Document:

ex_124407.htm

Exhibit 10.1

 

NINTH AMENDMENT

TO

LOAN AND SECURITY AGREEMENT 

 

This Ninth Amendment to Loan and Security Agreement is entered into as of September 21, 2018 (the “Amendment”), by and between HERITAGE BANK OF COMMERCE (“Bank”) and BRIDGELINE DIGITAL, INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of June 9, 2016 and as amended from time to time, including pursuant to that certain First Amendment to Loan and Security Agreement dated as of August 15, 2016, that certain Second Amendment to Loan and Security Agreement dated as of December 12, 2016, that certain Third Amendment to Loan and Security Agreement dated as of August 10, 2017, that certain Fourth Amendment to Loan and Security Agreement dated as of October 6, 2017, that certain Fifth Amendment to Loan and Security Agreement dated as of November 27, 2017, that certain Sixth Amendment to Loan and Security Agreement dated as of February 1, 2018, that certain Seventh Amendment to Loan and Security Agreement dated as of May 10, 2018, and that certain Eighth Amendment to Loan and Security Agreement dated as of August 10, 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 6.9(b) of the Agreement is amended and restated in its entirety to read as follows:

 

(b)     Performance to Plan – Adjusted EBITDA. Borrower’s minimum quarterly Adjusted EBITDA for the fiscal quarters ended on June 30, 2018 and September 30, 2018, and ending on December 31, 2018, shall be at least the amount set forth on Exhibit D. Borrower and Bank shall mutually agree upon minimum quarterly Adjusted EBITDA amounts for subsequent fiscal quarters no later than September 30, 2018.

 

 

 

2.        Section 6.9(c) of the Agreement is amended and restated in its entirety to read as follows:

 

(c)      Minimum Cash. Borrower shall maintain at all times at least $250,000 in unrestricted cash in its accounts at Bank. At all times on and after any repayment is made on the Subordinated Debt incurred by Borrower on or after September 7, 2018 pursuant to certain Term Notes issued by Borrower in the aggregate principal amount of $941,176, Borrower shall maintain at all times at least $500,000 in unrestricted cash in its accounts at Bank.

 

3.       Exhibit D to the Agreement is replaced in its entirety with the Exhibit D separately provided by Bank to Borrower. The parties agree and acknowledge that the financial covenants for the quarters ended June 30, 2018 and September 30, 2018 have previously been established as set forth on Exhibit D and the covenant for the June 30, 2018 quarter was satisfied. This Amendment establishes the reporting and financial covenants for the quarter ending on December 31, 2018.

 

4.       Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and no Event of Default has occurred and is continuing.

 

5.       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 Bank 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.

 

 

 

 

6.       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.

 

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

 

(a)     payment of an amendment fee in the amount of $2,500 plus all Bank Expenses incurred through the date of this Amendment; and

 

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

 

[remainder of this page intentionally left blank]

 

 

 

 

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

 

	 	
			BRIDGELINE DIGITAL, INC.

			 

			 

			 

			By: /s/ Micahel D. Prinn

			 

			Name: Michael D. Prinn

			

			Title: CFO

			 

			 

			 

			
	 	
			HERITAGE BANK OF COMMERCE

			 

			 

			 

			By: /s/ Karla Schrader

			 

			Name: Karla Schrader

			 

			Title: Vice President

			

 

 

 

 

Exhibit D

Compliance Certificate

 

	
			TO:

				
			HERITAGE BANK OF COMMERCE

			
	 	 
	
			FROM:

				
			BRIDGELINE DIGITAL, INC.

			

 

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 Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The 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

				 
	 	 	 	 	 
	
			A/R & A/P Agings

				
			Monthly within 30 days

				
			Yes

				
			No

				 
	
			Sales journal

				
			Monthly within 30 days

				
			Yes

				
			No

				 
	
			Collections journal

				
			Monthly within 30 days

				
			Yes

				
			No

				 
	
			Borrowing Base Certificate

				
			Monthly within 30 days

				
			Yes

				
			No

				 
	
			Deferred Revenue Schedule

				
			Monthly within 30 days

				
			Yes

				
			No

				 
	
			Balance Sheet and Income Statement

				
			Monthly within 30 days

				
			Yes

				
			No

				 
	
			Compliance Certificate

				
			Monthly within 30 days

				
			Yes

				
			No

				 
	
			Quarterly Financial statements/Form 10-Q

				
			Quarterly within 5 days of filing

				
			Yes

				
			No

				 
	
			Annual Financial Statements/Form 10-K/ (CPA audited)

