Document:

ex_132120.htm

Exhibit 10.46

 

TENTH AMENDMENT

TO

LOAN AND SECURITY AGREEMENT 

 

This Tenth Amendment to Loan and Security Agreement is entered into as of December 27, 2018 (the “Amendment”), by and between HERITAGE BANK OF COMMERCE (“Bank”) and BRIDGELINE DIGITAL, INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of June 9, 2016 and as amended from time to time, including pursuant to that certain First Amendment to Loan and Security Agreement dated as of August 15, 2016, that certain Second Amendment to Loan and Security Agreement dated as of December 12, 2016, that certain Third Amendment to Loan and Security Agreement dated as of August 10, 2017, that certain Fourth Amendment to Loan and Security Agreement dated as of October 6, 2017, that certain Fifth Amendment to Loan and Security Agreement dated as of November 27, 2017, that certain Sixth Amendment to Loan and Security Agreement dated as of February 1, 2018, that certain Seventh Amendment to Loan and Security Agreement dated as of May 10, 2018, that certain Eighth Amendment to Loan and Security Agreement dated as of August 10, 2018 and that certain Ninth Amendment to Loan and Security Agreement dated as of September 21, 2018 (collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.           The following definitions set forth in Section 1.1 of the Agreement are amended and restated in their entirety to read as follows:

 

“Adjusted EBITDA” means earnings before interest, taxes, depreciation and amortization expenses and non-cash stock-based compensation expense, and net of any non-cash good will adjustments, each as determined in accordance with GAAP.

 

“Revolving Maturity Date” means January 1, 2020.

 

2.           Section 6.9 of the Agreement is amended and restated in its entirety to read as follow:

 

6.9          Financial Covenants.

 

(a)       Minimum Asset Coverage Ratio. Borrower shall maintain at all times a ratio of (i) unrestricted cash in its accounts at Bank plus Eligible Accounts plus the Guaranteed Amount to (ii) all outstanding Obligations owing to Bank (the “Asset Coverage Ratio”) of at least 1.40 : 1.00.

 

(b)       Performance to Plan – Adjusted EBITDA. Borrower’s minimum quarterly Adjusted EBITDA for the fiscal quarters ending on December 31, 2018, March 31, 2019, June 30, 2019 and September 30, 2019 shall be at least the amount set forth on Exhibit D. Notwithstanding the foregoing, Borrower shall not be deemed in breach of the foregoing covenant if the total negative deviation from its projected Adjusted EBITDA for a particular quarter period does not exceed $200,000. Borrower and Bank shall mutually agree upon minimum quarterly Adjusted EBITDA amounts for subsequent fiscal quarters no later than September 30, 2019.

 

(c)       Minimum Cash. Borrower shall maintain at all times at least $500,000 in unrestricted cash in its accounts at Bank.

 

3.           Exhibit D to the Agreement is replaced in its entirety with the Exhibit D attached hereto.

 

 

 

 

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

 

5.           Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

 

6.           This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof.

 

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

 

(a)       payment of a prorated facility fee in the amount of $2,000 plus all Bank Expenses incurred through the date of this Amendment;

 

(b)       corporate resolutions and incumbency certificate;

 

(c)       affirmation of guaranty;

 

(d)       affirmation of intercreditor agreement; and

 

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

 

[remainder of this page intentionally left blank]

 

 

 

 

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

 

	 	
			BRIDGELINE DIGITAL, INC.

			 

			 

			By: /s/ Carole Tyner

			 

			Name: Carole Tyner

			

			Title: CFO

			
	 	 
	 	 
	 	
			HERITAGE BANK OF COMMERCE

			 

			 

			By: /s/ Mike Hansen

			 

			Name: Mike Hansen

			 

			Title: SVP & Manager

			

 

 

 

 

 

Exhibit D

Compliance Certificate

 

	
			TO:

				
			HERITAGE BANK OF COMMERCE

			

 

	
			FROM:

				
			BRIDGELINE DIGITAL, INC.

