Document:

ex10-1.htm

Exhibit 10.1

 

SEPARATION AGREEMENT

 

THIS SEPARATION AGREEMENT (this “Agreement”) is entered into as of this 8th day of May, 2012, by and between John Keane, a natural person residing in the Commonwealth of Massachusetts, on behalf of himself and his heirs, assigns, executors, agents and representatives (“Keane”), and MRI Interventions, Inc., a Delaware corporation (the “Company”).

 

W I T N E S S E T H:

 

WHEREAS, Keane was employed as the Vice President, Sales of the Company;

 

WHEREAS, Keane irrevocably separated from employment with the Company as of April 16, 2012 (the “Employment Termination Date”); and

 

WHEREAS, it is the desire of the Company and Keane to set forth herein their mutual agreement with respect to all matters relating to (i) Keane’s separation from employment with the Company, and (ii) Keane’s release of claims, all upon the terms set forth herein;

 

NOW, THEREFORE, for and in consideration of the mutual covenants and promises contained herein, the parties hereby agree as follows:

 

1.             Separation from Employment.  Effective as of the Employment Termination Date, Keane irrevocably separated from all positions of employment with the Company (and ADP TotalSource, Inc.).

 

2.             Cooperation.  Subject to his other personal and professional obligations, through the date of the Company’s final payment of the compensation described in Section 3(a) below, Keane will make himself reasonably available to consult and cooperate with Company representatives in connection with the orderly transition of his business responsibilities, and, in connection therewith, Keane will exercise reasonable efforts to respond diligently to inquiries related to the Company’s business.

 

3.             Payments and Benefits.

 

(a)         Provided that (i) Keane has executed and delivered to the Company, and has not revoked, the general release referred to in Section 9 hereof (the “Release”) and the seven (7) day revocation period explained in Attachment A entitled “General Release” has expired, and (ii) Keane is otherwise in compliance with the terms of this Agreement, then the Company will pay Keane the sum of Twenty Seven Thousand Five Hundred and 00/100 Dollars ($27,500.00), payable in three (3) installments in accordance with the Company’s standard payroll practices and on the Company’s standard payroll dates, subject to applicable withholdings and taxes.  Keane acknowledges that the payments referenced herein are consideration to which he would not otherwise be entitled.

 

(b)         Keane acknowledges and agrees that the payments under this Agreement are compensation and will be subject to his usual withholding and included in his W-2 earnings statement.

 

  

1

  

 

4.             Acknowledgment.  Keane agrees that none of the Company or any of its predecessors, successors (by merger or otherwise), parents, subsidiaries, affiliated entities, divisions and assigns, together with each and every of their present, past and future officers, directors, stockholders, general partners, limited partners, employees and agents and the heirs and executors of same (herein collectively referred to as the “Company Group”), has breached any oral or written contract that may have existed between Keane and the Company or any member of the Company Group with respect to Keane’s employment or termination of employment nor has the Company or any member of the Company Group violated any law, statute, rule, regulation or ordinance of any governmental authority relating to Keane’s employment.  Keane acknowledges that the payments and other consideration paid hereunder cannot and will not be construed as any admission of liability or wrongdoing on the part of either the Company or any member of the Company Group.  Keane further acknowledges and agrees that the payments and other benefits being received by him pursuant to this Agreement satisfy any claim that he might have had under any Company policy or practice.  Keane understands that the release provided for in Attachment A entitled "General Release" extends to all of the aforementioned claims and potential claims described therein which arose on or before the date of the execution of this Agreement, whether now known or unknown, suspected or unsuspected, and his participation as a member of any class asserting any such claims, and that this acknowledgement and release constitute essential terms of this Agreement.  Keane understands and acknowledges the significance and consequence of this Agreement and of each specific release and waiver, and expressly consents that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims, demands, obligations, and causes of action, if any, as well as those relating to any other claims, demands, obligations or causes of action herein above-specified.

 

5.             Reinstatement.  Keane hereby waives any right or claim he may have to employment, re-instatement, re-assignment or re-employment with the Company or any member of the Company Group.  Keane’s acknowledgement and agreement as to these matters are material inducements for the Company to make certain of its agreements, including, without limitation, the agreement to make the payments pursuant to Section 3.

