Document:

EXHIBIT 10.59
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                 AMENDED AND RESTATED GENERAL SECURITY AGREEMENT

                  AMENDED AND RESTATED GENERAL SECURITY AGREEMENT, dated as of
April 3, 2007, between Bridgeline Software, Inc., a Delaware corporation with
offices at 10 Sixth Road, Woburn, MA 01801 (the "Debtor") and the undersigned
Individual Investor (or his, her or its duly authorized agent) and the
undersigned individuals (collectively with the Individual Investors, the
"Purchasers") .

                              W I T N E S S E T H :

                  WHEREAS, the Debtor and certain investors (individually, an
"Existing Note Holder", and, collectively, the "Existing Note Holders") are
parties to secured promissory notes issued by the Debtor in the aggregate
principal amount of $2,800,000 (herein, as at any time amended, extended,
restated, renewed or modified, the "Existing Notes");

                  WHEREAS, the Debtor and certain new investors (individually, a
"New Note Holder", and, collectively, the "New Note Holders", and together with
the Existing Noteholders, the "Note Holders") are parties to secured promissory
notes issued by the Debtor in the aggregate principal amount of $200,000
(herein, as at any time amended, extended, restated, renewed or modified, the
"New Notes", and together with the Existing Notes, the "Notes");

                  WHEREAS, the Debtor and the Existing Note Holders acting
through their authorized agent entered into a certain General Security
Agreement, dated April 21, 2006 (the "Prior Agreement");

                  WHEREAS, pursuant to a certain Noteholder Agency Appointment
Agreement, dated April 21, 2006, by and among the Existing Note Holders and
their authorized agent, Joseph Gunnar & Co., LLC, the Existing Note Holders
authorized their authorized agent to modify the Prior Agreement;

                  WHEREAS, the authorized agent and the New Note Holders desire
to amend the Prior Agreement to grant to the New Note Holders a security
interest in the manner set forth below PARI PASSU with the security interest
granted to the Existing Note Holders.

                  NOW, THEREFORE, FOR VALUE RECEIVED, IT IS AGREED:

                  Section 1. Terms. Unless otherwise defined herein, capitalized
terms used in this Agreement shall have the meaning specified therefor in the
Note. As used herein the following terms shall have the meanings specified and
shall include in the singular number the plural and in the plural number the
singular:

                  "Assigned Agreements" shall mean all contracts and agreements
of the Debtor.

<PAGE>

                  "Collateral" means all of the Debtor's right, title and
interest in and under or arising out of each and all of the following:

                           All personal property and fixtures of the Debtor of
                  any type or description, wherever located and now existing or
                  hereafter arising or acquired, including but not limited to
                  the following:

                           (i)      all of the Debtor's goods including, without
                                    limitation:

                                    (a) all inventory, including without
                                    limitation, equipment held for lease,
                                    whether raw materials, in process or
                                    finished, all material or equipment usable
                                    in processing the same and all documents of
                                    title covering any inventory (all of the
                                    foregoing, "Inventory"), including without
                                    limitation that located at the locations
                                    listed on Schedule 1 annexed hereto;

                                    (b) all equipment (the "Equipment") employed
                                    in connection with the Debtor's business,
                                    together with all present and future
                                    additions, attachments and accessions
                                    thereto and all substitutions therefor and
                                    replacements thereof, including without
                                    limitation that located at the locations
                                    listed on Schedule 1 annexed hereto;

                           (ii)     all of the Debtor's present and future
                                    accounts, accounts receivable, general
                                    intangibles, contracts and contract rights
                                    (herein sometimes referred to as
                                    "Receivables"), including but not limited to
                                    the Debtor's rights (including rights to
                                    payment) under all Assigned Agreements,
                                    together with

                                    (a) all claims, rights, powers or privileges
                                    and remedies of the Debtor relating thereto
                                    or arising in connection therewith
                                    including, without limitation, all rights of
                                    the Debtor to make determinations, to
                                    exercise any election (including, but not
                                    limited to, election of remedies) or option
                                    or to give or receive any notice, consent,
                                    waiver or approval, together with full power
                                    and authority to demand, receive, enforce,
                                    collect or receipt for any of the foregoing
                                    or any property which is the subject of the
                                    Assigned Agreements, to enforce or execute
                                    any checks, or other instruments or orders,
                                    to file any claims and to take any action
                                    which (in the opinion of the Secured Party
                                    Representative, as defined herein)

<PAGE>

                                    may be necessary or advisable in connection
                                    with any of the foregoing,

                                    (b) all liens, security, guaranties,
                                    endorsements, warranties and indemnities and
                                    all insurance and claims for insurance
                                    relating thereto or arising in connection
                                    therewith,

                                    (c) all rights to property forming the
                                    subject matter of the Receivables including,
                                    without limitation, rights to stoppage in
                                    transit and rights to returned or
                                    repossessed property,

                                    (d) all writings relating thereto or arising
                                    in connection therewith including without
                                    limitation, all notes, contracts, security
                                    agreements, guaranties, chattel paper and
                                    other evidence of indebtedness or security,
                                    all powers-of-attorney, all books, records,
                                    ledger cards and invoices, all credit
                                    information, reports or memoranda and all
                                    evidence of filings or registrations
                                    relating thereto,

                                    (e) all catalogs, computer and automatic
                                    machinery software and programs, and the
                                    like pertaining to operations by the Debtor
                                    in, on or about any of its plants or
                                    warehouses, all sales data and other
                                    information relating to sales or service of
                                    products now or hereafter manufactured on or
                                    about any of its plants, and all accounting
                                    information pertaining to operations in, on
                                    or about any of its plants, and all media in
                                    which or on which any of the information or
                                    knowledge or data is stored or contained,
                                    and all computer programs used for the
                                    compilation or printout of such information,
                                    knowledge, records or data, and

