Document:

Exh10.1-ComericaLoanandSecurityAgreement

Exhibit 10.1

RAINMAKER SYSTEMS, INC.
LOAN AND SECURITY AGREEMENT

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This LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into as of June 14, 2012, by and between Comerica Bank (“Bank”) and Rainmaker Systems, Inc. (“Borrower”).
RECITALS
Borrower wishes to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower.  This Agreement sets forth the terms on which Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank.
AGREEMENT
The parties agree as follows:
		
	1.
	DEFINITIONS AND CONSTRUCTION.

1.1    Definitions.  As used in this Agreement, all capitalized terms shall have the definitions set forth on Exhibit A.  Any term used in the Code and not defined herein shall have the meaning given to the term in the Code.
1.2    Accounting Terms.  Any accounting term not specifically defined on Exhibit A shall be construed in accordance with GAAP and all calculations shall be made in accordance with GAAP.  The term “financial statements” shall include the accompanying notes and schedules.
		
	2.
	LOAN AND TERMS OF PAYMENT.

2.1    Credit Extensions.
(a)    Promise to Pay.  Borrower promises to pay to Bank, in lawful money of the United States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrower, together with interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms hereof.
(b)    Advances Under Revolving Line.
(i)    Amount.  Subject to and upon the terms and conditions of this Agreement Borrower may request Advances in an aggregate outstanding amount not to exceed the lesser of (A) the Revolving Line or (B) the Borrowing Base, less the aggregate face amount of Letters of Credit issued under the Letter of Credit Sublimit, the aggregate limits of the corporate credit cards issued to Borrower and merchant credit card processing reserves under the Credit Card Services Sublimit.  The aggregate face amounts of Letters of Credit issued under the Letter of Credit Sublimit and the aggregate limits of the corporate credit cards issued to Borrower and merchant credit card processing reserves under the Credit Card Services Sublimit (collectively, the “Sublimits”) shall not collectively exceed Five Hundred Thousand Dollars ($500,000) (the “Maximum Sublimit Amount”) at any time.  Amounts borrowed pursuant to this Section 2.1(b) may be repaid and reborrowed at any time without penalty or premium prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(b) shall be immediately due and payable.
(ii)    Form of Request.  Whenever Borrower desires an Advance, Borrower will notify Bank by facsimile transmission or telephone no later than 3:00 p.m. Pacific time (12:00 p.m. Pacific time for wire transfers), on the Business Day that the Advance is to be made.  Each such notification shall be promptly confirmed by a Payment/Advance Form in substantially the form of Exhibit C.  Bank is authorized to make Advances under this Agreement, based upon instructions received from a Responsible Officer or a designee of a Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary to meet Obligations which have become due and remain unpaid.  Bank shall be entitled to rely on any facsimile or telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance.  Bank will credit the amount of Advances made under this Section 2.1(b) to Borrower’s deposit account.

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(iii)    Letter of Credit Sublimit. Subject to the availability under the Revolving Line, and in reliance on the representations and warranties of Borrower set forth herein, at any time and from time to time from the date hereof through the Business Day immediately prior to the Revolving Maturity Date, Bank shall issue for the account of Borrower such Letters of Credit as Borrower may request by delivering to Bank a duly executed letter of credit application on Bank’s standard form; provided, however, that the outstanding and undrawn amounts under all such Letters of Credit (i) shall not at any time exceed the Letter of Credit Sublimit, and (ii) shall be deemed to constitute Advances for the purpose of calculating availability under the Revolving Line.  Any drawn but unreimbursed amounts under any Letters of Credit shall be charged as Advances against the Revolving Line. Notwithstanding the foregoing, the aggregate outstanding amount of Letters of Credit, together with the aggregate limits of the corporate credit cards issued to Borrower and merchant credit card processing reserves under the Credit Card Services Sublimit, shall not exceed the Maximum Sublimit Amount at any time.  All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s form application and letter of credit agreement.  Borrower will pay any standard issuance and other fees that Bank notifies Borrower it will charge for issuing and processing Letters of Credit.
(iv)    Credit Card Services Sublimit.  Subject to the terms and conditions of this Agreement, Borrower may request corporate credit cards and standard and e-commerce merchant account services from Bank (collectively, the “Credit Card Services”).  The aggregate limit of the corporate credit cards and merchant credit card processing reserves shall not exceed the Credit Card Services Sublimit, provided that availability under the Revolving Line shall be reduced by the aggregate limits of the corporate credit cards issued to Borrower and merchant credit card processing reserves.  Notwithstanding the foregoing, the aggregate limits of the corporate credit cards issued to Borrower and merchant credit card processing reserves under the Credit Card Services Sublimit, together with the aggregate outstanding amount of Letters of Credit, shall not exceed the Maximum Sublimit Amount at any time.  In addition, Bank may, in its sole discretion, charge as Advances any amounts that become due or owing to Bank in connection with the Credit Card Services.  The terms and conditions (including repayment and fees) of such Credit Card Services shall be subject to the terms and conditions of the Bank’s standard forms of application and agreement for the Credit Card Services, which Borrower hereby agrees to execute.
(v)    Collateralization of Obligations Extending Beyond Maturity.  Any Letters of Credit or Credit Card Services that may extend beyond the Revolving Maturity Date, then, effective as of the Revolving Maturity Date, the balance in any deposit accounts held by Bank and the certificates of deposit or time deposit accounts issued by Bank in Borrower’s name (and any interest paid thereon or proceeds thereof, including any amounts payable upon the maturity or liquidation of such certificates or accounts), shall automatically secure such obligations to the extent of the then continuing or outstanding and undrawn Letters of Credit and Credit Card Services; provided, however, that if there are insufficient balances in such accounts to secure such obligations, Borrower shall immediately deposit such additional funds as are necessary to fully secure such obligations.  Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any requests by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Letters of Credit and/or Credit Card Services are outstanding or continue.
(c)    Term Loan Advances.
(i)    Subject to and upon the terms and conditions of this Agreement, Bank agrees to make Term Loan Advances to Borrower.  Borrower may request Term Loan Advances, in a minimum amount of $250,000 or whole number multiples thereof, from the date hereof through December 14, 2012. The aggregate outstanding amount of Term Loan Advances shall not exceed the Term Loan Maximum Amount.
(ii)    Interest shall accrue from the date of each Term Loan Advance at the rate specified in Section 2.3(a), and shall be payable in accordance with Section 2.3(c).  Any Term Loan Advances that are outstanding on December 14, 2012 shall be payable in thirty (30) equal monthly installments of principal, plus all accrued interest, beginning on January 1, 2013, and continuing on the same day of each month thereafter through the Term Loan Maturity Date, at which time all amounts due in connection with Term Loan Advances shall be immediately due and payable.  Term Loan Advances, once repaid, may not be reborrowed.  Borrower may prepay any Term Loan Advances without penalty or premium.

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(iii)    When Borrower desires to obtain a Term Loan Advance, Borrower shall notify Bank (which notice shall be irrevocable) by facsimile transmission to be received no later than 3:00 p.m. Pacific time three (3) Business Days before the day on which the Term Loan Advance is to be made.  Such notice shall be substantially in the form of Exhibit C.  The notice shall be signed by a Responsible Officer or its designee.  Bank shall be entitled to rely on any facsimile or telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance.
2.2    Overadvances.  If the aggregate amount of the outstanding Advances plus the then current amount of the Sublimits exceeds the lesser of the Revolving Line or the Borrowing Base at any time, Borrower shall immediately pay to Bank, in cash, the amount of such excess.
2.3    Interest Rates, Payments, and Calculations.
(a)    Interest Rates.
(i)    Advances.  Except as set forth in Section 2.3(b), the Advances shall bear interest, on the outstanding daily balance thereof, as set forth in the Prime Referenced Rate Addendum to Loan and Security Agreement attached hereto as Exhibit F.
(ii)    Term Loan Advances.  Except as set forth in Section 2.3(b), Term Loan Advances shall bear interest, on the outstanding daily balance thereof, as set forth in the Prime Referenced Rate Addendum to Loan and Security Agreement attached hereto as Exhibit F.
(b)    Late Fee; Default Rate.  If any payment is not made within 10 days after the date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law.  All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to five (5) percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default.
(c)    Payments.  Interest hereunder shall be due and payable on the first Business Day of each month during the term hereof.  Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit accounts or against the Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then applicable hereunder.  Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder.
(d)    Computation.  In the event the Prime Rate is changed from time to time hereafter, the applicable rate of interest hereunder shall be increased or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate.  All interest chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed.
2.4    Crediting Payments.  Prior to the occurrence and continuance of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrower specifies.  After the occurrence and during the continuance of an Event of Default, Bank shall have the right, in its sole discretion, to immediately apply any wire transfer of funds, check, or other item of payment Bank may receive to conditionally reduce Obligations, but such applications of funds shall not be considered a payment on account unless such payment is of immediately available federal funds or unless and until such check or other item of payment is honored when presented for payment.  Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by Bank after 12:00 noon Pacific time shall be deemed to have been received by Bank as of the opening of business on the immediately following Business Day.  Whenever any payment to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such extension.

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2.5    Fees.  Borrower shall pay to Bank the following:
(a)    Revolving Line Facility Fee.  On the Closing Date, a commitment fee with respect to the Revolving Line equal to $5,000, which shall be nonrefundable; 
(b)    Term Loan Facility Fee.  On the Closing Date, a commitment fee with respect to the Term Loan equal to $12,500, which shall be nonrefundable; and
(c)    Bank Expenses.  On the Closing Date, all Bank Expenses incurred through the Closing Date, and, after the Closing Date, all Bank Expenses, as and when they become due.
2.6    Term.  This Agreement shall become effective on the Closing Date and, subject to Section 13.8, shall continue in full force and effect for so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement.  Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default.
		
	3.
	CONDITIONS OF LOANS.

3.1    Conditions Precedent to Initial Credit Extension.  The obligation of Bank to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, the following:
(a)    this Agreement;
(b)    an officer’s certificate of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Agreement;
(c)    a financing statement (Form UCC-1) naming Borrower as debtor;
(d)    agreement to furnish insurance;
(e)    a lessor’s acknowledgment and subordination for Borrower’s leased location at 1908 Kramer Lane, Suite 300, Austin, TX 78758;
(f)    payment of the fees and Bank Expenses then due specified in Section 2.5;
(g)    current SOS Reports indicating that except for Permitted Liens, there are no other security interests or Liens of record in the Collateral;
(h)    current financial statements, including audited statements for Borrower’s most recently ended fiscal year, together with an unqualified opinion, company prepared consolidated and consolidating balance sheets and income statements for the most recently ended month in accordance with Section 6.2, and such other updated financial information as Bank may reasonably request; 
(i)    current Compliance Certificate in accordance with Section 6.2; 
(j)    payoff letter and/or UCC-3 termination statement from Bridge Bank, NA;
(k)    an Automatic Debit Authorization; and
(l)    such other documents or certificates, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

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3.2    Conditions Precedent to all Credit Extensions.  The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is further subject to the following conditions:
(a)    timely receipt by Bank of the Payment/Advance Form as provided in Section 2.1; and
(b)    the representations and warranties contained in Article 5 shall be true and correct in all material respects on and as of the date of such Payment/Advance Form and on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit Extension (provided, however, that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date).  The making of each Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2.
		