 

6.             Return of Company Property.  Keane agrees, as a condition precedent to receipt of any payment pursuant to this Agreement, to deliver or cause to be delivered to the Company any and all books, notebooks, manuals, keys, access cards, computers, equipment, and other documents and materials in his possession or under his control which are the property of the Company or otherwise relate to any of the Company’s confidential or proprietary information or trade secrets.  Keane also hereby affirms that he is in possession of all of his property that he had at the Company’s premises and that the Company is not in possession of any of his property.

 

7.             Non-Disclosure and Non-Competition Agreement.  Keane acknowledges and agrees that (i) the Non-Disclosure and Proprietary Rights Agreement made by Keane dated March 17, 2010 and (ii) the Non-Competition Agreement made by Keane dated March 17, 2010 (collectively, the “Restrictive Agreements”), in each case shall remain in full force and effect and that the terms of such Restrictive Agreements are incorporated herein and made a part of this Agreement.  Keane agrees to comply with his continuing obligations under each of the Restrictive Agreements.

 

  

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8.             Release.  Keane and the Company will execute and deliver a General Release in the form attached hereto as Attachment A.

 

9.             Successors.  This Agreement shall inure to the benefit of and be enforceable by Keane and by Keane’s personal or legal representatives, executors and administrators and by the Company and its successors and assigns.

 

10.           No Admissions.  Neither the execution of this Agreement by the Company nor the terms hereof constitutes an admission by the Company, or by any agent or employee of the Company or any member of the Company Group, of liability or unlawful conduct in any manner.

 

11.           Entire Agreement.  Except with respect to Keane’s continuing obligations pursuant to the Restrictive Agreements, this Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall be binding upon their respective heirs, executors, administrators, successors and assigns.

 

12.           Severability.  If any term or provision of this Agreement shall be held to be invalid or unenforceable for any reason, then such term or provision shall be ineffective to the extent of such invalidity or unenforceability without invalidating the remaining terms or provisions hereof, and such term or provision shall be deemed modified to the extent necessary to make it enforceable.

 

13.           Advice of Counsel.  Keane represents and warrants that he has carefully read this Agreement, and he understands its contents, meaning and intent.  The Company hereby advises Keane to consult with such advisors, including legal counsel, as seem appropriate to Keane before signing this Agreement and Attachment A to this Agreement entitled “General Release.”  Understanding this document, Keane has freely and voluntarily executed it, without compulsion, coercion or duress.

 

14.           Amendments.  Neither this Agreement nor any term hereof may be orally changed, waived, discharged, or terminated, and may be amended only by a written agreement signed by both of the parties hereto.

 

15.           Governing Law.  This Agreement shall be governed by the laws of the State of Tennessee without regard to the conflict of law principles of any jurisdiction.

 

16.           Legally Binding.  The terms of this Agreement contained herein are contractual and not mere recitals.

 

[The next page is the signature page]

 

  

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IN WITNESS WHEREOF, the parties, acknowledging that they are acting of their own free will, have voluntarily caused the execution of this Agreement as of the day and year first written above.

 

 

KEANE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND IS VOLUNTARILY ENTERING INTO IT.

 

 

PLEASE READ THIS AGREEMENT CAREFULLY.  IT CONTAINS A RELEASE OF ANY AND ALL KNOWN AND UNKNOWN CLAIMS.

 

 

MRI Interventions, Inc.

 

 

By: /s/ Oscar Thomas                                                                                     

Name: Oscar Thomas                                                                                     

Title: Vice President, Business Affairs                                                        

 /s/ John Keane                                                                                               

John Keane

 

  

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ATTACHMENT A

 

GENERAL RELEASE

 

MRI Interventions, Inc., a Delaware corporation (the “Company”), and John Keane (“Keane”) enter into this Release (this “Release”) on the 8th day of May, 2012.

 

WITNESSETH

 

WHEREAS, the Company and Keane are parties to a Separation Agreement entered into as of May 8, 2012 (the “Separation Agreement”);

 

WHEREAS, as a condition to the receipt of certain benefits to be paid following the date of this Release (the “Benefits”) under the Separation Agreement and in consideration for the execution and delivery of this Release by the Company, Keane has agreed to execute and deliver this Release; and

 

WHEREAS, in consideration for the agreements and covenants of Keane contained in the Separation Agreement and the execution and delivery of this Release by Keane, the Company has agreed to execute and deliver this Release.

