EXHIBIT 10.61
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AGREEMENT
This Agreement (the "Agreement") is made as of May 15, 2007 by and between
Xxxxxx Xxxxxx & Co., LLC, as agent for certain Noteholders ("JGUN"), and
Bridgeline Software, Inc., a Delaware corporation (the "Company"). Capitalized
terms not otherwise defined herein shall have the same meaning as in the
Financing Agreement (together with all amendments) or in the Subordination
Agreement.
RECITALS
WHEREAS, the Company and Sand Hill Finance, LLC ("SHF) are parties to the
Financing Agreement, as amended and updated from time to time, dated as of March
29, 2005, under the terms and provisions of which agreement SHF agreed to extend
a line of credit and to purchase certain accounts of the Company in the amount
not to exceed Three Hundred Seventy Five Thousand Dollars ($375,000) (the "SHF
Credit"); and,
WHEREAS, as a condition to funding the SHF Credit to the Company, SHF
requires that JGUN, in its capacity as the agent for certain Noteholders,
execute a certain Subordination Agreement to subordinate any security interest
or lien that JGUN has in the Collateral (as the term is defined in the Financing
Agreement) to SHF, notwithstanding the respective dates of attachment or
perfection of JGUN's security interest in or lien on such Collateral; and,
WHEREAS, the Company represented to JGUN that (i) the Company requires the
SHF Credit to fund and maintain its day-to-day operations, and (ii) the Company
entered into the Financing Agreement and all amendments thereto in good faith
with the intent to pay off the entire principal balance of the SHF Credit,
together with all interest or any other payments due and payable by the Company
immediately upon consummation of the initial public offering of the Company's
securities which is ongoing as of the date of this Agreement; and,
WHEREAS, in light of and reliance of the foregoing representations to the
Company, JGUN wishes to assist the Company in obtaining the SHF Credit to fund
its operations by executing all necessary documents and agreements.
In consideration of JGUN's entering into the Subordination Agreement and
SHF's extension of the SHF Credit to the Company, of these premises and the
mutual and dependent promises hereinafter set forth and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agrees as follows:
1. The Company hereby understands and agrees that in the event that the
Company successfully raises at least Five Hundred Thousand Dollars ($500,000) in
cash on a cumulative basis (such funds may be raised by any combination of
contributions of cash, promissory notes, sales of securities of the Company,
license fees, royalties or by any other means or instruments) (the "Capital
Raising Event"), the Company shall, no later than ten (10) calendar days
following the final closing of such Capital Raising Event, pay off the entire
principal balance of the SHF Credit with any and all interest and other payments
due and payable thereunder in accordance with the terms and provisions of the
Financing Agreement. The Company agrees that it shall not apply to or divert
proceeds of such Capital Raising Event for any purpose whatsoever until and
unless the Company complies with and discharges its obligations set forth
hereinabove. The
Company further agrees to give a prompt oral notice to JGUN, which notice must
be confirmed in writing by overnight mail or facsimile transmission setting
forth the same information, of any such Capital Raising Event. In addition, the
Company also agrees to give a prompt notice to JGUN, in the same fashion and by
the same means, at any time and from time to time, the parties to the Financing
Agreement amend or modify any material terms or provisions thereof, including
without limitation, extending the time of payment, increasing applicable
interest rates, renewing, compromising or otherwise amending the terms of any
documents affecting the debt owed under the Financing Agreement or the
Collateral. Notwithstanding the foregoing, in no event shall the Company
increase the principal amount of its indebtedness and obligations to SHF under
the SHF Credit to be more than the amount of the SHF Credit (Three Hundred
Seventy Five Thousand Dollars ($375,000)) for as long as there is any debt owed
by the Company to the Noteholders is outstanding.
2. This Agreement shall remain effective for the duration of the
Subordination Agreement.
3. The Company's failure in any material respect in the performance of any
of its agreements or obligations set forth hereunder shall constitute an event
of default. Upon occurrence of such an event of default, JGUN shall be entitled
to exercise and enforce with respect of the Collateral all the rights and
remedies available to it under any agreement or instrument by and between the
Company and JGUN, including, without limitation, a certain General Security
Agreement, by and among the Company and individual Noteholders, dated as of
April 21, 2006, and any other agreements and instruments by and between the
parties to this Agreement, as well as any other rights and remedies, in law or
equity, of a secured party on default under the Uniform Commercial Code.
4. This Agreement shall bind any successors or assignees of the Company and
shall benefit any successors or assigns of JGUN. This Agreement is solely for
the benefit of the Company and JGUN and not for the benefit of any other party.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original and all of which together shall constitute one instrument.
This Agreement represents the entire agreement with respect to the subject
matter hereof, and supersedes all prior negotiations, agreements and
commitments. This Agreement may be amended only by written instrument signed by
the parties hereto. Any waiver hereunder must be in writing and signed by the
party granting such waiver.
5. Any notices required or permitted to be given under the terms of this
Agreement shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party.
6. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, excluding its choice of law or conflicts of law
or other provisions which might result in the selection of the substantive law
of another jurisdiction.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
XXXXXX XXXXXX & CO., LLC., as the Agent
for certain Noteholders
By: /S/ XXXXXXX XXXXX
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Title: CHIEF OPERATING OFFICER
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BRIDGELINE SOFTWARE, INC.
By: /S/ XXXX XXXXXX
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Title: /S/ CHIEF FINANCIAL OFFICER
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