
Developing Your Content       Providing a methodology on content and workflow
                              development is key to a successful implementation.
                              This course describes the information gathering
                              process consultants will complete with customers
                              that will provide them with a highly effective
                              solution for their particular business needs.

                              Appropriate audience: Functional and Architect
----------------------------- --------------------------------------------------
End User Train the            For partners that will be conducting end user
Trainer                       training as part of the implementation, we
                              provide train-the-trainer programs that enable you
                              to conduct various aspects of training as part of
                              the implementation. In addition, we provide
                              various tools and resources that partners can use
                              while conducting this training. The
                              train-the-trainer program is handled on an onsite,
                              customized basis only.

                              Appropriate audience: Functional
----------------------------- --------------------------------------------------
CSR Web-based Training        Agent Training provides CSRs and other end users
                              the skills necessary to use our client
                              applications to answer email. This application is
                              available in a WBT on our website.

                              Appropriate audience: End User
----------------------------- --------------------------------------------------
KANA CLASSIFY
----------------------------- --------------------------------------------------
Building & Deploying a        This course discusses all aspects involved with
Model                         implementing the Kana Classify advanced automation
                              technology. It covers pre-installation issues, the
                              building of Kana Classify models, using Kana
                              Classify with the Rules Engine, and advanced
                              debugging techniques.

                              Appropriate audience: Technical/Environmental,
                              Architect, and Developer
----------------------------- --------------------------------------------------
KANA FORMS
----------------------------- --------------------------------------------------
Installation,                 To obtain a conceptual understanding about Kana
Configuration &               Forms, this course provides a brief overview on
Troubleshooting               Kana Forms features and functionality. This course
                              primarily focuses on the process of installing and
                              configuring Kana Forms. In addition, this course
                              offers helpful advice on troubleshooting potential
                              issue after and during the install and
                              configuration of Kana Forms.

                              Appropriate audience: Technical/Environmental,
                              Architect, and Developer
----------------------------- --------------------------------------------------
KANA CONNECT
----------------------------- --------------------------------------------------
Architecture &                Kana Connect: Architecture and Deployment is a
Deployment                    training program intended for various groups of
                              audience to understand the product from functional
                              and technical perspectives. The course will cover
                              a wide range of topics related to Kana Connect
                              from Electronic Direct Marketing (EDM) concepts to
                              demonstration of system installation.

                              Appropriate audience: Functional,
                              Technical/Environmental and Architect
----------------------------- --------------------------------------------------
KANA CONDUITS
----------------------------- --------------------------------------------------
Kana Conduits SDK             This course provides an introduction to developers
                              and integrators on how to develop custom
                              application and integration using Kana Conduits.

                              Appropriate audience: Architect and Developer
----------------------------- --------------------------------------------------
Core Conduits                 This course provides an introduction for
                              developers and integrators on how to develop core
                              conduits to extend the functionality and provide
                              enterprise integration for the Kana Response
                              product.

                              Appropriate audience: Architect and Developer
----------------------------- --------------------------------------------------
<PAGE>   25

                        [KANA COMMUNICATIONS, INC. LOGO]

                                   SCHEDULE D
                      KANA COMMUNICATIONS, INC. ORDER FORM

                                AMENDMENT NO. ___
                                       TO
                   SOFTWARE LICENSE AND MAINTENANCE AGREEMENT

This Amendment No. __ ("Amendment") to the Software License and Maintenance
Agreement ("Agreement") dated _________ by Kana Communications, Inc. ("Kana")
and _________ ("Customer") is entered into as of this __ day of ______, 200_.

WHEREAS, Customer desires to purchase license to Software and/or Services
(collectively, "Products") as provided in the Agreement,

NOW THEREFORE, the parties agree as follows:

Customer agrees to purchase the Products set forth below, for the fees set forth
in the Agreement, subject to the terms of the Agreement, provided, however, that
if no Products are specified hereunder, the Products shall be as specified on
Schedule A to the Agreement.

All other terms of the Agreement shall continue in effect as set forth therein.
In the event of any conflict between the terms of this Addendum and the
Agreement, the terms of the Agreement shall prevail.

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly
executed by their proper representatives thereunto duly authorized.

KANA COMMUNICATIONS, INC.             CUSTOMER ("______________")

By: ______________________________    By: _______________________________

Name: ____________________________    Name: _____________________________

Title: ___________________________    Title: ____________________________

<PAGE>   26

                          EXHIBIT A TO AMENDMENT NO. __

                          [IDENTIFY PRODUCTS PURCHASED]

<PAGE>   27

                                     SUPPORT

Level 1 Support

Support provided by SERVICEWARE to it's End Users, either by telephone, modem or
on site, for the purpose of providing "how-to" information, environmental
problem isolation or correction of End User errors.

Level 2 Support

Support provided by SERVICEWARE to its End Users, either by telephone, modem or
on-site, for the purpose of diagnosing, product isolation and duplication of
technical problems and providing preventive maintenance in accordance with
Serviceware service and maintenance guidelines. Support includes installation or
replacement of hardware and installation or reinstallation of software and/or
patches. Support also includes diagnosis of difficulties caused by or related to
Local Area Network or external telecommunications connectivity or devices.

Level 3 Support

Support provided by Serviceware Technical Support either by telephone or modem,
when SERVICEWARE'S Level 2 Support activities have failed to solve a problem, .
Such support includes advanced diagnostic services. Level 3 Support will provide
a complete resolution, a temporary fix or alternative procedure restoring full
service. When a temporary fix or alternative procedure is provided, a complete
resolution will be supplied as soon as practical thereafter Level 3 Support will
also submit Defects to Kana.

Development/Engineering Support

Support provided by KANA Engineering to KANA Technical Support when Level 3
Support is not successful, and passed on to SERVICEWARE, to provide higher level
diagnostic services and corrective action that may include the development of
patches or other product design or modification changes. Kana will also accept
Defects from Serviceware Level 3 Support for resolution provided that they are
clearly identified to have been a function of the Kana product.

OEM maintains an organization and process to provide support for the Software.
Support under this Agreement shall include (i) diagnosis of problems or
performance deficiencies of the Software and (ii) a resolution of the problem or
performance deficiencies of the Software. OEM will provide telephone software
support 24 hours a day, 365 days per year. OEM will use diligent efforts to
cure, as described below, reported and reproducible errors in the Software. OEM
utilizes the following four (4) severity levels to categorize reported problems:

SEVERITY 1 CRITICAL BUSINESS IMPACT

The impact of the reported deficiency is such that the End-Customer is unable to
either use the Software or reasonably continue work using the Software. OEM will
commence work on resolving the deficiency within one-half hour of notification.

