Exhibit 10.1

SEVENTH LOAN MODIFICATION AGREEMENT
 
This Seventh Loan Modification Agreement (this “Loan Modification Agreement”) is
entered into as of February 11, 2013, with an effective date as of January 30,
2013 (the “Seventh Loan Modification Effective Date”), by and between (i)
SILICON VALLEY BANK, a California corporation, with its principal place of
business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan
production office located at 275 Grove Street, Suite 2-200, Newton,
Massachusetts 02466 (“Bank”) and (ii) BRIDGELINE DIGITAL, INC., a Delaware
corporation with its chief executive office located at 80 Blanchard Road,
Burlington, Massachusetts 01803 (“Bridgeline”) and BRIDGELINE INTELLIGENCE
GROUP, INC., a Delaware corporation, with offices located at 6711 Columbia
Gateway Drive, Suite 550, Columbia, Maryland 21046 (“Intelligence Group”).
 
1.           DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to Bank, Borrower is
indebted to Bank pursuant to a certain Amended and Restated Loan and Security
Agreement dated as of March 31, 2010, as amended by a certain First Loan
Modification Agreement, dated as of June 22, 2010, as further amended by a
certain Second Loan Modification Agreement, dated as of July 7, 2010, as further
amended by a certain Joinder, Waiver and Third Loan Modification Agreement,
dated as of November 5, 2010, as further amended by a certain Fourth Loan
Modification Agreement, dated as of May 6, 2011, as further amended by a certain
Joinder, Fifth Loan Modification and Waiver Agreement, dated as of December 16,
2011 and as further amended by a certain Sixth Loan Modification Agreement,
dated as of May 11, 2012 (as amended, the “Loan Agreement”).  Capitalized terms
used but not otherwise defined herein shall have the same meaning as in the Loan
Agreement.
 
2.           DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured
by the Collateral as described in the Loan Agreement and in a certain Amended
and Restated Intellectual Property Security Agreement, dated as of March 31,
2010 between Bank and Bridgeline and a certain Intellectual Property Security
Agreement dated as of December 16, 2011 between Bank and Intelligence Group
(together, the “IP Agreement”, and together with any other collateral security
granted to Bank, the “Security Documents”).  Hereinafter, the Security
Documents, together with all other documents evidencing or securing the
Obligations shall be referred to as the “Existing Loan Documents”.
 
3.           DESCRIPTION OF CHANGES IN TERMS.
 
 
A.
Modifications to Loan Agreement.

 
 
1.
The Loan Agreement shall be amended by deleting the following text appearing as
Section 6.9(a) thereof:

 
“(a)           EBITDA. EBITDA, measured quarterly on a trailing three-month
basis as of the last day of each fiscal quarter listed below, of no less than
the corresponding amounts listed below:
 
Quarterly Period Ending
Minimum EBITDA
   
March 31, 2011
$200,000
   
June 30, 2011
$300,000
   
September 30, 2011, and as of the last day of each quarterly period ending
thereafter
$400,000”

 
 
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and inserting in lieu thereof the following:

“(a)           EBITDA. EBITDA, measured quarterly on a trailing three-month
basis as of the last day of each fiscal quarter listed below, of no less than
the corresponding amounts listed below:
 
Quarterly Period Ending
Minimum EBITDA
   
December 31, 2012
$1.00
   
March 31, 2013
$1.00
   
June 30, 2013
$50,000
   
September 30, 2013
$125,000
   
December 31, 2013
$175,000
   
March 31, 2014, and as of the last day of each quarterly period ending
thereafter
$250,000

 
2.
The Loan Agreement shall be amended by deleting the following text appearing as
Section 6.9(b) thereof:

 
“(b)           Minimum Liquidity.  Unrestricted cash at Bank (excluding drawn
Non-formula Advances held at Bank) plus the unused Availability Amount
(excluding any undrawn availability with respect to Non-formula Advances) of not
less than (i) prior to receipt by Bank of the Permitted Term Loan Prepayment
Amount, One Million Dollars ($1,000,000); and (ii) commencing on the date that
Bank applies the Permitted Term Loan Prepayment Amount to the outstanding
principal balance of the Term Loan, and at all times thereafter, One Million Two
Hundred Fifty Thousand Dollars ($1,250,000).”
 
