Document:

Registration Rights Agreement

 EXHIBIT 10.02 
  
 REGISTRATION RIGHTS AGREEMENT 
  

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of June 25, 2005, by and among Kana Software, Inc., a Delaware corporation,
with its headquarters located at 181 Constitution Drive, Menlo Park, California 94025 (the “Company”), and each of the undersigned (together with their respective affiliates and any assignee or transferee of all of their respective
rights hereunder, the “Initial Investors”). 
  
 WHEREAS: 
  
 A. In connection with the
Common Stock and Warrant Purchase Agreement by and among the parties hereto of even date herewith (the “Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions contained therein, to issue and sell
to the Initial Investors (i) the Purchased Shares (as defined in the Purchase Agreement) and (ii) the Aggregate Warrant Shares (as defined in the Stock Purchase Warrant, dated June 30, 2005 (the “Warrants”)) upon the terms and
conditions set forth in the Warrants; and 
  
 B. To induce
the Initial Investors to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “1933 Act”), and applicable state securities laws; 
  
 NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company
and each of the Initial Investors hereby agree as follows: 
  
 1. DEFINITIONS. 
  
 a. As used in this
Agreement, the following terms shall have the following meanings: 
  
 (i) “Common Stock” means the Company’s common stock, par value $.001 per share 
  
 (ii) “Investors” means the Initial Investors and any transferee or assignee who agrees to become bound by the provisions
of this Agreement in accordance with Section 9 hereof. 
  
 (iii) “register,” “registered,” and “registration” refer to a registration of the offer and sale of securities effected by preparing and filing a Registration Statement or Statements in
compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission (the “SEC”). 
  
 (iv) “Registrable Securities” means (A) the Purchased Shares (as defined in the Purchase Agreement) issued pursuant to
the Purchase Agreement, (B) the 

 Warrant Shares (as defined in the Purchase Agreement) issued or issuable (up to the maximum number of
Warrant Shares issuable pursuant to the Warrants) upon exercise of or otherwise pursuant to the Warrants and (C) any shares of capital stock issued or issuable as a dividend on or in exchange for or otherwise with respect to any of the foregoing;
provided, however, that the foregoing definition shall include in all cases any Registrable Securities sold in a transaction in which the rights under this Agreement are not assigned. 
  
 (v) “Registration Statement(s)” means a registration statement(s) of the Company under the
1933 Act. 
  
 b. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement. 
  
 2. REGISTRATION. 
  
 a. Mandatory Registration. The Company shall prepare, and, on or prior to the date (the “Filing Date”) which is not later
than the thirtieth (30th) day following the filing of the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2005 (as defined in the Purchase Agreement), file with the SEC a Registration Statement on such form of
Registration Statement as is then available to effect a registration of the Registrable Securities, covering the resale of the Registrable Securities, which Registration Statement, to the extent allowable under the 1933 Act and the rules and
regulations promulgated thereunder (including Rule 416), shall state that such Registration Statement also covers such indeterminate number of additional shares of Common Stock as may become issuable upon exercise of or otherwise pursuant to the
Warrants (i) to prevent dilution resulting from stock splits, stock dividends or similar transactions or (ii) by reason of changes in the Exercise Price (as defined in the Warrants) of the Warrants in accordance with the terms thereof. The number of
shares of Common Stock initially included in such Registration Statement shall be no less than one (1) times the aggregate number of Purchased Shares and one and one-quarter (1.25) times the aggregate number of Warrant Shares that are then issuable
upon the exercise of or otherwise pursuant to the Warrants without regard to any limitation on the Investor’s ability to exercise the Warrants. The Company acknowledges that the number of shares initially included in the Registration Statement
with respect to the Warrants represents a good faith estimate of the maximum number of shares issuable upon exercise of or otherwise pursuant to the Warrants. The Registration Statement (and each amendment or supplement thereto, and each request for
acceleration of effectiveness thereof) shall be provided to (and subject to the approval of) the Initial Investors and their counsel prior to its filing or other submission. 
  
 b. Underwritten Offering. If any offering pursuant to a Registration Statement pursuant to Section 2(a) hereof
involves an underwritten offering, the Company shall have the right to select one legal counsel and an investment banker or bankers and manager or managers to administer the offering (collectively, the “underwriters”) which underwriter
shall be reasonably satisfactory to the Investors who hold a majority in interest of the Registrable Securities. In such event, the right of any Investor to include such Investor’s Registrable Securities in such registration s hall be
conditioned upon such Investor’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the 
  

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 extent provided herein. All Investors proposing to distribute their Registrable Securities through such underwriting
shall enter into an underwriting agreement in customary form. In the event that any Investors elect not to participate in such underwritten offering, the Registration Statement covering certain of the Registrable Securities shall contain appropriate
plans of distribution reasonably satisfactory to the Investors participating in such underwritten offering. 
  