SEVERITY 2 HIGH BUSINESS IMPACT

Important features of the Software are not working properly and there are no
acceptable, alternative solutions. While other areas of the Software are not
impacted, the reported deficiency has created a significant, negative impact on
the End-Customer's productivity or service level. OEM will commence work on
resolving the deficiency within one (1) hour of notification.

<PAGE>   28

SEVERITY 3 MEDIUM BUSINESS IMPACT

Important features of the Software are unavailable, but an alternative solution
is available or non-essential features of the Software are unavailable with no
alternative solution. The End-Customer impact, regardless of product usage, is
minimal loss of operational functionality or implementation resources. OEM will
commence work on resolving the deficiency within one (1) business day of
notification.

SEVERITY 4 LOW BUSINESS IMPACT

End-Customer submits a Software information request, software enhancement or
documentation clarification which has no operational impact. The implementation
or use of the Software by the End-Customer is continuing and there is no
negative impact on productivity. OEM will provide an initial response regarding
the request within one (1) business week.

SUPPORT FOR OEM Kana will maintain an organization and process to provide
support for the Software . Support shall include (i) diagnosis of problems or
performance deficiencies of the Software and (ii) a resolution of the problem or
performance deficiencies of the Software. Kana will provide telephone software
support on a business day basis. Business day is defined as 6:00 AM through 6:00
PM pacific time, excluding holidays and weekends with provisions for 24by7
Emergency phone support for Critical and High Business Impact Calls with
Response times of 30 minutes for Critical and 60 minutes for High. OEM shall be
permitted access to remotely accessible tools and/or informational databases if
and when they become available.

MAINTENANCE

During the term of this agreement, Kana will provide the OEM with copyrighted
patches, updates, releases and new versions of the Software along with other
generally available technical material. These maintenance materials including
the Software may not be used to increase the licensed number of versions or
copies of the Software. OEM agrees not to use or transfer the prior version but
to destroy or archive the prior version of the Software. All patches, updates,
release and new versions shall be considered part of the Software and shall be
subject to the license agreement related to the Software. The foregoing and any
other support to be provided by Kana is subject to payment to Kana of the
support fees set forth on Exhibit A. Kana will provide Serviceware the same
level of service(s) as above during the Warranty period.

SERVICEWARE'S OBLIGATIONS BEFORE REQUESTING SERVICE FROM KANA

In all cases, prior to requesting support from KANA, OEM shall take steps to
ensure that a problem is not caused by the End-Customer's operating system,
telephone system, telephony service provider, Local Area Network or
software/hardware not furnished by KANA. OEM shall also attempt to correct the
problem by utilizing its KANA-trained personnel to perform system diagnosis and
shutdown/restart procedures to diagnose or correct problems in accordance with
KANA service and maintenance guidelines.

ESCALATION PROCEDURE

KANA shall incorporate a procedure to prioritize each service call received from
OEM and, when appropriate, notify KANA Management and, as agreed, OEM management
to ensure serious system problems are communicated and resolved promptly.

Unless otherwise noted, all hours are clock hours not business hours.

Critical - 30 min. response.

High - 60 min. response.

Medium -  1 business day

Low -  5 business days

<PAGE>   29

TRAINING AND TROUBLESHOOTING TOOLS AND GOALS

OEM should have access to Kana End-User and Maintenance training, including Kana
internal training courses to prepare and enable OEM Support Personnel to deliver
the services as stated in the Description section under Level 1, 2 and 3
Support. OEM will also have access to Kana troubleshooting tools and guides in
support of products resold under this agreement. In connection with training,
Kana will make available to OEM general courseware, syllabus, laboratory
exercises, tests and post training evaluations. forms Pricing for such training
shall be as set forth on Exhibit A. To the extent available, Kana will provide
OEM with WEB access to information and documentation.

REPORTING

KANA shall offer SERVICEWARE reports on the number of calls received from
SERVICEWARE and status of defects affecting SERVICEWARE'S sites, including
current open and closed calls and their associated priority. Information shall
be provided in a format and at a frequency mutually agreed to by SERVICEWARE and
KANA. KANA may, based upon report information, recommend that SERVICEWARE'S
personnel attend refresher training classes if the number of calls for
assistance has been unusually high.

EXCLUSIONS

Kana shall not be responsible for correcting any errors not attributable to
Kana. Kana is not required to provide any Support relating to problems arising
out of:

         a.       altered, damaged, or modified Software;

         b.       Software that is not the most current release or the
                  immediately previous release, or where it is within 6 months
                  following the release of the current release, the second
                  release prior to the current release;

         c.       Software problems caused by OEM or End-Customer's negligence,
                  abuse, or misapplication, by use of the Software other than as
                  specified in the Documentation, or by other causes beyond the
                  control of Kana; or

         d.       Software installed on any computer hardware or operating
                  system not supported by Kana.<PAGE>   1
                                                                    EXHIBIT 10.1

                   AUGUST 2000 AMENDMENT TO SECOND AMENDED AND
                      RESTATED LOAN AND SECURITY AGREEMENT
                      AND MODIFICATION TO OTHER AGREEMENTS

     THIS AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT AND MODIFICATION TO OTHER AGREEMENTS (this "Amendment") is made and
entered into this 10th day of August, 2000, to be effective as of the respective
date herein indicated, by and among SEPCO INDUSTRIES, INC., a Texas corporation
("Sepco"), BAYOU PUMPS, INC., a Texas corporation ("Bayou") and AMERICAN MRO,
INC., a Nevada corporation ("American") (Sepco, Bayou and American being
hereinafter individually and collectively referred to as "Borrower", as governed
by the provisions of Section 1.4, Section 1.5, and Section 1.6 of the Loan
Agreement, as hereinafter defined), and FLEET CAPITAL CORPORATION, a Rhode
Island corporation ("Lender"), successor-in-interest by merger to Fleet Capital
Corporation, a Connecticut corporation (Fleet Capital Corporation, a Connecticut
corporation, having been, formerly known as Shawmut Capital Corporation, and
having been the successor-in-interest by assignment to Barclays Business Credit,
Inc., a Connecticut corporation).