                                    (f) all accounts, contract rights, general
                                    intangibles and other property rights of any
                                    nature whatsoever arising out of or in
                                    connection with the foregoing, including
                                    without limitation, payments due and to
                                    become due, whether as repayments,
                                    reimbursements, contractual obligations,
                                    indemnities, damages or otherwise;

                  (iii)    patents, patent applications, copyrights and
                           intellectual property of all description;

                  (iv)     all other personal property of the Debtor of any
                           nature whatsoever, including, without limitation, all
                           accounts, bank accounts, deposits, credit

<PAGE>

                           balances, contract rights, inventory, general
                           intangibles, goods, equipment, instruments, chattel
                           paper, machinery, furniture, furnishings, fixtures,
                           tools, supplies, appliances, plans and drawings,
                           together with all customer and supplier lists and
                           records of the business, and all property from time
                           to time described in any financing statement (UCC-1)
                           signed by the Debtor naming the Secured Party
                           Representative as secured party; and

                  (v)      all additions, accessions, replacements,
                           substitutions or improvements and all products and
                           proceeds including, without limitation, proceeds of
                           insurance, of any and all of the Collateral described
                           in clauses (i) through (iii) above.

                  "Instrument" shall have the meaning specified in Article 3 of
the Uniform Commercial Code, as in effect from time to time in the State of New
York and shall also include any other writing which evidences a right to the
payment of money and is not itself a security agreement or lease and is of a
type which is in the ordinary course of business transferred by delivery with
any necessary endorsement or assignment.

                  "Lien" means any mortgage, pledge, hypothecation, assignment,
security interest, deposit arrangement, encumbrance (including any easement,
right of way, zoning restriction and the like), lien (statutory or other) or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing lease involving substantially the same
economic effect as any of the foregoing and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).

                  "Permitted Liens" means:

                           (a) Liens for taxes, assessments or other
                  governmental charges or levies not at the time delinquent or
                  thereafter payable without penalty or being contested in good
                  faith by appropriate proceedings and for which adequate
                  reserves in accordance with generally accepted accounting
                  principles shall have been set aside on its books;

                           (b) Liens of carriers, warehousemen, mechanics,
                  materialmen and landlords incurred in the ordinary course of
                  business for sums not overdue or being contested in good faith
                  by appropriate proceedings and for which adequate reserves
                  shall have been set aside on its books;

                           (c) Liens (other than Liens arising under the
                  Employee Retirement Income Security Act of 1974, as amended,
                  or Section 412(n) of the Internal Revenue Code of 1986, as
                  amended) incurred in the ordinary course of business

<PAGE>

                  in connection with workers' compensation, unemployment
                  insurance or other forms of governmental insurance or
                  benefits, or to secure performance of tenders, statutory
                  obligations, leases and contracts (other than for borrowed
                  money) entered into in the ordinary course of business or to
                  secure obligations on surety or appeal bonds;

                           (d) judgment Liens in existence less than 30 days
                  after the entry thereof or with respect to which execution has
                  been stayed;

                           (e) ground leases in respect of real property on
                  which facilities owned or leased by the Debtor or any of its
                  subsidiaries are located;

                           (f) easements, rights-of-way, restrictions, minor
                  defects or irregularities in title and other similar charges
                  or encumbrances not interfering in any material respect with
                  the business of the Debtor and its subsidiaries taken as a
                  whole;

                           (g) any interest or title of a lessor secured by a
                  lessor's interest under any lease of real property on which
                  facilities owned or leased by the Debtor or any of its
                  subsidiaries are located;

                           (h) leases or subleases granted to others not
                  interfering in any material respect with the business of the
                  Debtor and its subsidiaries taken as a whole;

                           (i) a Lien on any asset securing indebtedness
                  (including capitalized lease obligations) incurred or assumed
                  for the purpose of financing the purchase price (including
                  capitalized lease payments in the nature thereof) of such
                  asset, provided that such Lien attaches only to the asset
                  acquired with the proceeds of such indebtedness and attaches
                  concurrently with or within ten (10) days following the
                  acquisition thereof;

                           (j) any liens set forth on Schedule 2; and

                           (k) any liens securing indebtedness or obligations,
                  which liens, indebtedness or obligations are approved by the
                  Note Holder in writing.

                  "Person" means any natural person, corporation, firm,
association, partnership, joint venture, limited liability company, joint-stock
company, trust, unincorporated organization, government, governmental agency or
subdivision, or any other entity, whether acting in an individual, fiduciary or
other capacity.

<PAGE>

                  "Receivables" has the meaning specified therefor in clause
(ii) of the definition of Collateral.

                  "Secured Obligations" means all obligations of the Debtor,
whether for fees, expenses or otherwise, now existing or hereafter arising under
this Agreement and the Notes.

                  Section 2. Security Interests. As security for the payment and
performance of all Secured Obligations the Debtor does hereby grant and assign
to each Note Holder, a continuing security interest in all of the Collateral,
whether now existing or hereafter arising or acquired and wherever located,
subject to the priority, if any, of Permitted Liens.

                  Section 3. General Representations, Warranties and Covenants.
The Debtor represents, warrants and covenants, which representations, warranties
and covenants shall survive execution and delivery of this Agreement, as
follows:

                  (a) This Agreement is made with full recourse to the Debtor
and pursuant to and upon all the warranties, representations, covenants, and
agreements on the part of the Debtor contained herein, in the Note and otherwise
made in writing in connection herewith or therewith.