 c. Payments by the Company. The Company shall use its best efforts to obtain effectiveness of the Registration Statement as soon as
practicable, but in any event not later than 150 days from the date of Closing (the “Registration Deadline”). If (i) the Registration Statement(s) covering the Registrable Securities required to be filed by the Company pursuant to
Section 2(a) hereof is not declared effective by the SEC by the Registration Deadline, or (ii) after the Registration Statement has been declared effective by the SEC, sales of all of the Registrable Securities cannot be made pursuant to the
Registration Statement, or (iii) the Common Stock is not listed or included for quotation on the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (the “Nasdaq SmallCap”), the New York Stock Exchange
(the “NYSE”) or the American Stock Exchange (the “AMEX”) after being so listed or included for quotation, then the Company will make payments to the Investors in such amounts and at such times as shall be determined
pursuant to this Section 2(c) as partial relief for the damages to the Investors by reason of any such delay in or reduction of their ability to sell the Registrable Securities (which remedy shall not be a penalty and shall not be exclusive of any
other remedies available at law or in equity). The Company shall pay to each holder of the Registrable Securities an amount equal to the product of (i) the sum of (A) the Purchase Price (as defined in the Purchase Agreement) of the Purchased Shares
and (B) the exercise price of the Warrants upon exercise of which such Registrable Securities were received (“Aggregate Share Price”) multiplied by (ii) the product of (A) 1.5% and the sum of: (x) the number of months (prorated for
partial months) after the Registration Deadline and prior to the date the Registration Statement is declared effective by the SEC; provided, however, that there shall be excluded from such period any delays which are solely
attributable to changes required by the Investors in the Registration Statement with respect to information relating to the Investors, including, without limitation, changes to the plan of distribution, or to the failure of the Investors to conduct
their review of the Registration Statement pursuant to Section 3(h) below in a reasonably prompt manner; (y) the number of months (prorated for partial months) during the Registration Period (as defined below) that sales of all of the Registrable
Securities cannot be made pursuant to the Registration Statement after the Registration Statement has been declared effective (including, without limitation, when sales cannot be made by reason of the Company’s failure to properly supplement or
amend the prospectus included therein in accordance with the terms of this Agreement (including Section 3(b) hereof or otherwise), but excluding any days during an Allowed Delay (as defined in Section 3(f)); and (z) the number of months (prorated
for partial months) that the Common Stock is not listed or included for quotation on the Nasdaq, Nasdaq SmallCap, NYSE or AMEX or that trading thereon is halted after the Registration Statement has been declared effective. (For example, if the
Registration Statement becomes effective one (1) month after the end the Registration Deadline, the Company would pay $15,000 for each $1,000,000 of Aggregate Share Price. If thereafter, sales could not be made pursuant to the Registration Statement
for an additional period of one (1) month, the Company would pay an additional $15,000 for each $1,000,000 of Aggregate Share Price.) Such amounts shall be paid in cash within five (5) business days after the end of each period that gives rise to
such obligation, provided that, if any such period extends for more than thirty (30) calendar days, interim payments shall be made for each such thirty (30) calendar day period. 
  

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 d. Piggy-Back Registrations. Subject to the last sentence of this Section 2(d), if at any
time prior to the expiration of the Registration Period (as hereinafter defined) the Company shall determine to file with the SEC a Registration Statement relating to an offering for its own account or the account of others under the 1933 Act of any
of its equity securities (other than on Form S-4 or Form S-8 or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with
stock option or other employee benefit plans), the Company shall send to each Investor who is entitled to registration rights under this Section 2(d) written notice of such determination and, if within fifteen (15) calendar days after the effective
date of such notice, such Investor shall so request in writing, the Company shall include in such Registration Statement all or any part of the Registrable Securities such Investor requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing underwriter(s) thereof shall impose a limitation on the number of shares of Common Stock which may be included in the Registration Statement because, in such
underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the
Registrable Securities with respect to which such Investor has requested inclusion hereunder as the underwriter shall permit. Any exclusion of Registrable Securities shall be made pro rata among the Investors seeking to include Registrable
Securities in proportion to the number of Registrable Securities sought to be included by such Investors; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all
outstanding securities, the holders of which are not entitled by contract to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities; and provided, further,
however, that, after giving effect to the immediately preceding proviso, any exclusion of Registrable Securities shall be made pro rata with holders of other securities having the contractual right to include such securities in the
Registration Statement other than holders of securities entitled to inclusion of their securities in such Registration Statement by reason of demand registration rights. No right to registration of Registrable Securities under this Section 2(d)
shall be construed to limit any registration required under Section 2(a) hereof. If an offering in connection with which an Investor is entitled to registration under this Section 2(d) is an underwritten offering, then each Investor whose
Registrable Securities are included in such Registration Statement shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in an underwritten offering using the same underwriter or underwriters and, subject to the
provisions of this Agreement, on the same terms and conditions as other shares of Common Stock included in such underwritten offering. Notwithstanding anything to the contrary set forth herein, the registration rights of the Investors pursuant to
this Section 2(d) shall only be available in the event the Company fails to timely file, obtain effectiveness or maintain effectiveness of any Registration Statement to be filed pursuant to Section 2(a) in accordance with the terms of this
Agreement; provided, however, the Company shall have the right to terminate or withdraw any registration initiated under this Section 2(d) prior to the effectiveness of such registration whether or not any Investor has elected to include Registrable
Securities in such registration. 
  

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 e. Eligibility for Form S-1. The Company represents and warrants that it meets the
registrant eligibility and transaction requirements for the use of Form S-1 for registration of the sale by the Initial Investors and any other Investors of the Registrable Securities and the Company shall file all reports required to be filed by
the Company with the SEC in a timely manner so as to maintain such eligibility for the use of Form S-1. 
  
 3. OBLIGATIONS OF THE COMPANY. 
  
 In connection with the registration of the Registrable Securities, the Company shall have the following obligations: 
  
 a. The Company shall prepare promptly, and file with the SEC as soon
as practicable after the Closing Date (but in no event later than the Filing Date), a Registration Statement with respect to the number of Registrable Securities provided in Section 2(a), and thereafter use its reasonable best efforts to cause such
Registration Statement relating to Registrable Securities to become effective as soon as possible after such filing, (but in no event later than the Registration Deadline), and keep the Registration Statement effective pursuant to Rule 415 at all
times until such date as is the earlier of (i) the date on which all of the Registrable Securities have been sold and (ii) the date on which is twenty (20) calendar days after the date on which the Investors receive notice from the Company that the
Registrable Securities may be immediately sold to the public without registration or restriction (including without limitation as to volume by each holder thereof) under the 1933 Act unless an Investor receives written advice from its counsel, in
such counsel’s reasonable opinion, that such registration is required or restrictions continue to exist with respect to sale of the Registrable Securities (the “Registration Period”), which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not
misleading. 
  
 b. Subject to Allowed Delays as provided in
Section 3(f), the Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statements and the prospectus used in connection with the Registration Statements as may be
necessary to keep the Registration Statements effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company
covered by the Registration Statements until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in the Registration Statements.
Notwithstanding the foregoing, if (i) a post-effective amendment to the Registration Statement (the “Post-Effective Amendment”) is required to be filed by the Company to include audited financial statements and (ii) the Company has
used its reasonable best efforts to obtain effectiveness of the Post-Effective Amendment, the Company will not be deemed in breach of this Section 3(b) in the event the Investors are unable to sell the Registrable Securities solely because the SEC
has not declared the Post-Effective Amendment effective; provided, however, that the occurrence of such event shall be deemed an Allowed Delay to the extent of the period provided pursuant to Section 3(f) and the remedies set forth in Section 2(c)
will be available to the Investors to the extent thereafter applicable. In the event that on any Trading Day (as defined in the Purchase Agreement) the number of shares 
  

