Document:

EXHIBIT 4(c)
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                               INSILCO HOLDING CO.
                             AND INSILCO CORPORATION
                                EQUITY UNIT PLAN

         SECTION 1. PURPOSE. The purposes of the Insilco Holding Co. and Insilco
Corporation Equity Unit Plan are to promote the interests of Insilco Holding Co.
(the "PARENT") and its stockholders and Insilco Corporation ("INSILCO") by
retaining exceptional executive personnel and other key employees of the Parent
and its Subsidiaries and motivating such employees by enabling them to
participate in the long-term growth and financial success of the Parent and its
Subsidiaries.

         SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:

         "AFFILIATE" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common control
with, such Person; PROVIDED that no stockholder of the Parent shall be deemed to
be an Affiliate of any other stockholder of the Parent solely by reason of any
investment in the Parent. For the purpose of this definition, the term "CONTROL"
(including, with correlative meanings, the terms "CONTROLLING," "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), when used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

         "AFFILIATED EMPLOYEE BENEFIT TRUST" means any trust that is a successor
to the assets held by a trust established under an employee benefit plan subject
to ERISA or any other trust established directly or indirectly under such plan
or any other such plan having the same sponsor.

         "AWARD AGREEMENT" means a written agreement executed by an Employee
evidencing an award of Equity Units under the Plan. Unless otherwise provided by
the Committee, the Award Agreement to be used for the award of Equity Units
under the Plan shall be substantially in the form attached as Exhibit A hereto.

         "BASE PRICE" means the Fair Market Value of a Common Share on the date
an Equity Unit is granted to a Participant. The Base Price on August 17, 1998 is
$45 per Common Share.

         "BOARD" means the Board of Directors of the Parent.

         "CAUSE" means, unless otherwise defined in any Employment Agreement or
Award Agreement:

         (a) a Participant's willful and continued failure substantially to
perform his or her duties (other than as a result of total or partial incapacity
due to physical or mental illness);
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         (b) a Participant's conviction for a felony arising from, or any act of
fraud, embezzlement, or willful dishonesty by the Participant in relation to the
business or affairs of the Parent or its Affiliates or any other felonious
conduct on the part of the Participant that is materially detrimental to the
best interests of the Parent or its Affiliates;

         (c) a Participant's being repeatedly under the influence of illegal
drugs or alcohol while performing his or her duties; or

         (d) any other willful act by a Participant which is materially
injurious to the financial condition or business reputation of the Parent or any
of its Affiliates as determined in the reasonable discretion of the Parent,
including a Participant's breach of the provisions of any non-competition,
non-solicitation or confidentiality covenant in favor of the Parent or its
Affiliates binding upon such Participant.

         Notwithstanding the foregoing, no action or failure to act will
constitute "Cause" if the Participant believed in good faith that such action or
failure to act was in the best interest of the Parent.

         "CODE" means the Internal Revenue Code of 1986, as the same may be
amended, and the rules and regulations promulgated thereunder.

         "COMMITTEE" means a committee of the Board designated by the Board to
administer the Plan. Until otherwise determined by the Board, the full Board
shall be the Committee under the Plan.

         "COMMON SHARES" means shares of common stock, $0.001 par value, of the
Parent or such other securities as may be designated by the Committee from time
to time.

         "EBITDA" means the consolidated operating income of the Parent, plus
(or minus) any income (or losses) from investments (excluding equity income from
Thermalex), plus depreciation, plus amortization, plus (or minus) any unusual,
non-recurring losses (or gains). The Committee may, in good faith, establish
such rules and policies as necessary or appropriate for the calculation of
EBITDA pursuant to the formula set forth above for purposes of the Plan.

         "EMPLOYEE" means an employee of the Parent or any Subsidiary.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as the same
may be amended, and the rules and regulations promulgated thereunder.

         "EQUITY UNIT" means any right granted under Section 6 of the Plan.

         "FAIR MARKET VALUE" means, with respect to a Common Share or other
security of the Parent, as of the date of determination, (i) if on the date of
determination such Common Shares or securities are Publicly Traded, the average
of the reported high and low sale prices of a Common Share or such other
security on such exchange or market as is the principal trading market for such
Common Shares or securities on the date of such determination (or, if such date
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is not a trading date, the last preceding trading date) and (ii) if on the date
of determination such Common Shares or securities are not Publicly Traded, the
amount determined as of the close of the calendar quarter immediately preceding
the date of determination pursuant to the following formula: the quotient of
(x)(A) a multiple of 6.3 times the last 12 months' EBITDA, minus (B) the sum of
the consolidated debt of the Parent and the accreted value of all outstanding
preferred stock of the Parent, plus (C) a multiple of 9.0 times the last 12
months' equity in net income of Affiliates of the Parent, divided by (y) the
aggregate number of shares of all classes of common stock of the Parent
outstanding, determined on a fully diluted basis, as of the close of the
calendar quarter immediately preceding the date of determination.

         "INSILCO" means Insilco Corporation, a Delaware corporation.

         "INVESTORS' AGREEMENT" means the Investors' Agreement dated as of
August 17, 1998 among (i) the Parent and (ii) DLJ Merchant Banking Partners II,
L.P., a Delaware limited partnership ("DLJMB"), DLJ Offshore Partners II, C.V.,
a Netherlands Antilles limited partnership, DLJ Merchant Banking Partners II-A,
L.P., a Delaware limited partnership, DLJ Diversified Partners, L.P., a Delaware
limited partnership, DLJ Diversified Partners-A, L.P., a Delaware limited
partnership, DLJEAB Partners, L.P., a Delaware limited partnership, DLJ
Millennium Partners, L.P., a Delaware limited partnership, DLJ Millennium
Partners-A, L.P., a Delaware limited partnership, DLJMB Funding II, Inc., a
Delaware corporation, UK Investment Plan 1997 Partners, a Delaware partnership,
DLJ First ESC, L.P., a Delaware limited partnership and DLJ ESC II, L.P., a
Delaware limited partnership, (each of the foregoing, a "DLJ ENTITY," and
collectively the "DLJ ENTITIES"), and 399 Venture Partners, Inc., a wholly owned
subsidiary of CitiBank, N.A. ("CVC").

         "PARENT" means Insilco Holding Co., a Delaware corporation.

         "PARTICIPANT" means any Employee receiving an Equity Unit under the
Plan.