                  (b) Except for the security interest of the Note Holder
therein, the Debtor is, and as to Collateral acquired from time to time after
the date hereof the Debtor will be, the owner of all the Collateral free from
any lien, security interest, encumbrance or other right, title or interest of
any Person (other than Permitted Liens) and the Debtor shall defend the
Collateral against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to the Note Holder.

                  (c) There is no financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) now on file or
registered in any public office covering any interest of any kind in the
Collateral, or intended to cover any such interest, which has not been
terminated or released by the secured party named therein and so long as the
Notes remain outstanding or any of the Secured Obligations of the Debtor remain
unpaid, the Debtor will not execute and there will not be on file in any public
office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except (i) financing statements filed or to be filed in respect of
and covering the security interest of the Note Holders hereby granted and
provided for and (ii) with respect to Permitted Liens.

                  (d) The chief executive office and chief place of business of
the Debtor is located at the address of the Debtor listed on the signature page
hereof, and the Debtor will not move its chief executive office and chief place
of business except to such new location as the Debtor may establish in
accordance with the last sentence of this Section 3(d). The originals of all
Assigned Agreements and all documents (as well as all duplicates thereof)
evidencing all

<PAGE>

Receivables and all other contract rights or accounts and other property of the
Debtor and the only original books of account and records of the Debtor relating
thereto are, and will continue to be, kept at such chief executive office, or at
such new location as the Debtor may establish in accordance with the last
sentence of this Section 3(d). The Debtor shall establish no such new location
until (i) it shall have given to the Note Holders not less than 30 days' prior
written notice of its intention to do so, clearly describing such new location
and providing such other information in connection therewith as the Note Holders
may reasonably request, and (ii) with respect to such new location, it shall
have taken such action, satisfactory to the Note Holders (including, without
limitation, all action required by Section 7 hereof), to maintain the security
interest of the Note Holders in the Receivables intended to be granted at all
times fully perfected and in full force and effect.

                  (e) The Debtor has no Collateral located outside of locations
set forth on Schedule 1 annexed hereto.

                  (f) The name of the Debtor is as set forth on the signature
page hereto and the Debtor shall not change such name, conduct its business in
any other name or take title to the Collateral in any other name while this
Agreement remains in effect, without providing the Note Holders no less than 20
days' notice and making such filings as the Note Holders shall reasonably
request. The Debtor has never had any name, or conducted business under any name
in any jurisdiction, other than its name set forth on the signature page hereto,
during the past six years other than as set forth in Schedule 2 annexed hereto.

                  (g) At the Debtor's own expense, the Debtor will: (i) without
limiting the provisions of the Notes, keep the Collateral fully insured at all
times with financially sound and responsible insurance carriers against loss or
damage by fire and other risks, casualties and contingencies and in such manner
and to the same extent that like properties are customarily so insured by other
entities engaged in the same or similar businesses similarly situated and keep
adequate insurance at all times against liability on account of damage to
persons and properties and under all applicable workers' compensation laws, by
insurers and in amounts approved by the Note Holders, for the benefit of the
Debtor and the Note Holders, (ii) upon request by the Note Holders, promptly
deliver the insurance policies or certificates thereof to the Note Holders, and
(iii) keep the Collateral in good condition at all times (normal wear and tear
excepted) and maintain same in accordance with all manufacturer's specifications
and requirements. Upon any failure of the Debtor to comply with its obligations
pursuant to this Section 3(g), each Note Holder may at its option, and without
affecting any of its other rights or remedies provided herein or as a secured
party under the Uniform Commercial Code, procure the insurance protection it
deems necessary and/or cause repairs or modifications to be made to the
Collateral and the cost of either or both of which shall be a lien against the
Collateral added to the amount of the indebtedness secured hereby and payable on
demand with interest at a rate per annum equal to 18%.

<PAGE>

                  (h) The Debtor hereby assigns to the Note Holders all of
Debtor's right, title and interest in and to any and all moneys which may become
due and payable with respect to the Collateral under any policy insuring the
Collateral (except proceeds relating to tangible personal property which are
applied to restoration or replacement), including return of unearned premium,
and shall cause any such insurance company to make payment directly to the Note
Holder for application to amounts outstanding under the Notes in accordance with
the terms of the Notes and, to the extent not provided therein, in such order as
the Note Holders shall determine.

                  (i) The Debtor will not use the Collateral in violation of any
statute or ordinance or applicable insurance policy and will promptly pay all
taxes and assessments levied against the Collateral.

                  (j) The Debtor will not sell, transfer, change the
registration, if any, dispose of, attempt to dispose of, substantially modify or
abandon the Collateral or any part thereof other than sales of Inventory in the
ordinary course of business and the disposition of obsolete or worn-out
Equipment in the ordinary course of business.

                  (k) The Debtor will not assert against the Note Holders or any
Note Holder any claim or defense which the Debtor may have against any seller of
the Collateral or any part thereof or against any other Person with respect to
the Collateral or any part thereof.

                  (l) The Debtor will indemnify and hold the Note Holders and
any Note Holder harmless from and against any loss, liability, damage, costs and
expenses whatsoever arising from the Debtor's use, operation, ownership or
possession of the Collateral or any part thereof.

                  (m) The Debtor will maintain the confidentiality of all
customer lists and not sell or otherwise dispose of such lists except that the
Debtor shall deliver copies thereof to each Note Holder upon its request, which
may be made at any time and from time to time after an Event of Default.