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 available under a Registration Statement filed pursuant to this Agreement is insufficient to cover all of the Registrable
Securities issued or issuable upon exercise of or otherwise pursuant to the Warrants or the Options, without giving effect to any limitations on the Investors’ ability to exercise the Warrants or the Options (the “Registration Trigger
Date”), the Company shall amend the Registration Statement, or file a new Registration Statement (on the short form available therefore, if applicable), or both, so as to cover one hundred twenty-five percent (125%) of all of the
Registrable Securities so issued or issuable (without giving effect to any limitations on exercise contained in the Warrants or the Options) as of the Registration Trigger Date, in each case, as soon as practicable, but in any event within twenty
(20) business days after the necessity therefor arises (based on the market price of the Common Stock and other relevant factors on which the Company reasonably elects to rely). The Company shall use its reasonable best efforts to cause such
amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof, but in any event within sixty (60) business days of the Registration Trigger Date. The provisions of Section 2(c) above shall be
applicable with respect to the Company’s obligations under this Section 3(b). 
  
 c. The Company shall furnish to each Investor whose Registrable Securities are included in a Registration Statement and its legal counsel (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one copy of each Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and each amendment or supplement thereto, and, in the case of the Registration Statement referred
to in Section 2(a), each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any
portion of any thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other
documents as such Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor. The Company will immediately notify each Investor by facsimile of the effectiveness of each Registration
Statement or any post-effective amendment. The Company will promptly respond to any and all comments received from the SEC, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon
as practicable and shall file an acceleration request as soon as practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto
will not be subject to review. 
  
 d. The Company shall use
reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration Statements under such other securities or “blue sky” laws of such jurisdictions in the United States as the Investors who hold a majority
in interest of the Registrable Securities being offered reasonably request, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take
all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to
(a) qualify to do business in any jurisdiction where it would 
  

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 not otherwise be required to qualify but for this Section 3(d), (b) subject itself to general taxation in any such
jurisdiction, (c) file a general consent to service of process in any such jurisdiction, (d) provide any undertakings that cause the Company undue expense or burden, or (e) make any change in its charter or bylaws, which in each case the Board of
Directors of the Company determines to be contrary to the best interests of the Company and its stockholders. 
  
 e. In the event of an underwritten offering, the Company shall enter into and perform its obligations under an underwriting agreement, in usual and
customary form, including, without limitation, customary indemnification and contribution obligations, with the underwriters of such offering. 
  
 f. During the period in which a prospectus relating to the Registration Statement must be delivered in connection with a sale or distribution of
Registrable Securities under the 1933 Act, the Company shall notify each Investor of the happening of any event as promptly as practicable after becoming aware of such event of which the Company has knowledge, as a result of which the prospectus
included in any Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and use its
reasonable best efforts promptly to prepare a supplement or amendment to any Registration Statement to correct such untrue statement or omission, and deliver such number of copies of such supplement or amendment to each Investor as such Investor may
reasonably request; provided that, for not more than fifteen (15) consecutive Trading Days (as defined in the Purchase Agreement) (or a total of not more than forty (40) Trading Days in any twelve (12) month period), the Company may delay the
disclosure of material non-public information concerning the Company (as well as prospectus or Registration Statement updating) the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the
Company and may refuse to permit the Investors to sell under such Registration Statement (an “Allowed Delay”); provided, further, that the Company shall promptly (i) notify the Investors in writing of the existence of (but in no
event, without the prior written consent of an Investor, shall the Company disclose to such Investor any of the facts or circumstances regarding) material non-public information giving rise to an Allowed Delay and (ii) advise the Investors in
writing to cease all sales under such Registration Statement until the end of the Allowed Delay, in which case the Investors agree to cease all sales under such Registration Statement until the end of the Allowed Delay. Upon expiration of the
Allowed Delay, the Company shall again be bound by the first sentence of this Section 3(f) with respect to the information giving rise thereto. 
  
 g. The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any Registration
Statement, and, if such an order is issued, to obtain the withdrawal of such order at the earliest possible moment and to notify each Investor who holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing
underwriters) of the issuance of such order and the resolution thereof. 
  
 h. The Company shall permit a single firm of counsel designated by the Initial Investors to review such Registration Statement, and all amendments and supplements thereto (as well as all requests for acceleration or effectiveness
thereof and any correspondence between the Company and the SEC relating to the Registration Statement) (collectively, the 
  

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 “Registration Documents”) a reasonable period of time prior to their filing with the SEC, and not file (or
send) any Registration Documents in a form to which such counsel reasonably objects and will not request acceleration of such Registration Statement without prior notice to such counsel. The sections of such Registration Statement covering
information with respect to the Investors, the Investor’s beneficial ownership of securities of the Company or the Investors intended method of disposition of Registrable Securities shall conform to the information provided to the Company by
each of the Investors. 
  
 i. The Company shall make
generally available to its security holders as soon as practicable, but not later than ninety (90) calendar days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 under the 1933
Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the effective date of the Registration Statement. 
  
 j. At the request of any Investor, in an underwritten offering, the Company shall furnish, on the date that
Registrable Securities are delivered to an underwriter for sale in connection with any Registration Statement (i) an opinion, dated as of such date, from counsel representing the Company for purposes of such Registration Statement, in form, scope
and substance as is customarily given in an underwritten public offering, addressed to the underwriters, if any, and the Investors and (ii) a letter, dated such date, from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and the Investors, in each case to the extent that such opinion and letter are
required to be delivered to such underwriters. 
  