                                    RECITALS

     A. Sepco and Barclays Business Credit, Inc., have entered into that certain
Second Amended and Restated Loan and Security Agreement, dated as of April 1,
1994, as amended by that certain First Amendment to Second Amended and Restated
Loan and Security Agreement and Secured Promissory Note, dated May, 1995,
executed by Sepco and Fleet Capital Corporation, a Connecticut corporation (at
that time known as Shawmut Capital Corporation), and as amended by that certain
Second Amendment to Second Amended and Restated Loan and Security Agreement,
entered into on April 3, 1996, executed by Sepco and Fleet Capital Corporation,
a Connecticut corporation, and as amended by that certain Third Amendment to
Second Amended and Restated Loan and Security Agreement, dated September 9,
1996, executed by Sepco, Bayou and Lender, and as amended by that certain Fourth
Amendment to Second Amended and Restated Loan and Security Agreement, dated
October 24, 1996, executed by Lender and Borrower, and as amended by that
certain letter agreement dated November 4, 1996, entered into by Lender and
Borrower, and as amended by that certain Fifth Amendment to Second Amended and
Restated Loan and Security Agreement, dated June 2, 1997, executed by Lender and
Borrower, and as amended by that certain Sixth Amendment to Second Amended and
Restated Loan and Security Agreement and Amendment to Other Agreements executed
by Borrower and Lender, and as amended by that certain Seventh Amendment to
Second Amended and Restated Loan and Security Agreement, entered into on June
30, 1998, executed by Borrower and Lender, and as amended by that certain Eighth
Amendment to Second Amended and Restated Loan and Security Agreement and
Modification to Other Agreements, entered into on October 20, 1998, executed by
Borrower and Lender, and as amended by that certain letter agreement dated March
30, 1999, executed by Borrower and Lender, and as amended by that certain letter
agreement, dated May 13, 1999, executed by Borrower and Lender, and as amended
by that certain August 1999 Amendment to Second Amended and Restated Loan and
Security Agreement and Modification to Other Agreements, entered into on August
13, 1999, executed by Borrower and Lender (as amended, the "Loan Agreement").

     B. Lender, effective May 1, 1996, as successor-in-interest by merger to
Fleet Capital Corporation, a Connecticut corporation, succeeded to, and today
remains the present holder of, all

AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT - PAGE 1

<PAGE>   2

right, title and interest of Fleet Capital Corporation, a Connecticut
corporation, in the Loan Agreement and each of the Other Agreements.

     C. Borrower and Lender desire to further amend the Loan Agreement and the
Other Agreements as hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:

                                    AGREEMENT

                                    ARTICLE I
                                   DEFINITIONS

     1.01 Capitalized terms used in this Amendment are defined in the Loan
Agreement, as amended hereby, unless otherwise stated.

                                   ARTICLE II
                           AMENDMENTS AND MODIFICATION

     Effective as of the respective date herein indicated, the Loan Agreement
and the Other Agreements are hereby respectively amended as follows:

     2.01 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT OF THE
DEFINITION OF "BORROWING BASE". Effective as of the date of execution of this
Amendment, the definition of "Borrowing Base" contained in Section 1.1 of the
Loan Agreement is hereby amended by deleting therefrom the reference to the
phrase "Thirty-Six Million Eight Hundred Thousand Dollars ($36,800,000), and
substituting therefor the phrase "Thirty Million Eight Hundred Thousand Dollars
($30,800.000)."

     2.02 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT AND
RESTATEMENT OF THE DEFINITION OF "COMMITMENT". Effective as of the date of
execution of this Amendment, the definition of "Commitment" contained in Section
1.1 of the Loan Agreement is hereby amended and restated to read in its entirety
as follows:

     "Commitment - shall mean Thirty Million Eight Hundred Thousand Dollars
($30,800,000)."

     2.03 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT AND
RESTATEMENT OF THE DEFINITION OF "DOMESTIC MARGIN". Effective as of the date of
execution of this Amendment, the definition of "Domestic Margin" contained in
Section 1.1 of the Loan Agreement is amended and restated to read in its
entirety as follows:

          "Domestic Margin - (i) as to the Revolving Credit Loans shall mean
     0.50% per annum, and (ii) as to the Term Loan and the Acquisition Term
     Loans shall mean 1.50% per annum."

AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT - PAGE 2

<PAGE>   3

     2.04 AMENDMENT TO SECTION 2.2(A) OF THE LOAN AGREEMENT. Effective as of the
date of execution of this Amendment, Section 2.2(A) of the Loan Agreement is
amended by deleting therefrom the reference to the date "March 31, 2001" and
substituting therefor the date "June 30, 2001."

     2.05 ADDITION OF A NEW SECTION 2.5. Effective as of the date of execution
of this Amendment, a new Section 2.5 Audit and Appraisal Fees; Annual Servicing
Fee is added to the Loan Agreement to read as follows:

          "2.5 Audit and Appraisal Fees; Annual Servicing Fee. Borrower shall
     reimburse Lender for all reasonable out-of-pocket costs and expenses
     incurred by Lender in connection with audits and appraisals of Borrower's
     books and records and such other matters as Lender shall deem appropriate.
     In connection with any audit by Lender of Borrower's books and records
     an/or of the books and records of DXP Acquisition, Inc. d/b/a Strategic
     Acquisition, Inc. and/or of Pelican State Supply Company, Inc., Borrower
     shall also pay Lender an aggregate per diem fee of Six Hundred Fifty
     Dollars ($650). All such out-of-pocket costs, fees and expenses shall be
     payable on demand."

     2.06 AMENDMENT TO SECTION 3.3(A) OF THE LOAN AGREEMENT. Effective as of the
date of execution of this Amendment, Section 3.3(A) of the Loan Agreement is
hereby amended by deleting therefrom the reference to the date "April 1, 2001"
and substituting therefor the date "July 1, 2001."

     2.07 AMENDMENT AND RESTATEMENT OF SECTION 3.3(C) OF THE LOAN AGREEMENT.
Effective as of the date of execution of this Amendment, Section 3.3(C) of the
Loan Agreement is amended and restated to read in its entirety as follows:

          "At the effective date of any termination of this Agreement, Borrower
     shall pay to Lender (in addition to the then outstanding principal, accrued
     interest and other charges owing under this Agreement and any of the Other
     Agreements), as liquidated damages for the loss of the bargain and not as a
     penalty, an amount equal to 0.5% of the highest of the Average Monthly Loan
     Balances outstanding pursuant to Section 2.1 during the twelve month period
     ending on the date of termination. If termination occurs on the last day of
     the Original Term or the last day of any Renewal Term, no termination
     charge shall be payable."

     2.08 EXTENSION OF MATURITY OF TERM NOTE. Effective as of the date of
execution of this Amendment, the maturity of the Term Note is hereby renewed and
extended until July 1, 2001.

