EXHIBIT 10.25

 

LOAN MODIFICATION AGREEMENT

 

This Loan Modification Agreement is entered into as of November 10 2004, by and
between Kana Software, Inc. (the “Borrower”) and Silicon Valley Bank (“Bank”).

 

1. DESCRIPTION OF EXISTING OBLIGATIONS: Among other Obligations which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, an Amended and Restated Loan and Security Agreement, dated July 10,
2000, as amended or modified from time to time, (the “Loan Agreement”). The Loan
Agreement provides for, among other things, a Committed Revolving Line in the
original principal amount of Ten Million Dollars ($10,000,000). The Loan
Agreement has been modified pursuant to, among other documents, a Loan
Modification Agreement dated December 28, 2001, pursuant to which, among other
things, the Committed Revolving Line was decreased to Three Million Dollars
($3,000,000). The Loan Agreement was further modified pursuant to, among other
documents, a Loan Modification Agreement dated November 22, 2002, pursuant to
which, among other things, the Committed Revolving Line was increased to Five
Million Dollars ($5,000,000). Defined terms used but not otherwise defined
herein shall have the same meanings as set forth in the Loan Agreement.

 

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the “Obligations.”

 

2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement and in an Intellectual Property
Security Agreement.

 

Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Obligations shall be referred
to as the “Security Documents”. Hereinafter, the Security Documents, together
with all other documents evidencing or securing the Obligations shall be
referred to as the “Existing Loan Documents”.

 

3. DESCRIPTION OF CHANGE IN TERMS.

 

  A. Modification(s) to Loan Agreement.

 

  1. Sub letter (b) under Section 2.3 entitled “Interest Rate, Payments” is
hereby amended in part to provide that interest is payable on the 9th of each
month.

 

  2. Section 6.6 entitled “Intentionally Omitted” is hereby deleted and replaced
with “Primary Accounts” and is to read as follows:

 

Borrower will maintain its primary operating accounts with Bank.

 

  3. Section 6.10 entitled “Minimum Unrestricted Cash” is hereby amended in its
entirety to read as follows:

 

Borrower shall maintain at least $7,000,000 in unrestricted cash and cash
equivalents with or through Bank at all times. If Borrower fails to comply with
the Compensating Balance for ten (10) consecutive Business Days, it shall not be
deemed as an Event of Default, provided that Borrower pays Bank a one time fee
of Ten Thousand Dollars ($10,000). However, it shall not be construed in any way
as to cure Borrower’s violation of any other Event of Default under the Loan
Agreement or Bank’s agreement to (i) waive any other Event of Default under the
Loan Agreement or (ii) forbear from exercising its right and remedies if an
Event of Default, exists or continues under the Loan Agreement.

 

  4. Section 6.11 entitled “Minimum Unrestricted Cash on Balance Sheet” is
hereby amended to read as follows:

 

Borrower shall maintain at least $13,000,000 in unrestricted cash on its balance
sheet at all times and tested monthly.

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  5. Section 7.3 entitled “Mergers and Acquisitions” is hereby amended to read
as follows:

 

Merge or consolidate with another corporation or entity (except that a
Subsidiary may merge or consolidated with or into another Subsidiary or
Borrower), or acquire all or substantially all of the capital stock or property
of a Person other than a Subsidiary; provided that Borrower or any of its
Subsidiaries may merge or consolidate with another corporation or entity or
acquire all of substantially all of the capital stock or property of a Person
other than a Subsidiary, if (a) a Default or Event of Default shall not have
occurred and be continuing and would not occur as a result of such transaction,
and (b) Borrower survives such transaction.

 

  6. The following defined term under Section 13.1 entitled “Definitions” is
hereby amended to read as follows:

 

“Revolving Maturity Date” is November 9, 2005

 

4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.

 

5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against paying any
of the Obligations.

 

6. PAYMENT OF LOAN FEE. Borrower shall pay Bank a fee in the amount of Twelve
Thousand Five Hundred Dollars ($12,500) (“Loan Fee”) plus all out-of-pocket
expenses.

 

7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing below)
understands and agrees that in modifying the existing Indebtedness, Bank is
relying upon Borrower’s representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Bank’s agreement to modifications
to the existing Obligations pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Obligations.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Obligations. It is the intention of Bank and Borrower to retain as liable
parties all makers and endorsers of Existing Loan Documents, unless the party is
expressly released by Bank in writing. Unless expressly released herein, no
maker, endorser, or guarantor will be released by virtue of this Loan
Modification Agreement. The terms of this paragraph apply not only to this Loan
Modification Agreement, but also to all subsequent loan modification agreements.

 

8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee.

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This Loan Modification Agreement is executed as of the date first written above.

 

BORROWER:   BANK: KANA SOFTWARE, INC.   SILICON VALLEY BANK By:  

/s/ John Thompson

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  By:  

/s/ Nick Tsiagkas

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Name:  

John Thompson

  Name:  

Nick Tsiagkas

Title:  

EVP, CFO

  Title:  

VP Relationship Manager