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Strategies & Market Trends : Floorless Preferred Stock/Debenture
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To: John Liu who started this subject11/29/2001 9:19:44 AM
From: Rajiv  Read Replies (1) of 1438
 
KANA's convertible -

On November 28, 2001, Kana Software, Inc., a Delaware corporation, entered into a share purchase agreement with funds affiliated with Technology Crossover Ventures, or TCV. TCV has committed to purchase a minimum of $38 million of Kana's newly created 8% Series A Convertible Preferred Stock, and may, at its discretion, purchase up to $45 million of the Series A Preferred Stock. Each share of Series A Preferred Stock will initially convert into Common Stock on a 10-for-1 basis. The purchase price of the Series A Preferred Stock will be ten times the lesser of (i) $10.00 per share (subject to adjustment for Kana's pending 1-for-10 reverse stock split) or (ii) 66 2/3% of a volume-based weighted average price for Kana's common stock on the Nasdaq National Market over a 10-day period prior to closing. There will be no change to the conversion ratio subsequent to issuance of the Series A Preferred Stock based upon the trading price of Kana's Common Stock. The Series A Preferred Stock will automatically convert into Common Stock at any time after the first anniversary of the issuance date if (1) the Common Stock has had a daily weighted average price of at least three times the purchase price of the Series A Preferred Stock (on an as-converted basis) for ninety consecutive trading days and (2) there is an effective registration statement in place covering the resale of the Common Stock underlying the Series A Preferred Stock.

The Series A Preferred Stock will accrue and cumulate dividends at a rate of 8% per year, compounded quarterly, and is convertible into Common Stock at any time at the option of TCV. The dividends are only payable through a corresponding increase in the liquidation preference of the Series A Preferred Stock and in the number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock.
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