     2.09 AMENDMENT TO PAYMENT TERMS IN THE TERM NOTE. Borrower and Lender
hereby agree that effective as of June 1, 2000, the last paragraph on page two
of the Term Note is amended and restated to read in its entirety as follows:

          "The principal amount of and accrued interest on this Note shall be
     due and payable on the dates and in the manner hereinafter set forth:

               (a) interest shall be due and payable monthly, in arrears, on the
          first day of each month, continuing until such time as the full
          principal

AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT - PAGE 3

<PAGE>   4

          balance, together with all other amounts owing hereunder, shall have
          been paid in full;

               (b) the principal shall be due and payable in monthly
          installments of ONE HUNDRED TWENTY THOUSAND FIVE HUNDRED TWENTY AND
          NO/100 DOLLARS ($120,520.00) and each shall be due and payable on June
          1, 2000, and on the first day of each month thereafter to and
          including the first day of June 1, 2001; and

               (c) the entire unpaid principal balance hereof, together with any
          and all other amounts due hereunder, shall be due and payable on July
          1, 2001."

     2.10 EXTENSION OF MATURITY OF ACQUISITION TERM LOANS NOTE. Effective as of
the date of execution of this Amendment, the maturity of the Acquisition Term
Loans Note is hereby renewed and extended until July 1, 2001.

     2.11 AMENDMENT TO PAYMENT TERMS IN THE ACQUISITION TERM LOANS NOTE.
Borrower and Lender hereby agree that effective as of June 1, 2000, the last
paragraph on page two of the Acquisition Term Loans Note is amended and restated
to read in its entirety as follows:

     "The principal amount and accrued interest on this Note shall be due and
payable on the dates and in the manner hereinafter set forth:

          (a)  interest shall be due and payable monthly, in arrears, on the
               first day of each month, continuing until such time as the full
               principal balance, together with all other amounts owing
               hereunder, shall have been paid in full;

          (b)  the principal shall be due and payable in monthly installments of
               TEN THOUSAND FOUR HUNDRED EIGHTY AND NO/100 DOLLARS ($10,480.00)
               and each shall be due and payable on June 1, 2000, and on the
               first day of each month thereafter to and including the first day
               of June, 2001; and

          (c)  the entire unpaid principal balance hereof, together with any and
               all amounts due hereunder, shall be due and payable on July 1,
               2001."

                                   ARTICLE III
                                 LIMITED WAIVER

     3.01 Borrower has informed Lender that Borrower has violated the financial
covenants contained in Sections 9.3(A), (B), (C) and (D) of the Loan Agreement
for the relevant fiscal period ending June 30, 2000, and has requested that
Lender waive such violations. Subject to the satisfaction of the conditions
precedent set forth in Section 4.01 of this Amendment and to the other terms,
conditions and provisions of this Amendment, the Lender hereby waives each of
the above-described Sections of the Loan Agreement; provided, however, that the
waiver described in this Section 3.01 of this Amendment is strictly limited to
the Sections of the Loan Agreement described above and to the specific
occurrences described above. Except as otherwise specifically provided for

AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT - PAGE 4

<PAGE>   5

in this Amendment, nothing contained herein shall be construed as a waiver by
Lender of any covenant or provision of the Loan Agreement, the Other Agreements,
this Amendment or of any other contract or instrument between Borrower and
Lender, and the failure of Lender at any time or times hereafter to require
strict performance by Borrower of any provision thereof shall not waive, affect
or diminish any right of Lender to thereafter demand strict compliance
therewith. Lender hereby reserves all rights granted under the Loan Agreement,
the Other Agreement, this Amendment and any other contract or instrument between
Borrower and Lender.

                                   ARTICLE IV
                              CONDITIONS PRECEDENT

     4.01 CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent in a manner
satisfactory to Lender, unless specifically waived in writing by Lender:

          (a) Lender shall have received each of the following, each in form and
     substance satisfactory to Lender, in its sole discretion, and, where
     applicable, each duly executed by each party thereto, other than Lender:

               (i) This Amendment, duly executed by Borrower, together with the
          relevant Consent, Ratification, and Amendment, respectively duly
          executed by David R. Little, individually, Gary A. Allcorn, Trustee
          for Kacey Joyce Little, Nicholas David Little and Andrea Rae Little
          1988 Trusts, DXP Enterprises, Inc. ("Parent"), DXP Acquisition, Inc.,
          d/b/a Strategic Acquisition, Inc. and Pelican State Supply Company,
          Inc.; and

               (ii) All other documents Lender may request with respect to any
          matter relevant to this Amendment or the transactions contemplated
          hereby;

          (b) The representations and warranties contained herein and in the
     Loan Agreement and the Other Agreements, as each is amended hereby, shall
     be true and correct as of the date hereof, as if made on the date hereof;

          (c) No Default or Event of Default shall have occurred and be
     continuing, unless such Default or Event of Default has been otherwise
     specifically waived in writing by Lender; and

          (d) All corporate proceedings taken in connection with the
     transactions contemplated by this Amendment and all documents, instruments
     and other legal matters incident thereto shall be satisfactory to Lender
     and its legal counsel.

                                    ARTICLE V
               RATIFICATIONS, REPRESENTATIONS AND WARRANTIES; FEE

     5.01 RATIFICATIONS. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Loan Agreement and the Other Agreements, and, except as expressly modified
and superseded by this Amendment, the terms and provisions of the Loan Agreement
and the Other Agreements are ratified and confirmed and shall continue in full
force and effect. Each Borrower and Lender agree that the Loan Agreement and the

AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT - PAGE 5

<PAGE>   6

Other Agreements, as amended hereby, shall continue to be legal, valid, binding
and enforceable in accordance with their respective terms.

     5.02 REPRESENTATIONS AND WARRANTIES. Each Borrower hereby represents and
warrants to Lender that (a) the execution, delivery and performance of this
Amendment and any and all Other Agreements executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of such Borrower and will not violate the Articles of Incorporation or
Bylaws of such Borrower; (b) attached hereto as Annex A is a true, correct and
complete copy of presently effective resolutions of each Borrower's Board of
Directors authorizing the execution, delivery and performance of this Amendment
and any and all Other Agreements executed and/or delivered in connection
herewith, certified by the Assistant Secretary of Borrower; (c) the
representations and warranties contained in the Loan Agreement, as amended
hereby, and any Other Agreement are true and correct on and as of the date
hereof and on and as of the date of execution hereof as though made on and as of
each such date; (d) no Default or Event of Default under the Loan Agreement, as
amended hereby, has occurred and is continuing, unless such Default or Event of
Default has been specifically waived in writing by Lender; (e) each Borrower is
in full compliance with all covenants and agreements contained in the Loan
Agreement and the Other Agreements, as amended hereby; (f) Sepco has not amended
its Articles of Incorporation or its Bylaws since the date of the Loan
Agreement, (g) Bayou has not amended its Articles of Incorporation or its Bylaws
since the date of incorporation of Bayou and (h) American has not amended its
Articles of Incorporation or its Bylaws since the date of incorporation of
American.