         "PERMITTED TRANSFEREE" means, for purposes of this Plan:

                  (i) in the case of any DLJ Entity, (A) any other DLJ Entity,
         (B) any general or limited partner of any DLJ Entity (a "DLJ PARTNER"),
         and any Affiliated Employee Benefit Trust or Person that is an
         Affiliate of any DLJ Partner (collectively, the "DLJ AFFILIATES"), (C)
         any managing director, general partner, director, limited partner,
         officer or employee of any DLJ Entity or of any DLJ Affiliate, or the
         heirs, executors, administrators, testamentary trustees, legatees or
         beneficiaries of any of the foregoing Persons referred to in this
         clause (C) (collectively, "DLJ ASSOCIATES"), (D) a trust, the
         beneficiaries of which, or a corporation, limited liability company or
         partnership, the stockholders, members or general or limited partners
         of which, include only DLJ Entities, DLJ Affiliates, DLJ Associates,
         their spouses or their lineal descendants or (E) a voting trustee for
         one or more DLJ Entities, DLJ Affiliates or DLJ Associates under the
         terms of a voting trust designed to conform with the requirements of
         the Insurance Law of the State of New York; and
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                  (ii) in the case of CVC, (A) any nominee or trustee for or any
         general or limited partner or shareholder of CVC, and any Person that
         is an Affiliate of CVC (collectively, the "CVC AFFILIATES"), (B) any
         managing director, general partner, limited partner, employee, officer
         or director of CVC or a CVC Affiliate, or any spouse, lineal
         descendant, sibling, parent, heir, executor, administrator,
         testamentary trustee, legatee or beneficiary of any of the foregoing
         Persons described in this clause (B) (collectively, "CVC ASSOCIATES"),
         (C) a "CO-INVESTMENT SCHEME" being a scheme under which certain
         officers, employees or partners of CVC or of its adviser or manager are
         entitled (as individuals or through a body corporate or any other
         vehicle) to acquire Common Shares which CVC would otherwise acquire and
         a Co-Investment Scheme which holds Common Shares for a body corporate
         or other vehicle may transfer their Common Shares to another body
         corporate or another vehicle which holds or is to hold Common Shares
         for the Co-Investment Scheme or the officers, employees or partners
         entitled to the Common Shares under the Co-Investment Scheme and (D)
         any trust, the beneficiaries of which, or any corporation, limited
         liability company or partnership, stockholders, members or general or
         limited partners of which include only CVC, CVC Affiliates, CVC
         Associates, their spouses or their lineal descendants.

         "PERSON" means any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.

         "PLAN" means this Insilco Holding Co. and Insilco Corporation Equity
Unit Plan.

         "PUBLIC OFFERING" means an underwritten public offering of Registrable
Securities of the Parent occurring after August 17, 1998 pursuant to an
effective registration statement under the Securities Act (other than pursuant
to a registration statement on Form S-4 or Form S-8 or any similar or successor
form).

         "PUBLICLY TRADED" means, with respect to any security, that (i) the
security is of a class that is listed or quoted for trading on a national
exchange or NASDAQ or a similar national trading or quotation system and (ii)
the aggregate market capitalization with respect to such class of securities,
based on last sale price or last quoted asked price reported on such exchange or
trading system, is $25,000,000.00, excluding all shares of such class of
securities beneficially owned by any DLJ Affiliate or any CVC Affiliate or any
employee of the Parent or Insilco.

         "REGISTRABLE SECURITIES" means, at any time, any Common Shares or
Warrants and any securities issued or issuable in respect of such Common Shares
or Warrants by way of conversion, exchange, stock dividend, split or
combination, recapitalization, merger, consolidation, other reorganization or
otherwise until (i) a registration statement covering such Common Shares or
Warrants has been declared effective by the SEC and such Common Shares or
Warrants have been disposed of pursuant to such effective registration
statement, (ii) such Common Shares or Warrants are sold under circumstances in
which all of the applicable conditions of Rule 144 (or any similar provisions
then in force) under the Securities Act are met or (iii) such Common Shares or
Warrants are otherwise transferred, the Parent has delivered a new certificate
or other evidence of ownership for such Common Shares or Warrants not bearing
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the legend required pursuant to the Investors' Agreement and such Common Shares
or Warrants may be resold without subsequent registration under the Securities
Act.

         "SECURITIES ACT" means the Securities Act of 1933, as the same may be
amended, and the rules and regulations promulgated thereunder.

         "SIGNIFICANT EVENT" means the first to occur of:

                  (i) the acquisition by any "person" (as such term is used in
         Section 3(a)(9) and 13(d)(3) of the Exchange Act) other than (A) the
         DLJ Entities, CVC and/or any of their respective Permitted Transferees
         or (B) any "group" (within the meaning of such Section 13(d)(3)) of
         which any of the DLJ Entities, CVC and/or any of their respective
         Permitted Transferees is a part, directly or indirectly, by virtue of
         the consummation of any purchase, merger or other combination,
         securities of the Parent representing more than 50% of the combined
         voting power of the Parent's then outstanding voting securities
         entitled to vote with respect to matters submitted to a vote of the
         stockholders generally;

                  (ii) the consummation of a Public Offering which results in
         the DLJ Entities', CVC's, and/or their respective Permitted
         Transferees' ceasing to have beneficial ownership of securities of the
         Parent representing, in the aggregate, at least 45% of the combined
         voting power of the Parent's then outstanding voting securities
         entitled to vote with respect to matters submitted to a vote of the
         stockholders generally;

                  (iii) the ceasing of the individuals who constitute the Board
         on the date hereof (the "INCUMBENT BOARD"), for any reason, to
         constitute at least a majority thereof, provided that any person
         becoming a director subsequent to such date whose election, or
         nomination for election by the Parent's shareholders, was approved by a
         vote of at least two-thirds (2/3) of the directors then comprising the
         Incumbent Board shall be, for purposes of this clause (iii), considered
         as though such person were a member of the Incumbent Board;

                  (iv) the approval by the shareholders of the Parent of a plan
         or agreement providing (A) for a merger or consolidation of the Parent
         other than with a wholly-owned subsidiary and other than a merger or
         consolidation that would result in the voting securities of the Parent
         outstanding immediately prior thereto continuing to represent (either
         by remaining outstanding or by being converted into voting securities
         of the surviving entity) more than 50% of the combined voting power of
         the voting securities of the Parent or such surviving entity
         outstanding immediately after such merger or consolidation, or (B) for
         a plan of complete liquidation of the Parent. If any of the events
         enumerated in this paragraph (iv) occurs, the Board shall determine the
         effective date of the Significant Event resulting therefrom for
         purposes of this Agreement;

                  (v) a sale or transfer by the Parent or any of its
         Subsidiaries of more than 50%, in value, all of the consolidated assets
         of the Parent and its Subsidiaries to an entity which is not an
         Affiliate of the Parent prior to such sale or transfer;
<PAGE>

                  (vi) August 17, 2008; or

                  (vii) any other event or circumstance determined by the Board
         to constitute a Significant Event.

         "STOCKHOLDER" means each Person (other than the Parent) who shall be a
party to or be bound by the Investors' Agreement, whether in connection with the
execution and delivery thereof, pursuant to Section 3.03 or Section 6.05
thereof, or otherwise, so long as such Person shall beneficially own any
securities of the Parent.

         "SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person.

         "TERMINATION DATE" means, with respect to an Employee, the last date on
which the Employee performs services for the Parent and its Subsidiaries in
exchange for compensation as an Employee.

         "WARRANTS" means the warrants issued by the Parent to Stockholders for
the purchase of an aggregate of 110,453 Common Shares (subject to adjustment as
provided for herein).

         SECTION 3.  ADMINISTRATION.

         (a) AUTHORITY OF COMMITTEE. The Plan shall be administered by the
Committee. Subject to the terms of the Plan, applicable law and contractual
restrictions affecting the Parent, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the
number of Equity Units to be awarded, or with respect to which payments, rights,
or other matters are to be calculated; (iii) determine the method or methods by
which Equity Units may be settled; (iv) determine whether, to what extent, and
under what circumstances cash or Common Shares payable with respect to Equity
Units shall be deferred if requested by the holder thereof; (v) interpret and
administer the Plan and any instrument or agreement relating to, or Equity Unit
granted under, the Plan; (vi) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (vii) make any other determination and take any
other action that the Committee deems necessary or desirable for the
administration of the Plan.