 

NOW THEREFORE, in consideration of the covenants and mutual promises herein contained, it is agreed as follows:

 

1.             Release.  Keane, on behalf of himself and anyone claiming through him, represents that he has not filed or caused to be filed any lawsuit, complaint, or charge with respect to any claim this Release purports to waive.  Keane hereby agrees not to sue (i) the Company or any of its divisions, subsidiaries, affiliates or other related entities of the above specified entities (whether or not such entities are wholly owned) or any of the past, present or future directors, officers, administrators, trustees, fiduciaries, employees, agents or attorneys of the Company or any of such other entities, or the predecessors, successors or assigns of any of them or (ii) ADP TotalSource, Inc. or any of its divisions, subsidiaries, affiliates or other related entities of the above specified entities (whether or not such entities are wholly owned) or any of the past, present or future directors, officers, administrators, trustees, fiduciaries, employees, agents or attorneys of ADP TotalSource, Inc. or any of such other entities, or the predecessors, successors or assigns of any of them (clauses (i) and (ii) hereinafter referred to as the “Released Parties”), and hereby releases and discharges, fully, finally and forever, the Released Parties from any and all claims, causes of action, lawsuits, liabilities, debts, accounts, covenants, contracts, controversies, agreements, promises, sums of money, damages, judgments and demands of any nature whatsoever, in law or in equity, both known and unknown, asserted or not asserted, foreseen or unforeseen, which Keane ever had or may presently have against any of the Released Parties arising from the beginning of time up to and including the date on which this Release is signed and delivered to the Company, in any way related to Keane’s employment by the Company, including, without limitation, any and all claims arising under:

 

  

Attachment A - 1

  

 

(a)         Anti-discrimination statutes, such as the Age Discrimination in Employment Act (“ADEA”), and the Older Workers Benefit Protection Act, which prohibit age discrimination in employment; Title VII of the Civil Rights Act of 1964, which prohibits discrimination or harassment based on race, color, national origin, religion, or sex; the Equal Pay Act and/or the Lilly Ledbetter Fair Pay Act, which prohibit paying men and women unequal pay for equal work; the Americans With Disabilities Act and/or the Americans with Disabilities Act Amendments Act, which prohibit discrimination based on disability; the Massachusetts Fair Employment Practices Law and any other federal, state or local law prohibiting employment discrimination, harassment, or retaliation of any kind.

 

(b)         Other laws, such as the Family and Medical Leave Act of 1993 (“FMLA”); any federal, state or local laws restricting an employer's right to terminate an employee, or otherwise regulating employment; any federal, state or local laws enforcing express or implied employment contracts or requiring an employer to deal with an employee fairly or in good faith; and any wage payment and collection law.

 

(c)         Tort and contract claims, such as claims for wrongful or constructive discharge, negligence, physical or personal injury, emotional distress, fraud, fraud in the inducement, negligent misrepresentation, defamation, invasion of privacy, interference with contract or with prospective economic advantage, breach of oral, express or implied contract, breach of covenants of good faith and fair dealing, and similar or related claims.

 

(d)         Other released claims, including, without limitation, claims:  (i) under the Employee Retirement Income Security Act of 1974; (ii) for compensation, stock options, bonuses, or lost wages; (iii) in any way related to design or administration of any employee benefits program; (iv) for severance or similar benefits or for post-employment health or group insurance benefits; or (v) for fees, costs or expenses of any attorneys who represent or have represented Keane.

 

(e)         Unknown claims:  Keane understands that he is releasing the Released Parties from claims that he may not know about as of the date hereof and that this is his knowing and voluntary intent even though someday he might learn that some or all of the facts he currently believes to be true are untrue and even though he might then regret having signed this Release.  Keane is expressly assuming that risk and agrees that this Release shall remain effective in all respects in any such case.  Keane expressly waives all rights he might have under any law that is intended to protect him from waiving unknown claims, and Keane understands the significance of doing so.

 

(f)         Nothing contained in this Release shall apply to, or release the Company from any obligation (i) contained in the Separation Agreement or this Release, (ii) to indemnify Keane as required by §145 of the Delaware General Corporation Law and the Company’s bylaws or (iii) with respect to any vested benefit with respect to Keane pursuant to any employee benefit or equity plan of the Company other than any severance or retention program or practice.

 

(g)         Keane acknowledges that the consideration offered in connection with the Separation Agreement was and is in part for this Release and such portion of such consideration is accepted by Keane as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and Keane expressly agrees that he is not entitled to, and shall not receive, any further recovery of any kind from the Company or any of the other Released Parties, and that in the event of any further proceedings whatsoever based upon any matter released herein, neither the Company nor any of the other Released Parties shall have any further monetary or other obligation of any kind to Keane, including any obligation for any costs, expenses or attorneys’ fees incurred by or on behalf of Keane, except as provided in the Separation Agreement or in this Release.

