X0202 4 2006-05-08 0 0001089907 KANA SOFTWARE INC KANA.PK 0001325442 NightWatch Capital Management, LLC 3311 NORTH UNIVERSITY AVENUE SUITE 200 PROVO UT 84604 0 0 1 0 Common Stock 2006-05-08 4 J 0 494866 A 5917788 I See Footnotes Kana Software, Inc. and the NW Funds (as defined in footnote (2)) have agreed that the NW Funds will receive the Common Stock to which this note relates as compensation for certain amendments to the original purchase agreements between them. The shares of Common Stock to which this note relates are held directly by NightWatch Capital Partners, L.P., a Delaware limited partnership (?NWCP?), with respect to 3,191,912 shares of Common Stock, and NightWatch Capital Partners II, L.P., a Delaware limited partnership (?NWCP II? and collectively with NWCP, the ?NW Funds?), with respect to 2,725,876 shares of Common Stock. NightWatch Capital Advisors, LLC (the ?Investment Manager?) serves as investment manager to, and has investment discretion over, the securities held by the NW Funds. NightWatch Capital Management, LLC (the ?General Partner?) serves as the general partner of, and has investment discretion over, the securities held by the NW Funds. John Nemelka is the managing member of the managing member of the managing member of the managing member of the managing member of the General Partner. Each managing member and the General Partner understand that by reason of Rule 16a-1 of the Securities Exchange Act of 1934, as amended (the ?Exchange Act?) each may be deemed to be the beneficial owners of the Common Stock of Kana Software, Inc. held by the NW Funds, although each disclaims beneficial ownership of such Common Stock except to the extent of any indirect pecuniary interest (within the meaning of Rule 16a-1 of the Exchange Act) therein in an indeterminate portion of the Common Stock beneficially owned by the NW Funds. /s/ Paul Burgon 2006-05-10