Exhibit 10.1

 

 

BRIDGELINE DIGITAL, INC.

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into
as of June 19, 2013, by and between Bridgeline Digital, Inc., a Delaware
corporation (the “Company”), and the investors set forth on the signature pages
affixed hereto (each, an “Investor” and, collectively, the “Investors”).

WHEREAS, the Investors wish to purchase from the Company, and the Company wishes
to sell and issue to the Investors, upon the terms and conditions stated in this
Agreement, an aggregate of up to 2,300,000 shares (the “Shares”) of the
Company’s Common Stock, par value $0.001 per share (the “Common Stock”),
together with Warrants (as defined below) exercisable for an aggregate of up to
460,000 Warrant Shares (as defined below), each Unit (as defined below)
exercisable at a purchase price of $5.00, upon the terms and conditions set
forth in this Agreement; and

WHEREAS, in connection with the Investors’ purchase of the Units, the Investors
will receive certain rights to participate in public offerings of shares of the
Company’s capital stock, and will be subject to certain restrictions on the
transfer of the Shares and the Warrant Shares, all as more fully set forth in
this Agreement.

NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree to the sale and purchase
of the Units as set forth herein.

1.

Definitions.

For purposes of this Agreement, the terms set forth below shall have the
corresponding meanings provided below.

“Affiliate” shall mean, with respect to any specified Person (as defined below),
(i) if such Person is an individual, the spouse, heirs, executors, or legal
representatives of such individual, or any trusts for the benefit of such
individual or such individual’s spouse and/or lineal descendants, or (ii)
otherwise, another Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Person specified. As used in this definition, “control” shall mean the
possession, directly or indirectly, of the sole and unilateral power to cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities or by contract or other written instrument.

“Blue Sky Application” as defined in Section 5.3(a) hereof.

“Business Day” shall mean any day on which banks located in New York City are
not required or authorized by law to remain closed.

“Closing” and “Closing Date” as defined in Section 2.2 (c) hereof.

“Common Stock” as defined in the recitals above.

“Company” as defined in the recitals above.

“Company Financial Statements” as defined in Section 4.5(a) hereof.

 

 
 

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“Company’s Knowledge” means the actual knowledge of any executive officer (as
defined in Rule 405 under the Securities Act) or director of the Company, or the
knowledge of any fact or matter which any person would reasonably be expected to
become aware of in the course of performing the duties and responsibilities as
an executive officer or director of the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“First Closing” and “First Closing Date” as defined in Section 2.2(a) hereof.

“Investor” as defined in the recitals above.

“Liens” means any mortgage, lien, title claim, assignment, encumbrance, security
interest, adverse claim, contract of sale, restriction on use or transfer or
other defect of title of any kind.

“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise),
business, or prospects of the Company and its Subsidiaries taken as a whole,
(ii) the transactions contemplated hereby or in any of the Transaction Documents
or (iii) the ability of the Company to perform its obligations under the
Transaction Documents (as defined below).

“Person” shall mean an individual, entity, corporation, partnership,
association, limited liability company, limited liability partnership,
joint-stock company, trust or unincorporated organization.

“Piggyback Registration” as defined in Section 5.1 hereof.

“Placement Agency Agreement” means that certain agreement, dated June 11, 2013
by and between the Placement Agent and the Company.

“Placement Agent” means Taglich Brothers, Inc.

“Private Placement Memorandum” means the Company’s Private Placement Memorandum
dated June 11, 2013, and any amendments or supplements thereto.

“Purchase Price” shall mean five dollars ($5) multiplied by the number of Units
purchased.

“Registrable Securities” shall mean the Shares, the Warrant Shares and any
shares issuable upon exercise of any warrants issued to the Placement Agent and
other registered broker-dealers and their affiliates as compensation in
connection with the transactions contemplated hereby; provided, that a security
shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement or Rule 144 under the Securities Act, or (B) such
security becoming eligible for sale by the Investors without any restriction
pursuant to Rule 144 (including, without limitation, volume restrictions) and
without the need for current public information required by Rule 144(c)(1) (or
Rule 144(i)(2), if applicable).

“Registration Statement” shall mean any registration statement of the Company
filed under the Securities Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this Agreement, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.

“Regulation D” as defined in Section 3.7 hereof.

 

 
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“Regulation S” as defined in Section 6.1(i)(E) hereof.

“Rule 144” as defined in Section 6.1(i)(C) hereof.

“SEC” means the U.S. Securities and Exchange Commission.

“SEC Documents” as defined in Section 4.5 hereof.

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” as defined in the recitals above.

“Subsequent Closing” and “Subsequent Closing Date” as defined in Section 2.2(b)
hereof.

“Subsidiaries” shall mean any corporation or other entity or organization,
whether incorporated or unincorporated, in which the Company owns, directly or
indirectly, any equity or other ownership interest or otherwise controls through
contract or otherwise.

“Transaction Documents” shall mean this Agreement and the Escrow Agreement.

“Transfer” shall mean any sale, transfer, assignment, conveyance, charge,
pledge, mortgage, encumbrance, hypothecation, security interest or other
disposition, or to make or effect any of the above.

“Underwriter” shall mean any entity engaged by the Company to serve as an
underwriter in connection with a registration or offering of securities referred
to in Section 5.

“Unit” shall mean five (5) Shares and a Warrant exercisable for one (1) share of
the Company’s Common Stock.

“Warrants” shall mean collectively the Common Stock purchase warrants, in the
form of Exhibit B delivered to the Investors at each Closing in accordance with
Section 2.2 hereof, which Warrants shall be exercisable immediately and for a
term of 5 years. Each Warrant shall be exercisable for shares of the Company’s
Common Stock in an amount equal to 20% of each Purchaser’s Subscription Amount,
with an exercise price equal to $1.25 per share, such exercise price and number
of shares subject to adjustment from time to time as set forth in the form of
Warrant.

“Warrant Shares” shall mean the shares of Common Stock issuable upon exercise of
the Warrants.

2.

Sale and Purchase of Units.

2.1.           Subscription for Units by Investors. Subject to the terms and
conditions of this Agreement, on the Closing Date (as hereinafter defined) each
of the Investors shall severally, and not jointly, purchase, and the Company
shall sell and issue to the Investors, the Units, in the respective amounts set
forth on the signature pages attached hereto in exchange for the Purchase Price.

2.2            Closings.

(a)     First Closing. Subject to the terms and conditions set forth in this
Agreement, the Company shall issue and sell to each Investor, and each Investor
shall, severally and not jointly, purchase from the Company on the First Closing
Date, such number of Units set forth on the signature pages attached hereto,
which will be reflected opposite such Investor’s name on Exhibit A-1 (the “First
Closing”). The date of the First Closing is hereinafter referred to as the
“First Closing Date.”

 

 
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(b)     Subsequent Closing(s). The Company agrees to issue and sell to each
Investor listed on the Subsequent Closing Schedule of Investors, and each
Investor agrees, severally and not jointly, to purchase from the Company on such
Subsequent Closing Date such number of Units set forth on the signature pages
attached hereto, which will be reflected opposite such Investor’s name on
Exhibit A-2 (a “Subsequent Closing”). There may be more than one Subsequent
Closing; provided, however, that the final Subsequent Closing shall take place
within the time periods set forth in the Private Placement Memorandum. The date
of any Subsequent Closing is hereinafter referred to as a “Subsequent Closing
Date.” Notwithstanding the foregoing, the maximum number of Shares to be sold at
the First Closing and all Subsequent Closings shall not exceed 2,300,000 in the
aggregate and the maximum number of Warrants to be sold at the First Closing and
all Subsequent Closings shall be exercisable for a maximum number of Warrant
Shares not to exceed 460,000 in the aggregate.

(c)     Closing. The First Closing and any applicable Subsequent Closings are
each referred to in this Agreement as a “Closing.” The First Closing Date and
any Subsequent Closing Dates are sometimes referred to herein as a “Closing
Date.” All Closings shall occur within the time periods set forth in the Private
Placement Memorandum at the offices of Sichenzia Ross Friedman Ference LLP,
counsel to the Placement Agent, at 61 Broadway, 32nd Floor, New York, New York
10006, or remotely via the exchange of documents and signatures.

2.3.           Closing Deliveries. At each Closing, the Company shall deliver to
the Investors, against delivery by the Investor of the Purchase Price (as
provided below), duly issued certificates representing the Shares and Warrants
registered in the name of the Investors. At each Closing, each Investor shall
deliver or cause to be delivered to the Company the Purchase Price set forth in
its counterpart signature page annexed hereto by paying United States dollars
via bank, certified or personal check which has cleared prior to the applicable
Closing Date or in immediately available funds, by wire transfer to the
following escrow account:

PNC Bank

300 Delaware Avenue

Wilmington, DE 19801

Acct Name: CSC Trust Company of Delaware, Escrow Agent for Bridgeline Digital

ABA#: 031100089

A/C#: 5605012373

OBI: FFC: Bridgeline Digital Escrow; 79-1910

Ref: Investor Name

 

3.

Representations, Warranties and Acknowledgments of the Investors.

Each Investor, severally and not jointly, represents and warrants to the Company
solely as to such Investor that:

3.1            Authorization. The execution, delivery and performance by such
Investor of the Transaction Documents to which such Investor is a party have
been duly authorized and will each constitute the valid and legally binding
obligation of such Investor, enforceable against such Investor in accordance
with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability,
relating to or affecting creditors’ rights generally.