			

 

The undersigned authorized officer of BRIDGELINE DIGITAL, INC. hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

 

	
			Reporting Covenant

				
			Required

				
			Complies

			
	
			A/R & A/P Agings

				
			Monthly within 30 days

				
			Yes

				
			No

			
	
			Sales journal

				
			Monthly within 30 days

				
			Yes

				
			No

			
	
			Collections journal

				
			Monthly within 30 days

				
			Yes

				
			No

			
	
			Borrowing Base Certificate

				
			Monthly within 30 days

				
			Yes

				
			No

			
	
			Deferred Revenue Schedule

				
			Monthly within 30 days

				
			Yes

				
			No

			
	
			Balance Sheet and Income Statement

				
			Monthly within 30 days

				
			Yes

				
			No

			
	
			Compliance Certificate

				
			Monthly within 30 days

				
			Yes

				
			No

			
	
			Quarterly Financial statements/Form 10-Q

				
			Quarterly within 5 days of filing

				
			Yes

				
			No

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

				
			Annually within 5 days of filing

				
			Yes

				
			No

			
	
			Borrower’s and Personal Guarantor’s tax returns and schedules

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

				
			Yes

				
			No

			
	
			Personal Guarantor’s personal financial statements

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

				
			Yes

				
			No

			
	
			A/R and Collateral audit

				
			Semi-annually

				
			Yes

				
			No

			
	
			IP Notices

				
			As required under Section 6.10

				
			Yes

				
			No

			
	 	 	 	 
	
			Financial Covenant

				
			Required

				
			Actual

				
			Complies

			
	
			Minimum Cash

				
			$500,000

				
			$___________

				
			Yes

				
			No

			
	
			Asset Coverage Ratio

				
			1.40 : 1.00

				
			_____: 1.00

				
			Yes

				
			No

			
	
			Maximum quarterly Adjusted EBITDA Loss for:

				 	 	 	 
	
			Quarter ending 12/31/18 and beyond

				
			($1,020,000)

				
			$__________

				
			Yes

				
			No

			
	
			Quarter ending 3/31/19 and beyond

				
			($928,000)

				
			$__________

				
			Yes

				
			No

			
	
			Quarter ending 6/30/19 and beyond

				
			($767,000)

				
			$__________

				
			Yes

				
			No

			
	
			Quarter ending 9/30/19 and beyond

				
			($569,000)

				
			$__________

				
			Yes

				
			No

			

 

	Comments Regarding Exceptions: See Attached.	 	 	 	 	 	 	 	 	 
	
			 

				 	 	
			BANK USE ONLY

				 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	
			Received by:

				 	 	 	 	 
	
			Sincerely,

				 	 	
			 

				 	 	AUTHORIZED SIGNER	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	
			Date:

				 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	
			Verified:

				 	 	 	 	 
	
			SIGNATURE

				 	 	
			 

				 	 	AUTHORIZED SIGNER	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	
			Date:

				 	 	 	 	 	 
	
			TITLE

				 	 	 	 	 	 	 	 	 
	 	 	 	
			Compliance Status

				 	Yes	No	 
	
			DATEex_132142.htm

Exhibit 10.47

 

THIRD AMENDMENT

TO

LOAN AND SECURITY AGREEMENT 

 

This Third Amendment to Loan and Security Agreement is entered into as of December 27, 2018 (the “Amendment”), by and between MONTAGE CAPITAL II, L.P. (“Lender”) and BRIDGELINE DIGITAL, INC. (“Borrower”).

 

RECITALS

 

Borrower and Lender are parties to that certain Loan and Security Agreement dated as of October 10, 2017 and as amended from time to time, including pursuant to that certain First Amendment to Loan and Security Agreement dated as of May 10, 2018 and that certain Second Amendment to Loan and Security Agreement dated as of October 22, 2018 (collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.           Section 5.3 of the Agreement is amended and restated in its entirety to read as follows:

 

5.3     Financial Covenants.

 

(a)     Minimum Asset Coverage Ratio. Borrower shall maintain, at all times and measured as of the last day of each month, a ratio of (i) Eligible Accounts plus Eligible Foreign Accounts plus Borrower's unrestricted cash maintained in accounts that are subject to an account control agreement in favor of Lender to (ii) all outstanding Obligations owing to Lender, of no less than 1.40 : 1.00.