 k. The
Company shall make available for inspection by (i) any Investor, (ii) any underwriter participating in any disposition pursuant to a Registration Statement, (iii) one firm of attorneys and one firm of accountants or other agents retained by the
Initial Investors, and (iv) one firm of attorneys retained by all such underwriters (collectively, the “Inspectors”) all pertinent financial and other records, and pertinent corporate documents and properties of the Company
(collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector to enable each Inspector to exercise its due diligence responsibility, and cause the Company’s officers, directors and employees to supply
all information which any Inspector may reasonably request for purposes of such due diligence; provided, however, that each Inspector shall hold in confidence and shall not make any disclosure (except to an Investor) of any Record or
other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (b) the release of such Records is ordered pursuant to a subpoena or other order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the
public other than by disclosure in violation of this or any other agreement; and provided further that the Company shall not be responsible for paying the fees and expenses of any Inspectors. The Company shall not be required to disclose any
confidential information in such Records to any Inspector until and unless such Inspector shall have entered into confidentiality agreements (in form and substance satisfactory to the Company) with the Company with respect thereto, substantially in
the form of this Section 3(k). Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or 
  

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 governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor)
shall be deemed to limit the Investor’s ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations. 
  
 l. The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to
the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement,
(iii) the release of such information is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means,
give prompt notice to such Investor prior to making such disclosure, and allow the Investor, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information. 
  
 m. The Company shall (i) cause all the Registrable Securities covered
by the Registration Statement to be listed on each national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the
rules of such exchange, or (ii) to the extent the securities of the same class or series are not then listed on a national securities exchange, secure the designation and quotation of all the Registrable Securities covered by the Registration
Statement on Nasdaq and, without limiting the generality of the foregoing, to arrange for at least two market makers to register with the National Association of Securities Dealers, Inc. (“NASD”) as such with respect to such
Registrable Securities. 
  
 n. The Company shall provide a
transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement. 
  
 o. The Company shall cooperate with the Investors who hold Registrable Securities being offered and the managing underwriter or underwriters, if
any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to be offered pursuant to such Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the managing underwriter or underwriters, if any, or the Investors may reasonably request and registered in such names as the managing underwriter or underwriters, if any, or the Investors may
request, and, within three (3) business days after a Registration Statement which includes Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the
transfer agent for the Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) an instruction in the form attached hereto as Exhibit 1 and an opinion of such counsel in
the form attached hereto as Exhibit 2; provided that before delivering such instruction and 
  

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 opinion, the Company shall be entitled to first receive a written undertaking signed by each Investor confirming that it
will only resell such Registrable Securities (a) in compliance with the prospectus delivery requirements of the 1933 Act (b) in a transaction in which such Investor shall have delivered to the Company an opinion of counsel (which opinion shall be in
form, substance and scope reasonably acceptable to the Company) to the effect that the Registrable Securities to be sold or transferred may be so sold or transferred pursuant to an exemption from such registration, or (c) pursuant to Rule 144(k)
under the 1933 Act. 
  
 p. At the request of the holders of
a majority-in-interest of the Registrable Securities, the Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and any prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of distribution set forth in such Registration Statement. 
  
 q. The Company shall not, and shall not agree to, allow the holders of any securities of the Company to include any of their securities in any
Registration Statement under Section 2(a) hereof or any amendment or supplement thereto under Section 3(b) hereof without the consent of the holders of a majority-in-interest of the Registrable Securities. In addition, the Company shall not offer
any securities for its own account or the account of others in any Registration Statement under Section 2(a) hereof or any amendment or supplement thereto under Section 3(b) hereof without the consent of the holders of a majority-in-interest of the
Registrable Securities. 
  
 r. The Company shall take all
other reasonable actions necessary to expedite and facilitate disposition by the Investors of Registrable Securities pursuant to a Registration Statement. 
  
 s. The Company shall comply with all applicable laws related to a Registration Statement and offering and sale of securities and all applicable
rules and regulations of governmental authorities in connection therewith (including without limitation the 1933 Act and the 1934 Act and the rules and regulations promulgated by the SEC). 
  
 4. OBLIGATIONS OF THE INVESTORS. 
  
 In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations: 
  
 a. It
shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such
information regarding itself in a Selling Holder Questionnaire, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least three (3) business days prior to the first anticipated filing date of the Registration Statement, the
Company shall notify each Investor of the information the Company requires from each such Investor. 
  

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 b. Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statements hereunder, unless such Investor has notified the Company in writing of such Investor’s election to
exclude all of such Investor’s Registrable Securities from the Registration Statements. 
  
 c. In the event that Registrable Securities are offered and sold in an underwritten offering, each Investor agrees to enter into and perform such Investor’s obligations under an underwriting agreement, in
usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the managing underwriter of such offering and take such other actions as are reasonably required in order to expedite or facilitate
the disposition of the Registrable Securities, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement. 
  
 d. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f) or 3(g), such Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until
such Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the Company, such Investor shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in such Investor’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. 
  
 e. No Investor may participate in any underwritten registration
hereunder unless such Investor (i) agrees to sell such Investor’s Registrable Securities on the basis provided in any underwriting arrangements in usual and customary form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, and (iii) agrees to pay its pro rata share of all underwriting discounts and
commissions and any expenses in excess of those payable by the Company pursuant to Section 5 below. 
  
 f. In the event that the Company amends or supplements the prospectus relating to the Registration Statement and delivers to an Investor a copy of
such amended or supplemented prospectus, the Investor agrees that it shall thereafter use such amended or supplemented prospectus, and shall no longer use the prospectus previously provided by the Company, for any offers or sales of Registrable
Securities. 
  
 g. Each Investor agrees to maintain in
confidence and shall not disclose any material nonpublic information (within the meaning of SEC Regulation F-D) regarding the Company received pursuant to this Agreement, including without limitation, any information contained in the notice pursuant
to Section 4(d) above, and the fact of such delay imposed by the Company pursuant thereto. 
  

 11 

 5. EXPENSES OF REGISTRATION. 
  
 All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations,
filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualification fees, printers and accounting fees, the fees and disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel selected by the Initial Investors pursuant to Sections 2(b) and 3(h) hereof shall be borne by the Company. 
  