                                   ARTICLE VI
                            MISCELLANEOUS PROVISIONS

     6.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in the Loan Agreement or any Other Agreement, including, without
limitation, any document furnished in connection with this Amendment, shall
survive the execution and delivery of this Amendment and the Other Agreements,
and no investigation by Lender or any closing shall affect the representations
and warranties or the right of Lender to rely upon them.

     6.02 REFERENCE TO LOAN AGREEMENT. Each of the Loan Agreement and the Other
Agreements, and any and all other agreements, documents or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Loan Agreement, as amended hereby, are hereby amended so that any
reference in the Loan Agreement and such Other Agreements to the Loan Agreement
shall mean a reference to the Loan Agreement as amended hereby.

     6.03 EXPENSES OF LENDER. As provided in the Loan Agreement, each Borrower
agrees to pay on demand all costs and expenses incurred by Lender in connection
with the preparation, negotiation, and execution of this Amendment and the Other
Agreements executed pursuant hereto and any and all amendments, modifications,
and supplements thereto, including, without limitation, the costs and fees of
Lender's legal counsel, and all costs and expenses incurred by Lender in
connection with the enforcement or preservation of any rights under the Loan
Agreement, as amended hereby, or any Other Agreements, including, without,
limitation, the costs and fees of Lender's legal counsel.

     6.04 SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this

AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT - PAGE 6

<PAGE>   7

Amendment and the effect thereof shall be confined to the provision so held to
be invalid or unenforceable.

     6.05 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall inure
to the benefit of Lender and each Borrower and their respective successors and
assigns, except that no Borrower may assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.

     6.06 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.

     6.07 EFFECT OF WAIVER. No consent or waiver, express or implied, by Lender
to or for any breach of or deviation from any covenant or condition by any
Borrower shall be deemed a consent to or waiver of any other breach of the same
or any other covenant, condition or duty.

     6.08 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

     6.09 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER AGREEMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.

     6.10 FINAL AGREEMENT. THE LOAN AGREEMENT AND THE OTHER AGREEMENTS, EACH AS
AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO
THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE LOAN
AGREEMENT AND THE OTHER AGREEMENTS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY EACH BORROWER
AND LENDER.

     6.11 RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF
ANY KIND OR NATURE FROM LENDER. EACH BORROWER HEREBY VOLUNTARILY AND KNOWINGLY
RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE
THE DATE THIS AMENDMENT IS EXECUTED, WHICH ANY BORROWER MAY NOW OR HEREAFTER
HAVE AGAINST LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND
ASSIGNS, IF

AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT - PAGE 7

<PAGE>   8

ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT,
VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY "LOANS",
INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING,
COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE
APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR
OTHER AGREEMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT - PAGE 8

<PAGE>   9

     IN WITNESS WHEREOF, this Amendment has been executed and is effective as of
the date first above-written.

                                 "BORROWER"

                                 SEPCO INDUSTRIES, INC.

                                 By:
                                         -------------------------------------
                                 Name
                                         -------------------------------------
                                 Title:
                                         -------------------------------------

                                 BAYOU PUMPS, INC.

                                 By:
                                         -------------------------------------
                                 Name
                                         -------------------------------------
                                 Title:
                                         -------------------------------------

                                 AMERICAN MRO, INC.

                                 By:
                                         -------------------------------------
                                 Name
                                         -------------------------------------
                                 Title:
                                         -------------------------------------

                                 "LENDER"

                                 FLEET CAPITAL CORPORATION

                                 By:
                                         -------------------------------------
                                 Name
                                         -------------------------------------
                                 Title:
                                         -------------------------------------

ANNEXES:

A-1 - Certified Resolutions of Sepco Industries, Inc.
A-2 - Certified Resolutions of Bayou Pumps, Inc.
A-3 - Certified Resolutions of American MRO, Inc.

AUGUST 2000 AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

<PAGE>   10

                                    ANNEX A-1

                            CERTIFIED RESOLUTIONS OF
                   SEPCO INDUSTRIES, INC.'S BOARD OF DIRECTORS

     RESOLVED: That any officer of Sepco Industries, Inc., a Texas corporation
(the "Corporation"), acting alone, by his signature be, and the same hereby is,
authorized and directed, in the name of and on behalf of the Corporation (a) to
amend the Corporation's existing Second Amended and Restated Loan and Security
Agreement by and between the Corporation and Fleet Capital Corporation, a Rhode
Island corporation ("Lender"), successor-in-interest by merger to Fleet Capital
Corporation, a Connecticut corporation (Fleet Capital Corporation, a Connecticut
Corporation having been formerly known as Shawmut Capital Corporation and having
been the successor-in-interest by assignment to Barclays Business Credit, Inc.),
(b) to execute and deliver to Lender with such changes in the terms and
provisions thereof as the officer executing same shall, in his sole discretion,
deem advisable, (i) a certain proposed August 2000 Amendment to Second Amended
and Restated Loan and Security Agreement and Modification to Other Agreements
and to be executed by Corporation, Bayou Pumps, Inc., American MRO, Inc. and
Lender, a draft of which has been reviewed and discussed by the Board of
Directors of the Corporation, and (ii) such other agreements, instruments,
statements and writings as the officer or officers executing the same may deem
desirable or necessary in connection therewith, and (c) to perform such other
acts as the officer or officers performing such acts on behalf of the
Corporation may deem desirable or necessary in connection therewith; and be it

     FURTHER RESOLVED: That said agreements will benefit the Corporation, both
directly and indirectly, and are in the best interests of the Corporation; and
be it

     FURTHER RESOLVED: That said agreements and other statements in writing
executed in the name and on behalf of the Corporation by any officer of the
Corporation shall be presumed conclusively to be the instruments, the execution
of which is authorized by these resolutions; and be it

     FURTHER RESOLVED: That the officers of the Corporation be, and the same
hereby are, authorized and directed to execute, in the name of and on behalf of
the Corporation, security agreements, financing statements, assignments,
collateral reports, loan statements, confirmations of delivery, lien statements,
pledge certificates, release certificates, removal reports, guaranties, cross-
collateralization agreements and such other writings and to take such other
actions as are necessary in their dealings with Lender, and any such papers
executed and any such actions taken by any of them prior to this time are
approved, ratified and confirmed; and be it

     FURTHER RESOLVED: That the Secretary or any Assistant Secretary of the
Corporation, by the signature of any one or more of them, be, and the same
hereby are, authorized and directed to attest the execution by the Corporation
of the papers signed pursuant to these resolutions, to affix the seal of the
Corporation thereto, if required by Lender, and to certify to Lender the
adoption of these resolutions.

