NOTE AND WARRANT PURCHASE AGREEMENT

Exhibit 10.1

NOTE AND WARRANT PURCHASE AGREEMENT

This NOTE AND WARRANT PURCHASE AGREEMENT (this “ Agreement ”), dated as of March 31, 2004, between eGain Communications Corporation, a Delaware corporation (the “ Company ”), and those entities and individuals listed on Schedule A attached hereto (each a “ Lender ” and collectively, the “ Lenders ”).

PREAMBLE

The Company wishes to obtain debt financing. Each Lender is willing, on the terms contained in this Agreement, to purchase Notes in the principal amount listed on Schedule A attached hereto, from the Company (i) on a fully subordinated basis vis a vis the indebtedness of the Company to Silicon Valley Bank and (ii) on a parity with the notes issued pursuant to the Prior Credit Facility.

ARTICLE I

DEFINITIONS

Capitalized terms not otherwise defined herein shall have the meanings set forth below when used in this Agreement and in the Exhibits hereto:

“ Acceptable Currency ” means and includes cash and any other method of payment which will result in that payment being credited to the account of the Company at the bank previously designated to the Lenders in time to earn interest for the day of each Closing.

“ Accounts ” means all existing and later arising accounts, contract rights, and other obligations owed the Company in connection with its sale or lease of goods (including licensing software and other technology) or provision of services, all credit insurance, guaranties, other security and all merchandise returned or reclaimed by the Company and the Company’s books and records relating to any of the foregoing.

“ Affiliate ” of a Person is a Person that owns or controls, directly or indirectly, the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

“ Bylaws ” means the bylaws of the Company, as amended.

“ Certificate of Incorporation ” means the Company’s certificate of incorporation, as in effect on the date of this Agreement.

“ Closing ” and “ Closing Date ” mean each consummation of a sale by the Company and a purchase by the Lenders of one or more Notes pursuant to the terms and conditions set forth in this Agreement.

“ Collateral ” means the property described on Annex A .

“ Contingent Obligations ” means, for any Person, any direct or indirect liability, contingent or not, of that Person for (i) any indebtedness, lease, dividend, letter of credit or other

obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (ii) any obligations for undrawn letters of credit for the account of that Person; and (iii) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under the guarantee or other support arrangement.

“Copyrights” means all copyright rights, applications or registrations and like protections in each work or authorship or derivative work, whether published or not (whether or not it is a trade secret) now or later existing, created, acquired or held.

“ Equipment ” means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which the Company has any interest.

“ ERISA ” means the Employment Retirement Income Security Act of 1974, and its regulations.

“ Event of Default ” means the occurrence of one of the events described in Section 9.1.

“ Indebtedness ” means (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations and (d) Contingent Obligations.

“ Intellectual Property ” means:

(a) Copyrights, Trademarks, and Patents including amendments, renewals, extensions, and all licenses or other rights to use and all license fees and royalties from the use;

(b) Any trade secrets and any intellectual property rights in computer software and computer software products now or later existing, created, acquired or held;

(c) All design rights which may be available to the Company now or later created, acquired or held;

(d) Any claims for damages (past, present or future) for infringement of any of the rights above, with the right, but not the obligation, to sue and collect damages for use or infringement of the intellectual property rights above;

All proceeds and products of the foregoing, including all insurance, indemnity or warranty payments.

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“ Inventory ” means all present and future inventory in which the Company has any interest, including merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or later owned by or in the custody or possession, actual or constructive, of the Company, including inventory temporarily out of its custody or possession or in transit and including returns on any accounts or other proceeds (including insurance proceeds) from the sale or disposition of any of the foregoing and any documents of title.

“ Investment ” means any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance or capital contribution to any Person; provided, however, that in no event shall the payments by the Company to its Subsidiaries pursuant to transfer pricing arrangements with such Subsidiaries be considered Investments.

“ Lien ” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

“ Loan Documents ” means, collectively, this Agreement, the Notes, and the Warrants.

“ Material Adverse Change ” means (i) a material adverse change in the business operations, or condition (financial or otherwise) of the Company; (ii) a material impairment of the prospect of repayment of any portion of the Obligations; or (iii) a material impairment of the priority of the Lenders’ security interests in the Collateral.