 

 
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3.2            Purchase Entirely for Own Account. The Units and the underlying
securities to be received by such Investor hereunder will be acquired for such
Investor’s own account, not as nominee or agent, and not with a view to the
resale or distribution of any part thereof in violation of the Securities Act,
and such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the
Securities Act, without prejudice, however, to such Investor’s right at all
times to sell or otherwise dispose of all or any part of such Units and the
underlying securities in compliance with applicable federal and state securities
laws. Nothing contained herein shall be deemed a representation or warranty by
such Investor to hold the Units and the underlying securities for any period of
time. Such Investor is not a broker-dealer registered with the SEC under the
Exchange Act or an entity engaged in a business that would require it to be so
registered.

3.3.           Investment Experience. Such Investor acknowledges that the
purchase of the Units and the underlying securities is a highly speculative
investment and that it can bear the economic risk and complete loss of its
investment in the Units and the underlying securities and has such knowledge and
experience in financial or business matters such that it is capable of
evaluating the merits and risks of the investment contemplated hereby.

3.4            Disclosure of Information. Such Investor has had an opportunity
to receive all information related to the Company and the Units requested by it
and to ask questions of and receive answers from the Company regarding the
Company, its business and the terms and conditions of the offering of the Units.
Neither such inquiries nor any other due diligence investigation conducted by
such Investor shall modify, amend or affect such Investor’s right to rely on the
Company’s representations and warranties contained in this Agreement and the
Private Placement Memorandum. Such Investor acknowledges that it has received
and reviewed the Private Placement Memorandum describing the offering of the
Units, as well as copies of the Company’s SEC Filings since December 5, 2012.

3.5            Restricted Securities. Such Investor understands that the Units
and the underlying securities are characterized as “restricted securities” under
the U.S. federal securities laws since they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances.

3.6            Legends. It is understood that, except as provided below,
certificates evidencing the Shares and the Warrant Shares may bear the following
or any similar legend:

(a)     “The securities represented hereby may not be transferred unless (i)
such securities have been registered for sale pursuant to the Securities Act of
1933, as amended, (ii) such securities may be sold pursuant to an available
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, or (iii) the Company has received an opinion
of counsel reasonably satisfactory to it that such transfer may lawfully be made
without registration under the Securities Act of 1933 or qualification under
applicable state securities laws.”

(b)     If required by the authorities of any state in connection with the
issuance of sale of the Units, the legend required by such state authority.

3.7            Accredited Investor. Such Investor is an accredited investor as
defined in Rule 501(a) of Regulation D, as amended, under the Securities Act
(“Regulation D”).

3.8            No General Solicitation. Such Investor did not learn of the
investment in the Units as a result of any public advertising or general
solicitation.

 

 
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3.9            Brokers and Finders. No Investor will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or any other
Investor, for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of such
Investor.

4.

Representations and Warranties of the Company.

The Company represents, warrants and covenants to the Investors that:

4.1.           Organization; Execution, Delivery and Performance.

(a)     The Company and each of its Subsidiaries, if any, is a corporation or
other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated or organized, with full
power and authority (corporate and other) to own, lease, use and operate its
properties and to carry on its business as and where now owned, leased, used,
operated and conducted. The Company is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which its
ownership or use of property or the nature of the business conducted by it makes
such qualification necessary except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect.

(b)     (i) The Company has all requisite corporate power and authority to enter
into and perform the Transaction Documents and to consummate the transactions
contemplated hereby and thereby and to issue the Shares and the Warrants, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including without limitation,
the issuance of the Units and the underlying securities) have been duly
authorized by the Company’s Board of Directors and no further consent or
authorization of the Company, its Board of Directors, or its stockholders, is
required, (iii) each of the Transaction Documents has been duly executed and
delivered by the Company by its authorized representative, and such authorized
representative is a true and official representative with authority to sign each
such document and the other documents or certificates executed in connection
herewith and bind the Company accordingly, and (iv) each of the Transaction
Documents constitutes, and upon execution and delivery thereof by the Company
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except to the
extent limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors’ rights
and general principles of equity that restrict the availability of equitable or
legal remedies.

4.2.           Shares and Warrant Shares Duly Authorized. The Shares to be
issued to each such Investor pursuant to this Agreement and the Warrant Shares
to be issued in connection with the exercise of the Warrants, when issued and
delivered in accordance with the terms of this Agreement and the Warrants, will
be duly and validly issued and will be fully paid and nonassessable and free
from all taxes or Liens with respect to the issue thereof and shall not be
subject to preemptive rights or other similar rights of stockholders of the
Company. Subject to the accuracy of the representations and warranties of the
Investors to this Agreement, the offer and issuance by the Company of the Units
and the underlying securities is exempt from registration under the Securities
Act.

 

 
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4.3            No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby will not: (i) conflict with or
result in a violation of any provision of the Certificate of Incorporation or
By-laws or (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or
both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent,
patent license or instrument to which the Company or any of its Subsidiaries is
a party, except for possible violations, conflicts or defaults as would not,
individually or in the aggregate, have a Material Adverse Effect, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and regulations of
any self-regulatory organizations to which the Company or its securities are
subject) applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected. Neither the Company nor any of its Subsidiaries is in violation of its
Certificate of Incorporation, By-laws or other organizational documents. Neither
the Company nor any of its Subsidiaries is in default (and no event has occurred
which with notice or lapse of time or both could put the Company or any of its
Subsidiaries in default) under, and neither the Company nor any of its
Subsidiaries has taken any action or failed to take any action that would give
to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party or by which any property or assets of the Company or any
of its Subsidiaries is bound or affected, or for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses
of the Company and its Subsidiaries are not being conducted in violation of any
law, rule ordinance or regulation of any governmental entity, except for
possible violations which would not, individually or in the aggregate, have a
Material Adverse Effect. Except as required under the Securities Act, the
Exchange Act, the rules and regulations of the Nasdaq Stock Market and any
applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court, governmental agency, regulatory agency, self regulatory organization or
stock market or any third party in order for it to execute, deliver or perform
any of its obligations under this Agreement or to issue and sell the Units and
the underlying securities in accordance with the terms hereof. All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof.

4.4.           Capitalization. As of June 11, 2013, the authorized capital stock
of the Company consists of (i) 30,000,000 shares of Common Stock, of which
15,332,968 shares are issued and outstanding, 3,548,713 shares are reserved for
issuance pursuant to stock options granted under the Company’s equity
compensation plans, 274,036 shares are reserved for issuance pursuant to the
Company’s employee stock purchase plan and 267,931 shares are reserved for
issuance pursuant to warrants to purchase Common Stock, and (ii) 1,000,000
shares of preferred stock, par value $0.001 per share, of which no shares are
issued and outstanding. Except as described above and in Schedule 4.4 hereto or
in the Private Placement Memorandum, (i) there are no outstanding options,
warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for any shares of capital stock of the Company or any of its
Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is
or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale
of any of its or their securities under the Securities Act (except for the
registration rights provisions contained herein) and (iii) there are no
anti-dilution or price adjustment provisions contained in any security issued by
the Company (or in any agreement providing rights to security holders) that will
be triggered by the issuance of the Units and the underlying securities. All of
such outstanding shares of capital stock are, or upon issuance will be, duly
authorized, validly issued, fully paid and nonassessable. No shares of capital
stock of the Company are subject to preemptive rights or any other similar
rights of the stockholders of the Company or any Lien imposed through the
actions or failure to act of the Company.

 

 
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4.5.           SEC Information.

(a)     The Company has timely filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Exchange Act (all of the foregoing and all other
documents filed with the SEC prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to herein as the
“SEC Documents”). The SEC Documents have been made available to the Investors
via the SEC’s EDGAR system. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents, and none of the SEC Documents, at the time they were filed with
the SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents (“Company Financial Statements”) complied
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto. The Company
Financial Statements have been prepared in accordance with United States
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in the Company Financial
Statements, the Company has no liabilities, contingent or otherwise, other than:
(i) liabilities incurred in the ordinary course of business subsequent to March
31, 2013 (the fiscal period end of the Company’s most recently-filed periodic
report), and (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required under generally accepted accounting
principles to be reflected in such financial statements, which, individually or
in the aggregate, are not material to the financial condition or operating
results of the Company.

(b)     The shares of Common Stock are currently traded on the Nasdaq Capital
Market. Except as set forth in the SEC Documents, the Company has not  received
notice (written or oral) from Nasdaq to the effect that the Company is not in
compliance with the continued listing and maintenance requirements of such
exchange. The Company is compliance with all such listing and maintenance
requirements.

4.6            Permits; Compliance. The Company and each of its Subsidiaries is
in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the “Company Permits”), and there is
no action pending or, to the knowledge of the Company, threatened regarding
suspension or cancellation of any of the Company Permits. Neither the Company
nor any of its Subsidiaries is in conflict with, or in default or violation of,
any of the Company Permits, except for any such conflicts, defaults or
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since March 31, 2013, neither the
Company nor any of its Subsidiaries has received any notification with respect
to possible conflicts, defaults or violations of applicable laws, except for
notices relating to possible conflicts, defaults or violations, which conflicts,
defaults or violations would not have a Material Adverse Effect.

4.7            Litigation. Except as set forth in the SEC Documents, there is no
action, suit, claim, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their
respective businesses, properties or assets or their officers or directors in
their capacity as such, that would have a Material Adverse Effect. The Company
is unaware of any facts or circumstances which might give rise to any of the
foregoing. There has not been, and the the Company’s Knowledge, there is not
pending or contemplated, any investigation by the SEC involving the Company, any
of its Subsidiaries or any current or former director or executive officer of
the Company or any of its Subsidiaries.

 

 
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4.8            No Material Changes.

(a)     Since March 31, 2013, except as set forth in the SEC Documents, there
has not been:

(i)     Any material adverse change in the financial condition, operations or
business of the Company from that shown on the Company Financial Statements, or
any material transaction or commitment effected or entered into by the Company
outside of the ordinary course of business;

(ii)     Any effect, change or circumstance which has had, or could reasonably
be expected to have, a Material Adverse Effect; or

(iii)     Any incurrence of any material liability outside of the ordinary
course of business.