                  (n) The Debtor will not enter into any agreement that is
inconsistent with the Debtor's obligations under this Agreement, without the
prior written consent of the Note Holders.

                  (o) If the Debtor transfer any assets to any subsidiary or
affiliate now existing or hereafter formed, before so doing, it shall cause such
person to sign a guaranty and security agreement covering the secured
obligations.

                  Section 4. Special Provisions Concerning Assigned Agreements.
The Debtor represents, warrants and agrees as follows:

<PAGE>

                  (a) The Assigned Agreements constitute the legal, valid and
binding obligations of the Debtor and, to the best of its knowledge, the other
parties thereto, enforceable in accordance with their respective terms.

                  (b) The Debtor will use its best efforts to faithfully abide
by, perform and discharge each and every material obligation, covenant and
agreement to be performed by the Debtor under the Assigned Agreements.

                  (c) At the request of the Note Holders, and at the sole cost
and expense of the Debtor, the Debtor will enforce or secure the performance of
each and every material obligation, covenant, condition and agreement contained
in the Assigned Agreements to be performed by the other parties thereto.

                  (d) The Debtor will not modify, amend or agree to vary any of
the Assigned Agreements in any material respect other than in the ordinary
course of business, or otherwise act or fail to act in a manner likely (directly
or indirectly) to entitle any party thereto to claim that the Debtor is in
default under the terms thereof.

                  (e) The Debtor will not terminate or permit the termination of
any Assigned Agreement, except in accordance with its terms, other than in the
ordinary course of business.

                  (f) Without the prior written consent of the Note Holders, the
Debtor will not, other than in the ordinary course of business, waive or in any
manner release or discharge any party to any Assigned Agreement from any of the
material obligations, covenants, conditions and agreements to be performed by it
under such Assigned Agreement including, without limitation, the obligation to
make all payments in the manner and at the time and places specified.

                  (g) If a Note Holder so requests after the occurrence of an
Event of Default, the Debtor will hold any payments received by it which are
assigned and set over to the Note Holder by this Agreement for and on behalf of
such Note Holder and turn them promptly over to such Note Holder forthwith in
the same form in which they are received (together with any necessary
endorsement) for application to amounts outstanding under the Notes in
accordance with the terms of the Notes and, to the extent not provided therein,
in such order as such Note Holder shall determine.

                  (h) The Debtor will appear in and defend every action or
proceeding arising under, growing out of or in any manner connected with the
Assigned Agreements or the obligations, duties or liabilities of the Debtor and
any assignee thereunder.

                  (i) Should the Debtor fail to make any payment or to do any
act as herein provided after 15 days' notice by the Note Holders, the Note
Holders may (but without obligation on the Note Holders' part to do so and
without notice to or demand on the Debtor and

<PAGE>

without releasing the Debtor from any obligation hereunder) make or do the same
in such manner and to such extent as the Note Holders may deem necessary to
protect the security interests provided hereby, including specifically, without
limiting the general powers, the right to appear in and defend any action or
proceeding purporting to affect the security interests provided hereby and the
Debtor, and the Note Holders may also perform and discharge each and every
obligation, covenant and agreement of the Debtor contained in any Assigned
Agreement and, in exercising any such powers, pay necessary costs and expenses,
employ counsel and incur and pay reasonable attorneys' fees.

                  (j) Upon the request of the Note Holders, the Debtor will send
to the Note Holders copies of all notices, documents and other papers furnished
or received by it with respect to any of the Assigned Agreements.

                  Section 5. Special Provisions Concerning Receivables. (a) As
of the time when each Receivable arises, the Debtor shall be deemed to have
warranted as to each such Receivable that such Receivable and all papers and
documents relating thereto are genuine and in all respects what they purport to
be, and that all papers and documents relating thereto:

                           (i) will be signed by the account debtor named
                  therein (or such account debtor's duly authorized agent) or
                  otherwise be binding on the account debtor;

                           (ii) will represent the genuine, legal, valid and
                  binding obligation of the account debtor evidencing
                  indebtedness unpaid and owed by such account debtor arising
                  out of the performance of labor or services or the sale and
                  delivery of merchandise or both;

                           (iii) to the extent evidenced by writings, will be
                  the only original writings evidencing and embodying such
                  obligation of the account debtor named therein; and

                           (iv) will be in compliance and will conform with all
                  applicable federal, state and local laws (including applicable
                  usury laws) and applicable laws of any relevant foreign
                  jurisdiction.

                  (b) The Debtor will keep and maintain at the Debtor's own cost
and expense satisfactory and complete records of the Receivables, including, but
not limited to, records of all payments received, all credits granted thereon,
all merchandise returned and all other dealings therewith, and the Debtor will
make the same available to the Note Holders, at the Debtor's own cost and
expense, at any and all reasonable times upon demand of the Note Holders. The
Debtor shall, at the Debtor's own cost and expense, deliver the Receivables
(including, without limitation, all documents evidencing the Receivables) and
such books and records to each Note

<PAGE>

Holder or to its representatives upon its demand at any time after the
occurrence of an Event of Default and, if prior to the Maturity Date,
Acceleration shall exist. If the Note Holder shall so request, the Debtor shall
legend, in form and manner satisfactory to the Note Holder, the Receivables and
other books, records and documents of the Debtor evidencing or pertaining to the
Receivables with an appropriate reference to the fact that the Receivables have
been assigned to the Note Holders and that the Note Holders have a security
interest therein.