“ Notes ” means the Subordinated Secured Promissory Notes of the Company issued to the Lenders under this Agreement in the form of the Note attached to this Agreement as Annex B .

“ Obligations ” means the Company’s obligation to repay amounts to the Lenders as evidenced by the Notes.

“ Patents ” means, renewals, reissues, extensions and continuations-in-part of the same.

“ Permitted Indebtedness ” means (a) the Company’s indebtedness to the Lenders under this Agreement or any other Loan Document; (b) Indebtedness existing on the Closing Date and shown on Exhibit 6.4 , (c) Subordinated Debt; (d) Indebtedness to trade creditors incurred in the ordinary course of business; (e) Indebtedness secured by a Lien described in clause (c) of the defined term “Permitted Liens”, provided, however, that (i) such Indebtedness does not exceed the lesser of the cost or fair market value of the Equipment financed with such Indebtedness and (ii) such Indebtedness does not exceed $10,000,000 in the aggregate at any given time; (f) capital leases; and (g) Indebtedness secured by Permitted Liens outstanding as of the date hereof.

“ Permitted Investments ” means (a) Investments shown on Exhibit 3.7 and existing on the Closing Date; (b) Investments made by the Company or any Subsidiary, provided, however, that the Company may make Investments in its Subsidiaries, provided, however, that (i) the aggregate amount of such Investments shall not exceed $300,000 in any given quarter and (ii) no Event of Default has occurred which is continuing or would exist immediately after giving effect to any such Investment; (iii) marketable direct obligations issued or unconditionally guaranteed by the United States or its agency or any State maturing within 2 years from its acquisition, (iii) commercial paper maturing no more than 1 year after its creation and currently having a rating of at least A-1 or P-1 from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc., and (iv) Bank certificates of deposit issued maturing no more than 2 years after issue.

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“ Permitted Liens ” means (a) Liens existing at the Closing and set forth in Exhibit 3.2 hereto (including liens pursuant to the Prior Credit Facility) or arising under this Agreement or the Notes, (b) purchase money Liens (i) on equipment acquired or held by the Company incurred for financing the acquisition of the equipment, or (ii) existing on equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the equipment; (c) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) and (b) above; provided that any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase.

“ Person ” means any individual, sole proprietorship, partnership, limited liability company, joint venture, company association, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

“ Prior Credit Facility ” means the subordinated secured promissory notes and accompanying warrants issued by the Company pursuant to that certain Note and Warrant Purchase Agreement by and between Ashutosh Roy and the Company dated as of December 23, 2002.

“ Securities Act ” means the Securities Act of 1933, as amended, or any similar federal law then in force.

“ SVB Loan Agreement ” means that certain Loan and Security Agreement, dated as of March 27, 2002, by and between the Company and Silicon Valley Bank, as amended, modified, and supplemented from time to time.

“ Subordinated Debt ” means debt incurred by the Company subordinated to the Company’s indebtedness owed to the Lenders and which is reflected in a written agreement in a manner and form acceptable to the Lenders and approved in writing by each of the Lenders.

“ Subordination Agreement ” means that certain Subordination Agreement, dated as of even date herewith, between the Lenders and Silicon Valley Bank, substantially in the form of Annex C hereto.

“ Subsidiary ” means any Person in which the Company, directly or indirectly through Subsidiaries or otherwise, beneficially owns at least 50% of either the equity interest in, or the voting control of, such Person.

“ Tangible Net Worth ” means, on any date, the consolidated total assets of the Company and its Subsidiaries minus , (i) any amounts attributable to (a) goodwill, (b) intangible items such as unamortized debt discount and expense, Patents, trade and service marks and names, Copyrights and research and development expenses except prepaid expenses, and (c) reserves not already deducted from assets, and (ii) Total Liabilities.

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“ Trademarks ” means trademark and servicemark rights, registered or not, applications to register and registrations and like protections, and the entire goodwill of the business of Assignor connected with the trademarks.