 

  

Attachment A - 2

  

 

2.             FMLA and FLSA Rights Honored.  Keane acknowledges that he has received all of the leave from work for family and/or personal medical reasons and/or other benefits to which he believes he is entitled under the Company’s policy and FMLA.  Keane has no pending request for FMLA leave.  The Company has not mistreated Keane in any way because of any illness or injury to Keane or any member of his family.  Keane has received all monetary compensation, including hourly wages, salary and/or overtime compensation, to which he believes he is entitled under the Fair Labor Standards Act (“FLSA”).

 

3.             ADEA Release Requirements Satisfied.  Keane understands that this Release has to meet certain requirements to validly release any ADEA claims Keane might have had, and Keane represents and warrants that all such requirements have been satisfied.  The Company hereby advises Keane that before signing this Release, he may take twenty-one (21) days to consider this Release.  Keane acknowledges that:  (1) he took advantage of as much of this period to consider this Release as he wished before signing; (2) he carefully read this Release; (3) he fully understands it; (4) he entered into this Release knowingly and voluntarily (free from fraud, duress, coercion, or mistake of fact); (5) this Release is in writing and is understandable; (6) in this Release, he waives current ADEA claims; (7) he has not waived future ADEA claims; (8) he is receiving valuable consideration in exchange for execution of this Release that he would not otherwise be entitled to receive; and (9) the Company hereby advises Keane in writing to discuss this Release with his attorney (at his own expense) prior to execution, and he has done so to the extent he deemed appropriate.

 

4.             Review & Revocation.

 

(a)         Review:  Before executing this Release, Keane may take twenty one (21) days to consider this Release.  Keane acknowledges and agrees that his waiver of rights under this Release is knowing and voluntary and complies in full with all criteria of the regulations promulgated under the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, and any and all federal, state and local laws, regulations and orders.  The Company hereby advises Keane in writing to consult with an attorney prior to executing this Release.  In the event that Keane executes this Release prior to the expiration of the twenty-one (21) day period, he acknowledges that his execution was knowing and voluntary and not induced in any way by the Company or any other person.

 

(b)         Revocation:  For a period of seven (7) days following his execution of this Release, Keane may revoke this Release.  If he wishes to revoke this Release, he must revoke in writing delivered by hand or confirmed facsimile prior to the end of the seventh (7th) day of the revocation period to Oscar Thomas, One Commerce Square, Suite 2550, Memphis, TN 38103, (901) 522-9400 (fax) or the revocation will not be effective.  If Keane timely revokes this Release, all provisions hereof will be null and void, including any and all payments referenced in the Separation Agreement to which this Release is attached.  If Keane does not advise Oscar Thomas in writing that he revokes this Release within seven (7) days of his execution of it, this Release shall be forever enforceable.  The eighth (8th) day following Keane’s execution of this Release shall be the Effective Date of this Release.  This Release is not effective or enforceable until the revocation period has expired.

 

  

Attachment A - 3

  

 

5.             No Assignment of Claims.  Keane expressly represents and warrants that he is the sole owner of the actual and alleged claims, demands, rights, causes of action and other matters that are released herein, that the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity, and that he has the full right and power to grant, execute and deliver the general release, undertakings and agreements contained herein.

 

6.             Release by the Company.  The Company hereby releases Keane from any and all claims, demands or causes of action of any kind that it now has against Keane arising out of or related to Keane’s employment with the Company, with the exception of claims, demands or causes of action arising out of or related to criminal acts, fraud or knowing wrongful conduct, that arise out of or relate to any occurrences prior to the date of this Release; provided, however, that nothing contained in this Release shall apply to, or release Keane from, any obligation contained in the Separation Agreement, the Restrictive Agreements (as that term is defined in the Separation Agreement) or this Release.

 

7.             Entire Agreement.  The Separation Agreement, the Restrictive Agreements and this Release constitute the entire agreement and understanding between the parties.  Keane has not relied on any oral statements that are not expressly stated in the Separation Agreement or this Release.

 

8.             Governing Law.  This Release shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Tennessee without regard to the principle of conflicts of laws.

 

MRI Interventions, Inc.