4.9            No General Solicitation. Neither the Company nor any person
participating on the Company’s behalf in the transactions contemplated hereby
has conducted any “general solicitation,” as such term is defined in Regulation
D promulgated under the Securities Act, with respect to any of the Units and the
underlying securities being offered hereby.

4.10          No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offers to
buy any security under circumstances that would require registration under the
Securities Act of the issuance of the Units and the underlying securities to the
Investors. The issuance of the Units to the Investors will not be integrated
with any other issuance of the Company’s securities (past, current or future)
for purposes of any stockholder approval provisions applicable to the Company or
its securities.

4.11          No Brokers. Except as set forth in Section 9.1, the Company has
taken no action which would give rise to any claim by any person for brokerage
commissions, transaction fees or similar payments relating to this Agreement or
the transactions contemplated hereby.

4.12          Internal Controls. The Company is in material compliance with the
provisions of the Sarbanes-Oxley Act of 2002 currently applicable to the
Company. The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and designed
such disclosure controls and procedures to ensure that material information
relating to the Company, including the Subsidiaries, is made known to the
certifying officers by others within those entities, particularly during the
period in which the Company’s most recently filed period report under the
Exchange Act, as the case may be, is being prepared. The Company's certifying
officers have evaluated the effectiveness of the Company's controls and
procedures as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no significant
changes in the Company's internal controls (as such term is defined in Item 308
of Regulation S-K) or, to the Company's Knowledge, in other factors that could
significantly affect the Company's internal controls. The Company maintains and
will continue to maintain a standard system of accounting established and
administered in accordance with GAAP and the applicable requirements of the
Exchange Act.

 

 
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4.13          Form D; Blue Sky Laws. The Company agrees to file a Form D with
respect to the Units and the underlying securities as required under Regulation
D and to provide a copy thereof to the Placement Agent promptly after such
filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary to qualify the Units and the
underlying securities for sale to the Investors at the applicable Closing
pursuant to this Agreement under applicable securities or “blue sky” laws of the
states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Placement Agent on
or prior to the Closing Date.

4.14          Disclosure. The Company confirms that neither it nor any other
Person acting on its behalf has provided any of the Investors or their agents or
counsel with any information that constitutes or could reasonably be expected to
constitute material, non-public information concerning the Company or any of its
Subsidiaries, other than the existence of the transactions contemplated by this
Agreement and the other Transaction Documents. The Company understands and
confirms that each of the Investors will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided
to the Investors regarding the Company and its Subsidiaries, their businesses
and the transactions contemplated hereby, including the schedules to this
Agreement, furnished by or on behalf of the Company or any of its Subsidiaries
is true and correct in all material respects and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. Each press release issued by the
Company or any of its Subsidiaries during the twelve (12) months preceding the
date of this Agreement did not at the time of release contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading. No event
or circumstance has occurred or information exists with respect to the Company
or any of its Subsidiaries or its or their business, properties, liabilities,
results of operations or financial conditions, which, under applicable law, rule
or regulation, requires public disclosure at or before the date hereof or
announcement by the Company but which has not been so publicly disclosed. The
Company acknowledges and agrees that no Investor makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3.

4.15          Intellectual Property Rights. The Company and its Subsidiaries own
or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, original works, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor (“Intellectual Property
Rights”) necessary to conduct their respective businesses as now conducted and
as presently proposed to be conducted. None of the Company’s or its
Subsidiaries’ Intellectual Property Rights have expired, terminated or been
abandoned, or are expected to expire, terminate or be abandoned, within two (2)
years from the date of this Agreement. The Company has no knowledge of any
infringement by the Company or any of its Subsidiaries of Intellectual Property
Rights of others. Except as set forth in the SEC Documents, there is no claim,
action or proceeding being made or brought, or to the Company’s Knowledge, being
threatened, against the Company or any of its Subsidiaries regarding their
Intellectual Property Rights. The Company is not aware of any facts or
circumstances which might give rise to any of the foregoing infringements or
claims, actions or proceedings. The Company and each of its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their Intellectual Property Rights, except where failure to take
such measures would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

 

 
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4.16          Tax Status. Except for occurrences that would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, the Company and each of its Subsidiaries (i) has timely made or
filed all foreign, federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject, (ii) has
timely paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company and its
Subsidiaries know of no basis for any such claim. The Company is not operated in
such a manner as to qualify as a passive foreign investment company, as defined
in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

4.17          Acknowledgement Regarding Investors’ Trading Activity. It is
understood and acknowledged by the Company that (i) following the public
disclosure of the transactions contemplated by the Transaction Documents in
accordance with the terms thereof, none of the Investors have been asked by the
Company or any of its Subsidiaries to agree, nor has any Investor agreed with
the Company or any of its Subsidiaries, to desist from effecting any
transactions in or with respect to (including, without limitation, purchasing or
selling, long and/or short) any securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold any of the
Shares for any specified term; (ii) any Investor, and counterparties in
“derivative” transactions to which any such Investor is a party, directly or
indirectly, presently may have a “short” position in the Common Stock which was
established prior to such Investor’s knowledge of the transactions contemplated
by the Transaction Documents; and (iii) each Investor shall not be deemed to
have any affiliation with or control over any arm’s length counterparty in any
“derivative” transaction. The Company further understands and acknowledges that
following the public disclosure of the transactions contemplated by the
Transaction Documents, one or more Investors may engage in hedging and/or
trading activities at various times during the period that the Units and the
underlying securities are outstanding, and such hedging and/or trading
activities, if any, can reduce the value of the existing stockholders’ equity
interest in the Company both at and after the time the hedging and/or trading
activities are being conducted. The Company acknowledges that such
aforementioned hedging and/or trading activities do not constitute a breach of
this Agreement or any other Transaction Document or any of the documents
executed in connection herewith or therewith.

4.18          Manipulation of Price. Neither the Company nor any of its
Subsidiaries has, and, to the Company’s Knowledge, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to
result in the stabilization or manipulation of the price of any security of the
Company or any of its Subsidiaries to facilitate the sale or resale of any of
the Units and the underlying securities, (ii) sold, bid for, purchased, or paid
any compensation for soliciting purchases of, any of the Units and the
underlying securities (other than the Placement Agent), or (iii) paid or agreed
to pay to any Person any compensation for soliciting another to purchase any
other securities of the Company or any of its Subsidiaries (other than the
Placement Agent).

4.19          Shell Company Status. The Company is not, and has never been, an
issuer identified in, or subject to, Rule 144(i).

 

 
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5.     Registration Rights.

5.1.           Participation in Registrations. Whenever the Company proposes to
register any of its securities under the Securities Act, whether for its own
account or for the account of another stockholder (except for the registration
of securities (A) to be offered pursuant to an employee benefit plan on Form S-8
or (B) pursuant to a registration made on Form S-4, or any successor forms then
in effect) at any time and the registration form to be used may be used for the
registration of the Registrable Securities (a “Piggyback Registration”), it will
so notify in writing all holders of Registrable Securities no later than the
earlier to occur of (i) the tenth (10th) day following the Company’s receipt of
notice of exercise of other demand registration rights, or (ii) thirty (30) days
prior to the anticipated filing date. Subject to the provisions of this
Agreement, the Company will include in the Piggyback Registration all
Registrable Securities, on a pro rata basis based upon the total number of
Registrable Securities with respect to which the Company has received written
requests for inclusion within ten (10) business days after the applicable
holder’s receipt of the Company’s notice.

5.2.           Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company,
whether or not any Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with the trading market on which the Common Stock is then listed for
trading, and (B) in compliance with applicable state securities or Blue Sky
laws, (ii) processing expenses of the Placement Agent, not to exceed $20,000
without the Company’s approval, including, but not limited to, printing
expenses, messenger, telephone and delivery expenses and customary marketing
expenses, (iii) fees and disbursements of counsel and independent public
accountants for the Company, (iv) fees and disbursements of one counsel to the
Placement Agent not to exceed $20,000, and (v) filing fees and counsel fees of
the Placement Agent if a determination is made that a FINRA Rule 5110 filing is
required to be made with respect to the Registration Statement.

5.3.           Indemnification.

(a)     Indemnification by the Company. The Company will indemnify and hold
harmless each Investor and its officers, directors, members, shareholders,
partners, representatives, employees and agents, successors and assigns, and
each other person, if any, who controls such Investor within the meaning of the
Securities Act, against any losses, obligations, claims, damages, liabilities,
contingencies, judgments, fines, penalties, charges, costs (including, without
limitation, court costs, reasonable attorneys’ fees and costs of defense and
investigation), amounts paid in settlement or expenses, joint or several,
(collectively, “Claims”) incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto, to which any of them may
become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof; (ii) any blue sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Registrable
Securities under the securities laws thereof (any such application, document or
information herein called a “Blue Sky Application”); (iii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; (iv) any violation
by the Company or its agents of any rule or regulation promulgated under the
Securities Act applicable to the Company or its agents and relating to action or
inaction required of the Company in connection with such registration; or (v)
any failure to register or qualify the Registrable Securities included in any
such Registration Statement in any state where the Company or its agents has
affirmatively undertaken or agreed in writing that the Company will undertake
such registration or qualification on an Investor’s behalf and will reimburse
such Investor, and each such officer, director or member and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Claim or action;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such
Investor or any such controlling person in writing specifically for use in such
Registration Statement or Prospectus.