         (b) COMMITTEE DISCRETION BINDING. Unless otherwise expressly provided
in the Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Equity Unit shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon all Persons, including the Parent, any
Subsidiary, any Participant, any holder or beneficiary of any Equity Unit, any
shareholder and any Employee.
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         SECTION 4.  EQUITY UNITS AVAILABLE FOR AWARDS.

         (a) EQUITY UNITS AVAILABLE. Subject to adjustment as provided in
Sections 4(b) and 4(c), the number of Equity Units which may be granted under
the Plan shall be 88,194.

         (b) ADJUSTMENTS. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Common Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, reclassification, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Common Shares or other
securities of the Parent, issuance of warrants or other rights to purchase
Common Shares or other securities of the Parent, or other similar corporate
transaction or event affects the Common Shares such that an adjustment is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in good faith and in such manner as it may deem equitable,
adjust the number of (i) Equity Units available under the Plan, (ii) Equity
Units outstanding, (iii) Common Shares (or number and kind of other securities
or property) available for settlement of Equity Units, and (iv) the amount of
the Base Price.

         (c) SOURCES OF COMMON SHARES DELIVERABLE UNDER EQUITY UNITS. Any Common
Shares delivered pursuant to settlement of an Equity Unit may consist, in whole
or in part, of authorized and unissued Common Shares or of treasury Common
Shares.

         SECTION 5. ELIGIBILITY. Any Employee, including any officer or
employee-director of the Parent or any Subsidiary shall be eligible to be
designated as a Participant.

         SECTION 6.  EQUITY UNITS.

         (a) GRANT. Subject to (i) execution of an Award Agreement by the Parent
and an Employee and (ii) compliance with such other conditions as the Committee
shall, in its sole discretion require, such Employee shall be granted the number
of Equity Units set forth opposite such Employee's name on Exhibit B hereto.
Subject to earlier termination pursuant to Section 7, each such Equity Unit
shall be cancelled and settled as set forth in Section 6(b). Additional
Employees may be granted Equity Units available under the Plan as determined by
the Committee.

         (b) VESTING. All Equity Units shall be 100% vested.

         (c) PAYMENT OF BASE PRICE. Upon the grant of an Equity Unit to a
Participant, the Participant shall be required to pay to Insilco an amount equal
to the Base Price multiplied by the number of Equity Units granted to the
Participant. The Participant may satisfy the requirement of paying the Base
Price by (i) making a cash payment to Insilco at the time of the grant, (ii)
agreeing at the time of the grant to cancel and terminate unexercised option
rights under the Insilco Corporation 1993 Long-Term Incentive Stock Option Plan,
and/or (iii) agreeing at the time of the grant to forego future salary or bonus
payments. Interest shall accrue on the unpaid amount of the Base Price, computed
from the date the Equity Unit is granted until the date the Base Price is paid
in full, and shall be compounded monthly. The rate of interest shall be a
<PAGE>

variable rate, adjusted as of the first day of each calendar month, equal to the
"applicable federal rate" which is the long-term rate, as defined in Section
1274(d) of the Internal Revenue Code of 1986, as amended, and as pronounced by
the Internal Revenue Service from time to time.

         (d) SETTLEMENT OF EQUITY UNITS. Each Equity Unit held by a Participant
shall be cancelled upon the earlier of the occurrence of a Significant Event or
the Participant's Termination Date in exchange for the applicable amount set
forth below (the "EQUITY UNIT SETTLEMENT AMOUNT") paid in the method and form
described below:

                  (i) SIGNIFICANT EVENT. Within 30 days after the occurrence of
         a Significant Event, each Equity Unit held by a Participant shall be
         cancelled in exchange for the payment to the Participant of an amount
         equal (a) to the Fair Market Value of a Common Share as of the date of
         such Significant Event, less (b) the amount of the Base Price the
         Participant is obligated to pay but has not yet paid and any unpaid
         interest and withholdings under Section 8(d).

                  (ii) TERMINATION OF EMPLOYMENT OTHER THAN FOR CAUSE. If a
         Participant's employment with the Parent and its Subsidiaries is
         terminated by reason of the Participant's resignation, retirement,
         disability or death or a termination by the Parent for any reason other
         than Cause or a termination described in Section 6(d)(iii) below, each
         Equity Unit held by the Participant shall be cancelled in exchange for
         payment to the Participant (or, in the case of the Participant's death,
         to the Participant's estate), within 30 days after such termination, of
         an amount equal to (a) the Fair Market Value of a Common Share as of
         the Participant's Termination Date, less (b) the amount of the Base
         Price the Participant is obligated to pay but has not yet paid and any
         unpaid interest and withholding under Section 8(d).

                  (iii) TERMINATION OF EMPLOYMENT OTHER THAN FOR CAUSE PRIOR TO
         DECEMBER 31, 2000. If a Participant's employment with Parent and its
         Subsidiaries is terminated by Parent and its Subsidiaries without Cause
         on or before December 31, 2000, each Equity Unit held by Participant
         shall be cancelled in exchange for payment by Parent to the
         Participant, within 30 days after such termination, of an amount equal
         to (a) the greater of (x) the Fair Market Value of a Common Share as of
         the Participant's Termination or (y) $45.00 plus the amount of any
         interest accruing on any unpaid portion of the Base Price from August
         17, 1998 until the date of such termination (whether or not such
         interest has been paid as of such termination date) less (b) the amount
         of the Base Price the Participant is obligated to pay but has not yet
         paid and any unpaid interest and withholding under Section 8(d).

                  (iv) TERMINATION OF EMPLOYMENT FOR CAUSE. If a Participant's
         employment with the Parent and its Subsidiaries is terminated by the
         Parent and its subsidiaries for Cause, each Equity Unit held by the
         Participant shall be cancelled in exchange for payment to the
         Participant within 30 days after such termination, of an amount equal
         to the lesser of (a) the Fair Market Value of a Common Share as of the
         Participant's Termination Date, less the amount of the Base Price the
         Participant is obligated to pay but has not yet paid and any
         withholding under Section 8(d), or (b) $45.00, less the
<PAGE>

         amount of the Base Price the Participant is obligated to pay but has
         not yet paid and any unpaid interest and withholding under Section
         8(d).

                  (v) FORM OF PAYMENT. With respect to payments under this
         Section 6, the Committee shall determine, in its sole discretion,
         whether Equity Units held by a Participant shall be settled by payment
         in cash paid by Insilco, Common Shares, or a combination of cash and
         Common Shares.

                  (vi) PARTICIPANT PAYMENT OBLIGATION. At the time that Equity
         Unit is settled pursuant to this Section 6(d), the Participant is
         unconditionally obligated to pay the full amount of the Base Price and
         interest relating to the Participant's Equity Unit, less the amount of
         the Base Price and interest previously paid by the Participant; and the
         Company shall have full recourse against the Participant for the
         payment of such amount.