                  (c) Except in the ordinary course of business prior to an
Event of Default and, if prior to the Maturity Date, Acceleration shall exist,
the Debtor will not rescind or cancel any indebtedness evidenced by any
Receivable or modify any term thereof or make any adjustment with respect
thereto, or extend or renew the same, or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto, or sell any Receivable or
interest therein, without the prior written consent of the Note Holders, except
that the Debtor may grant discounts in connection with the prepayment of any
Receivable in an amount which is customary in the line of business in which the
Debtor is engaged and consistent with the Debtor's past practices.

                  (d) The Debtor will duly fulfill all obligations on its part
to be fulfilled under or in connection with the Receivables and will do nothing
to impair the rights of the Note Holders in the Receivables.

                  (e) The Debtor shall endeavor to collect or cause to be
collected from the account debtor named in each Receivable, as and when due
(including, without limitation, Receivables which are delinquent, such
Receivables to be collected in accordance with generally accepted lawful
collection procedures) any and all amounts owing under or on account of such
Receivable, and credit forthwith (on a daily basis) upon receipt thereof all
such amounts as are so collected to the outstanding balance of such Receivable.
The costs and expenses (including attorney's fees) of collection, whether
incurred by the Debtor or the Note Holders, shall be borne by the Debtor.

                  (f) If any of the Receivables becomes evidenced by an
Instrument (other than a check received in payment of a Receivable and deposited
in the ordinary course of business), the Debtor will notify the Note Holders
thereof, and, upon request by the Note Holders, promptly deliver such Instrument
to the Note Holders appropriately endorsed to the order of the Note Holders as
further security for the satisfaction in full of the Secured Obligations.

                  (g) Upon request of the Note Holders, at any time when an
Event of Default and, if prior to the Maturity Date, Acceleration shall exist,
the Debtor shall promptly notify (in manner, form and substance satisfactory to
the Note Holders) all Persons who are at any time obligated under any Receivable
that the Note Holders possess a security interest in such Receivable and that
all payments in respect thereof are to be made to such account as the Note
Holders direct.

<PAGE>

                  Section 6. Special Provisions Concerning Equipment. The Debtor
will do nothing to impair the rights of the Note Holders in the Equipment. The
Debtor shall cause the Equipment to at all times constitute and remain personal
property. The Debtor will at all times keep all Equipment insured with
financially responsible insurance companies in favor of the Note Holders, at the
expense of the Debtor, against such perils and in such amounts as are customary
for Persons in the same general line of business as the Debtor and operating in
similar geographic locations and markets. If the Debtor shall fail to insure the
Equipment to the Note Holders' reasonable satisfaction, or if the Debtor shall
fail so to endorse and deposit all policies or certificates with respect
thereto, the Note Holders shall have the right (but shall be under no
obligation) for and on behalf of the Note Holders to procure such insurance and
the Debtor agrees to reimburse the Note Holders for all costs and expenses of
procuring such insurance, together with interest at a rate per annum equal to
18%. The Note Holders may apply any proceeds of such insurance when received by
it pursuant to the terms of this Section 6 or Section 3(h) hereof toward the
payment of any of the Secured Obligations, whether or not the same shall then be
due. The Debtor retains all liability and responsibility in connection with the
Equipment and the liability of the Debtor to pay the Secured Obligations shall
in no way be affected or diminished by reason of the fact that such Equipment
may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable
to the Debtor.

                  Section 7. Financing Statements; Documentary Stamp Taxes. (a)
The Debtor will, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Note Holders from time to time such lists, descriptions
and designations of Inventory, warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
reports and other assurances or instruments and take such further steps relating
to the Collateral and other property or rights covered by the security interest
hereby granted, which the Note Holders deem appropriate or advisable to perfect,
preserve or protect its security interest in the Collateral. The Debtor hereby
constitutes the Note Holders as its attorney-in-fact to execute and file in the
name and on behalf of the Debtor such additional financing statements and other
documents as the Note Holders may reasonably request, such acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an interest,
is irrevocable until the Secured Obligations are paid in full. Further, to the
extent permitted by applicable law, the Debtor authorizes the Note Holders to
file any such financing statements and other documents without the signature of
the Debtor or to execute the same on behalf of the Debtor. The Debtor will pay
all applicable filing fees and related expenses in connection with any such
financing statements.

                  (b) The Debtor agrees to procure, pay for, affix to any and
all documents and cancel any documentary tax stamps required by and in
accordance with, applicable law and the Debtor will indemnify and hold the Note
Holders and any Note Holders harmless against any liability (including interest
and penalties) in respect of such documentary stamp taxes.

<PAGE>

                  Section 8. Special Provisions Concerning Remedies and Sale. In
addition to any rights and remedies now or hereafter granted under applicable
law and not by way of limitation of any such rights and remedies, upon the
occurrence of an Event of Default the Note Holders shall have all of the rights
and remedies of a secured party under the Uniform Commercial Code as enacted in
any applicable jurisdiction in addition to the rights and remedies provided
herein, in the Note and in any other agreement executed in connection with the
Note whereby the Debtor has granted any Lien to the Note Holders. Without in any
way limiting the foregoing, upon the giving of notice to the Debtor of the Note
Holders' intent to pursue any one or all of the following or any other remedies
(it being understood that the Note Holders will take the same actions under this
Security Agreement):

                  (a) Upon the occurrence of an Event of Default, the Note
Holders shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code as enacted in any applicable jurisdiction in addition to
the rights and remedies provided herein, in the Note and any other document
whereby the Debtor has granted any Lien to the Note Holders. The Note Holders
shall have the right, without further notice to, or assent by, the Debtor, in
the name of the Debtor or in the name of the Note Holders or otherwise:

                           (i) to ask for, demand, collect, receive, compound
                  and give acquittance for the Receivables or any part thereof;