 

 
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(b)     Indemnification by the Investors. Each Investor agrees, severally but
not jointly, to indemnify and hold harmless, to the fullest extent permitted by
law, the Company, its directors, officers, employees, stockholders, partner,
representatives and each person who controls the Company (within the meaning of
the Securities Act) against any Claims resulting from any untrue statement of a
material fact or any omission of a material fact required to be stated in the
Registration Statement or Prospectus or preliminary prospectus or amendment or
supplement thereto or necessary to make the statements therein not misleading,
to the extent, but only to the extent that such untrue statement or omission is
contained in any information furnished in writing by such Investor to the
Company specifically for inclusion in such Registration Statement or Prospectus
or amendment or supplement thereto. In no event shall the liability of an
Investor be greater in amount than the dollar amount of the proceeds (net of all
expense paid by such Investor in connection with any claim relating to this
Section 5.3 and the amount of any damages such Investor has otherwise been
required to pay by reason of such untrue statement or omission) received by such
Investor upon the sale of the Registrable Securities included in the
Registration Statement giving rise to such indemnification obligation.

(c)     Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim or employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. No indemnifying party
will, except with the consent of the indemnified party, which consent shall not
be unreasonably withheld or delayed, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation.

(d)     Contribution. If for any reason the indemnification provided for in the
preceding paragraphs (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless, other than as expressly specified therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such Claim in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Securities Act shall be entitled to contribution from any person
not guilty of such fraudulent misrepresentation. In no event shall the
contribution obligation of a holder of Registrable Securities be greater in
amount than the dollar amount of the proceeds (net of all expenses paid by such
holder in connection with any claim relating to this Section 5.3 and the amount
of any damages such holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission) received by
it upon the sale of the Registrable Securities giving rise to such contribution
obligation.

 

 
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5.4.           Cooperation by Investor. Each Investor shall furnish to the
Company or the Underwriter, as applicable, such information regarding the
Investor and the distribution proposed by it as the Company may reasonably
request in connection with any registration or offering referred to in this
Section 5. Each Investor shall cooperate as reasonably requested by the Company
in connection with the preparation of the registration statement with respect to
such registration, and for so long as the Company is obligated to file and keep
effective such registration statement, shall provide to the Company, in writing,
for use in the registration statement, all such information regarding the
Investor and its plan of distribution of the Shares included in such
registration as may be reasonably necessary to enable the Company to prepare
such registration statement, to maintain the currency and effectiveness thereof
and otherwise to comply with all applicable requirements of law in connection
therewith.

6.     Transfer Restrictions.

6.1.           Transfer or Resale. Each Investor understands that:

(i)     Except as provided in the registration rights provisions set forth
above, the sale or resale of all or any portion of the Shares and the Warrant
Shares has not been and is not being registered under the Securities Act or any
applicable state securities laws, and all or any portion of the Shares and the
Warrant Shares may not be transferred unless:

(A)     the Shares and the Warrant Shares are sold pursuant to an effective
registration statement under the Securities Act;

(B)     the Investor shall have delivered to the Company, at the cost of the
Company, a customary opinion of counsel that shall be in form, substance and
scope reasonably acceptable to the Company, to the effect that the Shares and
the Warrant Shares to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration;

(C)     the Shares and the Warrant Shares are sold or transferred to an
“affiliate” (as defined in Rule 144 promulgated under the Securities Act (or a
successor rule) (“Rule 144”)) of the Investor who agrees to sell or otherwise
transfer the Shares and the Warrant Shares only in accordance with this Section
6.1 and who is an Accredited Investor;

(D)     the Shares and the Warrant Shares are sold pursuant to Rule 144; or

(E)     the Shares and the Warrant Shares are sold pursuant to Regulation S
under the Securities Act (or a successor rule) (“Regulation S”);

and, in each case, the Investor shall have delivered to the Company, at the cost
of the Company, a customary opinion of counsel, in form, substance and scope
reasonably acceptable to the Company. Notwithstanding the foregoing or anything
else contained herein to the contrary, the Shares and the Warrant Shares may be
pledged as collateral in connection with a bona fide margin account or other
lending arrangement.

 

 
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6.2            Transfer Agent Instructions. If an Investor provides the Company
with a customary opinion of counsel, that shall be in form, substance and scope
reasonably acceptable to such counsel, to the effect that a public sale or
transfer of such Shares and Warrant Shares may be made without registration
under the Securities Act and such sale or transfer is effected, the Company
shall permit the transfer and promptly instruct its transfer agent to issue one
or more certificates, free from restrictive legend, in such name and in such
denominations as specified by such Investor. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the
Investors, by vitiating the intent and purpose of the transactions contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 6.2 may be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions
of this Section, that the Investors shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring
immediate transfer, without the necessity of showing economic loss and without
any bond or other security being required.

7.     Conditions to Closing of the Investors.

The obligation of each Investor hereunder to purchase the Units at the Closing
is subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for each Investor’s
sole benefit and may be waived by such Investor at any time in its sole
discretion by providing the Company with prior written notice thereof:

 

7.1            Representations, Warranties and Covenants. The representations
and warranties of the Company shall be true and correct in all material respects
as of the date when made and as of the Closing Date as though originally made at
that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct in all material respects as of such date)
and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such
Investor shall have received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by such Investor in
the form reasonably acceptable to such Investor.

 

7.2            Consents. The Company shall have obtained all governmental,
regulatory or third party consents and approvals, if any, necessary for the sale
of the Units.

 

7.3            Delivery by Company. The Company shall have duly executed and
delivered to such Investor (A) each of the other Transaction Documents and (B)
an instruction letter to the Company’s transfer agent regarding the issuance of
the Units in the number as is set forth on the signature page hereby being
purchased by such Investor at the Closing pursuant to this Agreement.

 

7.4            Legal Opinion. Such Investor shall have received the opinion of
Morse, Barnes-Brown & Pendleton, P.C., the Company’s counsel, dated as of the
Closing Date, in the form reasonably acceptable to such Investor.

 

7.5            Listing of Shares. The Company shall have obtained approval of
the NASDAQ Stock Market to list or designate for quotation (as the case may be)
the Shares and the Warrant Shares.

 

7.6            No Material Adverse Effect. Since the date of first execution of
this Agreement, no event or series of events shall have occurred that reasonably
would have or result in a Material Adverse Effect.

 

7.7            No Prohibition. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.

 

 

 
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7.8            Other Documents. The Company shall have delivered to such
Investor such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as such Investor or its counsel may
reasonably request.

8.     Conditions to Closing of the Company.

The obligations of the Company to effect the transactions contemplated by this
Agreement with each Investor are subject to the fulfillment at or prior to each
Closing Date of the conditions listed below.

8.1.           Representations and Warranties. The representations and
warranties made by such Investor in Section 3 shall be true and correct in all
material respects at the time of Closing as if made on and as of such date.

8.2.           Corporate Proceedings. All corporate and other proceedings
required to be undertaken by such Investor in connection with the transactions
contemplated hereby shall have occurred and all documents and instruments
incident to such proceedings shall be reasonably satisfactory in substance and
form to the Company.

9.     Miscellaneous.

9.1.           Compensation of Placement Agent. The Investor acknowledges that
it is aware that the Placement Agent will receive from the Company, in
consideration for its services as financial advisor and placement agent in
respect of the transactions contemplated hereby, (a) a commission success fee
equal to 8% of the Purchase Price of the Units sold at each Closing, payable in
cash, (b) an expense allowance, which shall include reimbursement of legal
expenses incurred in connection with the transactions contemplated hereby, not
to exceed $40,000 without the Company’s approval, payable in cash, and
(c) five-year warrants to purchase such number of shares of the Company’s Common
Stock equal to ten percent (10%) of the number of Shares sold in the Offering,
at an exercise price per share equal to the closing price of the Company’s
common stock on the First Closing Date.

9.2.           Notices. All notices, requests, demands and other communications
provided in connection with this Agreement shall be in writing and shall be
deemed to have been duly given at the time when hand delivered, delivered by
express courier, or sent by facsimile (with receipt confirmed by the sender’s
transmitting device) in accordance with the contact information provided below
or such other contact information as the parties may have duly provided by
notice.

The Company:

Bridgeline Digital, Inc.

80 Blanchard Road

Burlington, Massachusetts 01803

Telephone:    (781) 376-5555

Facsimile:       (781) 376-5033

Attention:      Mr. Thomas L. Massie,
President and Chief Executive Officer

With a copy to:

Morse, Barnes-Brown & Pendleton, P.C.

CityPoint

230 Third Avenue, 4th Floor

Waltham, Massachusetts 02451

Telephone:     (781) 622-5930

Facsimile:        (781) 622-5933

Attention:        Joseph C. Marrow, Esq.

 

 

 
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The Investors:

As per the contact information provided on the signature pages hereof.

Taglich Brothers, Inc.:

Taglich Brothers, Inc.

275 Madison Avenue, Suite 1618

New York, NY 10016

Telephone:   (212) 661-6886

Facsimile:      (212) 661-6824

Attention:     Robert C. Schroeder

                       Vice President, Investment Banking

With a copy to: 

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, New York 10006

Telephone:      (212) 930-9700

Facsimile:        (212) 930-9725

Attention:       Marc Ross, Esq.

 

9.3            Survival of Representations and Warranties. Each party hereto
covenants and agrees that the representations and warranties of such party
contained in this Agreement shall survive the Closing. Each Investor shall be
responsible only for its own representations, warranties, agreements and
covenants hereunder.

9.4            Indemnification.

(a)     The Company agrees to indemnify and hold harmless each Investor and its
Affiliates and their respective directors, officers, employees and agents from
and against any and all losses, claims, damages, liabilities and expenses
(including without limitation reasonable attorney fees and disbursements and
other expenses incurred in connection with investigating, preparing or defending
any action, claim or proceeding, pending or threatened and the costs of
enforcement thereof) (collectively, “Losses”) to which such Person may become
subject as a result of any breach of representation, warranty, covenant or
agreement made by or to be performed on the part of the Company under the
Transaction Documents, and will reimburse any such Person for all such amounts
as they are incurred by such Person.