	4.
	CREATION OF SECURITY INTEREST.

4.1    Grant of Security Interest.  Borrower grants and pledges to Bank a continuing security interest in the Collateral, now existing or hereafter acquired, to secure prompt repayment of any and all Obligations and to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents.  Except as set forth in the Schedule, such security interest constitutes a valid, first priority security interest in the presently existing Collateral, and will constitute a valid, first priority security interest in later-acquired Collateral.  Borrower also hereby agrees (i) not to sell, transfer, assign, mortgage, pledge, lease, grant a security interest in, or encumber any of its Intellectual Property, except in connection with Permitted Liens and Permitted Transfers and (ii) not to agree with any third party that it will not sell, transfer, assign, mortgage, pledge, lease, grant a security interest in, or encumber any of its Intellectual Property.  Notwithstanding any termination of this Agreement, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations are outstanding.
4.2    Perfection of Security Interest.  Borrower authorizes Bank to file at any time financing statements, continuation statements, and amendments thereto that (i) either specifically describe the Collateral or describe the Collateral as all assets of Borrower of the kind pledged hereunder, and (ii) contain any other information required by the Code for the sufficiency of filing office acceptance of any financing statement, continuation statement, or amendment, including whether Borrower is an organization, the type of organization and any organizational identification number issued to Borrower, if applicable.  Any such financing statements may be filed by Bank at any time in any jurisdiction whether or not Revised Article 9 of the Code is then in effect in that jurisdiction.  Borrower shall from time to time endorse and deliver to Bank, at the request of Bank, all Negotiable Collateral and other documents that Bank may reasonably request, in form satisfactory to Bank, to perfect and continue perfection of Bank’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under the Loan Documents.  Borrower shall have possession of the Collateral, except where expressly otherwise provided in this Agreement or where Bank chooses to perfect its security interest by possession in addition to the filing of a financing statement.  Where Collateral is in possession of a third party, Borrower shall take such steps as Bank reasonably requests for Bank (i) to obtain an acknowledgment, in form and substance satisfactory to Bank, of the bailee that the bailee holds such Collateral for the benefit of Bank, and (ii) to obtain “control” of any Collateral consisting of investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such items and the term “control” are defined in Revised Article 9 of the Code) by causing the securities intermediary or depositary institution or issuing bank to execute a control agreement in form and substance satisfactory to Bank.  Borrower will not create any chattel paper without placing a legend on the chattel paper acceptable to Bank indicating that Bank has a security interest in the chattel paper.  Borrower from time to time may deposit with Bank specific cash collateral to secure specific Obligations; Borrower authorizes Bank to hold such specific balances in pledge and to decline to honor any drafts thereon or any request by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the specific Obligations are outstanding.  
4.3    Right to Inspect.  Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time during Borrower’s usual business hours but no more than twice a year (unless an Event of Default has occurred and is continuing), to inspect Borrower’s Books and to make copies thereof and to check, test, and appraise the Collateral in order to verify Borrower’s financial condition or the amount, condition of, 

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or any other matter relating to, the Collateral.
		
	5.
	REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants as follows:
5.1    Due Organization and Qualification.  Borrower and each Subsidiary is an entity duly existing under the laws of the state in which it is incorporated or organized, as applicable, and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified, except where the failure to do so could not reasonably be expected to cause a Material Adverse Effect.
5.2    Due Authorization; No Conflict.  The execution, delivery, and performance of the Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s organizational documents, nor will they constitute an event of default under any material agreement by which Borrower is bound.  Borrower is not in default under any agreement by which it is bound, except to the extent such default would not reasonably be expected to cause a Material Adverse Effect.
5.3    Collateral.  Borrower has rights in or the power to transfer the Collateral, and its title to the Collateral is free and clear of Liens, adverse claims, and restrictions on transfer or pledge except for Permitted Liens.  All Collateral is located solely in the Collateral States.  The Eligible Accounts are bona fide existing obligations.  The property or services giving rise to such Eligible Accounts has been delivered or rendered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor.  Borrower has not received notice of actual or imminent Insolvency Proceeding of any account debtor whose accounts are included in any Borrowing Base Certificate as an Eligible Account. No licenses or agreements giving rise to such Eligible Accounts is with any Prohibited Territory or with any Person organized under or doing business in a Prohibited Territory.  All Inventory is in all material respects of good and merchantable quality, free from all material defects, except for Inventory for which adequate reserves have been made.  Except as set forth in the Schedule or as otherwise explicitly permitted under the terms of this Agreement, none of the Collateral is maintained or invested with a Person other than Bank.
5.4    Intellectual Property.  Borrower is the sole owner of the Intellectual Property, except for licenses granted by Borrower to its customers in the ordinary course of business.  To the best of Borrower’s knowledge, each of the Copyrights, Trademarks and Patents is valid and enforceable, and no part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part, and no claim has been made to Borrower that any part of the Intellectual Property violates the rights of any third party except to the extent such claim could not reasonably be expected to cause a Material Adverse Effect.
5.5    Name; Location of Chief Executive Office.  Except as disclosed in the Schedule, Borrower has not done business under any name other than that specified on the signature page hereof, and its exact legal name is as set forth in the first paragraph of this Agreement.  The chief executive office of Borrower is located in the Chief Executive Office State at the address indicated in Section 10 hereof.
5.6    Actions, Suits, Litigation, or Proceedings.  Except as set forth in the Schedule, there are no actions, suits, litigation or proceedings, at law or in equity, pending by or against Borrower or any Subsidiary of Borrower before any court, administrative agency, or arbitrator in which a likely adverse decision could reasonably be expected to have a Material Adverse Effect.
5.7    No Material Adverse Change in Financial Statements.  All consolidated and consolidating financial statements related to Borrower and any Subsidiary of Borrower that are delivered by Borrower to Bank fairly present in all material respects Borrower’s consolidated and consolidating financial condition as of the date thereof and Borrower’s consolidated and consolidating results of operations for the period then ended.  There has not been a material adverse change in the consolidated or in the consolidating financial condition of Borrower since the date of the most recent of such financial statements submitted to Bank.
5.8    Solvency, Payment of Debts.  Borrower is able to pay its debts (including trade debts) as they mature; 

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the fair saleable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; and Borrower is not left with unreasonably small capital after the transactions contemplated by this Agreement.
5.9    Compliance with Laws and Regulations.  Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA.  No event has occurred resulting from Borrower’s failure to comply with ERISA that is reasonably likely to result in Borrower’s incurring any liability that could reasonably be expected to have a Material Adverse Effect.  Borrower is not an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940.  Borrower is not engaged principally, or as one of the important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System).  Borrower has complied in all material respects with all the provisions of the Federal Fair Labor Standards Act.  Borrower is in compliance with all environmental laws, regulations and ordinances except where the failure to comply is not reasonably likely to have a Material Adverse Effect.  Borrower has not violated any statutes, laws, ordinances or rules applicable to it, the violation of which could reasonably be expected to have a Material Adverse Effect.  Borrower and each Subsidiary of Borrower have filed or caused to be filed all tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all taxes reflected therein except those being contested in good faith with adequate reserves under GAAP or where the failure to file such returns or pay such taxes could not reasonably be expected to have a Material Adverse Effect.
5.10    Subsidiaries.  Borrower does not own any stock, partnership interest or other equity securities of any Person, except for Permitted Investments and except as set forth on the Schedule.
5.11    Government Consents.  Borrower and each Subsidiary of Borrower have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of Borrower’s business as currently conducted, except where the failure to do so would not reasonably be expected to cause a Material Adverse Effect.
5.12    Inbound Licenses.  Except as disclosed on the Schedule, Borrower is not a party to, nor is bound by, any inbound license or other similar agreement, the failure, breach, or termination of which could reasonably be expected to cause a Material Adverse Effect, or that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property.
5.13    Full Disclosure.  No representation, warranty or other statement made by Borrower in any certificate or written statement furnished to Bank taken together with all such certificates and written statements furnished to Bank contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading, it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not to be viewed as facts and that actual results during the period or periods covered by any such projections and forecasts may differ from the projected or forecasted results. 
		
	6.
	AFFIRMATIVE COVENANTS.

Borrower covenants that, until payment in full of all outstanding Obligations, and for so long as Bank may have any commitment to make a Credit Extension hereunder, Borrower shall do all of the following:
6.1    Good Standing and Government Compliance.  Borrower shall maintain its, and each of its Subsidiaries’ limited liability company or corporate, as applicable, existence and good standing in its respective state or jurisdiction of organization or incorporation, as applicable, shall maintain qualification and good standing in each other jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect, and shall furnish to Bank the organizational identification number issued to Borrower by the authorities of the jurisdiction in which Borrower is organized, if applicable.  Borrower shall meet, and shall cause each of its Subsidiaries to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA.  Borrower shall comply in all material respects with all applicable Environmental Laws, and maintain all material permits, licenses 

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and approvals required thereunder, where the failure to do so could reasonably be expected to have a Material Adverse Effect.  Borrower shall comply, and shall cause each of its Subsidiaries to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, and shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which or failure to comply with which would reasonably be expected to have a Material Adverse Effect.
6.2    Financial Statements, Reports, Certificates.  Borrower shall deliver to Bank:  (i) as soon as available, but in any event within twenty (20) days after the end of each calendar month, a company prepared consolidated balance sheet and income statement covering Borrower’s and its Subsidiaries’ operations during such period, prepared in accordance with GAAP, and in a form reasonably acceptable to Bank and certified by a Responsible Officer; (ii) as soon as available, but in any event within one hundred twenty (120) days after the end of Borrower’s fiscal year, audited consolidated financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an opinion which is unqualified (including no going concern comment or qualification) or otherwise consented to in writing by Bank on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank; (iii) if applicable, copies of all statements, reports and notices sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt and all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (iv) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of One Hundred Thousand Dollars ($100,000) or more; (v) promptly upon receipt, each management letter prepared by Borrower’s independent certified public accounting firm regarding Borrower’s management control systems; (vi) such budgets, sales projections, operating plans or other financial information generally prepared by Borrower in the ordinary course of business as Bank may reasonably request from time to time; and (vii) within twenty (20) days of the last day of each fiscal quarter, a report signed by Borrower, in form reasonably acceptable to Bank, listing any applications or registrations that Borrower has made or filed in respect of any Patents, Copyrights or Trademarks and the status of any outstanding applications or registrations, as well as any material change in Borrower’s Intellectual Property.
(a)    Within twenty (20) days after the last day of each month, Borrower shall deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit D hereto, together with aged listings by invoice date of accounts receivable and accounts payable.
(b)    Within twenty (20) days after the last day of each month, Borrower shall deliver to Bank with the monthly financial statements a Compliance Certificate certified as of the last day of the applicable month and signed by a Responsible Officer in substantially the form of Exhibit E hereto.
(c)    Immediately upon becoming aware of the occurrence or existence of an Event of Default hereunder, a written statement of a Responsible Officer setting forth details of the Event of Default, and the action which Borrower has taken or proposes to take with respect thereto.
(d)    Bank shall have a right from time to time hereafter to audit Borrower’s Accounts and appraise Collateral at Borrower’s expense, provided that such audits will be conducted no more often than every six (6) months unless an Event of Default has occurred and is continuing.
Borrower may deliver to Bank on an electronic basis any certificates, reports or information required pursuant to this Section 6.2, and Bank shall be entitled to rely on the information contained in the electronic files, provided that Bank in good faith believes that the files were delivered by a Responsible Officer.  If Borrower delivers this information electronically, it shall also deliver to Bank by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or .pdf file within five (5) Business Days of submission of the unsigned electronic copy the certification of monthly financial statements, the intellectual property report, the Borrowing Base Certificate and the Compliance Certificate, each bearing the physical signature of the Responsible Officer.
6.3    Inventory; Returns.  Borrower shall keep all Inventory in good and merchantable condition, free from all material defects except for Inventory for which adequate reserves have been made.  Returns and allowances, if any, as between Borrower and its account debtors shall be on the same basis and in accordance with the usual customary 