and inserting in lieu thereof the following:
 
“(b)           Minimum Liquidity.  Unrestricted cash at Bank (excluding drawn
Non-formula Advances held at Bank) plus the unused Availability Amount
(excluding any undrawn availability with respect to Non-formula Advances) of not
less than (i) from the Seventh Loan Modification Effective Date through and
including June 30, 2013, One Million Two Hundred Fifty Thousand Dollars
($1,250,000); and (ii) commencing July 1, 2013 and thereafter, One Million
Dollars ($1,000,000).”
 
 
3.
The Loan Agreement shall be amended by deleting the following text appearing in
Section 10 thereof:

 

“If to Borrower: Bridgeline Digital, Inc.  
e.Magination IG, LLC
 
c/o Bridgeline Digital, Inc.
 
10 Sixth Road
 
Woburn, Massachusetts 01801
 
Attn: Michael Prinn, CAO
 
Fax:        (781) 376-0533
 
Email:     mprinn@blinedigital.com

 
 
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with a copy to: Morse, Barnes-Brown & Pendleton, P.C.  
1601 Trapelo Road
  Waltham, Massachusetts 02451  
Attn:     Joseph C. Marrow, Esquire
 
Fax:       (781) 622-5933
 
Email:    jmarrow@mbbp.com
    If to Bank: Silicon Valley Bank  
275 Grove Street, Suite 2-200
 
Newton, Massachusetts 02466
 
Attn:     Mr. Benjamin Johnston
 
Fax:       (617) 969-4395
 
Email:    bjohnston@svb.com
    with a copy to: Riemer & Braunstein, LLP  
Three Center Plaza
 
Boston, Massachusetts 02108
 
Attn:     Charles W. Stavros, Esquire
 
Fax:       (617) 880-3477
 
Email:    cstavros@riemerlaw.com”
   
and inserting in lieu thereof the following:
    “If to Borrower: Bridgeline Digital, Inc.  
80 Blanchard Street
 
Burlington, Massachusetts 01803
 
Attn:     Michael Prinn, CFO
 
Fax:       (781) 376-0533
 
Email:    mprinn@blinedigital.com
    with a copy to: Morse, Barnes-Brown & Pendleton, P.C.  
230 Third Avenue, 4th Floor
 
Waltham, Massachusetts 02451
 
Attn:     Joseph C. Marrow, Esquire
 
Fax:       (781) 622-5933
 
Email:    jmarrow@mbbp.com
    If to Bank: Silicon Valley Bank  
275 Grove Street, Suite 2-200
 
Newton, Massachusetts 02466
 
Attn:     Mr. Steve Lyons
 
Fax:       (617) 969-4395
 
Email:    slyons@svb.com
    with a copy to: Riemer & Braunstein, LLP  
Three Center Plaza
 
Boston, Massachusetts 02108
 
Attn:     Charles W. Stavros, Esquire
 
Fax:       (617) 880-3477
 
Email:    cstavros@riemerlaw.com”

 
 
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4.
The Loan Agreement shall be amended by deleting the following definition
appearing in Section 13.1 thereof:

 
““Revolving Line Maturity Date” is March 31, 2014.”

and inserting in lieu thereof the following:

““Revolving Line Maturity Date” is March 31, 2015.”

 
5.
The Loan Agreement shall be amended by inserting the following new definition in
Section 13.1 thereof, in its appropriate alphabetical order:

 
““Seventh Loan Modification Effective Date” is January 30, 2013.”

 
6.
The Compliance Certificate attached as Exhibit B to the Loan Agreement is hereby
deleted and replaced with Exhibit B attached hereto.