         (e) PRIOR TAXABILITY. If the Internal Revenue Service finally
determines that a Participant must recognize taxable income in connection with
the Participant's cancellation and termination of unexercised option rights
under the Insilco Corporation 1993 Long-Term Incentive Stock Option Plan and the
related grant of Equity Units under the Plan, such Participant shall be entitled
to elect to cancel a sufficient number of Equity Units to satisfy the related
tax liability. Each such Equity Unit shall be cancelled in exchange for a cash
payment by Insilco to such Participant within 30 days after the Participant's
written notice of the final determination of the Internal Revenue Service is
received by the Committee in an amount equal to the Fair Market Value of a
Common Share on the date such notice is given by the Participant.

         SECTION 7.  AMENDMENT AND TERMINATION.

         (a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time subject to
Section 7(b); provided that no such amendment, alteration, suspension,
discontinuance or termination shall be made without shareholder approval if such
approval is necessary to comply with any tax or regulatory requirement for which
or with which the Board deems it necessary or desirable to qualify or comply.
Notwithstanding anything to the contrary herein, the Committee may amend the
Plan in such manner as may be necessary so as to have the Plan conform with
local rules and regulations in any jurisdiction outside the United States.

         (b) AMENDMENT TO EQUITY UNITS. Subject to the terms of the Plan and
applicable law, the Committee may, at any time, waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate,
any Equity Unit theretofore granted, prospectively or retroactively; provided
that any such waiver, amendment, alteration, suspension, discontinuance,
cancellation or termination that would adversely affect the rights of any
Participant or any holder or beneficiary of any Equity Unit theretofore granted
shall not, to that extent, be effective without the consent of the affected
Participant, holder or beneficiary.

         SECTION 8.  GENERAL PROVISIONS.
<PAGE>

         (a) NONTRANSFERABILITY. No Equity Unit shall be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a Participant,
except by will or the laws of descent and distribution.

         (b) NO RIGHTS TO EQUITY UNITS. No Employee or other Person shall have
any claim to be granted any Equity Units, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Equity Units. The terms and conditions of Equity Units need not be the same
with respect to each recipient.

         (c) COMMON SHARE CERTIFICATES. In the event any Equity Units are
settled in Common Shares, certificates issued in respect of such Common Shares
shall, unless the Committee otherwise determines, be registered in the name of
the Participant. Such stock certificates shall carry such appropriate legends,
and such written instructions shall be given to the Parent's transfer agent, as
may be deemed necessary or advisable by counsel to the Parent in order to comply
with the requirements of the Securities Act, any state securities laws or any
other applicable laws. All such certificates for Common Shares or other
securities delivered under the Plan shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the Plan
or the rules, regulations and other requirements of the Securities Exchange
Commission or any stock exchange upon which such Common Shares or other
securities are then listed and any other applicable laws or rules or
regulations, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.

         (d) WITHHOLDING. A Participant may be required to pay to the Parent or
any Subsidiary, and the Parent or any Subsidiary shall have the right and is
hereby authorized to withhold from any payment due under the Plan or from any
compensation or other amount owing to a Participant the amount (in cash, Common
Shares, other securities, or other property) of any applicable withholding taxes
in respect of any Equity Unit, and to take such other action as may be necessary
in the opinion of the Parent to satisfy all obligations for the payment of such
taxes. The Committee may, in its sole discretion, provide for additional cash
payments to holders of Equity Units to defray or offset any tax liability
related to the Equity Units.

         (e) AWARD AGREEMENTS. Each grant of Equity Units hereunder shall be
evidenced by an Award Agreement which shall be delivered to the Participant and
shall specify the terms and conditions of the Equity Units and any rules
applicable thereto.

         (f) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in
the Plan shall prevent the Parent or any Subsidiary from adopting or continuing
in effect other compensation arrangements, which may, but need not, provide for
the grant of equity units, options, restricted stock, Common Shares and other
types of awards (subject to shareholder approval if such approval is required),
and such arrangements may be either generally applicable or applicable only in
specific cases.

         (g) NO RIGHT TO EMPLOYMENT. The grant of Equity Units shall not be
construed as giving a Participant the right to be retained in the employ or
service of the Parent or any Subsidiary or interfere in any way with the right
of the Parent or any Subsidiary to terminate his
<PAGE>

or her employment at any time, subject to any obligations under any Employment
Agreement covering the Participant.

         (h) RIGHTS AS A STOCKHOLDER. No Participant or holder or beneficiary of
any Equity Units shall have any rights as a stockholder with respect to any
Common Shares unless and until he or she becomes the holder of such Common
Shares.

         (i) GOVERNING LAW. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan and any Award Agreement shall
be determined in accordance with the laws of the State of Delaware.

         (j) SEVERABILITY. If any provision of the Plan or any Award Agreement
is or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Equity Unit, or would disqualify the Plan or
any Equity Unit under any law deemed applicable by the Committee, such provision
shall be construed or deemed to be amended to conform to the applicable laws, or
if it cannot be construed or deemed to be amended without, in the determination
of the Committee, materially altering the intent of the Plan or the Award
Agreement, such provision shall be stricken as to such jurisdiction, Person or
Equity Unit, and the remainder of the Plan and any such Award Agreement shall
remain in full force and effect.

         (k) OTHER LAWS. The Committee may refuse to issue or transfer any
Equity Units, Common Shares or other consideration under the Plan if, acting in
its sole discretion, it determines that the issuance or transfer of such Equity
Units, Common Shares or such other consideration violates any applicable law or
regulation or entitles the Parent to recover the same under Section 16(b) of the
Exchange Act, and any payment tendered to the Parent by a Participant in
connection therewith shall be promptly refunded to the relevant Participant,
holder or beneficiary. Without limiting the generality of the foregoing, the
granting and settlement of Equity Units hereunder shall not be construed as an
offer to sell securities of the Parent, and no such offer shall be outstanding,
unless and until the Committee, in its sole discretion, has determined that any
such offer, if made, would be in compliance with all applicable requirements of
the U.S. federal securities laws and any other laws to which such offer, if
made, would be subject.

         (l) NO TRUST OR FUND CREATED. Neither the Plan nor the granting and
settlement of any Equity Unit shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Parent or any
Subsidiary and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Parent or any Subsidiary
hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Parent or any Subsidiary.

         (m) NO FRACTIONAL COMMON SHARES. No fractional Common Shares shall be
issued or delivered pursuant to the Plan, and the Committee shall determine
whether cash or other securities or other property shall be paid or transferred
in lieu of any fractional Common Shares or whether such fractional Common Shares
or any rights thereto shall be cancelled, terminated, or otherwise eliminated.
<PAGE>

         (n) HEADINGS. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed to be in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.

         SECTION 9.  TERM OF THE PLAN.

         (a) EFFECTIVE DATE. The Plan shall be effective as of August 17, 1998,
subject to the approval by the shareholders of the Parent. Equity Units may be
granted hereunder prior to such shareholder approval, subject in all cases,
however, to such approval.