                           (ii) to extend the time of payment of, compromise or
                  settle for cash, credit or otherwise, and upon any terms and
                  conditions, any of the Receivables;

                           (iii) to endorse the name of the Debtor on any
                  checks, drafts or other orders or instruments for the payment
                  of moneys payable to the Debtor which shall be issued in
                  respect of any Receivable;

                           (iv) to file any claims, commence, maintain or
                  discontinue any actions, suits or other proceedings deemed by
                  the Note Holders necessary or advisable for the purpose of
                  collecting or enforcing payment of any Receivable;

                           (v) to make test verifications of the Receivables or
                  any portion thereof;

                           (vi) to notify any or all account debtors under any
                  or all of the Receivables to make payment thereof directly to
                  the Note Holders for the account of the Note Holders and to
                  require the Debtor to forthwith give similar notice to the
                  account debtors;

                           (vii) to require the Debtor forthwith to account for
                  and transmit to the Note Holders in the same form as received
                  all proceeds (other than physical property) of collection of
                  Receivables received by the Debtor and, until so

<PAGE>

                  transmitted, to hold the same in trust for the Note Holders
                  and not commingle such proceeds with any other funds of the
                  Debtor;

                           (viii) to take possession of any or all of the
                  Collateral and, for that purpose, to enter, upon reasonable
                  notice, with the aid and assistance of any Person or Persons
                  and with or without legal process, any premises where the
                  Collateral, or any part thereof, are, or may be, placed or
                  assembled, and to remove any of such Collateral;

                           (ix) to execute any instrument and do all other
                  things necessary and proper to protect and preserve and
                  realize upon the Collateral and the other rights contemplated
                  hereby;

                           (x) upon reasonable notice to such effect, to require
                  the Debtor to deliver, at the Debtor's expense, any or all
                  Collateral to the Note Holders at a place designated by the
                  Note Holders; and

                           (xi) without obligation to resort to other security,
                  at any time and from time to time, to sell, re-sell, assign
                  and deliver all or any of the Collateral, in one or more
                  parcels at the same or different times, and all right, title
                  and interest, claim and demand therein and right of redemption
                  thereof, at public or private sale, for cash, upon credit or
                  for future delivery, and at such price or prices and on such
                  terms as the Note Holders may determine, with the amounts
                  realized from any such sale to be applied to the Secured
                  Obligations in the manner determined by the Note Holders.

The Debtor hereby agrees that all of the foregoing may be effected without
demand, advertisement or notice (except as otherwise provided herein or as may
be required by law), all of which (except as otherwise provided) are hereby
expressly waived, to the extent permitted by law. The Note Holders shall not be
obligated to do any of the acts hereinabove authorized, but in the event that
the Note Holder elects to do any such act, the Note Holder shall not be
responsible to the Debtor except for their gross negligence or willful
misconduct.

                  (b) the Note Holders may take legal proceedings for the
appointment of a receiver or receivers (to which the Note Holders shall be
entitled as a matter of right) to take possession of the Collateral pending the
sale thereof pursuant either to the powers of sale granted by this Agreement or
to a judgment, order or decree made in any judicial proceeding for the
foreclosure or involving the enforcement of this Agreement. If, after the
exercise of any or all of such rights and remedies, any of the Secured
Obligations shall remain unpaid, the Debtor shall remain liable for any
deficiency. After the indefeasible payment in full of the Secured Obligations,
any proceeds of the Collateral received or held by the Note Holders shall be
turned over to the Debtor and the Collateral shall be reassigned to the Debtor
by the Note Holders without recourse to the Note Holders

<PAGE>

and without any representations, warranties or agreements of any kind.

                  (c) Upon any sale of any of the Collateral, whether made under
the power of sale hereby given or under judgment, order or decree in any
judicial proceeding for the foreclosure or involving the enforcement of this
Agreement:

                           (i) the Note Holders may, to the extent permitted by
                  law, bid for and purchase the property being sold, and upon
                  compliance with the terms of sale may hold, retain and possess
                  and dispose of such property in its own absolute right without
                  further accountability, and may, in paying the purchase money
                  therefor, deliver any Note or claims for interest thereon and
                  any other instruments evidencing the Secured Obligations or
                  agree to the satisfaction of all or a portion of the Secured
                  Obligations in lieu of cash in payment of the amount which
                  shall be payable thereon, and the Note and such instruments,
                  in case the amounts so payable thereon shall be less than the
                  amount due thereon, shall be returned to the Note Holders
                  after being appropriately stamped to show partial payment;

                           (ii) the Note Holders may make and deliver to the
                  purchaser or purchasers a good and sufficient deed, bill of
                  sale and instrument of assignment and transfer of the property
                  sold;

                           (iii) the Note Holders are hereby irrevocably
                  appointed the true and lawful attorney-in-fact of the Debtor
                  in its name and stead, to make all necessary deeds, bills of
                  sale and instruments of assignment and transfer of the
                  property thus sold and for such other purposes as are
                  necessary or desirable to effectuate the provisions
                  (including, without limitation, this Section 8) of this
                  Agreement, and for that purpose they may execute and deliver
                  all necessary deeds, bills of sale and instruments of
                  assignment and transfer, and may substitute one or more
                  Persons with like power, the Debtor hereby ratifying and
                  confirming all that its said attorney, or such substitute or
                  substitutes, shall lawfully do by virtue hereof; but if so
                  requested by the Note Holderss or by any purchaser, the Debtor
                  shall ratify and confirm any such sale or transfer by
                  executing and delivering to the Note Holderss or to such
                  purchaser all property, deeds, bills of sale, instruments or
                  assignment and transfer and releases as may be designated in
                  any such request;

