Exhibit 10.42

 

LOAN AND SECURITY MODIFICATION AGREEMENT

 

This Loan and Security Modification Agreement is entered into as of December 23,
2015 by and between Bridgeline Digital, Inc. (“Borrower”) and Western Alliance
Bank (“Bank”).

 

1.     DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among
other documents, a Loan and Security Agreement dated as of December 20, 2013 by
and between Borrower and Bank, as may be amended from time to time (the “Loan
and Security Agreement”). Capitalized terms used without definition herein shall
have the meanings assigned to them in the Loan and Security Agreement.

 

2.     EVENT OF DEFAULT; WAIVER. Borrower acknowledges that there are existing
and uncured Events of Default arising from Borrower's failure to comply with
Section 6.9(a) the period ended April 30, 2015 (the "Covenant Default"). Subject
to the conditions contained herein and performance by Borrower of all of the
terms of the Loan and Security Agreement after the date hereof, Bank waives the
Covenant Default. Bank does not waive Borrower's obligations under such section
after the date hereof, and Bank does not waive any other failure by Borrower to
perform its Obligations under the Loan Documents.

 

3.     DESCRIPTION OF CHANGE IN TERMS.

 

A.     Modification(s) to Loan and Security Agreement:

 

 1.     The following defined term set forth in Section 1.1 of the Loan and
Security Agreement is amended and restated in its entirety to read as follows:

 

        “Revolving Line Maturity Date” means December 31, 2016.

 

4.     CONSISTENT CHANGES. The Loan Documents are each hereby amended wherever
necessary to reflect the changes described above.

 

5.     NO DEFENSES OF BORROWER/GENERAL Release. Borrower agrees that, as of this
date, it has no defenses against the obligations to pay any amounts under Loan
Documents. Each of Borrower and its affiliates (each, a “Releasing Party”)
acknowledges that Bank would not enter into this Loan and Security Modification
Agreement without Releasing Party’s assurance that it has no claims against Bank
or any of Bank’s officers, directors, employees or agents. Except for the
obligations arising hereafter under this Loan and Security Modification
Agreement, each Releasing Party releases Bank, and each of Bank’s and entity’s
officers, directors and employees from any known or unknown claims that
Releasing Party now has against Bank of any nature, including any claims that
Releasing Party, its successors, counsel, and advisors may in the future
discover they would have now had if they had known facts not now known to them,
whether founded in contract, in tort or pursuant to any other theory of
liability, including but not limited to any claims arising out of or related to
the Loan and Security Agreement or the transactions contemplated thereby.
Releasing Party waives the provisions of California Civil Code section 1542,
which states:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

The provisions, waivers and releases set forth in this section are binding upon
each Releasing Party and its shareholders, agents, employees, assigns and
successors in interest. The provisions, waivers and releases of this section
shall inure to the benefit of Bank and its agents, employees, officers,
directors, assigns and successors in interest. The provisions of this section
shall survive payment in full of the Obligations, full performance of all the
terms of this Loan and Security Modification Agreement and the other Loan
Documents, and/or Bank’s actions to exercise any remedy available under the Loan
Documents or otherwise.

 

 
 

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6.     CONTINUING VALIDITY. Borrower understands and agrees that in modifying
the existing Loan Documents, Bank is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Loan Documents. Borrower
represents and warrants that the representations and warranties contained in the
Loan and Security Agreement are true and correct as of the date of this Loan and
Security Modification Agreement, and that no Event of Default has occurred and
is continuing. Except as expressly modified pursuant to this Loan and Security
Modification Agreement, the terms of the Loan Documents remain unchanged and in
full force and effect. Bank's agreement to modifications to the existing Loan
Documents pursuant to this Loan and Security Modification Agreement in no way
shall obligate Bank to make any future modifications to the Loan Documents.
Nothing in this Loan and Security Modification Agreement shall constitute a
satisfaction of the Obligations. It is the intention of Bank and Borrower to
retain as liable parties all makers and endorsers of Loan Documents, unless the
party is expressly released by Bank in writing. No maker, endorser, or guarantor
will be released by virtue of this Loan and Security Modification Agreement. The
terms of this paragraph apply not only to this Loan and Security Modification
Agreement, but also to any subsequent loan and security modification agreements.

 

7.     CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; REFERENCE PROVISION. This
Loan and Security Modification Agreement constitutes a “Loan Document” as
defined and set forth in the Loan and Security Agreement, and is subject to
Sections 11 and 12 of the Loan and Security Agreement, which are incorporated by
reference herein.

 

8.     NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS
AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE MATTERS CONTAINED HEREIN, (B) THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

9.     CONDITIONS PRECEDENT. As a condition to the effectiveness of this Loan
and Security Modification Agreement, Bank shall have received, in form and
substance satisfactory to Bank, the following:

 

(a)     payment of all Bank Expenses incurred through the date of this Loan and
Security Modification Agreement; and

 

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

 

[signature page follows]

 

 
 

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10.     COUNTERSIGNATURE. This Loan and Security Modification Agreement shall
become effective only when executed by Bank and Borrower.

 

BORROWER: 

BANK: 

 

 

BRIDGELINE DIGITAL, INC.

WESTERN ALLIANCE BANK

    By:     /s/Michael Prinn                     By:     /s/Charles Wehr    
Name: Michael Prinn                     Name: Charles Wehr     Title: 
CFO                          Title:  Vice President