         (b) EXPIRATION DATE. The Plan shall terminate and be of no further
force or effect as of the date all payments due under the Plan have been made.<PAGE>

                                                                     EXHIBIT 4.5

                      STOCK AND WARRANT PURCHASE AGREEMENT

         This STOCK AND WARRANT PURCHASE AGREEMENT is dated as of the 6th day of
September, 2000 by and between Kana Communications, Inc., a Delaware corporation
with its principal office at 740 Bay Road, Redwood City, California (the
"Company" or "Kana"), and Andersen Consulting LLP, an Illinois limited liability
partnership, with an office at 1661 Page Mill Rd., Palo Alto, California (the
"Purchaser").

         WHEREAS, the Company desires to issue and sell to the Purchaser an
aggregate of 400,000 shares (the "SHARES") of the authorized but unissued shares
of common stock, $.001 par value per share, of the Company (the "COMMON STOCK");
and

         WHEREAS, the Company desires to issue and sell to the Purchaser a
warrant (the "Warrant") to purchase an aggregate of up to 725,000 shares (the
"Warrant Shares") of the authorized but unissued shares of the Common Stock; and

         WHEREAS, the Purchaser wishes to purchase the Shares and the Warrant
(collectively with the Warrant Shares, referred to as the "Securities"), on the
terms and subject to the conditions set forth in this Agreement.

         NOW THEREFORE, in consideration of the mutual agreements,
representations, warranties and covenants herein contained, the parties hereto
agree as follows:

         1.   DEFINITIONS. As used in this Agreement, the following terms shall
have the following respective meanings:

         (a)  "AFFILIATE" means, (i) as to Purchaser, any partnerships, firms,
              corporations, entities, individuals, and their successors and
              assigns, wherever located, which together comprise the Andersen
              Consulting worldwide organization whether by virtue of their
              member firm interfirm agreements with Andersen Consulting
              Partners Societe Cooperative or any successor thereto acting to
              coordinate the business of such entities or by virtue of a
              contract with or ownership, direct or indirect, by a member firm
              or otherwise being under control, directly or indirectly, of one
              or more member firms and which are thereby deemed part of the
              Andersen Consulting worldwide organization and, (ii) as to Kana,
              a legal entity that, directly or indirectly through one or more
              intermediaries, controls, is controlled by, or is under common
              control with Kana. For this purpose "control" shall mean direct
              or indirect beneficial ownership of fifty percent (50%) or more
              of the voting or income interest in such corporation or other
              business entity.

         (b)  "ALLIANCE AGREEMENT" shall mean the Restated Master Alliance
              Agreement by and between the parties hereto of even date herewith.

         (c)  "CLOSING DATE" means the date of the Closing.

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

<PAGE>

         (d)  "CONSULTING SERVICES AGREEMENT" shall mean the Consulting Services
              Agreement by and between the parties hereto of even date herewith.

         (e)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
              amended, and all of the rules and regulations promulgated
              thereunder.

         (f)  "SEC" shall mean the United States Securities and Exchange
              Commission.

         (g)  "SEC DOCUMENTS" shall mean all documents filed by the Company with
              the SEC (including documents filed by Silknet Software, Inc.).

         (h)  "SECURITIES ACT" shall mean the Securities Act of 1933, as
              amended, and all of the rules and regulations promulgated
              thereunder.

         2.   PURCHASE AND SALE OF THE SECURITIES.

              2.1   PURCHASE AND SALE.

         Subject to and upon the terms and conditions set forth in this
Agreement (including all exhibits hereto) and the Alliance Agreement, the
Company agrees to issue and sell to Purchaser, and Purchaser, hereby agrees to
purchase from the Company, at the Closing:

         (a)  400,000 shares of Common Stock; and

         (b)  the Warrant in substantially the form attached hereto as
EXHIBIT B.

         Purchaser shall deliver the consideration as set forth on EXHIBIT A at
the Closing.

              2.2   CLOSING. The closing of the transactions contemplated under
this Agreement (the "Closing") shall take place at the offices of the Company,
740 Bay Road, Redwood City, California, on the second business day after the
Company shall have given written notice to (the "Closing Notice") the Purchaser
that all of the conditions precedent set forth in Section 6.1 have been
satisfied in full or at such other location, date and time as may be agreed upon
between the Purchaser and the Company. At the Closing, the Company shall deliver
to each Purchaser a single stock certificate, registered in the name of such
Purchaser, representing the number of shares of Common Stock purchased by such
Purchaser, and the Warrant, against delivery of the purchase price.

         3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company hereby
represents and warrants to the Purchaser as follows:

              3.1   INCORPORATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is qualified to do business in each jurisdiction in which the character of
its properties or the nature of its business requires such qualification, except
where the failure to so qualify would not have a material adverse effect upon
the Company. The Company has all requisite corporate power and authority to
carry on its business as now conducted.

                                       2
<PAGE>

              3.2   CAPITALIZATION. The authorized capital stock of the Company
consists of (i) One billion shares of Common Stock, of which 93,162,339 shares
were outstanding as of June 30, 2000 and (ii) 5,000,000 shares of preferred
stock, of which no shares are outstanding on the date hereof. Except for options
for the purchase of Common Stock or the right to purchase Common Stock pursuant
to the Warrant, the Company's stock option plans and the Company's Employee
Stock Purchase Plan, or as set forth in the SEC Documents, there are no existing
options, warrants, calls, preemptive (or similar) rights, subscriptions or other
rights, agreements, arrangements or commitments of any character obligating the
Company to issue, transfer or sell, or cause to be issued, transferred or sold,
any shares of the capital stock of the Company or other equity interests in the
Company or any securities convertible into or exchangeable for such shares of
capital stock or other equity interests, and there are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of its capital stock or other equity interests except for the
right to repurchase unvested Common Stock purchased by service providers.

              3.3   AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution, delivery and performance of this Agreement and the
Warrant and the consummation of the transactions contemplated herein and therein
has been taken. When executed and delivered by the Company, this Agreement shall
constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such may be limited
by bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally and by general equitable principles. The Company has all
requisite corporate power to enter into this Agreement and to carry out and
perform its obligations under the terms of this Agreement.

              3.4   VALID ISSUANCE OF THE SHARES. The Shares being purchased by
the Purchaser hereunder will, upon issuance pursuant to the terms hereof, and
the Company's Amended and Restated Certificate of Incorporation, be duly
authorized and validly issued, fully paid and nonassessable. The Company has
reserved the Warrant Shares for issuance upon valid exercise of the Warrant, and
upon issuance and payment therefore by cash or otherwise pursuant to the terms
of the Warrant, and the Company's Amended and Restated Certificate of
Incorporation, the Warrant Shares will be duly authorized and validly issued,
fully paid and nonassessable. There are no statutory or contractual
shareholders' preemptive rights or rights of first refusal with respect to the
issuance of the Shares or Warrant Shares.

              3.5   SEC DOCUMENTS. As of their respective filing dates, the SEC
Documents complied in all material respects with the requirements of the
Exchange Act or the Securities Act, as applicable, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading, as of their respective filing dates, except to the extent corrected
by a subsequently filed SEC Document. Except as disclosed in the SEC Documents,
there are no actions, suits, arbitrations, proceedings or investigations
pending, or to the Company's knowledge, threatened involving the Company, or any
other events which could have a material adverse effect on the Company. As of
their respective dates, the financial statements included in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC and NASDAQ
with respect

                                       3
<PAGE>

thereto, and were in accordance with the books and records of the Company, were
complete and accurate in all material respects, and present fairly the
consolidated financial position and results of operations, changes in
stockholders' equity and cash flows of the Company and its subsidiaries as of
the dates and for the periods indicated, in accordance with GAAP, except that
the unaudited financial statements may not be in accordance with GAPP because of
the absence of footnotes normally contained therein and are subject to normal
year end adjustments.