                           (iv) all right, title, interest, claim and demand
                  whatsoever, either at law or in equity or otherwise, of the
                  Debtor of, in and to the property so sold shall be divested;
                  such sale shall be a perpetual bar both at law and in equity
                  against the Debtor, its successors and assigns, and against
                  any and all Persons claiming or who may claim the property
                  sold or any part thereof from, through or under the Debtor,
                  its successors or assigns;

<PAGE>

                           (v) the receipt of the Note Holders or of the officer
                  thereof making such sale shall be a sufficient discharge to
                  the purchaser or purchasers at such sale for his or their
                  purchase money, and such purchaser or purchasers, and his or
                  their assigns or personal representatives, shall not, after
                  paying such purchase money and receiving such receipt of the
                  Note Holders or of such officer therefor, be obliged to see to
                  the application of such purchase money or be in any way
                  answerable for any loss, misapplication or non-application
                  thereof; and

                           (vi) to the extent that it may lawfully do so, and
                  subject to any legal requirement that the Note Holders act in
                  a commercially reasonable manner, the Debtor agrees that it
                  will not at any time insist upon, or plead, or in any manner
                  whatsoever claim or take the benefit or advantage of, any
                  appraisement, valuation, stay, extension or redemption laws,
                  or any law permitting it to direct the order in which the
                  Collateral or any part thereof shall be sold, now or at any
                  time hereafter in force, which may delay, prevent or otherwise
                  affect the performance or enforcement of this Agreement, the
                  Note or any other agreement executed in connection with the
                  Note whereby the Debtor has granted any Lien to the Note
                  Holders, and the Debtor hereby expressly waives all benefit or
                  advantage of any such laws and covenants that it will not
                  hinder, delay or impede the execution of any power granted or
                  delegated to the Note Holders in this Agreement, but will
                  suffer and permit the execution of every such power as though
                  no such laws were in force. In the event of any sale of
                  Collateral pursuant to this Section, the Note Holders shall,
                  at least 10 days before such sale, give the Debtor written,
                  telecopied or telex notice of its intention to sell.

                  Section 9. Application of Moneys. (a) Except as otherwise
provided herein or in the Note, all moneys which the Note Holders shall receive,
in accordance with the provisions hereof, shall be applied (to the extent
thereof) in the following manner: First, to the payment of all costs and
expenses reasonably incurred in connection with the administration and
enforcement of, or the preservation of any rights under, this Agreement or any
of the reasonable expenses and disbursements of the Note Holders (including,
without limitation, the reasonable fees and disbursements of its counsel and
agents); Second, to the payment of all Secured Obligations arising out of the
Notes and, if not therein provided, in such order as the Note Holders may
determine; and Third, to the payment of all other Secured Obligations in such
order as the Note Holders may determine.

                  (b) If after applying any amounts which the Note Holders have
received in respect of the Collateral any of the Secured Obligations remain
unpaid, the Debtor shall continue to be liable for any deficiency, together with
interest.

<PAGE>

                  Section 10. Fees and Expenses, etc. Any and all fees, costs
and expenses of whatever kind or nature, including but not limited to the
reasonable attorneys' fees and legal expenses incurred by the Note Holders in
connection with the enforcement of this Agreement, the filing or recording of
any documents (including all taxes in connection therewith) in public offices,
the payment or discharge of any taxes, counsel fees, maintenance fees, fees and
other costs relating to the encumbrances or otherwise protecting, maintaining,
preserving the Collateral, or in defending or prosecuting any actions or
proceedings arising out of or related to the Collateral, shall be borne and paid
by the Debtor on written demand by the Note Holders setting forth in reasonable
detail the nature of such expenses and until so paid shall be added to the
principal amount of the Secured Obligations and shall bear interest at a rate
per annum equal to 18%. In addition, the Debtor will pay, and indemnify and hold
the Note Holders and any Note Holder harmless from and against, any and all
liabilities, obligations, losses, damages penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the Collateral, including (without limitation) claims of patent or trademark
infringement and any claim of unfair competition or anti-trust violation.

                  Section 11. Miscellaneous. All notices, communications and
distributions hereunder shall be in writing (including telecopied communication)
and mailed by certified mail, telecopied, personally delivered or delivered by
Federal Express or other reputable overnight courier service, if to the Debtor
addressed to it at its address set forth opposite its signature below, if to the
Note Holders, addressed to it at its address set forth opposite its signature
below, or as to either party at such other address as shall be designated by
such party in a written notice to such other party complying as to delivery with
the terms of this Section. All such notices and other communications shall be
effective (i) if mailed by certified mail, three days after the date of deposit
thereof with the U.S. Postal Service, properly addressed with postage prepaid,
(ii) if telecopied, upon receipt by the addressee, (iii) if personally
delivered, upon such delivery and (iv) if delivered by overnight courier
service, on the business day following delivery thereof to such courier service
in time for next-business-day delivery.

                  (b) No delay on the part of the Note Holders in exercising any
of its rights, remedies, powers and privileges hereunder or partial or single
exercise thereof, shall constitute a waiver thereof, except if, and in such case
only to the extent which, such failure prejudices or damages the Debtor. None of
the terms and conditions of this Agreement may be changed, waived, modified or
varied in any manner whatsoever unless in writing duly signed by the Debtor and
the Note Holders. No notice to or demand on the Debtor in any case shall entitle
the Debtor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the Note Holders to
any other or further action in any circumstances without notice or demand.