 

 

By: /s/ Oscar Thomas                                                                           

Name: Oscar Thomas                                                                            

Title: Vice President, Business Affairs                                              

  /s/ John Keane                                                                                    

John Keane

 

Attachment A - 4ex10-1.htm

EXHIBIT 10.1

 

SIXTH LOAN MODIFICATION AGREEMENT

 

This Sixth Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of May 11,  2012 (the “Sixth 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 and as further amended by a certain Joinder, Fifth Loan Modification and Waiver Agreement, dated as of December 16, 2011 (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 2.1.5(c) and Section 2.1.5(d) thereof:

 

“(c)           Repayment.  Commencing on the first day of the month following the last day of the Draw Period through and including the Term Loan Maturity Date, the principal amount of the Term Loan outstanding on the last day of the Draw Period is payable in (i) thirty-six (36) consecutive equal monthly installments of principal, based on a thirty-six (36) month amortization period, plus (ii) monthly payments of interest, in arrears, on the outstanding principal amount of the Term Loan at the rate set forth in Section 2.3(a)(ii).  Notwithstanding the foregoing, all unpaid principal and interest on the Term Loan shall be due on the Term Loan Maturity Date.

  

  

  

 

(d)           Prepayment.  The Term Loan may be prepaid by Borrower prior to the Term Loan Maturity Date, effective three (3) Business Days after written notice of prepayment is given to Bank.  Notwithstanding any such prepayment, Bank’s lien and security interest in the Collateral shall continue until Borrower fully satisfies its Obligations.  If such prepayment is at Borrower’s election prior to the last day of the Draw Period, there shall be no prepayment premium.  If such prepayment is at Borrower’s election or at Bank’s election due to the occurrence and continuance of an Event of Default after the termination of the Draw Period, but (i) prior to the first anniversary of the termination of the Draw Period, Borrower shall pay to Bank, in addition to the payment of any other expenses or fees then-owing, a prepayment fee in an amount equal to Forty Thousand Dollars ($40,000) (i.e. two percent (2.00%) of Two Million Dollars ($2,000,000)) and (ii) on or after the first anniversary of the termination of the Draw Period, but prior to the second anniversary of the termination of the Draw Period, Borrower shall pay to Bank, in addition to the payment of any other expenses or fees then-owing, a prepayment fee in an amount equal to Twenty Thousand Dollars ($20,000) (i.e. one percent (1.00%) of Two Million Dollars ($2,000,000)); provided that no termination fee shall be charged if the Term Loan is replaced with a new facility from another division of Silicon Valley Bank.  If such prepayment is at Borrower’s election or at Bank’s election due to the occurrence and continuance of an Event of Default after the second anniversary of the termination of the Draw Period, there shall be no prepayment premium.

Notwithstanding the foregoing, if such prepayment of the Term Loan is at Borrower’s election and is made for the sole purpose of increasing the unused Availability Amount (the “Excess Availability”) and, together with such Term Loan prepayment, Borrower submits a Transaction Report (including a request for an Advance) that supports, as determined by Bank, in its sole discretion, lending such Excess Availability, on a Dollar for Dollar basis, under the Revolving Line (by reference to the Availability Amount and such Transaction Report), then no prepayment premium shall be applicable with respect to such prepayment of the Term Loan.”

and inserting in lieu thereof the following:

“(c)           Repayment.  (i) On or before July 2, 2012, Bank shall have received the Permitted Term Loan Prepayment Amount.  Such Permitted Term Loan Prepayment Amount shall be in addition to regularly scheduled principal payments described below, and shall be applied to the principal amount of each remaining Term Loan Payment described below on a pro rata basis. The Permitted Term Loan Prepayment Amount shall be exempt from the applicable prepayment fee described in Section 2.1.5(d) hereof.

(ii)           Borrower shall continue repaying the outstanding amount of the Term Loan in accordance with the existing thirty-six (36) month amortization period, in (i) consecutive equal monthly installments of principal, plus (ii) monthly payments of interest, in arrears, (each such payment of principal and interest being a “Term Loan Payment”), at the rate set forth in Section 2.3(a)(ii).  Notwithstanding the foregoing, all unpaid principal and interest on the Term Loan shall be due on the Term Loan Maturity Date.  Once repaid, no amount of the Term Loan may be reborrowed.