(b)     Promptly after receipt by any Investor (the “Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 9.4, such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person, and shall assume the payment of all fees and
expenses; provided, however, that the failure of any Indemnified Person so to
notify the Company shall not relieve the Company of its obligations hereunder
except to the extent that the Company is materially prejudiced by such failure
to notify. In any such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless: (i) the Company and the
Indemnified Person shall have mutually agreed to the retention of such counsel;
or (ii) in the reasonable judgment of counsel to such Indemnified Person
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. The Company shall not be
liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent, or if there be a final judgment for the plaintiff, the Company
shall indemnify and hold harmless such Indemnified Person from and against any
loss or liability (to the extent stated above) by reason of such settlement or
judgment. Without the prior written consent of the Indemnified Person, which
consent shall not be unreasonably withheld, the Company shall not effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Person from all liability arising out
of such proceeding.

 

 
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9.5.           Entire Agreement. This Agreement contains the entire agreement
between the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter contained herein.

9.6            Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and, except for the Placement Agent and other registered
broker-dealers, if any, who are specifically agreed to be and acknowledged by
each party as third party beneficiaries hereof, is not for the benefit of, nor
may any provision hereof be enforced by, any other person.

9.7.            Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor any Investor shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, but subject to the provisions of Section 6.1
hereof, any Investor may, without the consent of the Company, assign its rights
hereunder to any person that purchases Shares in a private transaction from an
Investor or to any of its “affiliates,” as that term is defined under the 1934
Act.

9.8.            Public Disclosures. The Company shall (x) on or before 8:30
a.m., New York time, on the first (1st) Business Day after the date of this
Agreement, (x) issue a press release (the “Press Release”) reasonably acceptable
to the Investors disclosing all the material terms of the transactions
contemplated by the Transaction Documents and (y) on or before 8:30 a.m., New
York time, within three (3) Business Days after the date of this Agreement, file
a Current Report on Form 8-K describing all the material terms of the
transactions contemplated by the Transaction Documents in the form required by
the 1934 Act and attaching all the material Transaction Documents (including,
without limitation, this Agreement (and all schedules to this Agreement)
(including all attachments, the “8-K Filing”). From and after the issuance of
the Press Release, the Company shall have disclosed all material, non-public
information (if any) delivered to any of the Investors by the Company in
connection with the transactions contemplated by the Transaction Documents.
Neither the Company nor any Investor shall issue any press releases or any other
public statements with respect to the transactions contemplated hereby;
provided, however, the Company shall be entitled, without the prior approval of
any Investor, to make the Press Release and any other press release or other
public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations (provided that in the case of clause
(i) each Investor shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release). Without the
prior written consent of the applicable Investor (which may be granted or
withheld in such Investor’s sole discretion), the Company shall not disclose the
name of such Investor in any filing (other than the 8-K Filing, any Registration
Statement registering the Shares and the Warrant Shares and any other filing as
is required by applicable law and regulations), announcement, release or
otherwise.

9.9.            Binding Effect; Benefits. This Agreement and all the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns; nothing in this Agreement,
expressed or implied, is intended to confer on any persons other than the
parties hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.

 

 
18

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9.10.          Amendment; Waivers. All modifications, amendments or waivers to
this Agreement shall require the written consent of both the Company and a
majority-in-interest of the Investors (based on the number of Shares purchased
hereunder).

9.11.          Applicable Law; Disputes. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the conflict of law provisions thereof, and the parties hereto
irrevocably submit to the exclusive jurisdiction of the United States District
Court for the Southern District of New York, or, if jurisdiction in such court
is lacking, the Supreme Court of the State of New York, New York County, in
respect of any dispute or matter arising out of or connected with this Agreement

9.12.          Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and shall execute and
deliver all such other agreements, certificates, instruments and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

9.13.          Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile or by e-mail delivery of a “.pdf” format data
file, which shall be deemed an original.

9.14            Independent Nature of Investors. The obligations of each
Investor under this Agreement or other transaction document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under this Agreement or any other transaction document. Each Investor
shall be responsible only for its own representations, warranties, agreements
and covenants hereunder. The decision of each Investor to purchase Units
pursuant to this Agreement has been made by such Investor independently of any
other Investor and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company which may have been made or given by any other Investor
or by any agent or employee of any other Investor, and no Investor or any of its
agents or employees shall have any liability to any other Investor (or any other
person) relating to or arising from any such information, materials, statements
or opinions. Nothing contained herein or in any other transaction document, and
no action taken by any Investor pursuant hereto or thereto, shall be deemed to
constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement. Except as otherwise provided in
this Agreement or any other transaction document, each Investor shall be
entitled to independently protect and enforce its rights arising out of this
Agreement or out of the other transaction documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. Each Investor has been represented by its own
separate legal counsel in connection with the transactions contemplated hereby
and acknowledge and understand that Sichenzia Ross Friedman Ference LLP has
served as counsel to the Placement Agent only.

 

[SIGNATURE PAGES IMMEDIATELY FOLLOW]

 

 

 
19

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IN WITNESS WHEREOF, the undersigned Investors and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first above
written.

 

 

 

 

BRIDGELINE DIGITAL, INC.

 
 

By:/s/Michael D. Prinn                                       
Michael D. Prinn
Executive Vice President and Chief Financial Officer

 

 

 

INVESTORS:

 

The Investors executing the Signature Page in the form attached hereto as Annex
A and delivering the same to the Company or its agents shall be deemed to have
executed this Agreement and agreed to the terms hereof.

 

 

 

 
20

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Schedule 4.4

 

Capitalization

 

Certain stockholders that acquired shares of the Company’s Common Stock in
connection with the sale of their businesses to the Company were granted
“piggyback” registration rights such that if the Company registers any
securities for public sale for the benefit of any member of the Company’s
management team or any stockholder that acquired their shares through the sale
of their business to the Company, such stockholders will have the right to
include their shares in a registration statement. In connection with that
certain private placement dated October 29, 2010, the Company issued 1,000,000
shares of Common Stock to investors (the “October 2010 Private Placement”). In
connection with the October 2010 Private Placement, the Company granted
“piggyback” registration rights to investors in such October 2010 Private
Placement. In connection with that certain private placement dated May 31, 2012,
the Company issued 2,173,913 shares of Common Stock to investors (the “May 2012
Private Placement”). In connection with the May 2012 Private Placement, the
Company granted “piggyback” registration rights to investors in such May 2012
Private Placement.

 

On or about October 15, 2010, the Company issued Warrants to Purchase Common
Stock exercisable for up to 50,000 shares of Common Stock. The Warrants to
Purchase Common Stock terminate on or about October 15, 2015. As of the Closing,
Warrants to Purchase Common Stock exercisable for 50,000 shares remain
outstanding and unexercised. The Warrants to Purchase Common Stock were granted
at exercise prices of $1.00 (25,000 shares) and $2.00 (25,000 shares) per share.

 

On or about May 31, 2012, the Company issued Warrants to Purchase Common Stock
exercisable for up to 217,391 shares of Common Stock. The Warrants to Purchase
Common Stock terminate on or about May 31, 2017. As of the Closing, Warrants to
Purchase Common Stock exercisable for 217,931 shares remain outstanding and
unexercised. The Warrants to Purchase Common Stock were granted at an exercise
price of $1.40 per share.

 

 

 
21

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Annex A

Securities Purchase Agreement

Investor Counterpart Signature Page

 

The undersigned, desiring to: (i) enter into this Securities Purchase Agreement
dated as of June 19, 2013 (the “Agreement”), with the undersigned, Bridgeline
Digital, Inc., a Delaware corporation (the “Company”), in or substantially in
the form furnished to the undersigned and (ii) purchase the Units as set forth
below, hereby agrees to purchase such Units from the Company as of the Closing
and further agrees to join the Agreement as a party thereto, with all the rights
and privileges appertaining thereto, and to be bound in all respects by the
terms and conditions thereof. The undersigned specifically acknowledges having
read the representations in the Agreement section entitled “Representations,
Warranties and Acknowledgments of the Investors,” and hereby represents that the
statements contained therein are complete and accurate with respect to the
undersigned as an Investor.

Name of Investor:

If an entity:

Print Name of Entity:

 

                                                                                                                     

By:                                                                                                               

Name:

Title:

 

If an individual:

 

Print Name:                                                            
                                    

 

Signature:                                                                                                   

If joint individuals:

 

Print
Name:                                                                                             
   

 

Signature:                                               
                                                   

All Investors:

 

Address:                                                                                                     

                                                                                                                     
Telephone
No.:                                                                                        
 

Facsimile
No.:                                                                                          
  

Email
Address:                                                                                       
   

The Investor hereby elects to purchase ____________ Shares and Warrants
exercisable for ________ Warrant Shares (to be completed by Investor) at a
purchase price of $5.00 per Unit under the Securities Purchase Agreement at a
total Purchase Price of $__________ (to be completed by Investor).