 6. INDEMNIFICATION. 
  
 In the event any Registrable Securities are included in a Registration Statement under this Agreement: 
  
 a. To the extent permitted by law, the Company will indemnify, hold
harmless and defend (i) each Investor who holds such Registrable Securities, (ii) the directors, officers, partners, employees, agents and each person who controls any Investor within the meaning of the 1933 Act or the Securities Exchange Act of
1934, as amended (the “1934 Act”), if any, (iii) any underwriter (as defined in the 1933 Act) for the Investors, and (iv) the directors, officers, partners, employees and each person who controls any such underwriter within the
meaning of the 1933 Act or the 1934 Act, if any (each, an “Indemnified Person”), against any joint or several losses, claims, damages, liabilities or expenses (collectively, together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, “Claims”) to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement or the omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements therein not misleading; (ii) any untrue statement
or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made,
not misleading; or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of
the Registrable Securities (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject to the restrictions set forth in Section 6(c) with respect to the number of legal counsel, the Company
shall reimburse the Indemnified Person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim arising solely out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by any Indemnified Person or underwriter for such Indemnified Person expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement
thereto; (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld; and (iii) with respect to any preliminary
prospectus, shall not inure to the benefit of any Indemnified Person if the untrue 
  

 12 

 statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, such corrected prospectus or amendment or supplement to the prospectus was timely made available by the Company pursuant to Section 3(c) hereof, and the Indemnified Person was promptly advised in writing
not to use the incorrect prospectus prior to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it. Such indemnity shall remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9. 
  
 b. In connection with any Registration Statement in which an Investor is participating, each such Investor agrees severally and not jointly to
indemnify, hold harmless and defend, to the same extent and in the same manner set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement, each person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act, any underwriter and any other stockholder selling securities pursuant to the Registration Statement or any of its directors or officers or any person who controls such stockholder or underwriter
within the meaning of the 1933 Act or the 1934 Act (collectively and together with an Indemnified Person, an “Indemnified Party”), against any Claim to which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim arises out of or is based upon any Violation by such Investor, in each case to the extent (and only to the extent) that such Violation occurs solely in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and subject to Section 6(c), such Investor will reimburse any legal or other expenses (promptly as such expenses are incurred and are due and
payable) reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld; provided, further, however, that the Investor shall be liable under this Agreement
(including this Section 6(b) and Section 7) for only that amount as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary
prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented. 
  
 c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the
Indemnified Person or the Indemnified 
  

 13 

 Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The
indemnifying party shall pay for only one separate legal counsel for the Indemnified Persons or the Indemnified Parties, as applicable, and such legal counsel shall be selected by Investors holding a majority-in-interest of the Registrable
Securities included in the Registration Statement to which the Claim relates (with the approval of a majority-in-interest of the Initial Investors), if the Investors are entitled to indemnification hereunder, or the Company, if the Company is
entitled to indemnification hereunder, as applicable. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is actually prejudiced in its ability to defend such action. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable. The Indemnified Person or Indemnified Party shall use commercially reasonable efforts to
cooperate with the indemnifying party in connection with any negotiation or defense of any Proceeding or Loss by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Person or
Indemnified Party which relates to the Claims. 
  
 7.
CONTRIBUTION. 
  
 To the extent any indemnification by
an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however, that (i) no contribution shall be made under circumstances where the indemnifying party would not have been liable for indemnification under the fault standards set forth in Section 6, (ii) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation, and (iii)
contribution (together with any indemnification or other obligations under this Agreement) by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable
Securities. An Indemnified Party may not enter into any settlement with respect to any Claim without the prior written consent of the indemnifying party; provided, however, that such consent may not be unreasonably withheld, conditioned or delayed.

  
 8. REPORTS UNDER THE 1934 ACT. 
  
 With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the investors to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to:

  
 a. make and keep public information available, as
those terms are understood and defined in Rule 144; 
  

 14 

 b. file with the SEC in a timely manner all reports and other documents required of the Company
under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company’s obligations under Section 4.3 of the Purchase Agreement) and the filing of such
reports and other documents is required for the applicable provisions of Rule 144; and 
  
 c. furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon written request, (i) a written statement by the Company that it has complied with the reporting requirements of
Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit
the Investors to sell such securities pursuant to Rule 144 without registration. 
  
 9. ASSIGNMENT OF REGISTRATION RIGHTS. 
  
 The rights under this Agreement shall be automatically assignable by the Investors to any transferee of all or any portion more than 150,000 shares of Registrable Securities if: (i) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within ten (10) business days after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment, the
further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this
sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein, (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement, and (vi)
such transferee shall be an “accredited investor” as that term defined in Rule 501 of Regulation D promulgated under the 1933 Act. 
  
 10. AMENDMENT OF REGISTRATION RIGHTS. 
  
 Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company and the Investor to be bound by such amendment or waiver. 
  

 15 

 11. MISCELLANEOUS. 
  
 a. A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of
record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable Securities. 
  
 b. Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective five (5) calendar days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be: 
  
 If to the Company: 
  
 Kana Software, Inc. 
 181 Constitution Drive

 Menlo Park, California 94025 
 Attention: Chief Financial Officer 
 Facsimile: (650) 614-8301 
  
 With copy to: 
  
 Fenwick & West LLP 
 275 Battery Street

 San Francisco, CA 94111 
 Attention: David K. Michaels, Esq. 
 Facsimile: (415) 281-1350 
  
 If to an Investor: to the address set forth immediately below such Investor’s name on
the signature pages to the Purchase Agreement. 
  
 c.
Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. 
  
 d. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable
to agreements made and to be performed in the State of Delaware (without regard to principles of conflict of laws). Both parties irrevocably consent to the exclusive jurisdiction of the United States federal courts and the state courts located in
Delaware with respect to any suit or proceeding based on or arising under this Agreement, the agreements entered into in connection herewith or the transactions contemplated hereby or thereby and irrevocably agree that all claims in respect of such
suit or proceeding may be determined in such courts. Both parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. Both parties further agree that service of process 
  

 16 

 upon a party mailed by first class mail shall be deemed in every respect effective service of process upon the party in
any such suit or proceeding. Nothing herein shall affect either party’s right to serve process in any other manner permitted by law. Both parties agree that a final non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner. 
  
 e. This Agreement and the Purchase Agreement (including all schedules and exhibits thereto) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Purchase Agreement supersede all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof. 
  
 f.
Subject to the requirements of Section 9 hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto. 
  
 g. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the
meaning hereof. 
  
 h. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a
copy of this Agreement bearing the signature of the party so delivering this Agreement. 
  
