Execution
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AMENDMENT NO. 1 TO RIGHTS AGREEMENT


 


This Amendment No.
1 (this “Amendment”), dated as of August 18, 2014, is made by and between SWK Holdings Corporation, a Delaware
corporation (formerly known as Kana Software, Inc., the “Company”), and Computershare Trust Company, N.A., a
federally chartered trust company (the “Rights Agent”), to the Second Amended and Restated Rights Agreement,
dated as of February 12, 2012, between the Company and the Rights Agent (the “Rights Agreement”). All capitalized
terms not defined herein shall have the meanings ascribed to such terms in the Rights Agreement.


 


WHEREAS, the Company
proposes to enter into a Securities Purchase Agreement by and between Carlson Capital L.P., a Delaware limited partnership (“Carlson”),
and the Company (as amended, supplemented, modified or replaced from time to time, the “Securities Purchase Agreement”);


 


WHEREAS, as of the
date hereof, the Rights are redeemable;


 


WHEREAS, the Board
of Directors of the Company has determined that the Securities Purchase Agreement and the issuance of the Shares and the Rights
Offering (each as defined in the Securities Purchase Agreement) are advisable and in the best interests of the Company and its
stockholders;


 


WHEREAS, the Board
of Directors of the Company has determined it to be advisable and in the best interests of the Company and its stockholders to
amend the Rights Agreement as set forth in this Amendment to (a) render the Rights Agreement inapplicable to any of the transactions
contemplated by the Securities Purchase Agreement, including without limitation the issuance of the Shares and the Rights Offering,
and (b) cause Carlson and its Affiliates and Associates to each be considered an Exempt Person under the circumstances set forth
herein;


 


WHEREAS, subject to
certain limited exceptions, Section 27 of the Rights Agreement provides that at any time that the Rights are redeemable the Company
may in its sole and absolute discretion, and the Rights Agent shall, if the Company so directs, supplement or amend any provision
of the Rights Agreement in any respect without the approval of any holders of Rights or holders of Common Shares;


 


WHEREAS, this Amendment
is permitted by Section 27 of the Rights Agreement; and


 


WHEREAS, pursuant
to Section 27, the Company hereby amends, and directs the Rights Agent to amend, the Rights Agreement as set forth in this Amendment.


 






    	 



    	 



    

NOW THEREFORE, in
consideration of the foregoing premises and mutual covenants and agreements set forth herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and the Rights Agent, intending to be legally bound,
hereby agree as follows:


 



1.                 
Additional Definitions. Section 1 of the Rights Agreement is hereby amended and supplemented by adding the following
definitions in alphabetical order:


 


““Carlson” shall
mean Carlson Capital L.P., a Delaware limited partnership.”


 


““Securities Purchase Agreement”
shall mean the Securities Purchase Agreement, dated as of August 18, 2014, by and between Carlson and the Company (as such
agreement is amended, supplemented, modified or replaced from time to time).”


 


2.                 
Replacement of Definitions. Section 1 of the Rights Agreement is hereby amended by deleting and replacing in entirety
the following definitions:


 


““Exempt
Person” means a Person whose Beneficial Ownership (together with
all Affiliates and Associates of such Person) of 4.9% or more of the then-outstanding Common Shares will not, as determined by
the Company’s Board of Directors in its sole discretion, jeopardize or endanger the availability to the Company of its NOLs;
provided, however, that such a Person will cease to be an “Exempt Person” if the Board of Directors makes a contrary
determination with respect to the effect of such Person’s Beneficial Ownership (together with all Affiliates and Associates
of such Person) upon the availability to the Company of its NOLs; and provided further that Carlson and its Affiliates and Associates
shall each be considered an Exempt Person at all times, unless and until their collective Beneficial Ownership of the then-outstanding
Common Shares constitutes more than 76% of the then-outstanding Common Shares (with the definition of Common Shares for purposes
of this proviso being deemed to include any Common Shares that a Person has the right to acquire, whether or not such right is
exercisable immediately).”


 


““Final Expiration Date”
means February 3, 2015.”


 


3.                 
Amendment of Section 7. Section 7(d) is deleted and replaced in its entirety as follows:


 


“The Rights will expire on the Final Expiration
Date unless earlier redeemed or exchanged.”


4.                 
Addition of New Section 36. The Rights Agreement is amended by adding a new Section 36 thereto, which shall read
as follows:


 






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“Section 36. Exception For Securities
Purchase Agreement. Notwithstanding any provision of this Agreement to the contrary, none of a Flip-In Event, a Flip-Over Event,
a Triggering Event, a Distribution Date or a Share Acquisition Date shall be deemed to have occurred, none of Carlson or any of
its Affiliates or Associates, either individually or collectively, shall be deemed to have become an Acquiring Person, and no holder
of any Rights shall be entitled to exercise any Rights under, or be entitled to any rights pursuant to, this Agreement, in any
such case by reason of (a) the approval, execution, delivery, or performance of the Securities Purchase Agreement or any amendments
thereof or other documents attached thereto (in each case approved by the Board of Directors of the Company), (b) public or
other announcement or disclosure of the Securities Purchase Agreement or the transactions contemplated thereby, including without
limitation the issuance of the Shares and the Rights Offering (each as defined in the Securities Purchase Agreement), or (c) the
commencement or, prior to termination of the Securities Purchase Agreement, the consummation of, any of the transactions contemplated
by the Securities Purchase Agreement, in accordance with their respective terms, including without limitation the issuance of the
Shares and the Rights Offering.”


 


5.                 
Effective Date; Certification. This Amendment shall
be deemed effective as of the date first written above, as if executed on such date. The officer of the Company executing this
Amendment hereby certifies to the Rights Agent that the amendment to the Rights Agreement set forth in this Amendment is in compliance
with Section 27 of the Rights Agreement and the certification contained in this Section 3 shall constitute the certification required
by Section 27 of the Rights Agreement.


 


6.                 
Governing Law. This Amendment shall be deemed to be a contract made under the internal substantive laws of the State
of Delaware and for all purposes will be governed by and construed in accordance with the internal substantive laws of such State
applicable to contracts to be made and performed entirely within such State.


 


7.                 
Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of
this Amendment will remain in full force and effect and will in no way be affected, impaired or invalidated.


 


8.                 
Notice. The Rights Agent and the Company hereby waive any notice requirement with respect to each other under the
Rights Agreement, if any, pertaining to the matters covered by this Amendment.


 






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9.                 
No Other Effect. Except as expressly set forth herein, the Rights Agreement shall not by implication or otherwise
be supplemented or amended by virtue of this Amendment, but shall remain in full force and effect, as amended hereby.


 


10.             
Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts will for
all purposes be deemed to be an original, and all such counterparts will together constitute but one and the same instrument.


 


[Signature Page Follows]








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IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be duly executed as of the date and year first above written.


 





	SWK
    HOLDINGS CORPORATION
	 	 	 
	 	 	 
	By:	/s/ Brett Pope	 
	Name:  	Brett Pope	 
	Title:	Chief Executive Officer	 
	 	 	 
	 	 	 
	COMPUTERSHARE
    TRUST COMPANY, N.A., 
	as
    Rights Agent
	 	 	 
	 	 	 
	By:	/s/ Robert A. Buckley, Jr	 
	Name:	Robert A. Buckley, Jr	 
	Title:	Senior Vice President	 



 


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