 

 

 
22

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Exhibit A-1

 

First Closing held on June 19, 2013

 

Schedule of Investors

 

Investor

Shares

Warrants

Purchase Price

                         

Blaise A. Aguirre

17 Winthrop Road

Lexington, MA 02421

    22,000     4,400   $ 22,000

AJAMB, LLC

22 Woodhaven Drive

New City, NY 10956

    83,000     16,600   $ 83,000

Alvin Fund LLC

60 Madison Avenue

New York, NY 10010

    250,000     50,000   $ 250,000

Gary Arnold and Patricia Arnold, Tenants-in-Common

9800 Noriega Dr.

Pensacola, FL 32514

    50,000     10,000   $ 50,000

John R Bertsch Trust Dtd 12/4/2004 John R Bertsch Trustee

644 Cascade Hill

Grand Rapids, MI 49546

    115,000     23,000   $ 115,000

Big Red Investments Partnership Ltd

Attn: James J. Martin III, Manager

5025 W. Lemon St., Suite 200

Tampa, FL 33609

    25,000     5,000   $ 25,000

Jeremy Bond

48 Par-La

Hamilton

BERMUDA

    70,000     14,000   $ 70,000

Alvin R. Bonnette, Trustee of the Alvin R. Bonnette Rev Trust UA dtd 1/3185

181 East

Nashua, NH 03062

    20,000     4,000   $ 20,000

 

 

 

 
23

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Broms Financial LLC

Attn: Richard A. Broms, President

785 Crandon Blvd. #PH4

Key Biscayne, FL 33149

    65,000     13,000   $ 65,000

Angus Bruce & Lauralee Bruce, JTWROS

2789 Deerfield Road

Sag Harbor, NY 11963

    60,000     12,000   $ 60,000

Phillip L. Burnett & Allyson Burnett JTWROS

3569 San Carlos Drive, #1603

St. James City, FL 33956

    10,000     2,000   $ 10,000

Debruyn Holdings Inc.

P.O. Box 1207

Manhattan, KS 66505

    15,000     3,000   $ 15,000

Robert L. Debruyn & Tracey H. Debruyn, Trustees of the Robert L. Debruyn Trust
UAD 10/5/94

2030 Pierre Street

Manhattan, KS 66502

    15,000     3,000   $ 15,000

Tracey H. Debruyn & Robert L. Debruyn, Trustees of the Tracey H. Debruyn Trust
UAD 10/5/94

2030 Pierre Street

Manhattan, KS 66502

    15,000     3,000   $ 15,000

Frances DeLuca & Guerino DeLuca, Trustees of the Revocable Living Trust of
Frances DeLuca UAD 10/089/01

43675 Wabeer

Northville, MI 48168

    80,000     16,000   $ 80,000

Steven Farber

9 Daniel Drive

Glen Cove, NY 11542

    10,000     2,000   $ 10,000

Arthur H. Finnel & Elsa V. Finnel, Trustees the Arthur H. Finnel Living Trust
UAD 01/10/13

4 Cove Court

Moorestown, NJ 08057

    5,000     1,000   $ 5,000

 

 

 

 
24

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Dennis Fortin

26 Brookside Drive

Easton, CT 06612

    132,000     26,400   $ 132,000

Gary A. Hafner and Leeann Hafner Jt Ten

P.O. Box 406

Silverton, OR 97381

    20,000     4,000   $ 20,000

Lawrence Kane

P.O. Box 484

East Hampton, NY 11937

    10,000     2,000   $ 10,000

William N. Kehl

208 Crescent Avenue

Greenville, SC 29605

    15,000     3,000   $ 15,000

Samuel E. Leonard, Trustee of the

Samuel E. Leonard Trust UAD 2-5-90

P.O. Box 623

Atascadero, CA 93423

    10,000     2,000   $ 10,000

Andrew K. Light

10 W. Market St., Ste, 1500

Indianapolis, IN 46204

    50,000     10,000   $ 50,000

Roger W. Lunstra and Joyce M. Lunstra Living Trust dtd 6/15/07, Roger W. Lunstra
and Joyce M. Lunstra Co-Ttees

47636 Surrell Street

Sioux Falls, SD 57104

    20,000     4,000   $ 20,000

Robert W Main Ttee under The Robert W Main Trust Dtd 9/7/05

3607 South 14th Street

Alexandra, VA 22302

    20,000     4,000   $ 20,000

Jacqueline M. McCulloch and Donald B. McCulloch, Co-Trustees of the Jacqueline
M. McCulloch Trust U/A/ dtd 3/16/77

    20,000     4,000   $ 20,000

 

 

 

 
25

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Donald V. Moline

720 Old Howard Mill Road

Duluth, MN 55804

    10,000     2,000   $ 10,000

Richard Molinsky

51 Lords Highway

Weston, CT 06883

    50,000     10,000   $ 50,000

Dr. Richard V Nuttal & Annetta Mets Nuttall JTWROS

9 Airy Hall Court

Columbia, SC 29209

    10,000     2,000   $ 10,000

David A. Random

720 State Street

Portsmouth, NH 03801

    50,000     10,000   $ 50,000

Ronald A. Rayson

3800 Keowee Avenue

Knoxville, TN 37919

    10,000     2,000   $ 10,000

John J. Reisch, Jr., Trustee of the John J. Resich , Jr. Ret Trust

840 West 9th Street

San Pedro, CA 90731

    15,000     3,000   $ 15,000

S2 Partners LP

8014 Olson M

Golden Valley, MN 55427

    100,000     20,000   $ 100,000

Scot Holding Inc

Attn: Patrick Gordon, President

110 Mesa Park Drive, Suite 100

El Paso, TX 79912

    10,000     2,000   $ 10,000

Paul Seid

22 Woodhaven Drive

New City, NY 10956

    83,000     16,600   $ 83,000

 

 

 

 
26

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Shadow Capital LLC

Attn: B. Kent Garlinghouse, Manager

3601 SW 29th Street, Suite 250

Topeka, KS 66614

    150,000     30,000   $ 150,000

Valdemar Skov

1241 Old

Waldoboro, MA 04572

    10,000     2,000   $ 10,000

Michael N. Taglich

c/o Taglich Brothers

790 New York Avenue

Huntington, NY 11743

    250,000     50,000   $ 250,000

Robert F. Taglich

c/o Taglich Brothers

790 New York Avenue

Huntington, NY 11743

    250,000     50,000   $ 250,000

Three Treasures LP

9702 Synott

Houston, TX 77083

    25,000     5,000   $ 25,000

Robert D. Vanroijen, Trustee of the Robert D. Vanroijen Jr. Trust UA dtd
12-14-82

Tox Financial

Winter Park, FL 32789

    25,000     5,000   $ 25,000

Pamela M. Walsh and Brian P. Wash Joint Tenants

2 Hilltop Lane

East Hampton, NY 11937

    20,000     4,000   $ 20,000

Tad Wilson

877 Maple Drive

Spencer, IN 47460

    25,000     5,000   $ 25,000

FIRST CLOSING TOTAL

    2,300,000     460,000   $ 2,300,000.00

 

 

 
27

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Exhibit A-2

 

Subsequent Closing held on              , 2013

Schedule of Investors

 

 

Investor

Shares

Warrants

Purchase Price

                                                                               
       

SECOND CLOSING TOTAL

0

   

 

 

 

 

 
28

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Exhibit B

 

Form of Warrant

BRIDGELINE DIGITAL, INC.

Warrant No. IA-2013-__

WARRANT TO PURCHASE COMMON STOCK

VOID AFTER 5:00 P.M., EASTERN TIME,
ON THE EXPIRATION DATE

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR WITHOUT DELIVERING AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

FOR VALUE RECEIVED, Bridgeline Digital, Inc., a Delaware corporation (the
“Company”), hereby agrees to sell upon the terms and on the conditions
hereinafter set forth, at any time commencing on the date hereof but no later
than 5:00 p.m., Eastern Time, on June 19, 2018 (the “Expiration Date”), to
____________ _________, or his, her or its registered assigns (the “Holder”),
under the terms as hereinafter set forth, _____________________________
(_________) fully paid and non-assessable shares of the Company’s Common Stock,
par value $0.001 per share (the “Common Stock”), at a purchase price per share
of $1.25 (the “Warrant Price”), pursuant to the terms and conditions set forth
in this warrant (this “Warrant”). The number of shares of Common Stock issued
upon exercise of this Warrant (“Warrant Shares”) and the Warrant Price are
subject to adjustment in certain events as hereinafter set forth.

This Warrant is issued to the placement agent for services rendered in
connection with the Company’s Private Placement Memorandum dated June 11, 2013,
as the same may be amended from time to time.

1.              Exercise of Warrant.

(a)     The Holder may exercise this Warrant according to the terms and
conditions set forth herein by delivering to the Company (whether via facsimile
or otherwise) at any time prior to the Expiration Date (such date of exercise,
the “Exercise Date”) (i) the Exercise Notice attached hereto as Exhibit A (the
“Exercise Notice”) (having then been duly executed by the Holder), and (ii)
unless the Warrant is being exercised pursuant to a Cashless Exercise (as
defined below), cash, a certified check, a bank draft or wire transfer in
payment of the purchase price, in lawful money of the United States of America,
for the number of Warrant Shares specified in the Exercise Form. The Holder
shall not be required to deliver the original of this Warrant in order to effect
an exercise hereunder. Execution and delivery of an Exercise Form with respect
to less than all of the Warrant Shares shall have the same effect as
cancellation of the original of this Warrant and issuance of a new Warrant
evidencing the right to purchase the remaining number of Warrant Shares.
Execution and delivery of an Exercise Form for all of the then-remaining Warrant
Shares shall have the same effect as cancellation of the original of this
Warrant after delivery of the Warrant Shares in accordance with the terms
hereof.

