On March 19, 2014, Rainmaker Systems Inc. and Comerica Bank entered into a Forbearance and Fourth Modification and Release relating to the Loan and Security Agreement dated as of June 14, 2012, between the company and the Bank, as amended. Under the Forbearance Agreement, the Bank has agreed to forbear until May 1, 2014 from exercising its rights and remedies arising as a result of the company's nonpayment of amounts outstanding under its revolving line of credit which matured on December 14, 2013. The Loan Agreement consists of a revolving line of credit and a term loan, which are secured by substantially all of consolidated assets.

As of March 19, 2014, $2,497,654 was outstanding under the Loan Agreement, consisting of $997,654 outstanding under the revolving line of credit and $1,500,000 outstanding under the term loan. During the Forbearance Period, the company agrees to comply with the terms, covenants and provisions in the Loan Agreement and related documents, as amended by the Forbearance Agreement. The Forbearance Agreement amends the Loan Agreement to, among other things, (i) extend the maturity date of the revolving line of credit to May 1, 2014 and make the term loan coterminous with the revolving line of credit, (ii) limit advances under the revolving line of credit to $1,000,000 at any time outstanding, (iii) require the company to hold $1,562,000 in a segregated deposit account with the Bank as additional collateral for the term loan and a letter of credit in the face amount of $62,000, and (iv) increase the applicable margin for the revolving line of credit to 2.25%, and decrease the applicable margin for the term loan to 1.50%, effective as of March 1, 2014.