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practices of Borrower, as they exist on the Closing Date.  Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims involving more than One Hundred Thousand Dollars ($100,000).
6.4    Taxes.  Borrower shall make, and cause each of its Subsidiaries to make, due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by law, including, but not limited to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability, and will execute and deliver to Bank, on demand, proof satisfactory to Bank indicating that Borrower or a Subsidiary of Borrower has made such payments or deposits and any appropriate certificates attesting to the payment or deposit thereof; provided that Borrower or a Subsidiary of Borrower need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower or its Subsidiary, as applicable.
6.5    Insurance.
(a)    Borrower, at its expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where Borrower’s business is conducted on the date hereof.  Borrower shall also maintain liability and other insurance in amounts and of a type that are customary to businesses similar to Borrower’s.
(b)    All such policies of insurance shall be in such form, with such companies, and in such amounts as reasonably satisfactory to Bank.  All policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an additional loss payee, and all liability insurance policies shall show Bank as an additional insured and specify that the insurer must give at least twenty (20) days notice to Bank before canceling its policy for any reason.  Upon Bank’s request, Borrower shall deliver to Bank certified copies of the policies of insurance and evidence of all premium payments.  If no Event of Default has occurred and is continuing, proceeds payable under any casualty policy will, at Borrower’s option, be payable to Borrower to replace the property subject to the claim, provided that any such replacement property shall be deemed Collateral in which Bank has been granted a first priority security interest.  If an Event of Default has occurred and is continuing, all proceeds payable under any such policy shall, at Bank’s option, be payable to Bank to be applied on account of the Obligations.
6.6    Accounts.  Within sixty (60) days after the Closing Date, Borrower shall maintain all its depository, operating and investment accounts with Bank.
6.7    Financial Covenants.  Borrower shall at all times maintain the following financial ratios and covenants:
(a)    Minimum Cash Requirement.  A balance of Cash at Bank of not less than the greater of (i) the aggregate outstanding amount of Term Loan Advances and (ii) $1,000,000; provided that, after Borrower achieves positive cash flow (after taking into account payments made under the Revolving Line and the Term Loan), as determined in accordance with GAAP, for one calendar quarter, Borrower shall maintain a balance of Cash at Bank of not less than $1,000,000.
(b)    Bank Debt Liquidity Coverage.  A ratio of Liquidity to all Indebtedness owing to Bank of at least 1.25 to 1.00.
6.8    Registration of Intellectual Property Rights.
     (a)  Borrower shall register or cause to be registered on an expedited basis (to the extent not already registered) with the United States Patent and Trademark Office or the United States Copyright Office, as the case may be, those registrable intellectual property rights now owned or hereafter developed or acquired by Borrower, to the extent that Borrower, in its reasonable business judgment, deems it appropriate to so protect such intellectual property rights.

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(a)    Borrower shall promptly give Bank written notice of any applications or registrations of intellectual property rights filed with the United States Patent and Trademark Office and United States Copyright Office, including the date of such filing and the registration or application numbers, if any.
(b)    Borrower shall give Bank prompt written notice of the filing of any applications or registrations with the United States Copyright Office, including the title of such intellectual property rights to be registered, as such title will appear on such applications or registrations, and the date such applications or registrations will be filed.
(c)    Borrower shall (i) protect, defend and maintain the validity and enforceability of the material Trademarks, Patents, Copyrights, and trade secrets, (ii) use commercially reasonable efforts to detect infringements of the material Trademarks, Patents and Copyrights and promptly advise Bank in writing of material infringements detected and (iii) not allow any material Trademarks, Patents or Copyrights to be abandoned, forfeited or dedicated to the public without the written consent of Bank, which shall not be unreasonably withheld.
6.9    Consent of Inbound Licensors.  Prior to entering into or becoming bound by any material license or similar agreement, Borrower shall provide written notice to Bank of the material terms of such license or agreement with a description of its likely impact on Borrower’s business or financial condition.
6.10    Further Assurances.  At any time and from time to time Borrower shall execute and deliver such further instruments and take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement.
		
	7.
	NEGATIVE COVENANTS.

Borrower covenants and agrees that, so long as any credit hereunder shall be available and until the outstanding Obligations are paid in full or for so long as Bank may have any commitment to make any Credit Extensions, Borrower will not do any of the following without Bank’s prior written consent:
7.1    Dispositions.  Convey, sell, lease, license, transfer or otherwise dispose of (collectively, to “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, or move cash balances on deposit with Bank to accounts opened at another financial institution, other than Permitted Transfers.  
7.2    Change in Name, Location, Executive Office, or Executive Management; Change in Business; Change in Fiscal Year; Change in Control.  Change its name or the Borrower State or relocate its chief executive office without thirty (30) days prior written notification to Bank; replace its chief executive officer or chief financial officer without thirty (30) days prior written notification to Bank; engage in any business, or permit any of its Subsidiaries to engage in any business, other than or reasonably related or incidental to the businesses currently engaged in by Borrower; change its fiscal year end; or have a Change in Control.
7.3    Mergers or Acquisitions.  Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or consolidations of a Subsidiary into another Subsidiary or into Borrower), or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person, or enter into any agreement to do any of the same, except where (i) such transactions do not in the aggregate exceed One Hundred Thousand Dollars ($100,000) during any fiscal year, (ii) no Event of Default has occurred, is continuing or would exist after giving effect to such transactions, (iii) such transactions do not result in a Change in Control, and (iv) Borrower is the surviving entity.
7.4    Indebtedness.  Create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit any of its Subsidiaries to do so, other than Permitted Indebtedness, or prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any Indebtedness, except Indebtedness to Bank.
7.5    Encumbrances.  Create, incur, assume or allow any Lien with respect to any of its property, or assign or otherwise convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries 

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so to do, except for Permitted Liens, or covenant to any other Person that Borrower in the future will refrain from creating, incurring, assuming or allowing any Lien with respect to any of Borrower’s property.
7.6    Distributions.  Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock, except that Borrower may repurchase the stock of former employees pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase.
7.7    Investments.  Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments, or, subject to Section 6.6, maintain or invest any of its property with a Person other than Bank or permit any of its Subsidiaries to do so unless such Person has entered into a control agreement with Bank, in form and substance satisfactory to Bank, or suffer or permit any of its Subsidiaries to be a party to, or be bound by, an agreement that restricts such Subsidiary of Borrower from paying dividends or otherwise distributing property to Borrower. Further, Borrower shall not enter into any license or agreement with any Prohibited Territory or with any Person organized under or doing business in a Prohibited Territory.
7.8    Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.
7.9    Subordinated Debt.  Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in compliance with the terms of such Subordinated Debt and the terms of the subordination agreement relating to such Subordinated Debt, or amend any provision of any document evidencing such Subordinated Debt, except in compliance with the terms of the subordination agreement relating to such Subordinated Debt, or amend any provision affecting Bank’s rights contained in any documentation relating to the Subordinated Debt without Bank’s prior written consent.
7.10    Inventory and Equipment.  Store the Inventory or the Equipment with a bailee, warehouseman, or similar third party unless the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Bank’s benefit or (b) is in possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment.  Except for Inventory sold in the ordinary course of business and except for such other locations as Bank may approve in writing, Borrower shall keep the Inventory and Equipment only at the location set forth in Section 10 and such other locations of which Borrower gives Bank prior written notice and as to which Bank files a financing statement where needed to perfect its security interest.
7.11    No Investment Company; Margin Regulation.  Become or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose.
		
	8.
	EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an Event of Default by Borrower under this Agreement:
8.1    Payment Default.  If Borrower fails to pay any of the Obligations when due;
8.2    Covenant Default.
(a)    If Borrower fails to perform any obligation under Section 6.2, 6.4, 6.5, 6.6, or 6.7, or violates any of the covenants contained in Article 7 of this Agreement; 
(b)    If Borrower fails or neglects to perform any obligation under Sections 6.1, 6.3, 6.8, 6.9 or 

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6.10 and has failed to cure such default within 10 days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; however during such cure period no Credit Extensions will be made; or
(c)    If Borrower fails or neglects to perform or observe any other material term, provision, condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition or covenant that can be cured, has failed to cure such default within ten (10) days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, so long as Borrower continues to diligently attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made;
8.3    Material Adverse Change.  If there occurs any circumstance or circumstances that could reasonably be expected to have a Material Adverse Effect;
8.4    Defective Perfection.  If Bank shall receive at any time following the Closing Date an SOS Report indicating that except for Permitted Liens, Bank’s security interest in the Collateral is not prior to all other security interests or Liens of record reflected in the report;
8.5    Attachment.  If any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within five (5) days, or if Borrower or any of it Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower’s or any of its Subsidiaries’ assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of Borrower’s or any of its Subsidiaries’ assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within five (5) days after Borrower or Subsidiary of Borrower, as applicable, receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower or a Subsidiary of Borrower, as applicable (provided that no Credit Extensions will be made during such cure period);
8.6    Insolvency.  If Borrower or any Subsidiary of Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by Borrower or any Subsidiary of Borrower, or if an Insolvency Proceeding is commenced against Borrower or any Subsidiary of Borrower and is not dismissed or stayed within 30 days (provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding);
8.7    Other Agreements.  If there is a default or other failure to perform in any agreement to which Borrower or any Subsidiary of Borrower is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of One Hundred Thousand Dollars ($100,000) or that would reasonably be expected to have a Material Adverse Effect;
8.8    Subordinated Debt.  If Borrower or any of its Subsidiaries makes any payment on account of Subordinated Debt, except to the extent such payment is allowed under the terms of any subordination agreement entered into with Bank;
8.9    Judgments; Settlements.  If one or more (a) judgments, orders, decrees or arbitration awards requiring the Borrower and/or its Subsidiaries to pay an aggregate amount of One Hundred Thousand Dollars ($100,000) or greater shall be rendered against Borrower and/or its Subsidiaries  and the same shall not have been vacated or stayed within ten (10) days thereafter (provided that no Credit Extensions will be made prior to such matter being vacated or stayed); or (b) settlements is agreed upon by Borrower and/or its Subsidiaries for the payment by Borrower and/or its Subsidiaries of an aggregate amount One Hundred Thousand Dollars ($100,000) or greater; or

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8.10    Misrepresentations.  If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter into this Agreement or any other Loan Document.
		
	9.
	BANK’S RIGHTS AND REMEDIES.

9.1    Rights and Remedies.  Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrower:
(a)    Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.6 (insolvency), all Obligations shall become immediately due and payable without any action by Bank);
(b)    Demand that Borrower  (i) deposit cash with Bank in an amount equal to the amount of any Letters of Credit remaining undrawn and outstanding Credit Card Services, as collateral security for the repayment of any future drawings under such Letters of Credit and outstanding Credit Card Services, and (ii) pay in advance all Letter of Credit fees scheduled to be paid or payable over the remaining term of the Letters of Credit or Credit Card Services fees, and Borrower shall promptly deposit and pay such amounts;
(c)    Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between Borrower and Bank;
(d)    Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Bank reasonably considers advisable;
(e)    Make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral.  Borrower agrees to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate.  Borrower authorizes Bank to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith.  With respect to any of Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise;
(f)    Set off and apply to the Obligations any and all (i) balances and deposits of Borrower held by Bank, and (ii) indebtedness at any time owing to or for the credit or the account of Borrower held by Bank;
(g)    Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral.  Bank is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit;
(h)    Sell the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower’s premises) as Bank determines is commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order Bank deems appropriate.  Bank may sell the Collateral without giving any warranties as to the Collateral.  Bank may specifically disclaim any warranties of title or the like.  This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.  If Bank sells any of the Collateral upon credit, Borrower will be credited only with payments actually made by the purchaser, received by Bank, and applied to the indebtedness of 

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the purchaser.  If the purchaser fails to pay for the Collateral, Bank may resell the Collateral and Borrower shall be credited with the proceeds of the sale;
(i)    Bank may credit bid and purchase at any public sale; 
(j)    Apply for the appointment of a receiver, trustee, liquidator or conservator of the Collateral, without notice and without regard to the adequacy of the security for the Obligations and without regard to the solvency of Borrower, any guarantor or any other Person liable for any of the Obligations; and
(k)    Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrower.
Bank may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.
9.2    Power of Attorney.  Effective only upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to:  (a) send requests for verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; and (g) file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of Borrower where permitted by law; provided Bank may exercise such power of attorney to sign the name of Borrower on any of the documents described in clause (g) above, regardless of whether an Event of Default has occurred.  The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed and Bank’s obligation to provide advances hereunder is terminated.
9.3    Accounts Collection.  At any time after the occurrence and during the continuation of an Event of Default, Bank may notify any Person owing funds to Borrower of Bank’s security interest in such funds and verify the amount of such Account and Borrower shall collect all amounts owing to Borrower for Bank, receive in trust all payments as Bank’s trustee, and immediately deliver such payments to Bank in their original form as received from the account debtor, with proper endorsements for deposit.
9.4    Bank Expenses.  If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to Borrower:  (a) make payment of the same or any part thereof; (b) set up such reserves under the Revolving Line as Bank deems necessary to protect Bank from the exposure created by such failure; or (c) obtain and maintain insurance policies of the type discussed in Section 6.5 of this Agreement, and take any action with respect to such policies as Bank deems prudent.  Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral.  Any payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement.
9.5    Bank’s Liability for Collateral.  Bank has no obligation to clean up or otherwise prepare the Collateral for sale.  All risk of loss, damage or destruction of the Collateral shall be borne by Borrower.
9.6    No Obligation to Pursue Others.  Bank has no obligation to attempt to satisfy the Obligations by collecting them from any other person liable for them and Bank may release, modify or waive any collateral provided by any other Person to secure any of the Obligations, all without affecting Bank’s rights against Borrower.  Borrower waives any right it may have to require Bank to pursue any other Person for any of the Obligations.