(d)           Prepayment.  The Term Loan may be prepaid by Borrower prior to the Term Loan Maturity Date, effective three (3) Business Days after written notice of prepayment is given to Bank.  Notwithstanding any such prepayment, Bank’s lien and security interest in the Collateral shall continue until Borrower fully satisfies its Obligations.  If such prepayment is at Borrower’s election or at Bank’s election due to the occurrence and continuance of an Event of Default, Borrower shall pay to Bank, in addition to the payment of any other expenses or fees then-owing, a prepayment fee in an amount equal to (i) if such prepayment occurs on or after the Sixth Loan Modification Effective Date but on or prior to March 31, 2013, Forty Thousand Dollars ($40,000) and (ii) if such prepayment occurs on or after April 1, 2013 but on or prior to March 31, 2014, Twenty Thousand Dollars ($20,000); provided that no prepayment fee shall be charged (i) on or after April 1, 2014 or (ii) if the Term Loan is replaced with a new facility from another division of Silicon Valley Bank.”

 

  

  

  

	
  

	
2.

	
The Loan Agreement shall be amended by deleting the following text appearing as Section 6.2(a)(i) thereof:

 

“(i) (A) within thirty (30) days after the end of each month, and (B) upon each request for a Credit Extension, a Borrowing Base Certificate;”

and inserting in lieu thereof the following:

“(i) (A) within thirty (30) days after the end of each month, and (B) upon each request for a Credit Extension, a Transaction Report (including, without limitation, a Borrowing Base Certificate);”

	
  

	
3.

	
The Loan Agreement shall be amended by deleting the following text appearing at the end of Section 6.2(a) thereof:

 

“Notwithstanding the foregoing clauses (a)(i) and (a)(ii) hereof, commencing on the Fifth Loan Modification Effective Date through and including December 31, 2011, Borrower shall provide Bank with the following:

(i) (A) weekly, on the last Business Day of each week, and (B) upon each request for a Credit Extension, a Transaction Report (including, without limitation, a Borrowing Base Certificate); and

(ii) within thirty (30) days after the end of each month, (A) monthly accounts receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and held check registers, if any, and (C) monthly reconciliations of accounts receivable agings (aged by invoice date) and a Deferred Revenue report;”

 

	
  

	
4.

	
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 plus Committed Availability of not less than One Million Dollars ($1,000,000).”

 

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) 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).

 

	
  

	
5.

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

 

““Availability Amount” is (a) the lesser of (i) the Revolving Line minus the outstanding principal balance of the Term Loan or (ii) the amount available under the Borrowing Base, minus (b) the outstanding principal balance of any Advances.

“Borrowing Base” is eighty percent (80%) of Eligible Accounts, as determined by Bank from Borrower’s most recent Borrowing Base Certificate; provided, however, that Bank may decrease the foregoing percentage in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect the Collateral.

 

  

  

  

“Credit Extension” is any Advance, Term Loan, letter of credit, foreign currency forward contract, amount utilized for cash management services, or any other extension of credit by Bank for Borrower’s benefit.

“Revolving Line Maturity Date” is March 31, 2013.”

and inserting in lieu thereof the following:

““Availability Amount” is (a) the lesser of (i) the Revolving Line minus the outstanding principal balance of the Term Loan or (ii) (X) the amount available under the Borrowing Base plus (Y) during the Non-formula Advance Availability Period, the Non-Formula Advance minus (b) the outstanding principal balance of any Advances, including, without limitation, any outstanding Non-formula Advance.

“Borrowing Base” is (a) eighty percent (80%) of Eligible Accounts plus (b) the lesser of (i) eighty percent (80%) of Eligible Foreign Accounts or (ii) Fifty Thousand Dollars ($50,000), in each case as determined by Bank from Borrower’s most recent Borrowing Base Certificate; provided, however, that Bank may decrease the foregoing percentage in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect the Collateral.

“Credit Extension” is any Advance, Non-formula Advance, Term Loan, letter of credit, foreign currency forward contract, amount utilized for cash management services, or any other extension of credit by Bank for Borrower’s benefit.

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

	
  

	
6.

	
The Loan Agreement shall be amended by deleting the following text appearing as clause (e) of the definition of “Eligible Accounts” in Section 13.1 thereof:

 

“(e)           Accounts owing from an Account Debtor which does not have its principal place of business in the United States, except Eligible Foreign Accounts;”

and inserting in lieu thereof the following:

“(e)           Accounts owing from an Account Debtor which does not have its principal place of business in the United States;”

	
  

	
7.