				
			Annually within 5 days of filing

				
			Yes

				
			No

				 
	
			Borrower’s tax returns and schedule (CPA prepared)

				
			Annually within 5 days of filing but no later than October 31st of each year

				
			Yes

				
			No

				 
	
			Personal Guarantor’s personal financial statements

				
			Annually no later than October 31st of each year (or more frequently as Bank may request)

				
			Yes

				
			No

				 
	
			A/R and Collateral audit

				
			Semi-annually

				
			Yes

				
			No

				 
	
			IP Notices

				
			As required under Section 6.10

				
			Yes

				
			No

				 
	 	 	 	 	 
	
			Financial Covenant

				
			Required

				
			Actual

				
			Complies

				 
	 	 	 	 	 	 
	
			Asset Coverage Ratio

				
			1.40 : 1.00

				
			_____: 1.00

				
			Yes

				
			No

				 
	
			Maximum quarterly Adjusted EBITDA Loss for:

				 	 	 	 	 
	
			  Quarter ending 6/30/18 and beyond

				
			($415,000)

				
			$__________

				
			Yes

				
			No

				 
	
			  Quarter ending 9/30/18 and beyond

				
			($424,000)

				
			$__________

				
			Yes

				
			No

				 
	
			  Quarter ending 12/31/18 and beyond

				
			($415,000)

				
			$__________

				
			Yes

				
			No

				 
	
			  Quarter ending 3/31/19 and beyond

				
			TBD

				
			$__________

				
			Yes

				
			No

				 

 

	Comments Regarding Exceptions: See Attached.	  BANK USE ONLY	 
	 	 	 
	 	  Received by: __________________________________________________________
	Sincerely,	AUTHORIZED SIGNER	 
	 	 	 
	 	  Date: ________________________________________________________________ 
	 	 	 
	_______________________________________________	  Verified: ______________________________________________________________
	SIGNATURE	AUTHORIZED SIGNER	 
	 	 	 
	 	 	 
	_______________________________________________	  Date: _________________________________________________________________
	TITLE	 	 
	 	  Compliance Status	Yes         No
	_______________________________________________	 	 
	DATEExhibit 10.1

 

AMENDMENT NO. 1 TO CONVERTIBLE SENIOR PROMISSORY NOTE

 

THIS AMENDMENT NO. 1 TO CONVERTIBLE SENIOR PROMISSORY NOTE (this “Amendment”), dated as of the 25th day of September, 2018 (the “Effective Date”), is entered into by and between Cohen & Company Inc. (formerly Institutional Financial Markets, Inc.), a Maryland corporation (the “Company”), and the Edward E. Cohen IRA (the “Noteholder”).  Capitalized terms used herein but otherwise not defined shall have the meanings ascribed to such terms in the Note (as defined below).

 

RECITALS:

 

WHEREAS, on September 25, 2013, the Company issued to Mead Park Capital Partners LLC (“Mead Park”) (i) that certain Convertible Senior Promissory Note in the aggregate principal amount of $1,461,873; and (ii) that certain Convertible Senior Promissory Note in the aggregate principal amount of $2,923,755 (together, the “Original Notes”);

 

WHEREAS, on August 28, 2015, Mead Park sold (the “Sale”) the Original Notes to the Noteholder, and the Company documented the Sale by issuing to the Noteholder on August 28, 2015 a Convertible Senior Promissory Note in the aggregate principal amount of $4,385,628; and

 

WHEREAS, in accordance with Section 8(d) of the Note, the Company and the Noteholder desire to amend the Note to, among other things, (i) extend the Maturity Date from September 25, 2018 to September 25, 2019; and (ii) decrease the Conversion Price from $30.00 per share of Common Stock (after accounting for the adjustment to the Conversion Price as a result of the 1-for-10 reverse stock split of the Common Stock effectuated by the Company on December 16, 2009) to $12.00 per share of Common Stock, in each case, pursuant to the terms and conditions of this Amendment.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

1.                                      Amendment to Section 1(a) of the Note.  Effective as of the Effective Date, Section 1(a) of the Note is hereby deleted in its entirety and replaced with the following language:

 

“(a)                           Maturity.  The Outstanding Amount shall be due and payable in full on September 25, 2019 (the “Maturity Date”), unless this Note shall have been earlier converted in accordance with Section 2.”

 

2.                                      Amendment to Section 1(b) of the Note.  Effective as of the Effective Date, the first sentence of Section 1(b) of the Note is hereby amended to delete the reference therein to “Two Cents ($0.02) per share” and replace such deleted language with “Twenty Cents ($0.20) per share”.