                  (c) The obligations of the Debtor hereunder shall remain in
full force and effect without regard to, and shall not be impaired by, (i) any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of the Debtor; (ii)

<PAGE>

any exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of the Note, this Agreement or any other agreement
executed in connection with the Note whereby the Debtor has granted any Lien to
the Note Holders or any other agreement executed in connection with any of the
foregoing, the Secured Obligations or any security for any of the Secured
Obligations; or (iii) any amendment to or modification of any of the foregoing;
whether or not the Debtor shall have notice or knowledge of any of the
foregoing. The rights and remedies of the Note Holders herein provided are
cumulative and not exclusive of any rights or remedies which the Note Holders
would otherwise have.

                  (d) This Agreement shall be binding upon the Debtor and its
successors and assigns and shall inure to the benefit of the Note Holders and
their successors and assigns, except that the Debtor may not transfer or assign
any of its obligations, rights or interest hereunder without the prior written
consent of the Note Holders, and any such purported assignment by the Debtor
shall be void. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement.

                  (e) The descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.

                  (f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

                  (g) All rights, remedies and powers provided by this Agreement
may be exercised only to the extent that the exercise thereof does not violate
any applicable provision of law, and the provisions hereof are intended to be
subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they will not render this
Agreement invalid, unenforceable in whole or in part or not entitled to be
recorded, registered or filed under the provisions of any applicable law.

                  (h) Except to the extent that matters of title, or creation,
perfection and priority of the security interests created hereby, or procedural
issues of foreclosure are required to be governed by the laws of the state in
which the Collateral, or part thereof, is located, this Agreement shall be
governed by and construed in all respects under the laws of the State of New
York, without reference to its conflict of laws rules or principles. Any suit,
action, proceeding or litigation arising out of or relating to this Agreement
shall be brought and prosecuted only in federal and state courts in the City,
County and State of New York. The parties hereby irrevocably and unconditionally
consent to the jurisdiction of each such court or courts located within the
State of New York and to service of process by registered or certified mail,
return

<PAGE>

receipt requested, or by any other manner provided by applicable law, and hereby
irrevocably and unconditionally waive any right to claim that any suit, action,
proceeding or litigation so commenced has been commenced in an inconvenient
forum. EACH PARTY HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND
ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING,
COUNTERCLAIM OR OTHER LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, THE NOTES OR ANY FINANCING DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF ANY SUCH PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
SECURED PARTIES' ENTERING INTO THIS AGREEMENT.

                  (i) It is expressly agreed, anything herein, in the Note or in
any other agreement or instrument executed in connection with the Note to the
contrary notwithstanding, that the Debtor shall remain liable to perform all of
the obligations, if any, assumed by it with respect to the Collateral and the
Note Holders shall not have any obligations or liabilities with respect to any
Collateral by reason of or arising out of this Agreement, nor shall the Note
Holder be required or obligated in any manner to perform or fulfill any of the
obligations of the Debtor under or pursuant to any or in respect of any
Collateral.

                  (j) This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
counterparts taken together shall be deemed to constitute one and the same
instrument.

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.

Addresses                          BRIDGELINE SOFTWARE, INC.
                                   as Debtor
10 Sixth Rd.
Woburn, MA 01801                   By: /s/ Thomas Massie
                                       ----------------------------
                                       Name: Thomas Massie
                                       Title: President, Chief Executive Officer

                                   JOSEPH GUNNAR & CO., LLC
                                   duly authorized agent

                                   By: /s/ Stephan A. Stein
                                       ----------------------------
                                       Name: Stephan A. Stein
                                       Title: Chief Operating Officer

                                   By: /s/ Thomas Massie
                                       ----------------------------
                                       Name: Thomas Massie

                                   By: /s/ William Coldrick
                                       ----------------------------
                                       Name: William ColdrickEXHIBIT 10.60
                                                                   -------------

                                SECOND AMENDMENT
                                       TO
                               FINANCING AGREEMENT

     This Second Amendment to Financing Agreement is entered into as of April
26, 2007 (the "Amendment"), by and between SAND HILL FINANCE, LLC ("SHF") and
BRIDGELINE SOFTWARE, INC. ("Client").

                                    RECITALS

     Client and SHF are parties to that certain Financing Agreement dated as of
March 29, 2004, the First Amendment entered into as of September 12, 2005 as
amended (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. The reference to "SEVEN HUNDRED AND FIFTY THOUSAND DOLLARS ($750,000
(the `CREDIT LIMIT')" in Section 1.2 of the Agreement is hereby amended to read
"THREE HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($375,000) (the `Credit Limit')".

     2. Client shall pay to SHF a commitment fee equal to $1,875, which fee
shall be fully earned and nonrefundable as of the date hereof. Client authorizes
SHF to deduct such fee from the proceeds of such Advance.

     3. 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 SHF under the Agreement, as in effect prior to the date
hereof. Client ratifies and reaffirms the continuing effectiveness of all
guaranties, security agreements, mortgages, deeds of trust, environmental
agreements, and all other instruments, documents and agreements entered into in
connection with the Agreement.

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

     5. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument.

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

          (a) this Amendment, duly executed by Client;

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

                                        1
<PAGE>

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

                                         BRIDGELINE SOFTWARE, INC.

                                         By: /S/GARY CEBULA
                                             -------------------------------
                                         Title: CHIEF FINANCIAL OFFICER
                                                ----------------------------

                                         SAND HILL FINANCE, LLC

                                         By: /S/MARK CAMERON
                                             -------------------------------
                                         Title: PRESIDENT
                                                ----------------------------

                                        2

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