RAINMAKER SYSTEMS, INC. On October 30, 2013, Rainmaker Systems Inc. closed a loan agreement with Agility Capital II, LLC providing for a revolving line of credit of up to $500,000, which amount may be increased to $650,000 under certain conditions. the company may request advances under the loan agreement in an aggregate outstanding amount not to exceed the lesser of the applicable maximum revolving line or a borrowing base equal to 30% of the company's eligible accounts receivable balances. Amounts borrowed under the loan agreement are due on the earlier of the date on which the company's borrowings under its loan agreement with comerica bank become due and payable, and October 25, 2014.
The company's revolving line of credit with comerica bank is scheduled to mature on December 14, 2013. The interest rate per annum for advances under the loan agreement is 12.00%. if a default occurs under the loan agreement, the interest rate per annum for advances under the loan agreement would increase to 18%.
in addition, if a default in the payment of principal occurs under the loan agreement, the company would be required to pay a default fee equal to $10,000 plus an additional $15,000 for each subsequent 30-day period during which such payment default remains uncured. The loan agreement is secured by substantially all of rainmaker's consolidated assets. The loan agreement contains customary covenants that will, subject to limited exceptions, require agility's approval to, among other things, create liens; acquire or transfer assets outside of the ordinary course of business; pay cash dividends; and merge or consolidate with another company.
The loan agreement also requires that the company comply with the financial covenants contained in its loan agreement with comerica bank. The loan agreement also provides for customary events of default, including nonpayment, breach of covenants, payment defaults of other indebtedness, and certain events of bankruptcy, insolvency and reorganization that may result in acceleration of outstanding amounts under the loan agreement.