 i. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 
  
 j. Except as otherwise provided herein, all consents and other determinations to be made by the Investors pursuant to
this Agreement shall be made by Investors holding a majority of the Registrable Securities. 
  
 k. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to each Investor by vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for breach of its obligations hereunder will be inadequate and agrees, in the event of a breach or threatened breach by the Company of any of the provisions hereunder, that each Investor
shall be entitled, in addition to all other available remedies in law or in equity, to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, without
the necessity of showing economic loss and without any bond or other security being required. 
  
 l. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 

 

 17 

 m. In the event that any provision of this Agreement is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of any other provision hereof. 
  
 n. The initial number of Registrable Securities included in any Registration Statement and each increase to the number of Registrable Securities
included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time of such establishment or increase, as the case may be. In the event an Investor shall sell or otherwise
transfer any of such holder’s Registrable Securities, each transferee shall be allocated a pro rata portion of the number of Registrable Securities included in a Registration Statement for such transferor. Any shares of Common Stock included on
a Registration Statement and which remain allocated to any person or entity which does not hold any Registrable Securities shall be allocated to the remaining Investors, pro rata based on the number of shares of Registrable Securities then held by
such Investors. For the avoidance of doubt, the number of Registrable Securities held by an Investor shall be determined as if all Warrants then outstanding and held by an Investor were exercised for Registrable Securities. 
  
 o. The Company acknowledges that the obligations of each Investor
under this Agreement, are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement. The decision of each
Investor to enter into to this Agreement has been made by such Investor independently of any other Investor. The Company further acknowledges that nothing contained in this Agreement, and no action taken by any Investor pursuant hereto (including,
but not limited to, the (i) inclusion of an Investor in a Registration Statement and any amendments or supplements thereto and (ii) review by, and consent to, such Registration Statement and any amendments or supplements thereto by an Investor),
shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated hereby. Each Investor shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Investor to be
joined as an additional party in any proceeding for such purpose. 
  
 Each Investor has been represented by its own separate legal counsel in their review and negotiation of this Agreement. For reasons of administrative convenience only, this Agreement have been prepared by counsel for one of the Investors.
Such counsel does not represent all of the Investors but only such Investor and the other Investors have retained their own individual counsel with respect to the transactions contemplated hereby. The Company has elected to provide all Investors
with the same terms and Agreement for the convenience of the Company and not because it was required or requested to do so by the Investors. The Company acknowledges that such procedure with respect to this Agreement in no way creates a presumption
that the Investors are in any way acting in concert or as a group with respect to this Agreement or the transactions contemplated hereby or thereby. 
  
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 
  

 18 

 IN WITNESS WHEREOF, the Company and the undersigned Initial Investors have caused this Agreement
to be duly executed as of the date first above written. 
  

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

	 Name:
	 	 John Thompson

	 Title:
	 	Executive Vice President & Chief Financial Officer
	
	NIGHTWATCH CAPITAL PARTNERS, LP
		
	 By:
	 	 NightWatch Capital Management, LLC,
its General Partner

		
	 By:
	 	 /s/ John F. Nemelka

	 	 	 John F. Nemelka

	 	 	 Managing Principal

	
	NIGHTWATCH CAPITAL PARTNERS II, LP
		
	 By:
	 	 NightWatch Capital Management, LLC,
its General Partner

		
	 By:
	 	 /s/ John F. Nemelka

	 	 	 John F. Nemelka

	 	 	 Managing Principal

	
	RHP MASTER FUND, LTD.
		
	 By:
	 	 Rock Hill Investment Management, L.P.,
its investment manager

	 By:
	 	 RHP General Partner, LLC

		
	 By:
	 	 /s/ Keith Marlowe

	 	 	 Keith S. Marlowe

	 	 	 Director

  

 19Form of Stock Purchase Warrant issued by Kana Software, Inc.

 EXHIBIT 10.03 
  
 THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN THE COMMON STOCK AND WARRANT PURCHASE AGREEMENT DATED AS OF JUNE 25, 2005, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO THE COMPANY IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. 
  
 Right to Purchase 
              Shares of 
 Common Stock, 
 par value $0.001 
 per share 
  
 STOCK PURCHASE WARRANT 
  
 THIS CERTIFIES THAT, for value received,
                                 (the “Holder”) or its registered
assigns, is entitled to purchase from Kana Software, Inc., a Delaware corporation (the “Company”), at any time or from time to time during the period specified in Paragraph 2 hereof,
                     fully paid and nonassessable shares of the Company’s common stock, par value $.001 per share (the “Common
Stock”), at an exercise price of $2.452 per share (the “Exercise Price”). The term “Warrant Shares,” as used herein, refers to the shares of Common Stock purchasable hereunder. The Warrant Shares and the Exercise Price are
subject to adjustment as provided in Paragraph 4 hereof. The term Warrants means this Warrant issued to the Holder pursuant to that certain Common Stock and Warrant Purchase Agreement, dated June 25, 2005, by and among the Company and the Buyers
listed on the execution page thereof (the “Purchase Agreement”). 
  
 This Warrant is subject to the following terms, provisions, and conditions: 
  
 1. Manner of Exercise; Issuance of Certificates; Payment for Shares. (a) Subject to the provisions hereof, this Warrant may be exercised by
the Holder, in whole or in part, by the physical surrender of this Warrant, together with a completed exercise agreement in the form attached hereto (the “Exercise Agreement”), to the Company during normal business hours on any business
day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holder), and upon (i) payment to the Company in cash, by certified or official bank check or by wire transfer
for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder is not then registered pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the “1933 Act”), delivery to 

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

 2 

 2. Period of Exercise. This Warrant is exercisable at any time or from time to time on or
after December 27, 2005 and before 5:00 p.m., New York City time on the fifth (5th) anniversary of the date of issuance of the Warrant (the “Issue Date”) pursuant to the Purchase Agreement (the “Exercise Period”), after which the
portion of this Warrant not exercised prior thereto shall be and become void. 
  
 3. Certain Agreements of the Company. The Company hereby covenants and agrees as follows: 
  
 (a) Shares to be Fully Paid. All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued, fully
paid, and nonassessable and free from all taxes, liens, and charges with respect to the issue thereof. 
  
 (b) Reservation of Shares. During the Exercise Period, the Company shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. 
  