ANNEX A-1 - Page 1

<PAGE>   11

                                  CERTIFICATION

     The undersigned hereby certifies that the within and foregoing resolutions
are in effect as of the date hereof, without modification, and that the person
signing the within and foregoing Amendment on behalf of the Corporation is the
duly elected officer stated below his name, that he is authorized to sign such
Amendment, and that his signature thereon is genuine.

         DATED:  August ____, 2000.

                                      -----------------------------------------
                                      [Assistant] Secretary of the Corporation

ANNEX A-1 - Page 2

<PAGE>   12

                                    ANNEX A-2

                            CERTIFIED RESOLUTIONS OF
                     BAYOU PUMPS, INC.'S BOARD OF DIRECTORS

     RESOLVED: That any officer of Bayou Pumps, Inc., a Texas corporation (the
"Corporation"), acting alone, by his signature be, and the same hereby is,
authorized and directed, in the name of and on behalf of the Corporation (a) to
become a party to and amend that certain Second Amended and Restated Loan and
Security Agreement by and between Sepco Industries, Inc. ("Sepco") and Fleet
Capital Corporation, a Rhode Island corporation ("Lender"),
successor-in-interest by merger to Fleet Capital Corporation, a Connecticut
corporation (Fleet Capital Corporation, a Connecticut Corporation having been
formerly known as Shawmut Capital Corporation and having been the
successor-in-interest by assignment to Barclays Business Credit, Inc.), as
thereafter amended (Corporation being a present party to such Second Amended and
Restated Loan and Security Agreement), (b) to execute and deliver to Lender with
such changes in the terms and provisions thereof as the officer executing same
shall, in his sole discretion, deem advisable, (i) a certain proposed August
2000 Amendment to Second Amended and Restated Loan and Security Agreement and
Modification to Other Agreements to be executed by Corporation, Sepco, American
MRO, Inc. and Lender, a draft of which has been reviewed and discussed by the
Board of Directors of the Corporation, and (ii) such other agreements,
instruments, statements and writings as the officer or officers executing the
same may deem desirable or necessary in connection therewith, and (c) to perform
such other acts as the officer or officers performing such acts on behalf of the
Corporation may deem desirable or necessary in connection therewith; and be it

     FURTHER RESOLVED: That said agreements will benefit the Corporation, both
directly and indirectly, and are in the best interests of the Corporation; and
be it

     FURTHER RESOLVED: That said agreements and other statements in writing
executed in the name and on behalf of the Corporation by any officer of the
Corporation shall be presumed conclusively to be the instruments, the execution
of which is authorized by these resolutions; and be it

     FURTHER RESOLVED: That the officers of the Corporation be, and the same
hereby are, authorized and directed to execute, in the name of and on behalf of
the Corporation, security agreements, financing statements, assignments,
collateral reports, loan statements, confirmations of delivery, lien statements,
pledge certificates, release certificates, removal reports, guaranties, cross-
collateralization agreements and such other writings and to take such other
actions as are necessary in their dealings with Lender, and any such papers
executed and any such actions taken by any of them prior to this time are
approved, ratified and confirmed; and be it

     FURTHER RESOLVED: That the Secretary or any Assistant Secretary of the
Corporation, by the signature of any one or more of them, be, and the same
hereby are, authorized and directed to attest the execution by the Corporation
of the papers signed pursuant to these resolutions, to affix the seal of the
Corporation thereto, if required by Lender, and to certify to Lender the
adoption of these resolutions.

ANNEX A-2 - Page 1

<PAGE>   13

                                  CERTIFICATION

     The undersigned hereby certifies that the within and foregoing resolutions
are in effect as of the date hereof, without modification, and that the person
signing the within and foregoing Amendment on behalf of the Corporation is the
duly elected officer stated below his name, that he is authorized to sign such
Amendment, and that his signature thereon is genuine.

     DATED:  August ____, 2000.

                                      ----------------------------------------,
                                      [Assistant] Secretary of the Corporation

ANNEX A-2 - Page 2

<PAGE>   14

                                    ANNEX A-3

                            CERTIFIED RESOLUTIONS OF
                     AMERICAN MRO, INC.'S BOARD OF DIRECTORS

     RESOLVED: That any officer of American MRO, Inc., a Nevada corporation (the
"Corporation"), acting alone, by his signature be, and the same hereby is,
authorized and directed, in the name of and on behalf of the Corporation (a) to
amend that certain Second Amended and Restated Loan and Security Agreement by
and between Sepco Industries, Inc. ("Sepco") and Fleet Capital Corporation, a
Rhode Island corporation ("Lender"), successor-in-interest by merger to Fleet
Capital Corporation, a Connecticut corporation (Fleet Capital Corporation, a
Connecticut Corporation having been formerly known as Shawmut Capital
Corporation and having been the successor-in-interest by assignment to Barclays
Business Credit, Inc.), (b) to execute and deliver to Lender with such changes
in the terms and provisions thereof as the officer executing same shall, in his
sole discretion, deem advisable, (i) a certain proposed August 2000 Amendment to
Second Amended and Restated Loan and Security Agreement and Modification to
Other Agreements to be executed by Corporation, Sepco, Bayou Pumps, Inc. and
Lender, a draft of which has been reviewed and discussed by the Board of
Directors of the Corporation, and (ii) such other agreements, instruments,
statements and writings as the officer or officers executing the same may deem
desirable or necessary in connection therewith, and (c) to perform such other
acts as the officer or officers performing such acts on behalf of the
Corporation may deem desirable or necessary in connection therewith; and be it

     FURTHER RESOLVED: That said agreements will benefit the Corporation, both
directly and indirectly, and are in the best interests of the Corporation; and
be it

     FURTHER RESOLVED: That said agreements and other statements in writing
executed in the name and on behalf of the Corporation by any officer of the
Corporation shall be presumed conclusively to be the instruments, the execution
of which is authorized by these resolutions; and be it

     FURTHER RESOLVED: That the officers of the Corporation be, and the same
hereby are, authorized and directed to execute, in the name of and on behalf of
the Corporation, security agreements, financing statements, assignments,
collateral reports, loan statements, confirmations of delivery, lien statements,
pledge certificates, release certificates, removal reports, guaranties, cross-
collateralization agreements and such other writings and to take such other
actions as are necessary in their dealings with Lender, and any such papers
executed and any such actions taken by any of them prior to this time are
approved, ratified and confirmed; and be it

     FURTHER RESOLVED: That the Secretary or any Assistant Secretary of the
Corporation, by the signature of any one or more of them, be, and the same
hereby are, authorized and directed to attest the execution by the Corporation
of the papers signed pursuant to these resolutions, to affix the seal of the
Corporation thereto, if required by Lender, and to certify to Lender the
adoption of these resolutions.