 

(b)     Performance to Plan – Adjusted EBITDA. Borrower’s minimum quarterly Adjusted EBITDA for the fiscal quarters ending on December 31, 2018, March 31, 2019, June 30, 2019 and September 30, 2019 shall be at least the amount set forth on Exhibit A. Notwithstanding the foregoing, Borrower shall not be deemed in breach of the foregoing covenant if the total negative deviation from its projected Adjusted EBITDA for a particular quarter period does not exceed $200,000. Borrower and Lender shall mutually agree upon minimum quarterly Adjusted EBITDA amounts for subsequent fiscal quarters no later than September 30, 2019.

 

(c)     Minimum Cash. Borrower shall maintain at all times at least $500,000 in unrestricted cash in its accounts that are subject to an account control agreement in favor of Lender.

 

2.           The following definition in Section 13 of the Agreement is amended and restated in its entirety to read as follows:

 

“Adjusted EBITDA” means earnings before interest, taxes, depreciation and amortization expenses and non-cash stock-based compensation expense, and net of any non-cash good will adjustments, each as determined in accordance with GAAP.

 

3.           Exhibit A to the Agreement is replaced in its entirety with the Exhibit A attached hereto.

 

4.         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 Lender under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

 

 

 

 

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. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof.

 

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

 

(a)     payment of an amendment fee in the amount of $2,000 plus all Lender Expenses incurred through the date of this Amendment; and

 

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

 

[remainder of this page intentionally left blank]

 

 

 

 

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

 

	 	BRIDGELINE DIGITAL, INC.	 
	 	 	 
	 	 	 
	 	 	 
	 	By: /s/ Carole Tyner	 
	 	 	 
	 	Name: Carole Tyner	 
	 	 	 
	 	Title: CFO	 
	 	 	 
	 	 	 
	 	 	 
	 	MONTAGE CAPITAL II, L.P.	 
	 	 	 
	 	 	 
	 	 	 
	 	By: /s/ Michael J. Rose	 
	 	 	 
	 	Name: Michael J. Rose	 
	 	 	 
	 	Title: Managing Director	 

 

 

 

 

EXHIBIT A

COMPLIANCE CERTIFICATE

 

	
			BORROWER:

				
			Bridgeline Digital, Inc.

			

 

	Note: Please send all required reporting to:	Montage Capital II, L.P.
	 	900 East Hamilton Avenue, Suite 100
	 	Campbell, CA 95008
	 	Fax: (408) 659-2318
	 	Email: mrose@montagecapital.com

 

The undersigned authorized officer of Bridgeline Digital, Inc. hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Lender (the “Agreement”).

 

Borrower is in complete compliance for the period ending _______________ with all required covenants, except as noted below; and all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof.

 

Attached herewith are the required documents supporting the above certification. The authorized officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

 

	Reporting Covenant	Required	Complies
	Monthly financial statements	Monthly within 30 days	Yes	No
	A/R & A/P Agings	Monthly within 30 days	Yes	No
	Deferred revenue schedule	Monthly within 30 days	Yes	No
	Compliance Certificate	Monthly within 30 days	Yes	No
	Annual financial statements (CPA audited)	FYE within 120 days	Yes	No
	Annual financial projections for upcoming year	Within 30 days of FYE	Yes	No
	Tax returns with schedules	Within 15 days of filing	Yes	No
	10K and 10Q	Within 5 days of filing	Yes	No
	Reports & certificates provided to Senior Lender	Concurrently upon delivery to Senior Lender	Yes	No

 

	FINANCIAL COVENANTS	REQUIRED	ACTUAL	COMPLIES
	 	 	 	 	 
	Minimum unrestricted cash subject to control agreement	$500,000	$                      	Yes	No
	 	 	 	 	 
	Asset Coverage Ratio (monthly)	1.40 : 1.00	_______: 1.00	Yes	No
	 	 	 	 	 
	Maximum quarterly Adjusted EBITDA Loss for:	 	 	 	 
	Quarter ending 12/31/18 and beyond	($1,020,000)	$__________	Yes	No
	Quarter ending 3/31/19 and beyond	($928,000)	$__________	Yes	No
	Quarter ending 6/30/19 and beyond	($767,000)	$__________	Yes	No
	Quarter ending 9/30/19 and beyond	($569,000)	$__________	Yes	No

 

Please attach any comments as additional pages.

 

	 	
			Bridgeline Digital, Inc. 

			
	 	
			 

			
	 	
			Signature

			
	 	 
	 	
			Name

			
	 	 
	 	
			Title

			
	 	 
	 	
			Date

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