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9.7    Remedies Cumulative.  Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative.  Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default on Borrower’s part shall be deemed a continuing waiver.  No delay by Bank shall constitute a waiver, election, or acquiescence by it.  No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and then shall be effective only in the specific instance and for the specific purpose for which it was given.  Borrower expressly agrees that this Section 9.7 may not be waived or modified by Bank by course of performance, conduct, estoppel or otherwise.
9.8    Demand; Protest.  Except as otherwise provided in this Agreement, Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment and any other notices relating to the Obligations.
		
	10.
	NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below:

If to Borrower:            Rainmaker Systems, Inc.
900 East Hamilton, Suite 400
Campbell, California  95008
Attn:  Timothy Burns, CFO
FAX:  (512) 949-6057

If to Bank:            Comerica Bank
M/C 7578
39200 Six Mile Rd.
Livonia, MI 48152
Attn:  National Documentation Services

with a copy to:            Comerica Bank
226 Airport Parkway, Suite 100
San Jose, California  95110
Attn:  Jeff Hasselman
FAX:  (408) 451-8568

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.
		
	11.
	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of conflicts of law.  Each of Borrower and Bank hereby submits to the exclusive jurisdiction of the State and Federal courts located in the State of California.  THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES.  TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE 

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UNDERSIGNED PARTIES.
		
	12.
	REFERENCE PROVISION.

12.1    In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect to proceed under this Judicial Reference Provision.
12.2    With the exception of the items specified in Section 12.3, below, any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectively in this Section, the “Loan Documents”), will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding will be in the Superior Court in the County where the real property involved in the action, if any, is located or in a County where venue is otherwise appropriate under applicable law (the “Court”).
12.3    The matters that shall not be subject to a reference are the following: (i) non-judicial foreclosure of any security interests in real or personal property, (ii) exercise of selfhelp remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillary remedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This Agreement does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference pursuant to this Agreement.
12.4    The referee shall be a retired Judge or Justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted.
12.5    The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision.  
12.6    The referee will have power to expand or limit the amount and duration of discovery.  The referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.
12.7    Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial.
12.8    The referee shall be required to determine all issues in accordance with existing case law and the 

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statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference.  Pursuant to CCP § 644, such decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding and conclusive.  The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee.  The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision.
12.9    If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration.   The arbitration will be conducted by a retired judge or Justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.
12.10    THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.  
		
	13.
	GENERAL PROVISIONS.

13.1    Successors and Assigns.  This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties and shall bind all persons who become bound as a debtor to this Agreement; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion.  Bank shall have the right without the consent of or notice to Borrower to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder.
13.2    Indemnification.  Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against:  (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement and/or the Loan Documents; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank, its officers, employees and agents as a result of or in any way arising out of, following, or consequential to transactions between Bank and Borrower whether under this Agreement, or otherwise (including without limitation reasonable attorneys fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct.
13.3    Time of Essence.  Time is of the essence for the performance of all obligations set forth in this Agreement.
13.4    Severability of Provisions.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.
13.5    Correction of Loan Documents.  Bank may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent with the agreement of the parties.
13.6    Amendments in Writing, Integration.  All amendments to or terminations of this Agreement or the other Loan Documents must be in writing signed by the parties.  All prior agreements, understandings, representations, 

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warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement and the other Loan Documents, if any, are merged into this Agreement and the Loan Documents.
13.7    Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.
13.8    Survival.  All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Bank has any obligation to make any Credit Extension to Borrower.  The obligations of Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 13.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run.
13.9    Confidentiality.  In handling any confidential information, Bank and all employees and agents of Bank shall exercise the same degree of care that Bank exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such information may be made (i) to the subsidiaries or Affiliates of Bank in connection with their present or prospective business relations with Borrower, (ii) to prospective transferees or purchasers of any interest in the Obligations, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order, (iv) as may be required in connection with the examination, audit or similar investigation of Bank, (v) to Bank’s accountants, auditors and regulators, and (vi) as Bank may determine in connection with the enforcement of any remedies hereunder.  Confidential information hereunder shall not include information that either:  (a) is in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the public domain after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third party, provided Bank does not have actual knowledge that such third party is prohibited from disclosing such information.
 [signatures on following page]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

RAINMAKER SYSTEMS, INC.

By:    /s/ Timothy Burns                        

Name:    Timothy Burns                    

Title:    Chief Financial Officer                    

COMERICA BANK

By:    /s/ Jeff Hasselman                        

Name:    Jeff Hasselman                    

Title:    Vice President                        

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EXHIBIT A
DEFINITIONS
“Accounts” means all presently existing and hereafter arising accounts, contract rights, payment intangibles and all other forms of obligations owing to Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other technology) or the rendering of services by Borrower and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.
“Advance” or “Advances” means a cash advance or cash advances under the Revolving Line.
“Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and partners.
“Bank Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees and expenses, whether generated in-house or by outside counsel) incurred in connection with the preparation, negotiation, administration, and enforcement of the Loan Documents;  reasonable Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses (whether generated in-house or by outside counsel) incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.
“Borrower State” means Delaware, the state under whose laws Borrower is organized.
“Borrower’s Books” means all of Borrower’s books and records including:  ledgers; records concerning Borrower’s assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment, containing such information.
“Borrowing Base” means an amount equal to eighty percent (80%) of Eligible Accounts, as determined by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrower.
“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of California are authorized or required to close.
“Cash” means unrestricted cash and cash equivalents.
“Change in Control” shall mean a transaction in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of Borrower, who did not have such power before such transaction.
“Chief Executive Office State” means California, where Borrower’s chief executive office is located.
“Closing Date” means the date of this Agreement.
“Code” means the California Uniform Commercial Code as amended or supplemented from time to time.
“Collateral” means the property described on Exhibit B attached hereto and all Negotiable Collateral to the extent not described on Exhibit B, except to the extent any such property (i) is nonassignable by its terms without the consent of the licensor thereof or another party (but only to the extent such prohibition on transfer is enforceable under applicable law, including, without limitation, Sections 9406 and 9408 of the Code), (ii) the granting of a security interest therein is contrary to applicable law, provided that upon the cessation of any such restriction or prohibition, such property shall 

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automatically become part of the Collateral, or (iii) constitutes the capital stock of a controlled foreign corporation (as defined in the IRC), in excess of 65% of the voting power of all classes of capital stock of such controlled foreign corporations entitled to vote.
“Collateral State” means the state or states where the Collateral is located, which is California and Texas.
“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.
“Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held.
“Credit Card Services Sublimit” means a sublimit for corporate credit cards and e-commerce or merchant account services under the Revolving Line not to exceed Five Hundred Thousand Dollars ($500,000), subject to the Maximum Sublimit Amount.
“Credit Extension” means each Advance, Term Loan Advance or any other extension of credit by Bank to or for the benefit of Borrower hereunder.
“Eligible Accounts” means those Accounts that arise in the ordinary course of Borrower’s business that comply with all of Borrower’s representations and warranties to Bank set forth in Section 5.3; provided, that Bank may change the standards of eligibility in its commercially reasonable discretion, by giving Borrower thirty (30) days prior written notice.  Unless otherwise agreed to by Bank, Eligible Accounts shall not include the following:
(a)    Accounts that the account debtor has failed to pay in full within ninety (90) days of invoice date;
(b)    Credit balances over ninety (90) days;
(c)    Accounts with respect to an account debtor, twenty-five percent (25%) of whose Accounts the account debtor has failed to pay within ninety (90) days of invoice date;
(d)    Accounts with respect to an account debtor, including Subsidiaries and Affiliates, whose total obligations to Borrower exceed twenty percent (20%) of all Accounts, to the extent such obligations exceed the aforementioned percentage, except as approved in writing by Bank;
(e)    Accounts with respect to which the account debtor does not have its principal place of business in the United States, except for Eligible Foreign Accounts;
(f)    Accounts with respect to which the account debtor is the United States or any department, agency, or instrumentality of the United States, except for Accounts of the United States if the payee has assigned its 

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payment rights to Bank and the assignment has been acknowledged under the Assignment of Claims Act of 1940 (31 U.S.C. 3727);
(g)    Accounts with respect to which Borrower is liable to the account debtor for goods sold or services rendered by the account debtor to Borrower, but only to the extent of any amounts owing to the account debtor against amounts owed to Borrower;
(h)    Accounts with respect to which goods are placed on consignment, guaranteed sale, sale or return, sale on approval, bill and hold, demo or promotional, or other terms by reason of which the payment by the account debtor may be conditional;
(i)    Accounts with respect to which the account debtor is an officer, employee, agent or Affiliate of Borrower;
(j)    Accounts that have not yet been billed to the account debtor or that relate to deposits (such as good faith deposits) or other property of the account debtor held by Borrower for the performance of services or delivery of goods which Borrower has not yet performed or delivered; 
(k)    Accounts with respect to which the account debtor disputes liability or makes any claim with respect thereto as to which Bank believes, in its sole discretion, that there may be a basis for dispute (but only to the extent of the amount subject to such dispute or claim), or is subject to any Insolvency Proceeding, or becomes insolvent, or goes out of business; 
(l)    Accounts the collection of which Bank reasonably determines after inquiry and consultation with Borrower to be doubtful; and 
(m)    Retentions and hold-backs.
“Eligible Foreign Accounts” means Accounts (i) with respect to which the account debtor does not have its principal place of business in the United States and is not located in an OFAC sanctioned country, (ii) that are (a) supported by one or more letters of credit in an amount and of a tenor, and issued by a financial institution, acceptable to Bank, (b) insured by the Export Import Bank of the United States, (c) generated by an account debtor with its principal place of business in Canada, provided that the Bank has perfected its security interest in the appropriate Canadian province, or (d) approved by Bank on a case-by-case basis, and (iii) that otherwise meet the definition of Eligible Accounts, other than clause (e). All Eligible Foreign Accounts must be calculated in U.S. Dollars.
“Environmental Laws” means all laws, rules, regulations, orders and the like issued by any federal state, local foreign or other governmental or quasi-governmental authority or any agency pertaining to the environment or to any hazardous materials or wastes, toxic substances, flammable, explosive or radioactive materials, asbestos or other similar materials.
“Equipment” means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which Borrower has any interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.
“Event of Default” has the meaning assigned in Article 8.
“GAAP” means generally accepted accounting principles, consistently applied, as in effect from time to time.
“Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, (d) all Contingent Obligations, and (e) all obligations arising under the Credit Card Services Sublimit, if any.