 

 
29

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(b)     On or before the third (3rd) Trading Day following the later of (i) the
date on which the Company has received an Exercise Notice or (ii) the date on
which the Company receives payment of the exercise price (which shall not apply
for cashless exercises), the Company shall transmit an acknowledgment of
confirmation of receipt of such Exercise Notice to the Holder and the Company’s
transfer agent (the “Transfer Agent”). On or before the fifth (5th) Trading Day
following the later of (i) the date on which the Company has received such
Exercise Notice or (ii) the date on which the Company receives the exercise
price (such later date, the “Delivery Date”), the Company shall (X) provided
that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the Holder,
credit such aggregate number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise to the Holder’s or its designee’s balance
account with DTC through its Deposit/ Withdrawal at Custodian system, or (Y) if
the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver to the Holder or, at the Holder’s
instruction pursuant to the Exercise Notice, the Holder’s agent or designee, in
each case, sent by reputable overnight courier to the address as specified in
the applicable Exercise Notice, a certificate, registered in the Company’s share
register in the name of the Holder or its designee (as indicated in the
applicable Exercise Notice), for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon the later of (i) the date
on which the Company has received the Exercise Notice or (ii) the date on which
the Company receives the exercise price, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date
such Warrant Shares are credited to the Holder’s DTC account or the date of
delivery of the certificates evidencing such Warrant Shares (as the case may
be). Notwithstanding the foregoing, if a Holder has not received certificates
for all Warrant Shares prior to the tenth (10th) business day after the Delivery
Date with respect to an exercise of any portion of this Warrant for any reason,
then Holder shall have the right, but not the obligation, at any time thereafter
until receipt of all the Warrant Shares relating to the Exercise Notice, to
rescind the Exercise Notice by providing notice to the Company (the “Rescission
Notice”). Upon delivery of a Rescission Notice to the Company, the Holder shall
regain the rights of a Holder of this Warrant with respect to such unexercised
portions of this Warrant and the Company shall, as soon as practicable, return
such unexercised Warrant to the Holder or, if the Warrant has not been
surrendered, adjust its records to reflect that such portion of this Warrant has
not been exercised.

(c)     This Warrant may be exercised in whole or in part so long as any
exercise in part hereof would not involve the issuance of fractional Warrant
Shares. If exercised in part, at the request of the Holder and upon delivery of
the original Warrant, the Company shall deliver to the Holder a new Warrant,
identical in form to this Warrant, in the name of the Holder, evidencing the
right to purchase the number of Warrant Shares as to which this Warrant has not
been exercised, which new Warrant shall be signed by the President or Chief
Executive Officer of the Company. The term Warrant as used herein shall include
any subsequent Warrant issued as provided herein.

(d)     Notwithstanding any provisions herein to the contrary, in lieu of
exercising this Warrant by cash payment in the manner set forth in Section 1(a),
the Holder may, in its sole discretion, elect to exercise this Warrant, or a
portion hereof, and to pay for the Warrant Stock by way of cashless exercise (a
“Cashless Exercise”). If the Holder wishes to effect a cashless exercise, the
Holder shall deliver the Exercise Notice duly executed by such Holder or by such
Holder’s duly authorized attorney, at the principal office of the Company, or at
such other office or agency as the Company may designate in writing prior to the
date of such exercise, in which event the Company shall issue to the Registered
Holder the number of Warrant Shares computed according to the following
equation:

 

[pic1.jpg]

 

 
30

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; where

X = the number of Warrant Shares to be issued to the Registered Holder.

Y = the Warrant Shares purchasable under this Warrant or, if only a portion of
the Warrant is being exercised, the portion of the Warrant Shares being
exercised.

A = the Fair Market Value (defined below) of one share of Common Stock on the
Exercise Date.

B = the Exercise Price (as adjusted pursuant to the provisions of this Warrant).

For purposes of this Section 1(d), the “Fair Market Value” of one share of
Common Stock on the Exercise Date shall have one of the following meanings:

(1)     if the Common Stock is traded on a national securities exchange
registered with the Securities Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended, the Fair Market Value shall be deemed to be
the average of the Closing Prices over a five trading day period ending on the
Exercise Date. For the purposes of this Warrant, “Closing Price” means the
closing sale price of one share of Common Stock, as reported by Bloomberg; or

(2)     if the Common Stock is not traded on a national securities exchange, the
Fair Market Value shall be deemed to be the average of the closing bid prices
price over the ten (10) trading day period ending on the Exercise Date; or

(3)     if neither (1) nor (2) is applicable, the Fair Market Value shall be at
the commercially reasonable price per share which the Company could obtain on
the Exercise Date from a willing buyer (not a current employee or director) for
shares of Common Stock sold by the Company, from authorized but unissued shares,
as determined in good faith by the Company’s Board of Directors.

For illustration purposes only, if this Warrant entitles the Holder the right to
purchase 100,000 Warrant Shares and the Holder were to exercise this Warrant for
50,000 Warrant Shares at a time when the Exercise Price per share was $1.00 and
the Fair Market Value of each share of Common Stock was $2.00 on the Exercise
Date, as applicable, the cashless exercise calculation would be as follows:

X = 50,000 ($2.00-$1.00)

2.00

X = 25,000

Therefore, the number of Warrant Shares to be issued to the Holder after giving
effect to the cashless exercise would be 25,000 Warrant Shares and the Company
would issue the Holder a new Warrant to purchase 50,000 Warrant Shares,
reflecting the portion of this Warrant not exercised by the Holder. For purposes
of Rule 144 promulgated under the Securities Act of 1933, as amended (the
“Securities Act”), it is intended, understood and acknowledged that the Warrant
Shares issued in the cashless exercise transaction described pursuant to Section
1(c) shall be deemed to have been acquired by the Holder, and the holding period
for the shares of Warrant Shares shall be deemed to have commenced, on the date
of the Holder’s acquisition of the Warrant.

(e)     No fractional Warrant Shares or scrip representing fractional Warrant
Shares shall be issued upon the exercise of this Warrant. The Company shall pay
cash in lieu of such fractional Warrant Shares. The price of a fractional
Warrant Share shall equal the product of (i) the closing price of the Common
Stock on the exchange or market on which the Common Stock is then traded (if the
Common Stock is not then publicly traded, then upon the Fair Market Value per
share of the Common Stock (as determined by the Company’s Board of Directors)),
and (ii) the applicable fraction.

 

 
31

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(f)     Except as provided in Section 4 hereof, the Company shall pay any and
all documentary stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of Warrant Shares on exercise of this Warrant.

(g)     The Company will not close its stockholder books or records in any
manner which prevents the timely exercise of this Warrant, pursuant to the terms
hereof.

2.              Disposition of Warrant Shares and Warrant.

(a)     The Holder hereby acknowledges that: (i) this Warrant and any Warrant
Shares purchased pursuant hereto are not being registered (A) under the
Securities Act of 1933 (the “Act”) on the ground that the issuance of this
Warrant is exempt from registration under Section 4(2) of the Act as not
involving any public offering, or (B) under any applicable state securities law
because the issuance of this Warrant does not involve any public offering; and
(ii) that the Company’s reliance on the registration exemption under Section
4(2) of the Act and under applicable state securities laws is predicated in part
on the representations hereby made to the Company by the Holder. The Holder
represents and warrants that he, she or it is acquiring this Warrant and will
acquire Warrant Shares for investment for his, her or its own account, with no
present intention of dividing his, her or its participation with others or
reselling or otherwise distributing this Warrant or Warrant Shares.

(b)     The Holder hereby agrees that he, she or it will not sell, transfer,
pledge or otherwise dispose of (collectively, “Transfer”) all or any part of
this Warrant and/or Warrant Shares unless and until he, she or it shall have
first obtained an opinion, reasonably satisfactory to counsel for the Company,
of counsel (competent in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed Transfer
may be made without registration under the Act and without registration or
qualification under any state law.

(c)     If, at the time of issuance of Warrant Shares, no registration statement
is in effect with respect to such shares under applicable provisions of the Act
and the Warrant Shares may not be sold pursuant to Rule 144 of the Act, the
Company may, at its election, require that any stock certificate evidencing
Warrant Shares shall bear legends reading substantially as follows:

“THE SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THE SHARES REPRESENTED BY
THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT
PURSUANT TO WHICH THESE SHARES WERE PURCHASED FROM THE COMPANY. COPIES OF SUCH
RESTRICTIONS ARE ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. NO TRANSFER OF
SUCH SHARES OR OF THIS CERTIFICATE (OR OF ANY SHARES OR OTHER SECURITIES (OR
CERTIFICATES THEREFOR) ISSUED IN EXCHANGE FOR OR IN RESPECT OF SUCH SHARES)
SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS SET FORTH IN THE
WARRANT HAVE BEEN COMPLIED WITH.”

 

 
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“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.”

In addition, so long as the foregoing legend may remain on any stock certificate
evidencing Warrant Shares, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.

3.              Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance upon the exercise of this Warrant
such number of shares of the Common Stock as shall be required for issuance upon
exercise of this Warrant. The Company further agrees that all Warrant Shares
will be duly authorized and will, upon issuance and payment of the exercise
price therefor, be validly issued, fully paid and non-assessable, free from all
taxes, liens, charges and encumbrances with respect to the issuance thereof,
other than taxes, if any, in respect of any transfer occurring contemporaneously
with such issuance and other than transfer restrictions imposed by federal and
state securities laws.

Except and to the extent as waived or consented to in writing by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate or articles of incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such actions as
may be necessary or appropriate to protect the rights of Holder as set forth in
this Warrant. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (b)
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.

4.              Exchange, Transfer or Assignment of Warrant. Subject to Section
2, this Warrant is exchangeable, without expense, at the option of the Holder,
upon presentation and surrender hereof to the Company or at the office of its
stock transfer agent, if any, for other Warrants of the Company (“Warrants”) of
different denominations, entitling the Holder or Holders thereof to purchase in
the aggregate the same number of Warrant Shares purchasable hereunder. Subject
to Section 2, upon surrender of this Warrant to the Company or at the office of
its stock transfer agent, if any, with the Assignment Form attached hereto as
Exhibit B (the “Assignment Form”) duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in the Assignment Form and this
Warrant shall promptly be canceled. Subject to Section 2, this Warrant may be
divided or combined with other Warrants that carry the same rights upon
presentation hereof at the office of the Company or at the office of its stock
transfer agent, if any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the Holder
hereof.