              3.6   CONSENTS. All consents, approvals, orders and authorizations
required on the part of the Company in connection with the execution, delivery
or performance of this Agreement (the "Consents") and the consummation of the
transactions contemplated herein and therein have been obtained and will be
effective as of the Closing Date, except if the failure to obtain such Consents
would not have a material adverse effect on the transactions contemplated
hereby.

              3.7   NO CONFLICT. The execution and delivery of this Agreement by
the Company and the consummation of the transactions contemplated hereby and
thereby will not conflict with or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to a loss of a
material benefit under (i) any provision of the Certificate of Incorporation or
By-laws of the Company or (ii) any agreement or instrument, permit, franchise,
license, judgment, order, statute, law, ordinance, rule or regulations,
applicable to the Company or its respective properties or assets.

              3.8   BROKERS OR FINDERS. The Company has not entered into an
agreement with any broker or finder in connection with the transactions
contemplated by this Agreement, and the Company has not incurred, directly or
indirectly, any liability for any brokerage or finders' fees or agents
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.

              3.9   NASDAQ NATIONAL MARKET. The Common Stock is listed on the
Nasdaq National Market System, and there are no pending, or to the Company's
knowledge, threatened proceedings to revoke or suspend such listing.

         4.   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.  Purchaser
represents and warrants to the Company as follows:

              4.1   AUTHORIZATION. All action on the part of Purchaser and, if
applicable, its officers, directors and shareholders necessary for the
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and therein has been taken.
When executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally and by
general equitable principles. Purchaser has all requisite corporate power to
enter into this Agreement and to carry out and perform its obligations under the
terms of this Agreement.

                                       4
<PAGE>

              4.2   PURCHASE ENTIRELY FOR OWN ACCOUNT.  Purchaser is acquiring
the Securities for investment, for its own account and not as nominee or agent,
and not for resale or with a view to distribution thereof in violation of the
Securities Act.

              4.3   PURCHASER STATUS; ETC. Purchaser certifies and represents to
the Company that at the time Purchaser acquires any of the Securities, Purchaser
will be an institutional Purchaser that is an "Accredited Investor" as defined
in Rule 501 of Regulation D promulgated under the Securities Act and was not
organized for the purpose of acquiring the Securities. Purchaser's financial
condition is such that it is able to bear the risk of holding the Securities for
an indefinite period of time and the risk of loss of its entire investment.

              4.4   SECURITIES NOT REGISTERED.

         (a)  Purchaser understands that the Securities have not been
registered under the Securities Act, by reason of their issuance by the Company
in a transaction exempt from the registration requirements of the Securities
Act, and that the Securities must continue to be held by Purchaser and not
re-offered, resold, pledged or otherwise transferred unless a subsequent
disposition thereof is registered under the Securities Act or is exempt from
such registration and any such transfer is otherwise made in accordance with
applicable securities laws of any state of the United States. The Purchaser
understands that the exemptions from registration afforded by Rule 144 (the
provisions of which are known to it) promulgated under the Securities Act depend
on the satisfaction of various conditions, and that, if applicable, Rule 144 may
afford the basis for sales only in limited amounts. The Purchaser understands
that neither the Company nor any of its agents makes any representation as to
the availability of Rule 144 or any other exemption under the Securities Act for
the re-offer, resale, pledge or transfer of the Securities.

         (b)  Purchaser further represents that:

              (i)   No offering circular or prospectus will be provided to such
         Purchaser or prepared in connection with the offer and issuance of the
         Securities and that neither the Company or any of its agents has
         provided, and will not be providing, Purchaser with any other material
         regarding the Securities or the Company prepared by the Company or any
         other person. Purchaser has not requested the Company or any of its
         agents to provide Purchaser with any such information.

              (ii)  Except as set forth in Article 3 of this Agreement, neither
         the Company nor any of its agents makes any representation or warranty,
         expressed or implied, as to the accuracy or completeness of the
         information provided or to be provided to Purchaser by the Company,
         and nothing contained in any documents provided to Purchaser is, or
         shall be relied upon as, a promise or representation by the Company or
         any of its agents.

              (iii) An investment in the Securities includes a high degree of
         risk. In making the decision to acquire the Securities, (a) Purchaser
         has such business and financial experience as is required to give
         Purchaser the capacity to protect its own interests in connection
         with the purchase of the Securities, (b) Purchaser has not relied and
         will not rely on any investigation that any person acting on its behalf
         may have conducted with respect to the Securities or the Company and
         (c) such Purchaser will make its own

                                       5
<PAGE>

         investment decision regarding the Securities based on its own knowledge
         and investigation of the Company and the Securities.

              4.5   NO CONFLICT. The execution and delivery of this Agreement by
Purchaser and the consummation of the transactions contemplated hereby and
thereby will not conflict with or result in any violation of or default by
Purchaser (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
a loss of a material benefit under (i) any provision of the organizational
documents of Purchaser or (ii) any agreement or instrument, permit, franchise,
license, judgment, order, statute, law, ordinance, rule or regulations,
applicable to such Purchaser or its respective properties or assets.

              4.6   BROKERS.  Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.

              4.7   CONSENTS. All consents, approvals, orders and authorizations
required on the part of Purchaser in connection with the execution, delivery or
performance of this Agreement and the consummation of the transactions
contemplated herein have been obtained and are effective as of the Closing Date.

         5.   COVENANTS.

         The Company shall use commercially reasonable efforts to include the
Shares and the Warrant Shares in a Registration Statement on Form S-3 (the
"Registration Statement") to be filed with the SEC promptly after the Company is
S-3 eligible, and to request acceleration of effectiveness by September 29,
2000. Such Registration Statement will provide for the non-underwritten resale
of the Shares and the Warrant Shares. Company shall use commercially reasonable
efforts to cause the Registration Statement to remain effective until the
earlier of (a) such time all such Shares and Warrant Shares are sold and (b)
such Shares and Warrant Shares are saleable under Rule 144(k). Such registration
shall be subject to the normal terms and conditions used in connection with
resale prospectuses.

         6.   CONDITIONS PRECEDENT.

              6.1   CONDITIONS TO THE OBLIGATION OF THE PURCHASER TO CONSUMMATE
THE CLOSING. The obligation of Purchaser to consummate the Closing and to
purchase and pay for the Securities being purchased by it pursuant to this
Agreement is subject to the satisfaction of the following conditions precedent:

         (a)  The representations and warranties contained herein of
              the Company shall be true and correct on and as of the Closing
              Date with the same force and effect as though made on and as of
              the Closing Date (it being understood and agreed by Purchaser
              that, in the case of any representation and warranty of the
              Company contained herein which is not hereinabove qualified by
              application thereto of a materiality standard, such
              representation and warranty need be true and correct only in all
              material respects in order to satisfy as to such representation
              or warranty the condition precedent set forth in the foregoing
              provisions of this Section 6.1(a)).