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“Insolvency Proceeding” means any proceeding commenced by or against any Person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.
“Intellectual Property” means all of Borrower’s right, title, and interest in and to the following:
(a)    Copyrights, Trademarks and Patents;
(b)    Any and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired or held;
(c)    Any and all design rights which may be available to Borrower now or hereafter existing, created, acquired or held;
(d)    Any and all claims for damages by way of past, present and future infringement of any of the rights included above, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified above;
(e)    All licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties arising from such use to the extent permitted by such license or rights; 
(f)    All amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and
“Inventory” means all present and future inventory in which Borrower has any interest.
“Investment” means any beneficial ownership of (including stock, partnership or limited liability company interest or other securities) any Person, or any loan, advance or capital contribution to any Person.
“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
“Letter of Credit” means a commercial or standby letter of credit or similar undertaking issued by Bank at Borrower’s request in accordance with Section 2.1(b)(iii).
“Letter of Credit Sublimit” means a sublimit for Letters of Credit under the Revolving Line not to exceed Five Hundred Thousand Dollars ($500,000), subject to the Maximum Sublimit Amount.
“Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.
“Liquidity” means the sum of Cash plus eighty percent (80%) of Eligible Accounts.
“Loan Documents” means, collectively, this Agreement, any note or notes executed by Borrower, and any other document, instrument or agreement entered into in connection with this Agreement, all as amended or extended from time to time.
“Material Adverse Effect” means (i) a material adverse change in Borrower’s prospects, business or financial condition, or (ii) a material impairment in the prospect of repayment of all or any portion of the Obligations or in otherwise performing Borrower’s obligations under the Loan Documents, (iii) a material impairment in the perfection, value or priority of Bank’s security interests in the Collateral.
“Maximum Sublimit Amount” has the meaning assigned in Section 2.1(b)(i).
“Negotiable Collateral” means all of Borrower’s present and future letters of credit of which it is a beneficiary, drafts, 

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instruments (including promissory notes), securities, documents of title, and chattel paper, and Borrower’s Books relating to any of the foregoing.
“Obligations” means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise.
“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.
“Periodic Payments” means all installments or similar recurring payments that Borrower may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank.
“Permitted Indebtedness” means:
(a)    Indebtedness of Borrower in favor of Bank arising under this Agreement or any other Loan Document;
(b)    Indebtedness existing on the Closing Date and disclosed in the Schedule;
(c)    Indebtedness not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year of Borrower secured by a lien described in clause (c) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness;
(d)    Subordinated Debt; 
(e)    Indebtedness to trade creditors incurred in the ordinary course of business; and 
(f)    Intercompany Indebtedness permitted under clause (e) of the definition of Permitted Investments; and 
(g)    Extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.
“Permitted Investment” means:
(a)    Investments existing on the Closing Date disclosed in the Schedule;
(b)    (i) Marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) Bank’s certificates of deposit maturing no more than one (1) year from the date of investment therein, and (iv) Bank’s money market accounts;
(c)    Repurchases of stock from former employees or directors of Borrower under the terms of applicable repurchase agreements (i) in an aggregate amount not to exceed One Hundred Thousand Dollars ($100,000) in any fiscal year, provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases, or (ii) in any amount where the consideration for the repurchase is the cancellation of indebtedness owed by such former employees to Borrower regardless of whether an Event of Default exists;

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(d)    Investments accepted in connection with Permitted Transfers;
(e)    (i) Investments by Borrower in or to any of Rainmaker Systems Limited, Rainmaker Asia, Inc., Rainmaker EMEA Limited, Rainmaker Europe Ltd. and/or Rainmaker Systems (Canada), Inc. (the “Foreign Subsidiaries”) pursuant to transfer pricing or other arrangements on account of work performed by such Foreign Subsidiaries for or on behalf of Borrower, provided that such Investments shall not to exceed One Million Dollars ($1,000,000) in the aggregate in any calendar month; (ii) Investments of any Foreign Subsidiary in or to another Foreign Subsidiary; and (iii) Investments of any other Subsidiaries in or to other Subsidiaries or Borrower and Investments by Borrower in any other Subsidiaries not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year;
(f)    Investments not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements approved by Borrower’s Board of Directors;
(g)    Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of Borrower’s business;
(h)    Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business, provided that this subparagraph (h) shall not apply to Investments of Borrower in any Subsidiary; and
(i)    Joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower do not exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year.
“Permitted Liens” means the following:
(a)    Any Liens existing on the Closing Date and disclosed in the Schedule (excluding Liens to be satisfied with the proceeds of the Advances) or arising under this Agreement or the other Loan Documents;
(b)    Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings and for which Borrower maintains adequate reserves, provided the same have no priority over any of Bank’s security interests;
(c)    Liens securing obligations not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate (i) upon or in any Equipment (other than Equipment financed by a Credit Extension) acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such Equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such Equipment, or (ii) existing on such Equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such Equipment;
(d)    Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase;
(e)    Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.5 (attachment) or 8.9 (judgments);

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(f)    (i) Non-exclusive licenses or sublicenses and (ii) exclusive licenses set forth on the Schedule granted in the ordinary course of Borrower’s business and, with respect to any licenses where Borrower is the licensee, any interest or title of a licensor or under any such license or sublicense;
(g)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the applicable Person; and
(h)    deposits to secure the performance of bids, trade contracts (other than for borrowed money), contracts for the purchase of property, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case, incurred in the ordinary course of business and not representing an obligation for borrowed money.
“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition by Borrower or any Subsidiary of:  
(a)    Inventory in the ordinary course of business; 
(b)    Non-exclusive licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary course of business; 
(c)    Worn-out or obsolete Equipment not financed with the proceeds of a Credit Extension; 
(d)    During the 2012 calendar year, Borrower’s assets located in Asia and the Cayman Islands; or 
(e)    Other assets of Borrower or its Subsidiaries that do not in the aggregate exceed One Hundred Thousand Dollars ($100,000) during any fiscal year.
“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.
“Prime Rate” means the variable rate of interest, per annum, most recently announced by Bank, as its “prime rate,” whether or not such announced rate is the lowest rate available from Bank.
“Prohibited Territory” means any person or country listed by the Office of Foreign Assets Control of the United States Department of Treasury as to which transactions between a United States Person and that territory are prohibited.
“Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Controller of Borrower.
“Revolving Line” means a Credit Extension of up to Two Million Dollars ($2,000,000) (inclusive of the aggregate face amount of Letters of Credit issued under the Letter of Credit Sublimit and the aggregate limits of the corporate credit cards issued to Borrower and merchant credit card processing reserves under the Credit Card Services Sublimit.
 “Revolving Maturity Date” means December 14, 2013.
“Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any.
“SOS Reports” means the official reports from the Secretaries of State of each Collateral State, Chief Executive Office State and the Borrower State and other applicable federal, state or local government offices identifying all current security interests filed in the Collateral and Liens of record as of the date of such report.

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“Sublimits” has the meaning assigned in Section 2.1(b)(i).
“Subordinated Debt” means any debt incurred by Borrower that is subordinated in writing to the debt owing by Borrower to Bank on terms reasonably acceptable to Bank (and identified as being such by Borrower and Bank).
“Subsidiary” means any corporation, partnership or limited liability company or joint venture in which (i) any general partnership interest or (ii) more than 50% of the stock, limited liability company interest or joint venture of which by the terms thereof ordinary voting power to elect the Board of Directors, managers or trustees of the entity, at the time as of which any determination is being made, is owned by Borrower, either directly or through an Affiliate.
 “Term Loan” means a Credit Extension of up to Three Million Dollars ($3,000,000).
“Term Loan Advance” means a cash advance or cash advances made pursuant to Section 2.1(c).
“Term Loan Maturity Date” means June 14, 2015.
“Term Loan Maximum Amount” means Three Million Dollars ($3,000,000).
“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

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DEBTOR:            RAINMAKER SYSTEMS, INC.
SECURED PARTY:        COMERICA BANK
EXHIBIT B
COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT
All personal property of Debtor of every kind, whether presently existing or hereafter created or acquired, and wherever located, including but not limited to: (a) all accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), general intangibles (including payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records; and (b) any and all cash proceeds and/or noncash proceeds thereof, including, without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment.  All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time.
Notwithstanding the foregoing, the Collateral shall not include any copyrights, patents, trademarks, servicemarks and applications therefor, now owned or hereafter acquired, or any claims for damages by way of any past, present and future infringement of any of the foregoing (collectively, the “Intellectual Property”); provided, however, that the Collateral shall include all accounts and general intangibles that consist of rights to payment from the sale, licensing or disposition of all or any part of, or rights in, the Intellectual Property (the “Rights to Payment”).  Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security interest in the Rights to Payment, then the Collateral shall automatically, and effective as of June 14, 2012, include the Intellectual Property to the extent necessary to permit perfection of Bank’s security interest in the Rights to Payment.

Exhibit B – Page #PageNum#

EXHIBIT C

TECHNOLOGY & LIFE SCIENCES DIVISION
LOAN ANALYSIS
LOAN ADVANCE/PAYDOWN REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00* P.M, P.S.T.
DEADLINE FOR CREDIT EXTENSIONS IS 3:00 P.M., P.S.T.**
DEADLINE FOR WIRE TRANSFERS IS 1.30 P.M, P.S.T.

*At month end and the day before a holiday, the cut off time is 1:30 P.M., P.S.T.
**Subject to 3 day advance notice.

TO: Loan Analysis                     DATE: _____________________    TIME: ______________________
FAX #: (650) 462-6061

	
		
	

FROM:      Rainmaker Systems, Inc.   
      Borrower’s Name

FROM:                     
      Authorized Signer’s Name

FROM:                     
      Authorized Signature (Borrower)

PHONE #                  

FROM ACCOUNT#:                  
(please include Note number, if applicable)

TO ACCOUNT#:                  
(please include Note number, if applicable)

	

TELEPHONE REQUEST (For Bank Use Only):

The following person is authorized to request the loan payment
transfer/loan advance on the designated account and is known to me.

   ____________________________________________________
   Authorized Requester & Phone #

   ____________________________________________________
   Received by (Bank ) & Phone #

   ____________________________________________________
   Authorized Signature (Bank)

	
		
	REQUESTED TRANSACTION TYPE      REQUESTED DOLLAR AMOUNT

PRINCIPAL INCREASE* (ADVANCE)   $________________________________________
PRINCIPAL PAYMENT (ONLY)      $________________________________________

OTHER INSTRUCTIONS:
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

	For Bank Use Only

Date Rec’d:
Time:
Comp. Status:   YES   NO
Status Date:
Time:
Approval:

All representations and warranties of Borrower stated in the Loan and Security Agreement are true, correct and complete in all material respects as of the date of the telephone request for an advance confirmed by this Borrowing Certificate, including without limitation the representation that Borrower has paid for and owns the equipment financed by Bank; provided, however, that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date.

*IS THERE A WIRE REQUEST TIED TO THIS LOAN ADVANCE? (PLEASE CIRCLE ONE) YES NO
If YES, the Outgoing Wire Transfer Instructions must be completed below.

	
		
	OUTGOING WIRE TRANSFER INSTRUCTIONS         Fed Reference Number      Bank Transfer Number
                        ____________________      ______________________

The items marked with an asterisk (*) are required to be completed.

