September 29, 2005
September
29, 2005
|
NightWatch
Capital Partners, LP and
NightWatch
Capital Partners II, LP
0000
Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx,
Xxxx 00000
Attention:
Xxxx Xxxxxxx
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RHP
Master Fund, Ltd.
c/o
Rock Hill Investor Management, L.P.
0
Xxxx Xxxxx - Xxxx, Xxxxx 000
Xxxx
Xxxxxx, XX 00000
Attention:
Xxxxx Xxxxx
|
Re:
Purchase of Additional Units
Dear
Xxxx
and Xxxxx:
In
connection with the execution of the Common Stock and Warrant Purchase Agreement
(the "Purchase Agreement"), dated September 29, 2005, by and among Kana
Software, Inc. (the "Company") and the Buyers named therein (the "Buyers"),
the
undersigned parties have agreed to enter into this letter agreement to set
out
the terms and conditions on which additional Units will be sold by the Company
to the Buyers (the "Additional Issuance"). Capitalized
terms used herein but not otherwise defined herein, shall have the respective
meanings set forth in the Purchase Agreement.
The
Company hereby agrees to sell $1,000,000 of Units to the Buyers, and the Buyers
agree to purchase (on a pro rata basis based on the number of Units
purchased under the Purchase Agreement), at a price per Unit of $1.52, within
three (3) business days of satisfaction of the Purchase Conditions. If the
Purchase Conditions are not satisfied, the Buyers will not have any obligation
to purchase Units, and the Company will not have any obligation to sell Units,
pursuant to the Additional Issuance. "Purchase Conditions" shall mean (i) the
Company shall have filed its quarterly reports for the three-month periods
ended
March 31, 2005 and June 30, 2005 on or prior to October 7, 2005 and on or prior
to October 19, 2005, respectively, and (ii) shall have filed its quarterly
report for the three-month period ended September 30, 2005 without the
Common
Stock being delisted from the Principal Exchange.
The
Company will provide prompt written notice to the Buyers of its satisfaction
of
the Purchase Conditions.
Upon
satisfaction of the Purchase Conditions, the parties will promptly execute
definitive agreements for the Additional Issuance in the same forms as the
Transaction Documents (other than Sections 4.12 and 4.15, which will be
deleted).
All
warrants issued pursuant to the Additional Issuance will become exercisable
beginning six months days following the date of issuance and will expire five
years from the date of issuance. All securities issued pursuant to the Buyers
under the terms of this letter agreement will have registration rights identical
to such registration rights included in the Registration Rights Agreement,
dated
the date hereof, by and among the parties.
NightWatch
Capital Partners, LP,
NightWatch
Capital Partners II, LP
RHP
Master Fund, Ltd.
September
29, 2005
Page
2
Please
indicate your agreement to the foregoing by executing a counterpart copy of
this
letter and returning it to the undersigned.
| KANA SOFTWARE, INC. | ||||
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By:
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/s/
Xxxx Xxxxxxxx
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Name:
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Xxxx
Xxxxxxxx
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Title:
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Chief
Financial Officer
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[Signatures
Continue on Following Page]
NightWatch
Capital Partners, LP,
NightWatch
Capital Partners II, LP
RHP
Master Fund, Ltd.
September
29, 2005
Page
3
Agreed
and Acknowledged:
NIGHTWATCH
CAPITAL PARTNERS, LP
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By
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NightWatch
Capital Management, LLC, its general partner
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By:
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/s/
Xxxx X. Xxxxxxx
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Xxxx
X. Xxxxxxx
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Managing
Principal
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NIGHTWATCH
CAPITAL PARTNERS II, LP
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By
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NightWatch
Capital Management, LLC, its general partner
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By:
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/s/
Xxxx X. Xxxxxxx
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Xxxx
X. Xxxxxxx
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Managing
Principal
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RHP
MASTER FUND, LTD.
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By:
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Rock
Hill Investment Management, L.P., its investment manager
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By:
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RHP
General Partner, LLC
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By:
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/s/
Xxxxx X. Xxxxxxx
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Xxxxx
X. Xxxxxxx
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Director
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