 (c) Listing. The Company shall promptly secure the listing of the shares of Common Stock issuable upon exercise of the Warrant upon each
national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance upon exercise of this Warrant) and shall maintain, so long as any other shares of Common
Stock shall be so listed, such listing of all shares of Common Stock from time to time issuable upon the exercise of this Warrant; and the Company shall so list on each national securities exchange or automated quotation system, as the case may be,
and shall maintain such listing of, any other shares of capital stock of the Company issuable upon the exercise of this Warrant if and so long as any shares of the same class shall be listed on such national securities exchange or automated
quotation system. 
  
 (d) Certain Actions
Prohibited. The Company will not, by amendment of its charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be
requested by the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant. Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant. 
  
 (e) Successors and Assigns. This Warrant and the rights and obligations evidenced hereby will be binding upon any entity succeeding to the
Company by merger, consolidation, or acquisition of all or substantially all the Company’s assets (the “Company’s 
  

 3 

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

 4 

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

  
 (b) Effect on Exercise Price of Certain Events.
For purposes of determining the adjusted Exercise Price under Paragraph 4(a) hereof, the following will be applicable: 
  
 (i) Issuance of Rights or Options. If the Company in any manner issues or grants any warrants, rights or options, whether or
not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as “Options”) and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the greater of (1) the Market Price and (2) the Exercise Price on
the date of issuance or grant of such Options, then the maximum total number of shares of Common Stock issuable upon the exercise of all such Options will, as of the date of the issuance or grant of such Options, be deemed to be outstanding and to
have been issued and sold by the Company for such price per share for purposes of this Section 4. For purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon the exercise of such Options” is
determined by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the
time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable).
No further adjustment to the Exercise Price will be 
  

 5 

 made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the
conversion or exchange of Convertible Securities issuable upon exercise of such Options. 
  
 (ii) Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities, whether or
not immediately convertible (other than where the same are issuable upon the exercise of Options) and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the greater of (1) the Market Price and (2)
the Exercise Price on the date of issuance of such Convertible Securities, then the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities will, as of the date of the issuance of
such Convertible Securities, be deemed to be outstanding and to have been issued and sold by the Company for such price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such
conversion or exchange” is determined by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities. No further adjustment to the Exercise Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities. 
  
 (iii) Change in Option Price or Conversion
Rate. If there is a change at any time in (i) the amount of additional consideration payable to the Company upon the exercise of any Options; (ii) the amount of additional consideration, if any, payable to the Company upon the conversion or
exchange of any Convertible Securities; or (iii) the rate at which any Convertible Securities are convertible into or exchangeable for Common Stock (other than under or by reason of provisions designed to protect against dilution), the Exercise
Price in effect at the time of such change will be readjusted to the Exercise Price which would have been in effect at such time had such Options or Convertible Securities still outstanding provided for such changed additional consideration or
changed conversion rate, as the case may be, at the time initially granted, issued or sold. 
  
 (iv) Treatment of Expired Options and Unexercised Convertible Securities. If, in any case, the total number of shares of
Common Stock issuable upon exercise of any Option or upon conversion or exchange of any Convertible Securities is not, in fact, issued and the rights to exercise such Option or to convert or exchange such Convertible Securities shall have expired or
terminated, the Exercise Price then in effect will be readjusted to the Exercise Price which would have been in effect at the time of such expiration or termination had such Option or Convertible Securities, to the extent outstanding immediately
prior to such expiration or termination (other than in respect of the actual number of shares of Common Stock issued upon exercise or conversion thereof), never been issued. 
  

 6 

 (v) Calculation of Consideration Received. All calculations under this
Paragraph 4 shall be made to the nearest cent or nearest 1/100th of a share, as applicable. If any Common Stock, Options or Convertible Securities are issued, granted or sold for cash, the consideration received therefor for purposes of this Warrant
will be the amount received by the Company therefor, before deduction of reasonable commissions, underwriting discounts or allowances or other reasonable expenses paid or incurred by the Company in connection with such issuance, grant or sale. In
case any Common Stock, Options or Convertible Securities are issued or sold for a consideration part or all of which shall be other than cash, the amount of the consideration other than cash received by the Company will be the fair value of such
consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Company will be the Market Price thereof as of the date of receipt. In case any Common Stock, Options or Convertible
Securities are issued in connection with any acquisition, merger or consolidation in which the Company is the surviving corporation, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and
business of the non-surviving corporation as is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined in good faith by the Board
of Directors of the Company. 
  
 (vi)
Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise Price will be made (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance
of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as
the issuance of such stock or options is approved by a majority of the independent members of the Board of Directors of the Company or a majority of the members of a committee of independent directors established for such purpose; (iii) upon the
issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is not to raise equity capital and
(ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in
the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less
shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date
hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction
have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of
the assets, or other reorganization in which the Company acquires, in a single transaction or series of 
  

 7 

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

 

 8 

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

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

  
 (ii) the Company shall offer for subscription
pro rata to the holders of the Common Stock any additional shares of stock of any class or other rights; 
  
 (iii) there shall be any capital reorganization of the Company, or reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all its assets to, another corporation or entity; or 
  
 (iv) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; 
  

 9 

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

  

 10 

 holders of the outstanding Warrants by (b) an independent investment bank of nationally recognized
standing in the valuation of businesses similar to the business of the Company. The manner of determining the Market Price of the Common Stock set forth in the foregoing definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder. 
  
 (iii) “Common Stock,” for purposes of this Paragraph 4, includes the Common Stock, par value $0.001 per share, and any additional class of stock of the Company having no preference as to
dividends or distributions on liquidation, provided that the shares purchasable pursuant to this Warrant shall include only shares of Common Stock, par value $0.001 per share, in respect of which this Warrant is exercisable, or shares resulting from
any subdivision or combination of such Common Stock, or in the case of any reorganization, reclassification, consolidation, merger, or sale of the character referred to in Paragraph 4(e) hereof, the stock or other securities or property provided for
in such Paragraph. 
  
 5. Issue Tax. The issuance of
certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the holder of this Warrant or such shares for any issuance tax or other costs in respect thereof, provided, however, the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the holder of this Warrant. 
  