 

 
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5.              Capital Adjustments. This Warrant is subject to the following
further provisions:

(a)     Recapitalization, Reclassification and Succession. If any
recapitalization of the Company or reclassification of its Common Stock or any
merger or consolidation of the Company into or with a corporation or other
business entity, or the sale or transfer of all or substantially all of the
Company’s assets or of any successor corporation’s assets to any other
corporation or business entity (any such corporation or other business entity
being included within the meaning of the term “successor corporation”) shall be
effected, at any time while this Warrant remains outstanding and unexpired,
then, as a condition of such recapitalization, reclassification, merger,
consolidation, sale or transfer, lawful and adequate provision shall be made
whereby the Holder of this Warrant thereafter shall have the right to receive
upon the exercise hereof as provided in Section 1 and in lieu of the Warrant
Shares immediately theretofore issuable upon the exercise of this Warrant, such
shares of capital stock, securities or other property as may be issued or
payable with respect to or in exchange for the number of outstanding shares of
Common Stock equal to the number of Warrant Shares immediately theretofore
issuable upon the exercise of this Warrant had such recapitalization,
reclassification, merger, consolidation, sale or transfer not taken place, and
in each such case, the terms of this Warrant shall be applicable to the shares
of stock or other securities or property receivable upon the exercise of this
Warrant after such consummation.

(b)     Subdivision or Combination of Shares. If the Company at any time while
this Warrant remains outstanding and unexpired shall subdivide or combine its
Common Stock, the number of Warrant Shares purchasable upon exercise of this
Warrant shall be proportionately adjusted.

(c)     Stock Dividends and Distributions. If the Company at any time while this
Warrant is outstanding and unexpired shall issue or pay the holders of its
Common Stock, or take a record of the holders of its Common Stock for the
purpose of entitling them to receive, a dividend payable in, or other
distribution of, Common Stock, then the number of Warrant Shares purchasable
upon exercise of this Warrant shall be adjusted to the number of shares of
Common Stock that Holder would have owned immediately following such action had
this Warrant been exercised immediately prior thereto.

(d)     Price Adjustments. Whenever the number of Warrant Shares purchasable
upon exercise of this Warrant is adjusted pursuant to Sections 5(a), 5(b) or
5(c), the then applicable Warrant Price shall be proportionately adjusted.

(e)     Certain Shares Excluded. The number of shares of Common Stock
outstanding at any given time for purposes of the adjustments set forth in this
Section 5 shall exclude any shares then directly or indirectly held in the
treasury of the Company.

(f)     Deferral and Cumulation of De Minimis Adjustments. The Company shall not
be required to make any adjustment pursuant to this Section 5 if the amount of
such adjustment would be less than one percent (1%) of the Warrant Price in
effect immediately before the event that would otherwise have given rise to such
adjustment. In such case, however, any adjustment that would otherwise have been
required to be made shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to not less than one percent (1%) of the Warrant
Price in effect immediately before the event giving rise to such next subsequent
adjustment. All calculations under this Section 5 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be, but in no
event shall the Company be obligated to issue fractional Warrant Shares or
fractional portions of any securities upon the exercise of the Warrant.

 

 
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(g)     Duration of Adjustment. Following each computation or readjustment as
provided in this Section 5, the new adjusted Warrant Price and number of Warrant
Shares purchasable upon exercise of this Warrant shall remain in effect until a
further computation or readjustment thereof is required.

6.             Notice to Holders.

(a)     Notice of Record Date. In case:

(i)     the Company shall take a record of the holders of its Common Stock (or
other stock or securities at the time receivable upon the exercise of this
Warrant) for the purpose of entitling them to receive any dividend (other than a
cash dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right;

(ii)     of any capital reorganization of the Company, any reclassification of
the capital stock of the Company, any consolidation with or merger of the
Company into another corporation, or any conveyance of all or substantially all
of the assets of the Company to another corporation; or

(iii)     of any voluntary dissolution, liquidation or winding-up of the
Company;

then, and in each such case, the Company will mail or cause to be mailed to the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution or winding-up. Such notice shall
be mailed at least ten (10) calendar days prior to the record date therein
specified, or if no record date shall have been specified therein, at least ten
(10) days prior to such specified date.

(b)     Certificate of Adjustment. Whenever any adjustment shall be made
pursuant to Section 5 hereof, the Company shall promptly provide the Holder with
prompt written notice, signed and certified by its Chairman, Chief Executive
Officer, President or a Vice President, setting forth in reasonable detail the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated and the Warrant Price and number of Warrant
Shares purchasable upon exercise of this Warrant after giving effect to such
adjustment.

7.              Loss, Theft, Destruction or Mutilation. Upon receipt by the
Company of evidence satisfactory to it, in the exercise of its reasonable
discretion, of the ownership and the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company and, in the case of mutilation, upon
surrender and cancellation thereof, the Company will execute and deliver in lieu
thereof, without expense to the Holder, a new Warrant of like tenor dated the
date hereof.

 

 
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8.              Warrant Holder Not a Stockholder. The Holder of this Warrant, as
such, shall not be entitled by reason of this Warrant to any rights whatsoever
as a stockholder of the Company, including but not limited to voting rights. No
provision hereof, in the absence of any affirmative action by Holder to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein of the rights
or privileges of Holder, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.

9.             Registration Rights. The Holder shall have the registration
rights with respect to its Warrant Shares pari passu to the purchasers of shares
of Common Stock of the Company set forth in that certain Securities Purchase
Agreement, dated as of June 19, 2013, between such purchasers and the Company.

10.           Notices.   Any notice provided for in this Warrant must be in
writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested), or sent by reputable overnight
courier service (charges prepaid) to the recipient at the address below
indicated:

If to the Company:

Bridgeline Digital, Inc.
80 Blanchard Road
Burlington, Massachusetts 01803
Attention: Mr. Thomas L. Massie,
 President and Chief Executive Officer

If to the Holder:

To the address of such Holder set forth on the books and records of the Company.

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Warrant will be deemed to have been given (a) if personally
delivered, upon such delivery, (b) if mailed, five days after deposit in the
U.S. mail, or (c) if sent by reputable overnight courier service, one business
day after such services acknowledges receipt of the notice.

11.           Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW RULES.

12.           Submission to Jurisdiction. EACH OF THE HOLDER AND THE COMPANY
SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY
OF NEW YORK, STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS WARRANT AND AGREES THAT ALL CLAIMS IN RESPECT OF THE ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH OF THE HOLDER AND
THE COMPANY ALSO AGREE NOT TO BRING ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS WARRANT IN ANY OTHER COURT. EACH OF THE PARTIES WAIVES ANY
DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO
BROUGHT AND WAIVES ANY BOND, SURETY, OR OTHER SECURITY THAT MIGHT BE REQUIRED OF
ANY OTHER PARTY WITH RESPECT THERETO.

 

 
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13.            Warrant Register. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.

14.            Miscellaneous.

(a)     Remedies. Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive and
not to assert the defense in any action for specific performance that a remedy
at law would be adequate.

(b)     Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

(c)     Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Holder.

(d)     Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

 

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IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
behalf, in its corporate name and by a duly authorized officer, as of this 19th
day of June 2013.

BRIDGELINE DIGITAL, INC.

By:                                                                                 
Michael D. Prinn
Executive Vice President and Chief Financial Officer

 

 

 
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EXHIBIT A

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

BRIDGELINE DIGITAL, INC.

 

The undersigned holder hereby exercises the right to purchase _________________
of the shares of Common Stock (“Warrant Shares”) of Bridgeline Digital, Inc., a
Delaware corporation (the “Company”), evidenced by Warrant to Purchase Common
Stock No. _______ (the “Warrant”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

1.               Form of Exercise Price. The Holder intends that payment of the
Exercise Price shall be made as:

 

____________

a “Cash Exercise” with respect to _________________ Warrant Shares; and/or

 

____________

a “Cashless Exercise” with respect to _______________ Warrant Shares.

2.               Payment of Exercise Price. In the event that the Holder has
elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the Holder shall pay the exercise price in the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

3.               Delivery of Warrant Shares. The Company shall deliver to
Holder, or its designee or agent as specified below, __________ Warrant Shares
in accordance with the terms of the Warrant. Delivery shall be made to Holder,
or for its benefit, to the following address:

_______________________

_______________________

_______________________

_______________________

4.               Fractional Shares. In lieu of receipt of a fractional share of
Common Stock, the undersigned will receive a check representing payment
therefor.

Date: _______________ __, ______

                                                                       

   Name of Registered Holder

By:                                                                 

Name:

Title:

 

 
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EXHIBIT B

ASSIGNMENT FORM

Bridgeline Digital, Inc.
80 Blanchard Road
Burlington, Massachusetts 01803
Attention: Mr. Thomas L. Massie,

President and Chief Executive Officer

 

FOR VALUE RECEIVED,                                hereby sells, assigns and
transfers unto

(Please print assignee’s name, address and Social Security/Tax Identification
Number)

________________________________________________

________________________________________________

________________________________________________

the right to purchase shares of common stock, par value $0.001 per share, of
Bridgeline Digital, Inc., a Delaware corporation (the “Company”), represented by
this Warrant to the extent of shares as to which such right is exercisable and
does hereby irrevocably constitute and appoint ____________________________,
Attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.

Dated:                                                                                       

                                                                                                       
PRINT WARRANT HOLDER NAME                                     

     

                                                                                                       
Name:                                                                                            
Title: 
                                                                                            

   

Witness:

 

                                                                                                   

 

 

 

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