                                       6
<PAGE>

         (b)  The Alliance and Consulting Services Agreements shall have
              been executed and delivered by the Company.

         (c)  The Company shall have performed all obligations and conditions
              herein required to be performed or observed by the Company

         (d)  No proceeding challenging this Agreement or the transactions
              contemplated hereby, or seeking to prohibit, alter, prevent or
              materially delay the Closing, shall have been instituted before
              any court, arbitrator or governmental body, agency or official and
              shall be pending.

         (e)  The acquisition of the Securities by the Purchaser shall not be
              prohibited by any law or governmental order or regulation. All
              necessary consents and authorizations of, or registrations,
              declarations and filings with, any governmental or administrative
              agency or of any other person with respect to any of the
              transactions contemplated hereby shall have been duly obtained or
              made and shall be in full force and effect.

         (f)  All instruments and corporate proceedings in connection with the
              transactions contemplated by this Agreement to be consummated at
              the Closing shall be satisfactory in form and substance to such
              Purchaser, and such Purchaser shall have received copies (executed
              or certified, as may be appropriate) of all documents which such
              Purchaser may have reasonably requested in connection with such
              transactions.

              6.2   CONDITIONS TO THE OBLIGATION OF THE COMPANY TO
CONSUMMATE THE CLOSING. The obligation of the Company to consummate the Closing
and to issue and sell to Purchaser the Securities to be purchased by it at the
Closing is subject to the satisfaction of the following conditions precedent:

         (a)  The representations and warranties contained herein of
              such Purchaser shall be true and correct on and as of the Closing
              Date with the same force and effect as though made on and as of
              the Closing Date (it being understood and agreed by the Company
              that, in the case of any representation and warranty of Purchaser
              contained herein which is not hereinabove qualified by
              application thereto of a materiality standard, such
              representation and warranty need be true and correct only in all
              material respects in order to satisfy as to such representation
              or warranty the condition precedent set forth in the foregoing
              provisions of this Section 6.2(a)).

         (b)  The Alliance and Consulting Services Agreements shall have been
              executed and delivered by Purchaser.

         (c)  The Purchaser shall have performed all obligations and conditions
              herein required to be performed or observed by the Purchaser on or
              prior to the Closing Date.

         (d)  No proceeding challenging this Agreement or the transactions
              contemplated hereby, or seeking to prohibit, alter, prevent or
              materially delay the Closing, shall

                                       7
<PAGE>

              have been instituted before any court, arbitrator or governmental
              body, agency or official and shall be pending.

         (e)  The issuance of the Securities by the Company shall not be
              prohibited by any law or governmental order or regulation. All
              necessary consents and authorizations of, or registrations,
              declarations and filings with, any governmental or administrative
              agency or of any other person with respect to any of the
              transactions contemplated hereby shall have been duly obtained or
              made and shall be in full force and effect.

         (f)  All instruments and corporate proceedings in connection with the
              transactions contemplated by this Agreement to be consummated at
              the Closing shall be satisfactory in form and substance to the
              Company, and the Company shall have received counterpart
              originals, or certified or other copies of all documents,
              including without limitation records of corporate or other
              proceedings, which it may have reasonably requested in connection
              therewith.

              Transfer, Legends.

              6.3   SECURITIES LAW TRANSFER RESTRICTIONS. Purchaser shall not
sell, assign, pledge, transfer or otherwise dispose or encumber any of the
Shares or Warrant Shares being purchased by it hereunder, except (i) pursuant to
an effective registration statement under the Securities Act, (ii) pursuant to
Rule 144 promulgated under the Securities Act or (iii) pursuant to an available
exemption from registration under the Securities Act and applicable state
securities laws and, if requested by the Company, upon delivery by Purchaser of
an opinion of counsel reasonably satisfactory to the Company to the effect that
the proposed transfer is exempt from registration under the Securities Act and
applicable state securities laws. The Warrant shall not be transferable, except
as explicitly set forth in the Warrant. The Company shall not register on its
securities ledger any transfer of the Securities in violation of this Section.
The Company may, and may instruct any transfer agent for the Company, to place
such stop transfer orders as may be required on the transfer books of the
Company in order to ensure compliance with the provisions of this Section. The
foregoing shall not be deemed a restriction on Purchaser's ability to assign or
transfer the Shares or Warrant Shares to its Affiliates; provided that any
transfer shall be subject to all restrictions set forth above except that the
Company agrees not to request an opinion of counsel, including the imposition of
Legends on any certificate evidencing the transferred Shares as described in
Section 7.2 below.

              6.4   LEGENDS. Each certificate requesting any of the Shares or
Warrant Shares shall be endorsed with the legends set forth below, and Purchaser
covenants that, except to the extent such restrictions are waived by the
Company, it shall not transfer the shares represented by any such certificate
without complying with the restrictions on transfer described in this Agreement
and the legends endorsed on such certificate:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED,
         SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
         ABSENCE OF AN EFFECTIVE

                                       8
<PAGE>

         REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE
         EXEMPTION FROM REGISTRATION UNDER SAID ACT. THE COMPANY MAY REQUIRE
         DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
         COMPANY THAT ANY PROPOSED TRANSFER IS EXEMPT FROM OR IN COMPLIANCE
         WITH SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW."

         7.   TERMINATION; LIABILITIES CONSEQUENT THEREON.  This Agreement may
be terminated and the transactions contemplated hereunder abandoned at any time
prior to the Closing only as follows:

              (a)   by the Purchaser, upon notice to the Company if the
conditions set forth in Section 6.1 shall not have been satisfied on or prior to
October 15, 2000; or

              (b)   by the Company, upon notice to the Purchaser if the
conditions set forth in Section 6.2 shall not have been satisfied on or prior to
October 15, 2000; or

              (c)   at any time by mutual agreement of the Company and the
Purchaser; or

              (d)   by the Purchaser, if there has been any breach of
any representation or warranty or any material breach of any covenant of the
Company contained herein and the same has not been cured within 15 days after
notice thereof, (it being understood and agreed by Purchaser that, in the case
of any representation or warranty of the Company contained herein which is not
hereinabove qualified by application thereto of a materiality standard, such
representation or warranty will be deemed to have been breached for purposes of
this Section 8.1(d) only if such representation or warranty was not true and
correct in all material respects at the time such representation or warranty was
made by the Company); or

              (e)   by the Company, if there has been any breach of any
representation, warranty or any material breach of any covenant of Purchaser
contained herein and the same has not been cured within 15 days after notice
thereof (it being understood and agreed by the Company that, in the case of any
representation and warranty of the Purchaser contained herein which is not
hereinabove qualified by application thereto of a materiality standard, such
representation or warranty will be deemed to have been breached for purposes of
this Section 8.1(e) only if such representation or warranty was not true and
correct in all material respects at the time such representation or warranty was
made by such Purchaser).

         Any termination pursuant to this Section 8 shall be without liability
on the part of any party, unless such termination is the result of a material
breach of this Agreement by a party to this Agreement in which case such
breaching party shall remain liable for such breach notwithstanding any
termination of this Agreement.