	*Beneficiary Name
	 

	*Beneficiary Account Number
	 

	*Beneficiary Address
	 

	Currency Type
	US DOLLARS ONLY

	*ABA Routing Number (9 Digits)
	 

	*Receiving Institution Name
	 

	*Receiving Institution Address
	 

	*Wire Amount
	$

Exhibit C- Page #PageNum#

Exhibit C- Page #PageNum#

EXHIBIT D

FORM OF BORROWING BASE CERTIFICATE

	
															
	REPORT OF ACCOUNTS RECEIVABLE AND INVENTORY
	 
	 
	 
	(Note: Company should retain a copy of this report for its records.)
	

	We submit the following information in connection with the Loan and Security Agreement(s)
	 
	 

	heretofore executed by the undersigned in favor of Comerica Bank.
	 
	 

	This report is dated:
	 
	 
	 
	 
	 
	 
	 

	This reports sequential transmittal number is:
	 
	 
	 
	—
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	ACCOUNTS RECEIVABLE AND INVENTORY
	 
	 
	 
	 
	 
	 

	1.
	Accounts Receivable Balance as of
	 
	 
	 
	 
	 
	$
	

	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	2.
	Charges Billed This Period to Date (Dr to A/R)
	 
	 
	 
	 
	+
	

	—
	

	3.
	Credits Period to Date (Cr to A/R)
	 
	 
	 
	 
	 
	 

	 
	A.  Payments ( - )
	—
	

	 
	 
	 
	 
	 
	 
	 

	 
	B. Adjustments ( +/- )
	—
	

	 
	 
	 
	 
	 
	—
	

	—
	

	4.
	New Accounts Receivable Balance as of
	 
	 
	 
	 
	 
	$
	

	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	5.
	Ineligible Accounts (see detailed Worksheets)
	 
	 
	 
	 
	—
	

	—
	

	6.
	Net Eligible Accounts Receivable (Line 4 less Line 5)
	 
	 
	 
	 
	$
	

	—
	

	7.
	Accounts Receivable Loan Formula:
	 
	80
	%
	 
	 
	 
	$
	

	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	8.
	Inventory Loan Formula (Line 8, Inventory BBC)
	 
	 
	 
	 
	$
	

	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	9.
	A.  Total Collateral Loan Formula ( Line 7 + Line 8) or
	 
	 
	 
	 
	$
	

	—
	

	 
	B.  Maximum Loan Amount
	 
	 
	 
	 
	 
	 
	 
	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	LOAN
	 
	 
	 
	 
	 
	 
	 
	 

	10.
	Loan Balance Per Last Report dated:
	 
	 
	 
	 
	 
	$
	

	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	11.
	Less Loan Payments
	 
	 
	 
	 
	 
	 
	—
	

	—
	

	 
	( If submitting manually, attach tape to illustrate calculation of payments total - since LAST REPORT)
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	12.
	Sub Total
	 
	 
	 
	 
	 
	 
	$
	

	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	13.
	Plus Advances and Other Obligations
	 
	 
	 
	 
	 
	 

	 
	A.  Advances Since Last Report
	—
	

	 
	( If sending manually, attach tape to illustrate calculation )
	 
	 

	 
	B.  This Advance
	 
	—
	

	 
	 
	 
	 
	 
	 

	 
	C. Other Obligations (e.g., LC's, ACH Limits,
	—
	

	 
	 
	 
	 
	+
	

	—
	

	 
	      Credit Card Accounts, F/X Sublimit/Usage)
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	14.
	Current Loan Balance
	 
	 
	 
	 
	 
	 
	$
	

	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	15.
	Net Loan Availability (The lesser of Lines 9 A or 8 B, less Line 14)
	 
	$
	

	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	Company Name
	 
	 
	 
	 
	Authorized Signature

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

Exhibit D - Page #PageNum#

EXHIBIT E

COMPLIANCE CERTIFICATE

Please send all Required Reporting to:                Comerica Bank 
Technology & Life Sciences Division
Loan Analysis Department
250 Lytton Avenue
3rd Floor, MC 4240
Palo Alto CA 94301
Phone: (650) 462-6060
Fax: (650) 462-6061

FROM: RAINMAKER SYSTEMS, INC.

The undersigned authorized Officer of Rainmaker Systems, Inc. (“Borrower”), 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             , 201___ with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance with Section 6.8, except as noted below and (i) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof; provided, however, that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date. Attached herewith are the required documents supporting the above certification (“Supporting Documents”). The Officer further certifies the Supporting Documents are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied form one period to the next except as explained in an accompanying letter or footnotes. 

Please indicate compliance status by circling Yes/No under “Complies” or “Applicable” column, 

	
				
	REPORTING COVENANTS
	REQUIRED
	COMPLIES

	Company Prepared Monthly F/S
	Monthly, within 20 days
	YES
	NO

	Compliance Certificate
	Monthly, within 20 days
	YES
	NO

	CPA Audited. Unqualified F/S
	Annually, within 120 days of FYE
	YES
	NO

	Borrowing Base Cert, A/R & A/P Agings
	Monthly. within 20 days
	YES
	NO

	Annual Business Plan, Budgets, Sales Projections
	Upon request of Bank
	YES
	NO

	Intellectual Property Report
	Quarterly within 30 days
	YES
	NO

	Audit
	Semi-annual
	YES
	NO

	 
	 
	 
	 

	If Public:
	 
	 
	 

	10-Q
	Quarterly, within 5 days of SEC filing (50 days)
	YES
	NO

	10-K
	Annually, within 5 days of SEC filing (95 days)
	YES
	NO

	 
	 
	 
	 

	Total amount of Borrower’s cash and investments maintained with Bank
	Amount: $____________________________
	YES
	NO

	
				
	 
	          DESCRIPTION
	APPLICABLE

	Legal Action > $100,000 (Sect. 6.2(iv))
	Notify promptly upon notice _____________________
	YES
	NO

	Inventory Disputes> $100,000 (Sect. 6.3)
	Notify promptly upon notice _____________________
	YES
	NO

	Mergers & Acquisitions> $100,000 (Sect. 7.3)
	Notify promptly upon notice _____________________
	YES
	NO

	Cross default with other agreements >$100,000 (Sect. 8.7)
	Notify promptly upon notice _____________________
	YES
	NO

	Judgments >  $100,000 (Sect. 8.9)
	Notify promptly upon notice _____________________
	YES
	NO

	
					
	FINANCIAL COVENANTS
	REQUIRED
	ACTUAL
	COMPLIES

	TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED
	 
	 
	 

	 
	 
	 
	 

	Minimum Liquidity Ratio
	1.25:1.00
	_____:1.00
	YES
	NO

	Minimum Cash at Bank
	See Section 6.7(a)
	$________________________
	YES
	NO

Exhibit E - Page #PageNum#

	
					
	FINANCIAL COVENANTS
	REQUIRED
	ACTUAL
	COMPLIES

	Permitted Indebtedness for equipment leases
	<$100,000
	$________________________
	YES
	NO

	Permitted Investments for stock repurchase
	<$100,000
	$________________________
	YES
	NO

	Permitted Investments for subsidiaries (excluding Asia those
between UK Subs)
	<$100,000
	$________________________
	YES
	NO

	Permitted Investments between Asia and UK Subs
	<$1,000,000
	$________________________
	YES
	NO

	Permitted Investments for employee loans
	<$100,000
	$________________________
	YES
	NO

	Permitted Investments for joint ventures
	<$100,000
	$________________________
	YES
	NO

	Permitted Liens for equipment leases
	<$100,000
	$________________________
	YES
	NO

	Permitted Transfers
	<$100,000
	$________________________
	YES
	NO

Please Enter Below Comments Regarding Violations: 

Exhibit E - Page #PageNum#

The undersigned further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no credit extensions will be made. 

Very truly yours, 

                        
Authorized Signer

                        
Name

                        
Title

Exhibit E - Page #PageNum#

EXHIBIT F

Prime Referenced Rate Addendum 
To Loan and Security Agreement

This Prime Referenced Rate Addendum to Loan and Security Agreement (this “Addendum”) is entered into as of June 14, 2012, by and between Comerica Bank (“Bank”) and Rainmaker Systems, Inc., a Delaware corporation (“Borrower”).  This Addendum supplements the terms of the Loan and Security Agreement dated June 14, 2012 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Agreement”).
		
	1.
	Definitions.  As used in this Addendum, the following terms shall have the following meanings.  Initially capitalized terms used and not defined in this Addendum shall have the meanings ascribed thereto in the Agreement.

a.“Applicable Margin” means:
(i)    with respect to Obligations consisting of Advances, one and one half percent (1.50%) per annum; and
(ii)    with respect to Obligations consisting of Term Loan Advances and all other Obligations (other than Advances) two and one quarter percent (2.25%) per annum.
b.“Business Day” means any day, other than a Saturday, Sunday or any other day designated as a holiday under Federal or applicable State statute or regulation, on which Bank is open for all or substantially all of its domestic and international business (including dealings in foreign exchange) in San Jose, California, and, in respect of notices and determinations relating the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also carried on in the London interbank market and on which banks are open for business in London, England.
c.“Change in Law” means the occurrence, after the date hereof, of any of the following: (i) the adoption or introduction of, or any change in any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not applicable to Bank on such date, or (ii) any change in interpretation, administration or implementation thereof of any such law, treaty, rule or regulation by any Governmental Authority, or (iii) the issuance, making or implementation by any Governmental Authority of any interpretation, administration, request, regulation, guideline, or directive (whether or not having the force of law), including any risk-based capital guidelines.  For purposes of this definition, (x) a change in law, treaty, rule, regulation, interpretation, administration or implementation shall include, without limitation, any change made or which becomes effective on the basis of a law, treaty, rule, regulation, interpretation administration or implementation then in force, the effective date of which change is delayed by the terms of such law, treaty, rule, regulation, interpretation, administration or implementation, and (y) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, H.R. 4173) and all requests, rules, regulations, guidelines, interpretations or directives promulgated thereunder or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or promulgated, whether before or after the date hereof, and (z) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall each be deemed to be a "Change in Law", regardless of the date enacted, adopted, issued or implemented. 
d.“Daily Adjusting LIBOR Rate” means, for any day, a per annum interest rate which is equal to the quotient of the following:
		
	(1)
	for any day, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day.  In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be reasonably selected by Bank, or in the absence of such other service, the “Daily Adjusting LIBOR Rate” for such day shall, instead, be determined based upon the average of the rates at which Bank is offered dollar deposits at or about 8:00 a.m. (California time) (or as soon thereafter as practical), on such day, or if such day is not a Business Day, on the immediately preceding Business Day, in the interbank eurodollar market in an amount comparable to the outstanding principal amount of the Obligations and for a period equal to one (1) month;

Exhibit F - Page 37

divided by
		
	(2)
	1.00 minus the maximum rate (expressed as a decimal) on such day at which Bank is required to maintain reserves on "Euro-currency Liabilities" as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.

e.“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supranational bodies such as the European Union or the European Central Bank).
f.“LIBOR Lending Office” means Bank's office located in the Cayman Islands, British West Indies, or such other branch of Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending Office by notice to Borrower.
g."Prime Rate" means the per annum interest rate established by Bank as its prime rate for its borrowers, as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time.
h."Prime Referenced Rate" means, for any day, a per annum interest rate which is equal to the Prime Rate in effect on such day, but in no event and at no time shall the Prime Referenced Rate be less than the sum of the Daily Adjusting LIBOR Rate for such day plus two and one-half percent (2.50%) per annum.  If, at any time, Bank determines that it is unable to determine or ascertain the Daily Adjusting LIBOR Rate for any day, the Prime Referenced Rate for each such day shall be the Prime Rate in effect at such time, but not less than two and one-half percent (2.50%) per annum.  

2.Interest Rate Options.  Subject to the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest at the Prime Referenced Rate plus the Applicable Margin. 