ANNEX A-3 - Page 1

<PAGE>   15

                                  CERTIFICATION

     The undersigned hereby certifies that the within and foregoing resolutions
are in effect as of the date hereof, without modification, and that the person
signing the within and foregoing Amendment on behalf of the Corporation is the
duly elected officer stated below his name, that he is authorized to sign such
Amendment, and that his signature thereon is genuine.

     DATED: August ____, 2000.

                                    ------------------------------------------,
                                    [Assistant] Secretary of the Corporation

ANNEX A-3 - Page 2

<PAGE>   16

                      CONSENT, RATIFICATION, AND AMENDMENT

     The undersigned, DAVID R. LITTLE, has executed that certain Amended and
Restated Unconditional Guaranty, dated September 16, 1994 (the "Guaranty"), in
favor of FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender"),
successor-in-interest by merger to Fleet Capital Corporation, a Connecticut
corporation (Fleet Capital Corporation, a Connecticut corporation, having
formerly been known as Shawmut Capital Corporation and having been the
successor-in-interest by assignment to Barclays Business Credit, Inc.). The
undersigned hereby (i) consents and agrees to the terms of the August 2000
Amendment to Second Amended and Restated Loan and Security Agreement and
Modification to Other Agreements, dated on or about the date hereof (the "Loan
Amendment"), by and among Sepco Industries, Inc., a Texas corporation, Bayou
Pumps, Inc., a Texas corporation, American MRO, Inc., a Nevada corporation, and
Lender, a copy of which has been reviewed by the undersigned, and (ii) agrees
that the Guaranty shall remain in full force and effect and shall continue to be
the legal, valid and binding obligation of the undersigned enforceable against
it in accordance with its terms. Furthermore, the undersigned hereby agrees and
acknowledges that (a) the obligations, indebtedness and liabilities arising in
connection with the Loan Amendment comprise some, but not all, of the
"Obligations" as such term is used in the Guaranty, (b) the Guaranty is an
"Other Agreement", as such term is defined in the Loan Agreement, (c) the
Guaranty, is not as of this date subject to any claims, defenses or offsets, (d)
nothing contained in the Loan Agreement or any Other Agreement entered into
prior to or as of the date hereof shall adversely affect any right or remedy of
Lender under the Guaranty, and (e) the execution and delivery of the Loan
Amendment shall in no way reduce, impair or discharge any obligations of the
undersigned as guarantor pursuant to the Guaranty and shall not constitute a
waiver by Lender of any of Lender's rights against the undersigned.

     Dated: August ____, 2000.

                                  ---------------------------------------------
                                  David R. Little, individually

CONSENT AND RATIFICATION

<PAGE>   17

                      CONSENT, RATIFICATION, AND AMENDMENT

     The undersigned, GARY A. ALLCORN, TRUSTEE FOR KACEY JOYCE LITTLE, NICHOLAS
DAVID LITTLE AND ANDREA RAE LITTLE 1988 TRUSTS, has executed that certain
Amended and Restated Pledge Agreement dated September 16, 1994 (the "Pledge
Agreement"), in favor of FLEET CAPITAL CORPORATION, a Rhode Island corporation
("Lender"), successor-in-interest by merger to Fleet Capital Corporation, a
Connecticut corporation (Fleet Capital Corporation, a Connecticut corporation,
having been formerly known as Shawmut Capital Corporation and having been the
successor-in-interest by assignment to Barclays Business Credit, Inc.). The
undersigned hereby (i) consents and agrees to the terms of the August 2000
Amendment to Second Amended and Restated Loan and Security Agreement and
Modification to Other Agreements, dated on or about the date hereof (the "Loan
Amendment"), executed by Sepco Industries, Inc., a Texas corporation, Bayou
Pumps, Inc., a Texas corporation, American MRO, Inc., a Nevada corporation, and
Lender, a copy of which has been reviewed by the undersigned, and (ii) agrees
that the Pledge Agreement shall remain in full force and effect and shall
continue to be the legal, valid and binding obligation of the undersigned
enforceable against it in accordance with its terms. Furthermore, the
undersigned hereby agrees and acknowledges that (a) the obligations,
indebtedness and liabilities arising in connection with the Loan Amendment
comprise some, but not all, of the "Secured Indebtedness" as such term is used
in the Pledge Agreement, (b) the Pledge Agreement is an "Other Agreement" as
such term is defined in the Loan Agreement, (c) the Pledge Agreement, is not as
of the date hereof subject to any claims, defenses or offsets, (d) nothing
contained in this Agreement or any Other Agreement entered into prior to or as
of the date hereof shall adversely affect any right or remedy of Lender under
the Pledge Agreement, and (e) the execution and delivery of the Loan Amendment
shall in no way reduce, impair or discharge any obligations of the undersigned
pursuant to the Pledge Agreement and shall not constitute a waiver by Lender of
any of Lender's rights against the undersigned.

     Dated: August ____, 2000.

                                           ------------------------------------
                                           GARY A. ALLCORN, TRUSTEE FOR
                                           KACEY JOYCE LITTLE, NICHOLAS
                                           DAVID LITTLE AND ANDREA RAE
                                           LITTLE 1988 TRUSTS

CONSENT AND RATIFICATION

<PAGE>   18
                      CONSENT, RATIFICATION, AND AMENDMENT

     The undersigned has executed each of the following guaranty agreements in
favor of FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender") (each
such guaranty agreement being hereinafter referred to as a "Guaranty"):

          (1)  Continuing Guaranty Agreement [Indebtedness of Sepco Industries,
               Inc.], dated as of October 24, 1996;

          (2)  Continuing Guaranty Agreement [Indebtedness of Bayou Pumps,
               Inc.], dated as of October 24, 1996; and

          (3)  Continuing Guaranty Agreement [Indebtedness of American MRO,
               Inc.], dated as of October 24, 1996.