         8.   MISCELLANEOUS PROVISIONS.

              8.1   PUBLIC STATEMENTS OR RELEASES. None of the parties to this
Agreement shall make, issue, or release any announcement, whether to the public
generally, or to any of its suppliers or customers, with respect to this

                                       9

<PAGE>

Agreement or the transactions provided for herein, or make any statement or
acknowledgment of the existence of, or reveal the status of, this Agreement or
the transactions provided for herein, without the prior consent of the other
parties; provided, that nothing in this Section 9.1 shall prevent any of the
parties hereto from making such public announcements as it may consider
necessary in order to satisfy its legal obligations, but to the extent not
inconsistent with such obligations, it shall provide the other parties with an
opportunity to review and comment on any proposed public announcement before it
is made.

              8.2   FURTHER ASSURANCES. Each party agrees to cooperate fully
with the other party and to execute such further instruments, documents and
agreements and to give such further written assurances, as may be reasonably
requested by the other party to better evidence and reflect the transactions
described herein and contemplated hereby, and to carry into effect the intents
and purposes of this Agreement.

              8.3   RIGHTS CUMULATIVE. Each and all of the various rights,
powers and remedies of the parties shall be considered to be cumulative with and
in addition to any other rights, powers and remedies which such parties may have
at law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.

              8.4   PRONOUNS. All pronouns or any variation thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.

              8.5   NOTICES.  Any notices, reports or other correspondence
(hereinafter collectively referred to as "correspondence") required or permitted
to be given hereunder shall be sent by postage prepaid first class mail, courier
or telecopy or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder. The date of giving any notice shall
be the date of its actual receipt.

All correspondence to the Company shall be addressed as follows:

                           Kana Communications, Inc.
                           740 Bay Road
                           Redwood City, CA 94063
                           Attention: General Counsel
                           Telecopier: (650) 474-8507

 with a copy to:

                           Brobeck, Phleger & Harrison LLP
                           Two Embarcadero Place
                           2200 Geng Road
                           Palo Alto, CA 94303
                           Attention: David A. Makarechian, Esq.
                           Telecopier: (650) 496-2885

                  All correspondence to Purchaser shall be sent to Purchaser at
the address set forth below:

                                       10
<PAGE>

                           Andersen Consulting LLP
                           1661 Page Mill Road
                           Palo Alto, California 94304
                           Fax:  (650) 213-2222
                           Attention: General Counsel

With a copy to:

                           Andersen Consulting LLP
                           100 S. Wacker Drive
                           Chicago, Illinois 60606-5300
                           Fax:  (312) 693-7701
                           Attention: Legal Group, Ventures and Alliances

Any entity may change the address to which correspondence to it is to be
addressed by notification as provided for herein.

              8.6   CAPTIONS.  The captions and paragraph headings of this
Agreement are solely for the convenience of reference and shall not affect its
interpretation.

              8.7   SEVERABILITY. Should any part or provision of this
Agreement be held unenforceable or in conflict with the applicable laws or
regulations of any jurisdiction, the invalid or unenforceable part or provisions
shall be replaced with a provision which accomplishes, to the extent possible,
the original business purpose of such part or provision in a valid and
enforceable manner, and the remainder of this Agreement shall remain binding
upon the parties hereto.

              8.8   GOVERNING LAW; INJUNCTIVE RELIEF.

                    (a)  This Agreement shall be governed by and construed in
accordance with the internal and substantive laws of the State of Delaware and
without regard to any conflicts of laws concepts which would apply the
substantive law of some other jurisdiction.

                    (b)  Each of the parties hereto acknowledges and agrees that
damages will not be an adequate remedy for any material breach or violation of
this Agreement if such material breach or violation would cause immediate and
irreparable harm (an "Irreparable Breach"). Accordingly, in the event of a
threatened or ongoing Irreparable Breach, each party hereto shall be entitled to
seek, in any state or federal court in the United States, equitable relief of a
kind appropriate in light of the nature of the ongoing or threatened Irreparable
Breach, which relief may include, without limitation, specific performance or
injunctive relief; PROVIDED, HOWEVER, that if the party bringing such action is
unsuccessful in obtaining the relief sought, the moving party shall pay the
non-moving party's reasonable costs, including attorney's fees, incurred in
connection with defending such action. Such remedies shall not be the parties'
exclusive remedies, but shall be in addition to all other remedies provided in
this Agreement.

                                       11
<PAGE>

              8.9   WAIVER. No waiver of any term, provision or condition of
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or be construed as, a further or continuing waiver of any
such term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.

              8.10  EXPENSES.  Each party will bear its own costs and expenses
in connection with this Agreement.

              8.11  ASSIGNMENT. The rights and obligations of the parties hereto
shall inure to the benefit of and shall be binding upon the authorized
successors and permitted assigns of each party. Other than an assignment to an
Affiliate or in the event of a merger, sale of substantially all the assets or
similar change of control (in which case the assigning party shall provide
prompt notice to the other party of the assignment), neither party may assign
its rights or obligations under this Agreement or designate another person (i)
to perform all or part of its obligations under this Agreement or (ii) to have
all or part of its rights and benefits under this Agreement, in each case
without the prior written consent of the other party. In the event of any
assignment in accordance with the terms of this Agreement, the assignee shall
specifically assume and be bound by the provisions of the Agreement by executing
and agreeing to an assumption agreement reasonably acceptable to the other
party.

              8.12  SURVIVAL. The respective representations and warranties
given by the parties hereto shall terminate upon the Closing Date. The other
covenants and agreements contained herein, shall survive the Closing Date and
the consummation of the transactions contemplated herein for a period one year
(unless clearly stated otherwise), without regard to any investigation made by
any party.

              8.13  ENTIRE AGREEMENT. This Agreement (and all exhibits and
agreements referenced herein) constitute the entire agreement between the
parties hereto respecting the subject matter hereof and supersedes all prior
agreements, negotiations, understandings, representations and statements
respecting the subject matter hereof, whether written or oral. No modification,
alteration, waiver or change in any of the terms of this Agreement shall be
valid or binding upon the parties hereto unless made in writing and duly
executed by the Company and the Purchaser.

                        [Remainder of page intentionally blank.]

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Stock and
Warrant Purchase Agreement as of the day and year first above written.

COMPANY:                               KANA COMMUNICATIONS, INC.

                                       By: /S/ FRANKLIN P. HUANG
                                           --------------------------------
                                       Name:  Franklin P. Huang
                                       Title: Vice President and General Counsel

PURCHASER:                             ANDERSEN CONSULTING LLP

                                       By: /S/ STEPHEN M. LORACK
                                           ---------------------------------
                                           Name:  Stephen M. Lorack
                                           Title: Partner

                                       13
<PAGE>

                                    EXHIBIT A

                                    PURCHASER

                           NUMBER OF SHARES
PURCHASER                  TO BE PURCHASED                        CONSIDERATION
---------                  ----------------                       -------------
Andersen Consulting LLP    400,000                                          (1)

Andersen Consulting LLP    Warrant for 725,000 shares of Common Stock       (1)

(1)   *

*        INDICATES THAT CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN
         OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 406.
         CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
         PORTIONS.

                                       14
<PAGE>

                                    EXHIBIT B

                                     WARRANT

                                       15

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