 6. No Rights or Liabilities as a Shareholder. This Warrant shall not entitle the Holder to any voting rights
or other rights as a shareholder of the Company. No provision of this Warrant, in the absence of affirmative action by the Holder to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise
to any liability of such holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 
  
 7. Transfer, Exchange, and Replacement of Warrant. 
  
 (a) Restriction on Transfer. This Warrant and the rights
granted to the Holder are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed assignment in the form attached hereto, and funds sufficient to pay any transfer taxes payable upon the making of such
transfer, at the office or agency of the Company referred to in Paragraph 7(e) below, provided, however, that any transfer or assignment shall be subject to all applicable securities laws, the conditions set forth in Paragraph 7(f) hereof and to the
applicable provisions of the Purchase Agreement. Until due presentment for registration of transfer on the books of the Company, the Company may treat the registered Holder as the owner and Holder for all purposes, and the Company shall not be
affected by any notice to the contrary. Notwithstanding anything to the contrary contained herein, the registration rights described in Paragraph 8 are assignable only in accordance with the provisions of that certain Registration Rights Agreement,
dated as of June 25, 2005, by and among the Company and the other signatories thereto (the “Registration Rights Agreement”). 
  
 (b) Warrant Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Holder at the office or
agency of the Company 
  

 11 

 referred to in Paragraph 7(e) below and presentation of a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the holder or its agent or attorney, for new Warrants of like tenor representing in the aggregate the right to purchase the number of shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be designated by the Holder at the time of such surrender. 
  
 (c) Replacement of Warrant. Upon request and receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, the Company will execute and deliver, in lieu thereof, a new
Warrant of like tenor and dated as of such cancellation or, in the case of any such mutilation, upon surrender and cancellation of this Warrant by Holder, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like
tenor and dated as of such cancellation. 
  
 (d)
Cancellation; Payment of Expenses. Upon the surrender of this Warrant in connection with any transfer, exchange, or replacement as provided in this Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company shall
pay all taxes (other than securities transfer taxes) and all other expenses (other than legal expenses, if any, incurred by the Holder or transferees) and charges payable in connection with the preparation, execution, and delivery of Warrants
pursuant to this Paragraph 7. 
  
 (e) Register. The
Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holder), a register for this Warrant, in which the Company shall record the name and address of the person
in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant. 
  
 (f) Exercise or Transfer Without Registration. This Warrant shall only be exercised, transferred, or exchanged in compliance with Section
2.6 of the Purchase Agreement. The first holder of this Warrant, by taking and holding the same, represents to the Company that such holder is acquiring this Warrant for investment and not with a view to the distribution thereof. 
  
 8. Registration Rights. The Holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in respect of the Warrant Shares as are set forth in Section 2 of the Registration Rights Agreement. 
  
 9. Notices. All notices, requests, and other communications required or permitted to be given or delivered
hereunder to the holder of this Warrant shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to such holder at the address
shown for such holder on the books of the Company, or at such other address as shall have been furnished to the Company by notice from such holder. All notices, requests, and other communications required or permitted to be given or delivered
hereunder to the Company shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight 
  

 12 

 mail courier, postage prepaid and addressed, to the office of the Company at 181 Constitution Drive, Menlo Park,
California 94025, Attention: Chief Financial Officer, or at such other address as shall have been furnished to the holder of this Warrant by notice from the Company. Any such notice, request, or other communication may be sent by facsimile, but
shall in such case be subsequently confirmed by a writing personally delivered or sent by certified or registered mail or by recognized overnight mail courier as provided above. All notices, requests, and other communications shall be deemed to have
been given either at the time of the receipt thereof by the person entitled to receive such notice at the address of such person for purposes of this Paragraph 9, or, if mailed by registered or certified mail or with a recognized overnight mail
courier upon deposit with the United States Post Office or such overnight mail courier, if postage is prepaid and the mailing is properly addressed, as the case may be. 
  
 10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS). BOTH PARTIES IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE STATE
COURTS LOCATED IN DELAWARE WITH RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND IRREVOCABLY AGREE THAT ALL CLAIMS
IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A
PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. 
  
 11. Miscellaneous. 
  
 (a) Amendments. This Warrant and any provision hereof may only
be amended by an instrument in writing signed by the Company and the Holder. 
  
 (b) Descriptive Headings. The descriptive headings of the several paragraphs of this Warrant are inserted for purposes of reference only, and shall not affect the meaning or construction of any of the
provisions hereof. 
  
 (c) Cashless Exercise.
Notwithstanding anything to the contrary contained in this Warrant, if the resale of the Warrant Shares by the holder is not then registered pursuant to an effective registration statement under the 1933 Act, this Warrant may be exercised by
presentation and surrender of this Warrant to the Company at its principal executive offices with 
  

 13 

 a written notice of the holder’s intention to effect a cashless exercise, including a calculation of the number of
shares of Common Stock to be issued upon such exercise in accordance with the terms hereof (a “Cashless Exercise”). In the event of a Cashless Exercise, the Holder shall be entitled to receive a certificate for the number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where: 
  
 (A) = the Closing Price on the Trading Day immediately preceding the date of such election; 
  
 (B) = the Exercise Price of this Warrant, as adjusted; and 
  
 (X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of
this Warrant by means of a cash exercise rather than a cashless exercise. 
  
 (d) Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holder of this Warrant by vitiating the intent and purpose of the transactions
contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of
this Warrant, that the holder of this Warrant shall be entitled, in addition to all other available remedies in law or in equity, to an injunction or injunctions to prevent or cure any breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions of this Warrant, without the necessity of showing economic loss and without any bond or other security being required. 
  
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 
  

 14 

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

			
	KANA SOFTWARE, INC.
		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

	
	 Dated as of June     , 2005

  

 15 

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

			
	 Name:
	 	  

	 Signature:
	 	  

	 Address:
	 	  

	  

	  

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

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

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

					
	 Name of Assignee

	 	 Address

	 	 No of Shares

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

  
 Dated:
                         , 200     
  
 In the presence of: 
  
 _________________________ 
  

			
	Name:	 	  

		
	Signature:	 	  

	
	Title of Signing Officer or Agent (if any):
	
	  

		
	Address:	 	  

	  

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

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