 
 
4.           CONDITIONS PRECEDENT.  As a condition precedent to the
effectiveness of this Loan Modification Agreement and the Bank’s obligation to
make further Credit Extensions, the Bank shall have received the following
documents or payments prior to or concurrently with this Agreement, each in form
and substance satisfactory to the Bank:
 
 
A.
copies, certified by a duly authorized officer of each Borrower, to be true and
complete as of the date hereof, of each of (i) the governing documents of each
Borrower, respectively, as in effect on the date hereof (but only to the extent
modified since last delivered to the Bank), (ii) the resolutions of each
Borrower, respectively, authorizing the execution and delivery of this Loan
Modification Agreement, the other documents executed in connection herewith and
each Borrower’s respective performance of all of the transactions contemplated
hereby (but only to the extent required since last delivered to Bank), and (iii)
an incumbency certificate giving the name and bearing a specimen signature of
each individual who shall be so authorized (but only to the extent any
signatories have changed since such incumbency certificate was last delivered to
Bank);

 
 
B.
a certificate of the Secretary of State (or similar entity) of the applicable
jurisdiction of organization of a recent date as to each Borrower’s respective
existence and good standing;

 
 
C.
results of UCC searches and other searches as necessary with respect to the
Collateral indicating no Liens (other than the Liens of Bank or Permitted Liens)
and otherwise in form and substance satisfactory to the Bank;

 
 
D.
an Acknowledgement and Reaffirmation of Subordination Agreement from TMX
Interactive, Inc., together with the duly executed signature pages thereto;

 
 
E.
updated evidence of insurance;

 
 
F.
updated/ supplements to the Perfection Certificate for each Borrower, as
necessary; and

 
 
G.
such other documents as Bank may reasonably request.

 
 
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5.           FEES.  Borrower shall pay to Bank (i) a fully earned,
non-refundable modification fee equal to Ten Thousand Dollars ($10,000), which
fee shall be due and payable on or prior to the Seventh Loan Modification
Effective Date; and (ii) a fully earned, non-refundable extension fee equal to
Twenty Five Thousand Dollars ($25,000), which fee shall be due and payable on or
prior to the Seventh Loan Modification Effective Date (such extension fee is in
lieu of the Twenty Five Thousand Dollar ($25,000) anniversary fee described in
the Sixth Loan Modification Agreement).  In addition, Borrower shall also pay to
Bank an annual renewal fee equal to Twenty Five Thousand Dollars ($25,000),
which fee shall be due and payable on February [], 2014 and shall be deemed
fully earned as of that date. Borrower shall also reimburse Bank for all legal
fees and expenses incurred in connection with the Existing Loan Documents and
this Loan Modification Agreement.
 
6.           RATIFICATION OF PERFECTION CERTIFICATE.  Bridgeline hereby
ratifies, confirms and reaffirms, all and singular, the terms and disclosures
contained in a certain Perfection Certificate dated as of March 31, 2010, as
amended as of the date hereof and acknowledges, confirms and agrees that, except
as amended, the disclosures and information Bridgeline provided to Bank in the
Perfection Certificate, as supplemented through the date hereof, have not
changed.  In addition, Intelligence Group hereby ratifies, confirms and
reaffirms all and singular, the terms and disclosures contained in a certain
Perfection Certificate dated as of the date hereof, as supplemented through the
date hereof.  Each Borrower acknowledges, confirms and agrees the disclosures
and information provided to Bank in such Perfection Certificates, as
supplemented through the date hereof, have not changed.
 
7.           CONSISTENT CHANGES.  The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
 
8.           RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies,
confirms, and reaffirms all terms and conditions of the Existing Loan Documents
and of all security or other collateral granted to the Bank, and confirms that
the indebtedness secured thereby includes, without limitation, the Obligations.
 
9.           NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees
that Borrower has no offsets, defenses, claims, or counterclaims against Bank
with respect to the Obligations, or otherwise, and that if Borrower now has, or
ever did have, any offsets, defenses, claims, or counterclaims against Bank,
whether known or unknown, at law or in equity, all of them are hereby expressly
WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.
 
