Exhibit 10.47

 

THIRD AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

 

This Third Amendment to Loan and Security Agreement is entered into as of
December 27, 2018 (the “Amendment”), by and between MONTAGE CAPITAL II, L.P.
(“Lender”) and BRIDGELINE DIGITAL, INC. (“Borrower”).

 

RECITALS

 

Borrower and Lender are parties to that certain Loan and Security Agreement
dated as of October 10, 2017 and as amended from time to time, including
pursuant to that certain First Amendment to Loan and Security Agreement dated as
of May 10, 2018 and that certain Second Amendment to Loan and Security Agreement
dated as of October 22, 2018 (collectively, the “Agreement”). The parties desire
to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.           Section 5.3 of the Agreement is amended and restated in its
entirety to read as follows:

 

5.3     Financial Covenants.

 

(a)     Minimum Asset Coverage Ratio. Borrower shall maintain, at all times and
measured as of the last day of each month, a ratio of (i) Eligible Accounts plus
Eligible Foreign Accounts plus Borrower's unrestricted cash maintained in
accounts that are subject to an account control agreement in favor of Lender to
(ii) all outstanding Obligations owing to Lender, of no less than 1.40 : 1.00.

 

(b)     Performance to Plan – Adjusted EBITDA. Borrower’s minimum quarterly
Adjusted EBITDA for the fiscal quarters ending on December 31, 2018, March 31,
2019, June 30, 2019 and September 30, 2019 shall be at least the amount set
forth on Exhibit A. Notwithstanding the foregoing, Borrower shall not be deemed
in breach of the foregoing covenant if the total negative deviation from its
projected Adjusted EBITDA for a particular quarter period does not exceed
$200,000. Borrower and Lender shall mutually agree upon minimum quarterly
Adjusted EBITDA amounts for subsequent fiscal quarters no later than September
30, 2019.

 

(c)     Minimum Cash. Borrower shall maintain at all times at least $500,000 in
unrestricted cash in its accounts that are subject to an account control
agreement in favor of Lender.

 

2.           The following definition in Section 13 of the Agreement is amended
and restated in its entirety to read as follows:

 

“Adjusted EBITDA” means earnings before interest, taxes, depreciation and
amortization expenses and non-cash stock-based compensation expense, and net of
any non-cash good will adjustments, each as determined in accordance with GAAP.

 

3.           Exhibit A to the Agreement is replaced in its entirety with the
Exhibit A attached hereto.

 

4.         Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Lender under the Agreement, as in effect prior to the date
hereof. Borrower ratifies and reaffirms the continuing effectiveness of all
agreements entered into in connection with the Agreement.

 

 

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5.        This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original hereof.

 

6.           As a condition to the effectiveness of this Amendment, Lender shall
have received, in form and substance satisfactory to Lender, the following:

 

(a)     payment of an amendment fee in the amount of $2,000 plus all Lender
Expenses incurred through the date of this Amendment; and

 

(b)     such other documents, and completion of such other matters, as Lender
may reasonably deem necessary or appropriate.

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

  BRIDGELINE DIGITAL, INC.                       By: /s/ Carole Tyner          
Name: Carole Tyner           Title: CFO                       MONTAGE CAPITAL
II, L.P.                       By: /s/ Michael J. Rose           Name: Michael
J. Rose           Title: Managing Director  

 

 

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EXHIBIT A

COMPLIANCE CERTIFICATE

 

BORROWER:

Bridgeline Digital, Inc.

 

Note: Please send all required reporting to: Montage Capital II, L.P.   900 East
Hamilton Avenue, Suite 100   Campbell, CA 95008   Fax: (408) 659-2318   Email:
mrose@montagecapital.com

 

The undersigned authorized officer of Bridgeline Digital, Inc. hereby certifies
that in accordance with the terms and conditions of the Loan and Security
Agreement between Borrower and Lender (the “Agreement”).

 

Borrower is in complete compliance for the period ending _______________ with
all required covenants, except as noted below; and all representations and
warranties of Borrower stated in the Agreement are true and correct in all
material respects as of the date hereof.

 

Attached herewith are the required documents supporting the above certification.
The authorized officer further certifies that these are prepared in accordance
with Generally Accepted Accounting Principles (GAAP) and are consistently
applied from one period to the next except as explained in an accompanying
letter or footnotes.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenant Required Complies Monthly financial statements Monthly within
30 days Yes No A/R & A/P Agings Monthly within 30 days Yes No Deferred revenue
schedule Monthly within 30 days Yes No Compliance Certificate Monthly within 30
days Yes No Annual financial statements (CPA audited) FYE within 120 days Yes No
Annual financial projections for upcoming year Within 30 days of FYE Yes No Tax
returns with schedules Within 15 days of filing Yes No 10K and 10Q Within 5 days
of filing Yes No Reports & certificates provided to Senior Lender Concurrently
upon delivery to Senior Lender Yes No

 

FINANCIAL COVENANTS REQUIRED ACTUAL COMPLIES           Minimum unrestricted cash
subject to control agreement $500,000 $                       Yes No          
Asset Coverage Ratio (monthly) 1.40 : 1.00 _______: 1.00 Yes No          
Maximum quarterly Adjusted EBITDA Loss for:         Quarter ending 12/31/18 and
beyond ($1,020,000) $__________ Yes No Quarter ending 3/31/19 and beyond
($928,000) $__________ Yes No Quarter ending 6/30/19 and beyond ($767,000)
$__________ Yes No Quarter ending 9/30/19 and beyond ($569,000) $__________ Yes
No

 

Please attach any comments as additional pages.

 

 

Bridgeline Digital, Inc.

 

 

 

Signature

     

Name

     

Title

     

Date