“ Warrants ” mean the Warrants to purchase Common Stock of the Company granted to the Lenders under this Agreement at the Closing in the form of the Warrant attached to this Agreement as Annex D .

Additional defined terms are found in the body of the following text.

The masculine form of words includes the feminine and the neuter and vice versa, and, unless the context otherwise requires, the singular form of words includes the plural and vice versa. The words “ herein ,” “ hereof ,” “ hereunder ,” and other words of similar import when used in this Agreement refer to this Agreement as a whole, and not to any particular section or subsection.

ARTICLE II

PURCHASE AND SALE TERMS

Section 2.1 Purchase and Sale of Notes . Subject to the terms of this Agreement, on or before March 31, 2004, or such other time as shall be agreed by the Company and the Lenders in writing (the “ Closing ”), the Company shall issue and sell to each Lender, and such Lender shall purchase from the Company, a Note in the form of the Note attached to this Agreement as Annex B . The purchase price payable by such Lender for such Note, as well as the face amount of such Note, are set forth opposite such Lenders’ name on Exhibit 2.1 .

Section 2.2 Warrants . Subject to the terms of this Agreement, at each Closing, as further consideration for the purchase of the Notes, the Company shall grant to each Lender, and such Lender shall receive from the Company, a Warrant in the form of the Warrant attached to this Agreement as Annex D .

Section 2.3 Payment . At the Closing, each Lender shall pay, in full and in Acceptable Currency, the purchase price (as set forth on Exhibit 2.1 ) of the Note purchased by it.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as otherwise set forth in the Exhibits furnished pursuant to this Agreement, the Company represents and warrants to each Lender at each Closing that:

Section 3.1 Due Organization; Authorization and Other Matters . The Company and each Subsidiary is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good standing in, any state in which the conduct of its business or its ownership of property requires that it be qualified. The execution, delivery and performance of the Loan Documents have been duly authorized, and do not conflict with the Company’s formation documents, nor constitute an event of default under any material agreement by which the Company is bound. The Company is not in default under any agreement to which or by which it is bound in which the default could cause a Material Adverse Change. The Loan Documents have

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been validly executed by the Company, and each such document is the Company’s legal, valid and binding obligation, enforceable against the Company in accordance with its terms. The Company represents and warrants that (i) the Loan Documents and the transactions contemplated therein have been approved by a disinterested majority of the Board of Directors, after full disclosure of all relevant facts regarding such transactions, including knowledge of each Lender’s relationship as an officer, director or shareholder of the Company; (ii) the principal terms contained in the Loan Documents were negotiated on behalf of the Company with the assistance of one or more disinterested, outside directors whose collective financial sophistication and experience negotiating and conducting financial transactions equals or exceeds the financial sophistication and experience of such Lender; and (iii) the Company has for several months explored many other alternatives for securing necessary working cash for the Company, and has elected to move forward with the Loan Documents in large part due to the present absence of suitable alternatives and the Company’s urgent need for cash.

Section 3.2 Collateral . The Company has good title to the Collateral, free of Liens except Permitted Liens. All Inventory is in all material respects of good and marketable quality, free from material defects. The Company is the sole owner of the Intellectual Property, except for non-exclusive licenses granted to its customers in the ordinary course of business. Each Patent is valid and enforceable and no part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part, and no claim has been made that any part of the Intellectual Property violates the rights of any third party.

Section 3.3 Litigation . Except as shown in Exhibit 3.3 , there are no actions or proceedings pending or, to the Company’s knowledge, threatened by or against the Company or any Subsidiary in which an adverse decision could cause a Material Adverse Change.

Section 3.4 No Material Adverse Change in Financial Statements . All consolidated financial statements for the Company, and any Subsidiary, delivered to each Lender fairly present in all material respects the Company’s consolidated financial condition and the Company’s consolidated results of operations. There has not been any material deterioration in the Company’s consolidated financial condition since the date of the most recent financial statements submitted to each Lender.

Section 3.5 Solvency . The fair salable value of the Company’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; the Company is not left with unreasonably small capital after the transactions contemplated by this Agreement; and the Company is able to pay its debts (including trade debts) as they mature.

Section 3.6 Regulatory Compliance . The Company is not an “investment company” or a co