10.           CONTINUING VALIDITY.  Borrower understands and agrees that in
modifying the existing Obligations, Bank is relying upon Borrower’s
representations, warranties, and agreements, as set forth in the Existing Loan
Documents.  Except as expressly modified pursuant to this Loan Modification
Agreement, the terms of the Existing Loan Documents remain unchanged and in full
force and effect.  Bank’s agreement to modifications to the existing Obligations
pursuant to this Loan Modification Agreement in no way shall obligate Bank to
make any future modifications to the Obligations.  Nothing in this Loan
Modification Agreement shall constitute a satisfaction of the Obligations.  It
is the intention of Bank and Borrower to retain as liable parties all makers of
Existing Loan Documents, unless the party is expressly released by Bank in
writing.  No maker will be released by virtue of this Loan Modification
Agreement.
 
 
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11.           RIGHT OF SET OFF.  Borrower hereby grants to Bank, a lien,
security interest and right of set off as security for all Obligations to Bank,
whether now existing or hereafter arising upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of Bank
(including a Bank subsidiary) or in transit to any of them.  At any time after
the occurrence and during the continuance of an Event of Default, without demand
or notice, Bank may set off the same or any part thereof and apply the same to
any liability or obligation of Borrower even though unmatured and regardless of
the adequacy of any other collateral securing the Obligations.  ANY AND ALL
RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY
OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
 
 
12.           CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER.  Section 11 of the
Loan Agreement is hereby incorporated by reference.
 
 
13.           COUNTERSIGNATURE.  This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Bank.
 
 
[The remainder of this page is intentionally left blank]
 
 
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This Loan Modification Agreement is executed as a sealed instrument under the
laws of the Commonwealth of Massachusetts, as of the Seventh Loan Modification
Effective Date.
 

BORROWER:
 
BANK:
BRIDGELINE DIGITAL, INC.
 
 
By:  /s/Michael D.
Prinn                                                                                                       
Name: Michael D. Prinn
Title:  Chief Financial Officer
 
SILICON VALLEY BANK
 
 
By:    /s/Steve Lyons                
                                                     
Name: Steve Lyons
Title:  Vice President
 
BRIDGELINE INTELLIGENCE GROUP, INC.
 
 
By: /s/Michael D. Prinn                                          
                                                                
Name: Michael D. Prinn
Title:  Treasurer
 
 

[Seventh Loan Modification Agreement Signature Page]
 
 
 

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EXHIBIT A- COMPLIANCE CERTIFICATE

 

TO: SILICON VALLEY BANK Date:                       FROM: BRIDGELINE DIGITAL,
INC.     BRIDGELINE INTELLIGENCE GROUP, INC.  

 
 
The undersigned authorized officer of Bridgeline Digital, Inc. and Bridgeline
Intelligence Group, Inc. (individually and collectively, jointly and severally,
the “Borrower”) certifies that under the terms and conditions of the Amended and
Restated Loan and Security Agreement between Borrower and Bank (as amended, the
“Agreement”), (1) Borrower is in complete compliance for the period ending
_______________ with all required covenants except as noted below, (2) there are
no Events of Default, (3) all representations and warranties in the Agreement
are true and correct in all material respects on this date except as noted
below; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, (4)
Borrower, and each of its Subsidiaries, has timely filed all required tax
returns and reports, and Borrower has timely paid all foreign, federal, state
and local taxes, assessments, deposits and contributions owed by Borrower except
as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement,
and (5) no Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Bank.  Attached are the
required documents supporting the certification.  The undersigned certifies that
these are prepared in accordance with GAAP consistently applied from one period
to the next except as explained in an accompanying letter or footnotes.  The
undersigned acknowledges that no borrowings may be requested at any time or date
of determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered.  Capitalized terms used but not otherwise defined
herein shall have the meanings given them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column.
 
