Exhibit 10.41
LOAN AND SECURITY MODIFICATION
AGREEMENT
This Loan and Security Modification
Agreement is entered into as of May 26, 2009, by and between
Kana Software, Inc. (the “Borrower”) and Bridge Bank,
National Association (“Lender”).
1. DESCRIPTION OF EXISTING
INDEBTEDNESS : Among other indebtedness which may be owing by
Borrower to Lender, Borrower is indebted to Lender pursuant to,
among other documents, a Second Amended and Restated Loan and
Security Agreement, dated March 28, 2008 by and between
Borrower and Lender, as may be amended from time to time, including
without limitation by that certain Loan and Security Modification
Agreement dated as of March 17, 2009 (collectively, the
“Loan and Security Agreement”). Capitalized terms used
without definition herein shall have the meanings assigned to them
in the Loan and Security Agreement.
Hereinafter, all indebtedness owing
by Borrower to Lender shall be referred to as the
“Indebtedness” and the Loan and Security Agreement and
any and all other documents executed by Borrower in favor of Lender
shall be referred to as the “Existing
Documents”.
2. ACKNOWLEDGEMENT OF
DEFAULTS .
Borrower hereby acknowledges that as
of the date hereof, the following Events of Default (the
“Existing Defaults”) have occurred and remain uncured
under the Loan and Security Agreement:
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1)
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For the months
ended January 31, 2009, February 28,
2009, March 31, 2009 and April 30, 2009, failure to
maintain the monthly Asset Coverage Ratio of at least 2.00 to 1.00,
as required in Section 6.7, entitled “Asset Coverage
Ratio.”
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2)
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For the quarter
ended March 31, 2009, failure to maintain the quarterly
Profitability of not less than One Dollar ($1.00), as required in
Section 6.8, entitled “Profitability.”
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3)
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For the quarter
ended March 31, 2009, failure to maintain a Debt Service
Coverage ratio of at least 1.50:1.00, as required in
Section 6.9, entitled “Debt Service
Coverage.”
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3. WAIVER OF DEFAULT
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Lender hereby agrees to waive the
Existing Defaults, provided, and only so long as, Borrower complies
in all respects with the Loan and Security Agreement and with the
Existing Documents. This waiver shall not constitute a continuing
waiver or a course of conduct waiving this or any other provisions
of the Loan and Security Agreement.
4. DESCRIPTION OF CHANGE IN
TERMS .
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A.
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Modifications to Loan and Security
Agreement:
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1)
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The following
defined terms in Section 1.1 are hereby amended as
follows:
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“EBITDA” means with
respect to any fiscal period an amount equal to the sum of
(a) Consolidated Net Income of the Borrower and its
Subsidiaries for such fiscal period, plus (b) in each case to
the extent deducted in the calculation of the Borrower’s
Consolidated Net Income and without duplication,
(i) depreciation and amortization for such period, plus
(ii) income tax expense for such period, plus
(iii) Consolidated Total Interest Expense paid or accrued
during such period, plus (iv) non-cash expense associated with
granting stock options, plus (v) extraordinary and
non-recurring restructuring costs, and minus, to the extent added
in computing Consolidated Net Income, and without duplication, all
extraordinary and non-recurring revenue and gains (including income
tax benefits) for such period, all as determined in accordance with
GAAP.
1
“Revolving Line” means a
credit extension of up to an aggregate amount of Six Million
Dollars ($6,000,000) less the Existing Equipment Advances and the
Equipment Loan B Advances.
“Revolving Maturity
Date” means June 30, 2010.
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2)
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Sections 6.7,
6.8 and 6.9 of the Loan and Security Agreement are amended in their
entirety to read as follows:
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6.7 Asset Coverage
Ratio . Beginning with
the period ending May 31, 2009, Borrower shall maintain,
measured monthly, a ratio of Cash plus Eligible Accounts to all
Indebtedness to Bank of at least 1.50 to 1.00.
6.8 Minimum EBITDA.
Beginning with the period ending
June 30, 2009, Borrower shall maintain a minimum EBITDA,
measured on a quarterly basis, of not less than Five Hundred
Thousand Dollars ($500,000).
6.9 Term Sheets/New
Equity. By no later than
June&nb