3.Payment of Interest.  Accrued and unpaid interest on the unpaid balance of the Obligations outstanding under the Agreement shall be payable monthly, in arrears, on the first Business Day of each month, until maturity (whether as stated herein, by acceleration, or otherwise).  In the event that any payment under this Addendum becomes due and payable on any day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, to the extent applicable, interest shall continue to accrue and be payable thereon during such extension at the rates set forth in this Addendum.  Interest accruing hereunder shall be computed on the basis of a year of 360 days, and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the applicable interest rate as a result of any change in the Prime Referenced Rate on the date of each such change.

4.Bank's Records.  The amount and date of each advance under the Agreement, its applicable interest rate, and the amount and date of any repayment shall be noted on Bank's records, which records shall be conclusive evidence thereof, absent manifest error; provided, however, any failure by Bank to make any such notation, or any error in any such notation, shall not relieve Borrower of its obligations to repay Bank all amounts payable by Borrower to Bank under or pursuant to this Addendum and the Agreement, when due in accordance with the terms hereof.   

5.Default Interest Rate.  From and after the occurrence of any Event of Default, and so long as any such Event of Default remains unremedied or uncured thereafter, the Obligations outstanding under the Agreement shall bear interest at a per annum rate of five percent (5%) above the otherwise applicable interest rate hereunder, which interest shall be payable upon demand.  In addition to the foregoing, a late payment charge equal to five percent (5%) of each late payment hereunder may be charged on any payment not received by Bank within ten (10) calendar days after the payment due date therefor, but acceptance of payment of any such charge shall not constitute a waiver of any Event of Default under the Agreement.  In no event shall the interest payable under this Addendum and the Agreement at any time exceed the maximum rate permitted by law.

6.Prepayment.   Borrower may prepay all or part of the outstanding balance of any Obligations at any time without premium or penalty.  Any prepayment hereunder shall also be accompanied by the payment of all accrued and unpaid interest on the amount so prepaid.  Borrower hereby acknowledges and agrees that the foregoing shall not, in any way whatsoever, limit, restrict, or otherwise affect Bank's right to make demand for payment of all or any part of the Obligations under the Agreement due on a demand basis in Bank's sole and absolute discretion.

Exhibit F - Page 37

7.Regulatory Developments or Other Circumstances Relating to the Daily Adjusting LIBOR Rate.
a.If any Change in Law shall: (a) subject Bank to any tax, duty or other charge with respect to this Addendum or any Obligations under the Agreement, or shall change the basis of taxation of payments to Bank of the principal of or interest under this Addendum or any other amounts due under this Addendum in respect thereof (except for changes in the rate of tax on the overall net income of Bank or its LIBOR Lending Office imposed by the jurisdiction in which Bank's principal executive office or LIBOR Lending Office is located); or (b) impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Bank, or shall impose on Bank or the foreign exchange and interbank markets any other condition affecting this Addendum or the Obligations; and the result of any of the foregoing is to increase the cost to Bank of maintaining any part of the Obligations or to reduce the amount of any sum received or receivable by Bank under this Addendum by an amount deemed by Bank to be material, then Borrower shall pay to Bank, within fifteen (15) days of Borrower's receipt of written notice from Bank demanding such compensation, such additional amount or amounts as will compensate Bank for such increased cost or reduction.  A certificate of Bank, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, setting forth the basis for determining such additional amount or amounts necessary to compensate Bank shall be conclusive and binding for all purposes, absent manifest error.
b.In the event that any Change in Law affects or would affect the amount of capital required or expected to be maintained by Bank (or any corporation controlling Bank), and Bank determines that the amount of such capital is increased by or based upon the existence of any obligations of Bank hereunder or the maintaining of any Obligations, and such increase has the effect of reducing the rate of return on Bank's (or such controlling corporation's) capital as a consequence of such obligations or the maintaining of such Obligations to a level below that which Bank (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy), then Borrower shall pay to Bank, within fifteen (15) days of Borrower's receipt of written notice from Bank demanding such compensation, additional amounts as are sufficient to compensate Bank (or such controlling corporation) for any increase in the amount of capital and reduced rate of return which Bank reasonably determines to be allocable to the existence of any obligations of Bank hereunder or to maintaining any Obligations.  A certificate of Bank as to the amount of such compensation, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, shall be conclusive and binding for all purposes absent manifest error.

8.Legal Effect.  Except as specifically modified hereby, all of the terms and conditions of the Agreement remain in full force and effect.

9.Conflicts.  As to the matters specifically the subject of this Addendum, in the event of any conflict between this Addendum and the Agreement, the terms of this Addendum shall control.
[Signature Page Follows]    [Signature Page to Prime Referenced Rate Addendum to Loan and Security Agreement]

IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first set forth above.
COMERICA BANK                        RAINMAKER SYSTEMS, INC.

By: /s/ Jeff Hasselman                        By: /s/ Timothy Burns                        
Name: Jeff Hasselman                        Name: Timothy Burns                    
Its: Vice President                        Its: Chief Financial Officer                        

Exhibit F - Page 37Exh10.2-ComcastMSA/SOW

Exhibit 10.2
****Text omitted and filed separately
Confidential treatment requested under 
17 C.F.R. §200.80(b)(4) and 17 C.F.R. 24b-2

MASTER SERVICES AGREEMENT
OUTSOURCED SALES SERVICES 

THIS AGREEMENT (the “Agreement”) is made effective as of this 21st day of March, 2012, by and between Comcast Cable Communications Management, LLC., a Delaware Limited Liability Company, with offices at 1500 Market St, Philadelphia, PA 19102 ("Comcast") and Rainmaker Systems Inc., a Delaware corporation, with offices at 900 E Hamilton Ave., Se 400 Campbell, CA 95008 ("Vendor").

RECITALS

WHEREAS, Comcast is presently providing broadband products and services in various market areas in the United States;

WHEREAS, Comcast desires to appoint Vendor on a nonexclusive basis to conduct various call center sales services and/or ecommerce technology services; and

WHEREAS, Vendor is authorized and qualified to transact such business.

NOW THEREFORE, in consideration of the mutual benefits and agreements herein contained and other good and valuable consideration, the parties hereto, intending to be legally bound, hereby agree as follows:

SECTION I

APPOINTMENT

1.1    Comcast hereby appoints Vendor on a nonexclusive basis to provide the services described in the applicable Statement of Work (the “Services”).  The Statement of Work (“SOW”) will follow and be signed separately. In the event of a conflict between this Agreement and a Statement of Work, the provisions contained within the SOW shall control.

1.2    Vendor hereby accepts such appointment and agrees actively and continuously to exert its best efforts, on Comcast’s behalf, to provide the Services.

1.3    Comcast reserves the right to: (a) add to, alter or subtract from Vendor services upon **** prior written notice to Vendor subject to Section II herein and (b) perform the same or similar types of services itself or utilizing third parties.

#PageNum#
COMCAST CONFIDENTIAL

SECTION II

COMCAST PRODUCTS

Vendor shall provide the Services for the Comcast products and services set forth in the applicable Statement of Work (the “Comcast Products”).  If applicable to the Services described in the Statement of Work, all policies, procedures, scripts, descriptions, terms, conditions and prices utilized by Vendor for the Comcast Products shall be the policies, procedures, scripts, descriptions, terms, conditions and prices authorized by Comcast in writing.  Vendor shall not under any circumstances utilize other policies, procedures, scripts, descriptions, terms, conditions and prices for any Product without the prior written authorization of Comcast.  Comcast reserves the right to add to, alter or subtract from the Comcast Products as well as any policies, procedures, scripts, descriptions, terms or conditions related thereto upon **** prior written notice to Vendor.  If, in Vendor’s commercially reasonable discretion, such modified Comcast Products make the Services economically unfeasible for Vendor, Vendor shall notify Comcast and the parties shall work together in good faith to agree to modified pricing under the applicable SOW.  If the parties are unable to agree on modified pricing, either party shall have the right to terminate this Agreement and/or the applicable SOW for its convenience upon **** notice to the other party.  

SECTION III

COMPENSATION

3.1    Comcast will pay Vendor the prices set forth in the applicable Statement of Work for the Services.  If applicable to the Services described in the Statement of Work, Vendor will track all inbound calls performed during any shift and invoice the activity for each shift according to the aforementioned prices.  Unless otherwise specified in the applicable Statement of Work, Vendor will submit to Comcast a monthly invoice and report detailing such calls or describing the Services rendered.  Comcast shall pay all invoices within **** days of receipt.  

3.2    **** Upon request by Comcast, an officer of Vendor shall certify that Vendor is in compliance with this Agreement.
 

3.3    The amounts to be paid by Comcast under this Agreement do not include any state, provincial or local sales and use taxes, however designated, which may be levied or assessed on any Vendor service.  With respect to such taxes, Comcast will either furnish Vendor with an appropriate exemption certificate on a timely basis or pay to Vendor, upon presentation of invoices therefore, such amounts as Vendor may by law be required to collect or pay, provided that Vendor will use reasonable efforts to minimize the amount of any such tax.  Comcast shall have no obligation to Vendor with respect to other taxes, including, but not limited to, those taxes relating to Vendor’s net or gross income or revenue, license, occupation, or real or personal property.

#PageNum#
COMCAST CONFIDENTIAL

3.4    The parties acknowledge that there may be an increase in the amount of time spent by a support agent with Comcast’s subscribers as a result of Vendor’s failure to comply with training requirements, security protocols, or other representation and warranties hereunder, that may adversely impact payment or fees owed by Comcast.  **** 
 
SECTION IV

DUTIES OF VENDOR

4.1    Vendor shall provide the Services on a continuing basis throughout the term of this Agreement and/or any Statement of Work and shall diligently perform all other duties that are required to be performed hereunder or as set forth in the Statement of Work. Vendor agrees to meet service level commitments for Comcast products as set forth in Exhibit A: Performance Commitments. 

4.2    Vendor shall comply with all laws, rules and regulations governing its activities and applicable to the Services. The Parties will work in good faith to agree upon the division of responsibility between the Parties with regard to adhering to Do Not Call List Laws.  Vendor shall provide a data file to Comcast, on a daily basis of customers who have requested to be placed on a Do Not Call List.  Comcast shall incorporate the information obtained from the file into the appropriate subscriber management databases.

4.3    Vendor agrees that Comcast may observe Vendor’s employees from time to time in their performance of Vendor’s duties and obligations under this Agreement and/or any Statement of Work.  Further, Vendor shall conduct periodic support reviews with Comcast upon the prior written request of Comcast. 

4.4    Vendor shall maintain complete and accurate records with respect to its activities hereunder in accordance with all applicable laws, rules, and regulations as well as with the terms and conditions of this Agreement.  Without limiting the generality of the foregoing, Vendor shall maintain throughout the term of this Agreement and for a period not less than two (2) years thereafter:  (a) all advertising, brochures, scripts, promotional and call handling materials that are substantially different than those provided by Comcast and (b) the name and the last known address and phone number for all current and former employees directly involved in performing Vendor’s obligations pursuant to this Agreement.  Further, Vendor shall provide to Comcast its Federal Taxpayer Identification Number (or equivalent), State Identification Number (or equivalent) and such other information specified in the applicable Statement of Work.

4.5    Vendor agrees to allow Comcast to inspect and audit those of Vendor’s records related to Vendor's performance under this Agreement during Vendor's normal business hours with reasonable written notice at such locations as are reasonably specified by Comcast.