Reporting Covenant
Required
Complies
     
Monthly financial statements with
Compliance Certificate
Monthly within 30 days
Yes   No
Annual financial statement (CPA Audited)
FYE within 150 days
Yes   No
10-Q, 10-K and 8-K
Within 5 days after filing with SEC
 Yes   No
A/R & A/P Agings and Deferred Revenue reports
Monthly within 30 days
Yes   No
Board-approved projections
Annually, w/in 45 days of approval and
as amended
Yes   No
Transaction Reports
Monthly within 30 days and with each
request for a  Credit Extension
Yes   No
 

Financial Covenant
Required
Actual
Complies
       
Maintain at all times:
     
Minimum EBITDA (tested quarterly, on a
trailing three-month basis)
*
 
Yes   No
December 31, 2012
$1.00
$_________
Yes   No
March 31, 2013
$1.00
$_________
Yes   No
June 30, 2013
$50,000
$_________
Yes   No
September 30, 2013
$125,000
$_________
Yes   No
December 31, 2013
$175,000
$_________
Yes   No
March 31, 2014 and thereafter
$250,000
$_________
Yes   No
Minimum Liquidity (certified monthly)
**
$_________
Yes   No

*           See Section 6.9(a) of the Loan Agreement
**           See Section 6.9(b) of the Loan Agreement
 
 
 

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The following Intellectual Property was registered after the Effective Date (if
no registrations, state “None”):
 ____________________________________________________________________________.

There were no held checks as of the end of such month there except as follows
(if no held checks, state “None”):
____________________________________________________________________________.

The following financial covenant analyses and information set forth in Schedule
1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above:  (If
no exceptions exist, state “No exceptions to note.”)
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BRIDGELINE DIGITAL, INC.
BRIDGELINE INTELLIGENCE GROUP, INC.
 
 
By:                                                                     
Name:                                                                
Title:                                                                  
 
BANK USE ONLY
 
Received by: ____________________________
authorized signer
Date:           _____________________________
 
Verified: _______________________________ 
authorized signer
Date:           _____________________________
 
Compliance Status:                                Yes     No

 
 
 

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Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the
terms of the Loan Agreement shall govern.

Dated:  ____________________

I.           Minimum EBITDA (Section 6.9(a))

Required:                      Achieve EBITDA, measured quarterly on a trailing
three-month basis as of the last day of each fiscal quarter listed below, of no
less than the corresponding amounts listed below:

Quarterly Period Ending
Minimum EBITDA
   
December 31, 2012
$1.00
   
March 31, 2013
$1.00
   
June 30, 2013
$50,000
   
September 30, 2013
$125,000
   
December 31, 2013
$175,000
   
March 31, 2014, and as of the last day of each quarterly period ending
thereafter
$250,000

Actual: All amounts measured on a trailing three month basis:
A.
Net Income
$                   
 
B.
Interest Expense
$                   
 
C.
To the extent deducted from the calculation of Net Income, non-cash stock
compensation expense, depreciation expense and amortization expense (including,
without limitation, goodwill)
 
$                   
 
 
D.
Other one-time non-cash expenses approved by Bank, on a case-by-case basis, in
its sole discretion
$                   
 
E.
EBITDA (line A plus line B plus line C plus line D)
$                   
 

Is line E equal to or greater than
$[                                                               ]?
 
                                         No, not in
compliance                                                                                                  
 Yes, in compliance
 
 
 

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II.           Minimum Liquidity (Section 6.9(b))

Required:                Maintain, at all times, unrestricted cash at Bank
(excluding drawn Non-formula Advances held at Bank) plus the unused Availability
Amount (excluding any undrawn availability with respect to Non-formula Advances)
of not less than (i) from the Seventh Loan Modification Effective Date through
and including June 30, 2013, One Million Two Hundred Fifty Thousand Dollars
($1,250,000); and (ii) commencing July 1, 2013 and thereafter, One Million
Dollars ($1,000,000).
 

Actual:

A.
Unrestricted Cash at Bank (excluding drawn Non-formula Advances held at Bank)
$                   
 
B.
unused Availability Amount (but excluding any undrawn availability with respect
to Non-formula Advances)
 
$                   
 
C.
Liquidity (line A plus line B)
$                   
 

Is line C equal to or greater than
$[                                                                      ]?

                                        No, not in
compliance                                                                                                  
 Yes, in compliance