On January 7, 2015, Bridgeline Digital, Inc. issued a Term Note to Michael Taglich to document a loan by Mr. Taglich to the company of $500,000. The terms of the Note provide that the company will pay interest at a rate of 7% per annum and the note will mature on June 30, 2016. In consideration of the loan by Mr. Taglich and a personal guaranty delivered by Mr. Taglich to Bridge Bank, N.A. for the benefit of the company on December 19, 2014, on January 7, 2015 the company issued Mr. Taglich a warrant to purchase 300,000 shares of Common Stock of the Company at a price equal to $0.80 per share.

The warrant has a term of five years and is exercisable six months after the date of issuance. The company agreed to provide piggyback registration rights with respect to the shares of common stock underlying the warrant. On January 7, 2015, the company also entered into a side letter with Mr. Taglich pursuant to which the company agreed in the event the Guaranty remains outstanding for a period of more than 12 months, on each anniversary of the date of issuance of the Guaranty while the Guaranty remains outstanding the company will issue Mr. Taglich a warrant to purchase 150,000 shares of Common Stock of the company, which warrant shall contain the same terms as the warrant issued to Mr. Taglich on January 7, 2015.