Item 1.01. Entry into a Material Definitive Agreement.

On October 16, 2009, Kana Software, Inc. ("KANA") and four former employees of RightNow Technologies, Inc. ("RightNow") entered into a General Release and Settlement Agreement with RightNow to settle the lawsuit that was filed by RightNow in the Eighteenth Judicial District Court of Gallatin County, Montana on January 24, 2007 against KANA and the four former employees of RightNow. The lawsuit alleged violation of certain provisions of employment agreements, misappropriation of trade secrets, as well as other claims. In the General Release and Settlement Agreement, KANA agreed that it will pay a total of $1,000,000 to RightNow with $100,000 due within ten days of executing the General Release and Settlement Agreement and the remainder due over nine consecutive quarters beginning with the quarter commencing January 1, 2010. In addition, KANA provided RightNow with a subordinated security interest in its assets to secure the amounts payable to RightNow. Under the General Release and Settlement Agreement, the parties dismissed the lawsuit with prejudice, and all parties received executed mutual releases.

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