eGAIN COMMUNICATIONS CORPORATION

RESTRUCTURING AGREEMENT

THIS RESTRUCTURING AGREEMENT (the Agreement) is dated as of September 29, 2004, by and between eGAIN COMMUNICATIONS CORPORATION, a Delaware corporation (the Company) and each holder of Series A Preferred (as defined herein) listed on Schedule A attached hereto (each a Holder).

W I T N E S S E T H:

WHEREAS, holders of the Companys 6.75% Series A Cumulative Convertible Preferred Stock (the Series A Preferred) issued pursuant to that certain Securities Purchase Agreement dated August 8, 2000, between the Company and the Holders (the Series A Agreement) possess certain rights, preferences and privileges, including but not limited to certain conversion, redemption and registration rights (the Rights); and

WHEREAS, the Series A Preferred is currently convertible into shares Common Stock of the Company at a conversion ratio equal to the face amount per share of Series A Preferred ($100,000) plus accreted dividends divided by $56.875 (as adjusted for any stock splits, dividends, combinations or the like occurring after the date hereof and prior to the Conversion (as defined below));

WHEREAS, the Company has requested that the Holders agree to modify certain Rights held by such Holders in return for the enhanced liquidity associated with an earlier conversion of the Series A Preferred into Common Stock;

WHEREAS, holders of at least (i) sixty-six and two-thirds percent (66 ²/3%) of all outstanding shares of the Series A Preferred and (ii) a majority of all outstanding shares of the Series A Preferred not held by Oak Hill Capital Partners, L.P., FW Investors V, L.P., Oak Hill Venture Fund I, L.P. and Oak Hill Capital Management Partners, L.P. (the Oak Hill Entities) have the authority under the Certificate of Designation of 6.75% Series A Cumulative Convertible Preferred Stock dated as of August 21, 2000 pursuant to which the Series A Preferred was issued, have the power and authority to amend the Rights for all holders of Series A Preferred;

WHEREAS, following the execution of this Agreement and the Voting Agreement (as defined herein), the Company shall as soon as reasonably practicable solicit the approval (the Common Stockholder Approval) of the holders of the Companys Common Stock of the adoption of the Restated Certificate and the conversion of the Series A Preferred into Common Stock pursuant thereto (the Conversion);

WHEREAS, the Company and the Holders anticipate that the holders of the Common Stock resulting from the Conversion will be permitted, under applicable United States securities law, to tack the holding period during which such holder held the shares of Series A Preferred:

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and for other consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto further agree as follows:

1. Restructuring. Each of the Holders hereby agree to modify the Rights held by the Holders, by (i) consenting to the filing of the Amended and Restated Certificate of Incorporation in substantially the form attached hereto as Exhibit B (the Restated Certificate) following Common Stockholder Approval and (ii) executing the Amendment No. 1 to Registration Rights Agreement in substantially the form attached hereto as Exhibit C (the Rights Agreement Amendment) at the Closing (as defined herein). The filing of the Restated Certificate and the execution of the Rights Agreement Amendment shall be referred to as the Restructuring.

2. Voting Agreement. In connection with the execution of this Agreement, the Company and each Holder shall execute a Voting Agreement and Proxy in substantially the form attached hereto as Exhibit A (the Voting Agreement).

3. Closing. The closing of the Restructuring shall be held by fax at 10:00 a.m., California time on the filing of the Restated Certificate as soon as practicable but in any event within fifteen (15) business days following the Common Stockholder Approval, currently anticipated to be on or about November 30, 2004 (the Closing) or at such other time and place as shall be mutually agreed upon by the Company and Holders holding at least (i) sixty-six and two-thirds percent (66 2/3%) of all outstanding shares of the Series A Preferred and (ii) a majority of all outstanding shares of the Series A Preferred not held by the Oak Hill Entities.

4. Representations and Warranties of the Company. The Company hereby represents and warrants to each Holder as follows:

4.1 Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the Rights Agreement Amendment (collectively, the Restructuring Documents), the performance of all obligations of the Company hereunder and thereunder and the authorization and issuance of the Common Stock issuable in connection with the Conversion has been taken or will be taken prior to the Closing, and the Restructuring Documents constitute valid and legally binding obligations of the Company. The Common Stock issuable upon the Conversion (collectively, the Securities) have been duly authorized and, when issued in compliance with the provisions of this Agreement and the Restated Certificate, will be validly issued, fully paid and non-assessable, and free of any liens or encumbrances.

4.2 Offering Valid. Assuming the accuracy of the representations and warranties of the Holders contained in Section 5 hereof, the issuance of the Securities will be exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act), and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws.

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