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

 

““Non-formula Advance” is, to the extent the applicable Borrowing Base is less than the full amount available under the then-applicable Availability Amount, the lesser of (i) Eight Hundred Thousand Dollars ($800,000) or (ii) the result of (x) the Revolving Line minus (y) the amount otherwise available under the applicable Borrowing Base minus (z) the outstanding principal balance of the Term Loan; provided, however, that Bank may decrease the foregoing amount in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect the Collateral.

 

  

  

  

 

“Non-formula Advance Availability Period” is, from and after the date the Permitted Term Loan Prepayment Amount is received by Bank, provided a Default or an Event of Default has not occurred, the period commencing three (3) Business Days prior to the end of each fiscal quarter of the Borrower and terminating on the earlier to occur of (i) the occurrence of a Default and (ii) 12:00 noon eastern time on the third Business Day of the immediately succeeding fiscal quarter of the Borrower.  During the Non-formula Advance Availability Period, Non-formula Advances will be deposited by Bank to the Borrower’s cash collateral account maintained at Bank, and will be used solely to repay outstanding Non-formula Advances upon the termination of the applicable Non-formula Advance Availability Period.

“Permitted Term Loan Prepayment Amount” is Eight Hundred Thousand Dollars ($800,000), to be applied to reduce the outstanding principal balance of the Term Loan.

“Sixth Loan Modification Effective Date” is May    , 2012.”

	
  

	
8.

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

 

““Committed Availability” is, as of any date of determination, an amount equal to (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base minus (b) all outstanding Obligations of Borrower owed to Bank.”

	
  

	
9.

	
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.

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

 

	
  

	
E.

	
such other documents as Bank may reasonably request.

 

  

  

  

 

5.           CONDITIONS SUBSEQUENT.   (a) On or before July 2, 2012, Borrower shall have delivered to Bank (i) evidence satisfactory to Bank that Borrower has received gross proceeds from the issuance of additional equity of the Borrower or Subordinated Debt of not less than One Million Eight Hundred Thousand Dollars ($1,800,000), together with such Subordination Agreements as Bank may require, in form and substance acceptable to Bank, in its sole discretion; and (ii) the Permitted Term Loan Prepayment Amount for application to the outstanding principal balance of the Term Loan.  An Event of Default will be deemed to have occurred under the Loan Agreement if the foregoing conditions subsequent have not been complied with on or prior to July 2, 2012; and

 

(b)           On or before May 21, 2012 (or such later date as Bank shall determine, in its sole discretion), an Acknowledgment and Reaffirmation of Subordination Agreement with TMX Interactive, Inc., together with executed signature pages thereto.

 

6.            FEES.  Borrower shall pay to Bank (i) 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 Sixth Loan Modification Effective Date; and (ii) an annual renewal fee equal to Twenty Five Thousand Dollars ($25,000), which fee shall be due and payable on March 31, 2013 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.

 

7.           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.  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.

 

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

 

9.           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.

 

10.         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.

 

11.         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.

 

  

  

  

 

12.         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.

 

13.         CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER.  Section 11 of the Loan Agreement is hereby incorporated by reference.

 

14.         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]

  

  

  

 

This Loan Modification Agreement is executed as a sealed instrument under the laws of the Commonwealth of Massachusetts, as of the Sixth Loan Modification Effective Date.

 

 

	
BORROWER:

 

	
BANK:

	
BRIDGELINE DIGITAL, INC.

 

 

By: /s/Michael Prinn

Name: Michael D. Prinn

Title:  Chief Accounting Officer

 

	
SILICON VALLEY BANK

 

 

By:     /s/ Steve Lyons

Name: Steve Lyons

Title:  Relationship Manager

 

	
BRIDGELINE INTELLIGENCE GROUP, INC.

 

 

By: /s/Michael Prinn

Name: Michael D. Prinn

Title:  Treasurer

 

	  

 

[Sixth Loan Modification Agreement Signature Page]

  

  

  

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, Transaction Reports 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

	
Borrowing Base Certificate*

	
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)

	
*

	
_________:1.00

	
Yes   No

	
March 31, 2011

	
$200,000

	
$_________

	
Yes   No

	
June 30, 2011

	
$300,000

	
$_________

	
Yes   No

	
September 30, 2011 and thereafter

	
$400,000

	
$_________

	
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

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.”)

------------------------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------------------------

	
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

  

  

  

 

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

	
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”

 

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

  

  

  

 

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) 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).

 

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

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