 

3.                                      Amendments to Section 2 of the Note.  Effective as of the Effective Date:

 

 

a.              The first sentence of Section 2 of the Note is hereby amended to delete the reference therein to “$3.00” and replace such deleted language with “$12.00”; and

 

b.              The following language shall be added to the end of Section 2 of the Note:

 

“Notwithstanding the foregoing or anything to the contrary herein (including anything in this Section 2 or Section 3), until the Company’s stockholders approve the Stockholder Proposal (as defined below), the Holder shall not be permitted to convert any portion of this Note in accordance with this Section 2 or Section 3 if such conversion would result in the Parent issuing a number of shares of Common Stock that, when aggregated with any shares of Common Stock previously issued to the Holder in connection with any Conversion hereunder, equals or exceeds 12.92% of the outstanding Common Stock as of September 25, 2018.”

 

4.                                      Amendment to Section 4 of the Note.  Effective as of the Effective Date, the following language shall be added to the end of Section 4 of the Note:

 

“In addition to the covenants above, the Company hereby covenants as follows:

 

(1)                                 Prior to any issuance of shares of Common Stock upon a Conversion of this Note, the Company shall prepare and file with the NYSE American any Additional Listing Application required in connection with the shares of Common Stock that may be issued upon Conversion of this Note.

 

(2)                                 At the 2019 annual meeting of the Company’s stockholders (the “2019 Annual Meeting of Stockholders”), the Company shall cause its stockholders to vote on, among other things, a proposal (the “Stockholder Proposal”) regarding the issuance of the shares of Common Stock issuable upon Conversion of this Note for purposes of Section 713 of the NYSE American’s Company Guide, as applicable.  The Board of Directors shall recommend to the Company’s stockholders that such stockholders approve the Stockholder Proposal, and shall not modify or withdraw such resolution.  In connection with the 2019 Annual Meeting of Stockholders, the Company shall promptly prepare and file with the Securities and Exchange Commission (the “SEC”) a Definitive Proxy Statement on Schedule 14A pursuant to Section 14(a) of the Exchange Act (the “Company Proxy Statement”), use its reasonable best efforts to solicit proxies for such stockholder approval and to respond to any comments of the SEC or its staff and mail a definitive proxy statement related the 2019 Annual Meeting of Stockholders to the Company’s stockholders promptly after clearance by the SEC.  If at any time prior to the 2019 Annual 

 

2

 

Meeting of Stockholders there shall occur any event that is required to be set forth in an amendment or supplement to the Company Proxy Statement, the Company shall promptly prepare and mail to its stockholders such an amendment or supplement.  The Company shall promptly correct any information provided by it or on its behalf for use in the Company Proxy Statement if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall promptly prepare and mail to its stockholders an amendment or supplement to correct such information to the extent required by applicable Laws.  The Board of Directors’ recommendation described in this Section 4 shall be included in the Company Proxy Statement.”

 

5.                                      No Other Changes.  Except as expressly amended by this Amendment, all of the terms and conditions of the Note shall continue in full force and effect and shall be unaffected by this Amendment.

 

6.                                      Amendment. This Amendment may not be amended or modified except by a written agreement executed by the Company and the Noteholder.

 

7.                                      Governing Law.  THIS AMENDMENT SHALL BE GOVERNED, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES OR THE CONFLICTS OF LAW PRINCIPLES OF ANY OTHER STATE IN EITHER CASE THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE.

 

8.                                      Headings.  The sections and other headings contained in this Amendment are for reference purposes only and shall not affect the meaning or interpretation of this Amendment.

 

9.                                      Binding Effect.  This Amendment shall be binding upon and inure to the benefit of the Company and the Noteholder and their respective heirs, successors and permitted assigns.

 

10.                               Counterparts.  This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same instrument

 

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3

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 to Convertible Senior Promissory Note as of the date first written above.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
COHEN &   COMPANY INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joseph W.   Pooler, Jr.
    
	
 
    	
 
    	
Name: 
    	
Joseph W.   Pooler, Jr.
    
	
 
    	
 
    	
Title: 
    	
Executive Vice   President, Chief Financial Officer and Treasurer
    
	
 
    	
 
    
	
 
    	
NOTEHOLDER:
    
	
 
    	
 
    
	
 
    	
THE EDWARD E. COHEN IRA
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Edward E. Cohen
    
	
 
    	
 
    	
Name: 
    	
Edward E. Cohen
    
	
 
    	
 
    	
Title: 
    	
Owner

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