The undersigned hereby (i) consents and agrees to the terms of the August 2000
Amendment to Second Amended and Restated Loan and Security Agreement and
Modification to Other Agreements, dated on or about the date hereof (the "Loan
Amendment"), by and among Sepco Industries, Inc., a Texas corporation, Bayou
Pumps, Inc., a Texas corporation, American MRO, Inc., a Nevada corporation, and
Lender, a copy of which has been reviewed by the undersigned, and (ii) agrees
that each Guaranty shall remain in full force and effect and shall continue to
be the legal, valid and binding obligation of the undersigned enforceable
against it in accordance with its terms. Furthermore, the undersigned hereby
agrees and acknowledges that (a) the obligations, indebtedness and liabilities
arising in connection with the Loan Amendment comprise some, but not all, of the
"Obligations" as such term is used in each Guaranty, (b) each Guaranty is an
"Other Agreement", as such term is defined in the Loan Agreement, (c) no
Guaranty is as of this date subject to any claims, defenses or offsets, (d)
nothing contained in the Loan Agreement or any Other Agreement entered into
prior to or as of the date hereof shall adversely affect any right or remedy of
Lender under any Guaranty, and (e) the execution and delivery of the Loan
Amendment shall in no way reduce, impair or discharge any obligations of the
undersigned as guarantor pursuant to each Guaranty and shall not constitute a
waiver by Lender of any of Lender's rights against the undersigned.

     Dated: August ____, 2000.

                                      DXP ENTERPRISES, INC., formerly
                                      known as Index, Inc.

                                      By:
                                             --------------------------------
                                      Name
                                             --------------------------------
                                      Title:
                                             --------------------------------

CONSENT AND RATIFICATION

<PAGE>   19

                      CONSENT, RATIFICATION, AND AMENDMENT

     The undersigned has executed each of the following guaranty agreements in
favor of FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender") (each
such guaranty agreement being hereinafter referred to as a "Guaranty"):

          (1)  Continuing Guaranty Agreement [Indebtedness of Sepco Industries,
               Inc.], dated as of June 16, 1997;

          (2)  Continuing Guaranty Agreement [Indebtedness of Bayou Pumps,
               Inc.], dated as of June 16, 1997; and

          (3)  Continuing Guaranty Agreement [Indebtedness of American MRO,
               Inc.], dated as of June 16, 1997.

The undersigned hereby (i) consents and agrees to the terms of the August 2000
Amendment to Second Amended and Restated Loan and Security Agreement and
Modification to Other Agreements, dated on or about the date hereof (the "Loan
Amendment"), by and among Sepco Industries, Inc., a Texas corporation, Bayou
Pumps, Inc., a Texas corporation, American MRO, Inc., a Nevada corporation, and
Lender, a copy of which has been reviewed by the undersigned, and (ii) agrees
that each Guaranty shall remain in full force and effect and shall continue to
be the legal, valid and binding obligation of the undersigned enforceable
against it in accordance with its terms. Furthermore, the undersigned hereby
agrees and acknowledges that (a) the obligations, indebtedness and liabilities
arising in connection with the Loan Amendment comprise some, but not all, of the
"Obligations" as such term is used in each Guaranty, (b) each Guaranty is an
"Other Agreement", as such term is defined in the Loan Agreement, (c) no
Guaranty is as of this date subject to any claims, defenses or offsets, (d)
nothing contained in the Loan Agreement or any Other Agreement entered into
prior to or as of the date hereof shall adversely affect any right or remedy of
Lender under any Guaranty, and (e) the execution and delivery of the Loan
Amendment shall in no way reduce, impair or discharge any obligations of the
undersigned as guarantor pursuant to each Guaranty and shall not constitute a
waiver by Lender of any of Lender's rights against the undersigned.

     Dated: August ____, 2000

                                         DXP ACQUISITION, INC., d/b/a
                                         STRATEGIC ACQUISITION, INC.

                                         By:
                                                --------------------------------
                                         Name
                                                --------------------------------
                                         Title:
                                                --------------------------------

CONSENT AND RATIFICATION

<PAGE>   20

                      CONSENT, RATIFICATION, AND AMENDMENT

     The undersigned has executed each of the following guaranty agreements in
favor of FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender") (each
such guaranty agreement being hereinafter referred to as a "Guaranty"):

          (1)  Continuing Guaranty Agreement [Indebtedness of Sepco Industries,
               Inc.], dated as of May 29, 1997;

          (2)  Continuing Guaranty Agreement [Indebtedness of Bayou Pumps,
               Inc.], dated as of May 29, 1997; and

          (3)  Continuing Guaranty Agreement [Indebtedness of American MRO,
               Inc.], dated as of May 29, 1997.

The undersigned hereby (i) consents and agrees to the terms of the August 2000
Amendment to Second Amended and Restated Loan and Security Agreement and
Modification to Other Agreements, dated on or about the date hereof (the "Loan
Amendment"), by and among Sepco Industries, Inc., a Texas corporation, Bayou
Pumps, Inc., a Texas corporation, American MRO, Inc., a Nevada corporation, and
Lender, a copy of which has been reviewed by the undersigned, and (ii) agrees
that each Guaranty shall remain in full force and effect and shall continue to
be the legal, valid and binding obligation of the undersigned enforceable
against it in accordance with its terms. Furthermore, the undersigned hereby
agrees and acknowledges that (a) the obligations, indebtedness and liabilities
arising in connection with the Loan Amendment comprise some, but not all, of the
"Obligations" as such term is used in each Guaranty, (b) each Guaranty is an
"Other Agreement", as such term is defined in the Loan Agreement, (c) no
Guaranty is as of this date subject to any claims, defenses or offsets, (d)
nothing contained in the Loan Agreement or any Other Agreement entered into
prior to or as of the date hereof shall adversely affect any right or remedy of
Lender under any Guaranty, and (e) the execution and delivery of the Loan
Amendment shall in no way reduce, impair or discharge any obligations of the
undersigned as guarantor pursuant to each Guaranty and shall not constitute a
waiver by Lender of any of Lender's rights against the undersigned.

     Dated: August ____, 2000.

                                         PELICAN STATE SUPPLY
                                         COMPANY, INC.

                                         By:
                                                -------------------------------
                                         Name
                                                -------------------------------
                                         Title:
                                                -------------------------------

CONSENT AND RATIFICATION

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