4.6    Vendor will indemnify and hold Comcast and its respective directors, officers, and employees (the “Indemnitees”) harmless from and against all claims, demands suits, proceedings, damages, costs, expenses, liabilities (including, without limitation, reasonable legal fees) or causes of action (collectively, “Liabilities”) brought against or incurred by any Indemnitee to the extent 

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caused by: (i) injury to persons (including physical or mental injury, libel, slander and death) caused by Vendor; (ii) loss or damage to Comcast property caused by Vendor; (iii) violations of applicable laws, applicable permits, codes, ordinances or regulations by Vendor; or (iv) any claims arising out of or in connection with Vendor’s obligation pursuant to this Agreement or any other liability, resulting from the negligence or willful misconduct of Vendor, its officers, agents, employees, or subcontractors in the performance of this Agreement.  If Vendor and Comcast jointly cause such Liabilities, the Parties will share the liability in proportion to their respective degree of causal responsibility.  Comcast will indemnify and hold Vendor and its respective directors, officers,  and employees harmless from and against all claims, demands, suits, proceedings, damages, costs, expenses, liabilities (including without limitation, reasonable legal fees) or causes of action (collectively, “Liabilities”) brought against or incurred by Vendor for: (i) any claims arising out of or in connection with Comcast’s obligation pursuant to this Agreement and (ii) any other liability resulting from the negligence or willful misconduct of Comcast, its officers, agents or employees in connection with  this Agreement.

4.7    EXCEPT FOR DAMAGES RESULTING FROM A PARTY’S (1) GROSS NEGLIGENCE, INTENTIONAL ACTS, CRIMINAL OR FRAUDULENT ACTS OR (2) A PARTY’S OBLIGATION TO INDEMNFIFY THE OTHER PARTY HEREUNDER, OR (3) A PARTY’S BREACH OF SECTION IX (RELATING TO CONFIDENTIALITY) OF THIS AGREEMENT (IN EACH CASE, WITH RESPECT TO WHICH THESE LIMITATIONS SHALL NOT APPLY), UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY (WHETHER BASED IN CONTRACT, TORT, OR OTHER LEGAL OR EQUITABLE GROUNDS) FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), INCLUDING BUT NOT LIMITED TO, LOSS REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS.

4.8    Vendor agrees that during the term of this Agreement, it will not solicit any employee of Comcast for the express intent of employment with Vendor, provided that nothing herein shall prohibit any general advertisement for employment opportunities, which is not specifically targeted at any particular employee.

4.9    In exercising its rights and performing its obligations under this Agreement or any Statement of Work, Vendor shall conduct its business and represent Comcast in a professional, ethical, legal and businesslike manner.  Vendor agrees that it will:  (a) utilize only competent personnel; (b) conduct its operations at all times in such a manner that its actions or the actions of its personnel will not jeopardize Comcast’s and its affiliates’ respective relationships with their communities of operation and with their actual and potential customers; and (c) ensure that personnel maintain a polite, cooperative manner when dealing with any and all prospective and actual customers.  Comcast shall have the right for any reason, where in compliance with applicable laws, rules or regulations, to request that Vendor discontinue using any such specifically identified person or persons for the Vendor Services and Vendor shall be entitled to provide replacement personnel and continue providing Vendor Services as otherwise provided in this Agreement and the applicable 

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SOW.  The request for discontinuance will be fulfilled to the best of Vendor’s ability immediately after Comcast's written notice to Vendor, and Vendor shall not furnish such person(s) to perform Vendor’s obligations under this Agreement or Statement of Work again, without the prior written consent of Comcast.

4.10    Comcast reserves the right to alter or amend Vendor’s obligations hereunder and/or any Statement of Work upon **** days prior written notice; provided, however, that Vendor shall have the right to terminate this Agreement and/or any Statement of Work within **** days following receipt of notice of any change in Vendor’s sole discretion.

4.11    Vendor shall implement and comply with Security Protocols established by Comcast and attached hereto as Exhibit B.  Upon reasonable prior notice, Comcast may audit Vendor for compliance with the Security Protocols.  Any cost of audit shall be borne by Comcast, except in the event that a material breach of the Security Protocols is discovered during any audit, in which case Vendor shall reimburse Comcast for the reasonable costs incurred in performing such audit.  Comcast reserves the right to amend such Security Protocols from time to time as deemed necessary in its sole discretion, provided that Vendor shall have **** prior notice to implement any new changes.  ****
 
4.12    Vendor, unless otherwise specified by Comcast in writing, shall obtain and maintain throughout the term of this Agreement insurance with coverage and limits as follows:

(a)    Workers Compensation and Occupational Disease Insurance: At statutory limits as provided by the state in which the Work is to be performed, and Employer's Liability Insurance at a limit of not less than Five Hundred Thousand Dollars ($500,000) for all damages arising from each accident or occupational disease;     

(b)    Comprehensive General Liability Insurance Covering Operations and Premises Liability; The limits of such liability insurance shall be no less than One Million Dollars ($1,000,000) combined single limit of liability for each occurrence; and

(c)    Umbrella Excess Liability: Coverage in an amount no less than One Million Dollars ($1,000,000) for each occurrence; and

All such insurance shall be carried with companies with A-/VII Best’s rating, such policies shall name the Comcast entity first above-referenced and its parents, affiliates and subsidiaries and its and their employees and agents as additional insured parties.

SECTION V

DUTIES OF COMCAST

5.1    Comcast shall pay Vendor for its performance of the Vendor Services, pursuant to Section III.

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5.2    Comcast shall comply with all laws, rules and regulations governing its activities under this Agreement.

5.3    Comcast shall keep Vendor informed of the descriptions, prices, terms and conditions under which the Comcast Products shall be provided, and Comcast shall review and approve/disapprove all scripts and other sales and marketing materials developed by Vendor on a timely basis.
        
5.4     Comcast shall invoice or arrange to invoice customers obtained by Vendor for the Comcast Products.  Vendor shall have no right or obligation to bill or to collect any payments from actual or potential customers for Comcast Products, nor shall Vendor so bill and/or collect.  Should Vendor receive any payments for Comcast Products hereunder directly from a customer, Vendor shall immediately tender such payments to Comcast.

5.5    Comcast agrees that during the term of this Agreement that it will not solicit any employee of Vendor for the express intent of employment with Comcast, provided that nothing herein shall prohibit any general advertisement for employment opportunities, which is not specifically targeted at any particular employee.

5.6    Comcast shall provide to Vendor the online information systems equipment described in the applicable Statement of Work (the “Comcast Equipment”).  In the event of any faulty Comcast Equipment, Comcast, at its expense, shall repair or replace the faulty Comcast Equipment for Vendor.  Comcast's obligation to repair or to replace Comcast Equipment hereunder at Comcast's expense does not apply to any Comcast Equipment that has been lost or damaged because of misuse, disaster (including, but not limited to, fire, flood, or earthquake) or theft occurring at Vendor's site.  In the event Comcast does repair or replace lost or damaged Comcast Equipment, Comcast shall invoice Vendor for such repair or replacement, and Vendor will pay such invoice within thirty (30) days of the date thereof.  Within thirty (30) days after any termination of this Agreement, Vendor shall either return all of the Comcast Equipment to Comcast or Vendor shall pay to Comcast the full manufacturer’s suggested retail price for the replacement of any Comcast Equipment or any software that is not returned in working order within thirty (30) days after any termination of this Agreement, together with any incidental costs incurred by Comcast relating to its replacement or repair.  Comcast shall retain title to the Comcast Equipment at all times. Vendor shall not create or permit to be created any liens or encumbrances on the Comcast Equipment.

SECTION VI

EXPENSES
Except as otherwise provided in this Agreement or as otherwise agreed to in writing by Comcast, Comcast shall be responsible for all expenses incurred by Comcast in the performance of Comcast's obligations under this Agreement and/or any Statement of Work, and Vendor shall be responsible for all expenses incurred by Vendor in the performance of Vendor's obligations under this Agreement and/or any Statement of Work, unless expenses have been approved for 

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reimbursement by Comcast. 

SECTION VII

TRADEMARKS AND SERVICE MARKS
7.1    Except as expressly provided in Section 7.2, Vendor shall not be deemed by anything contained in this Agreement or done pursuant to it to acquire any right, title or interest in or to the use of the name “Comcast,” the Comcast service marks, or in or to any trademark or service mark now or hereafter owned by or used by Comcast or any affiliate thereof (the “Marks”).
7.2    **** Vendor may use such Marks solely for purposes of the Vendor’s performance of its obligations under this Agreement, ****.
7.3    Immediately upon termination of this Agreement, Vendor will turn over to Comcast any materials using any Mark, unless Comcast has consented to ongoing use by the Vendor of such Marks pursuant to a separate agreement.

SECTION VIII
INTELLECTUAL PROPERTY, INVENTION AND PATENT RIGHTS
Neither Party shall be deemed by anything contained in this Agreement or done pursuant to it to acquire any right, title or interest in or to any design, invention, improvement, process, methodology, ideas, know-how, techniques or system now or hereafter embodied in any Product or in any hardware, software or middleware provided by a Party to the other Party, whether or not such design, invention, improvement, process or system is patented or patentable under the laws of any country.

Notwithstanding the foregoing, Vendor grants Comcast the worldwide, non-exclusive, royalty-free, non-transferrable right to use the Vendor ecommerce technology in accordance with the terms of this Agreement and the applicable SOW, for the sole purpose of Vendor processing sales transactions for non-subscription Comcast internet support services, on Comcast’s behalf.  Furthermore, a Party who provides technology to the other Party under this Agreement grants such receiving Party a license to use such provided technology for the sole purpose of fulfilling its obligations under this Agreement and a SOW.   

SECTION IX

PROPRIETARY INFORMATION, NONDISCLOSURE AND PUBLICITY

9.1     Both Parties agree that all information furnished to it by the other Party which is 

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identified as being proprietary or confidential or which the receiving Party knows or has reason to know is confidential, trade secret or proprietary information (the "Proprietary Information") is to be treated in a confidential manner and shall remain the sole and exclusive property of the providing Party.  Proprietary Information may not be directly or indirectly disseminated to any third party without the prior written consent of the disclosing Party; provided, however, that the receiving Party may disclose the same to its employees and subcontractors that have a need to know because of their involvement in this Agreement and have agreed to maintain the confidential nature of the Proprietary Information.  Both Parties acknowledge that the Proprietary Information of the other Party is a valuable asset of the disclosing Party, that any unauthorized disclosure or use thereof may cause irreparable harm and loss, that monetary damages may not be sufficient to compensate, and that injunctive relief is an appropriate remedy to prevent any actual or threatened unauthorized use or disclosure of the Proprietary Information.  Without limiting the foregoing, the terms and conditions of this Agreement are Proprietary Information.   Both Parties shall return any copies of Proprietary Information to the disclosing Party upon the request of the disclosing Party and upon the termination or expiration of this Agreement.

9.2    The confidentiality and non-disclosure obligations set forth herein do not apply to any portion of the Proprietary Information that (a) is or becomes public knowledge through no fault of the  receiving Party; (b) is disclosed to the  receiving Party without a restriction on disclosure by a third party that has the lawful right to disclose the same; or (c) is required to be disclosed by  the receiving Party pursuant to a lawful and formal request of a governmental or regulatory authority (so long  the receiving Party provides  the disclosing Party with prior written notice of such governmental or regulatory request and a reasonable opportunity under the circumstances to contest such request).

9.3    Neither Party shall  use any confidential information belonging to a third party in furtherance of their obligations hereunder, unless otherwise authorized by that third party.

9.4    [publicity] **** 

9.5    Vendor hereby acknowledges that Comcast has a special responsibility under the law to keep personally identifiable information of its customers (“PII”) private and confidential.  PII is subject to the subscriber privacy protections set forth in Section 631 of the Cable Communications Policy Act of 1984, as amended (47 USC Sec. 551), as well as other applicable federal and state laws.  Vendor agrees that it shall use such information in strict compliance with Section 631, all other applicable laws governing the use, collection, disclosure and storage of such information, and the protocols set forth hereunder.  In addition to and without limiting the foregoing, in no event shall Vendor use, disclose or in any way provide personally identifiable information of a customer in violation of 47 USC 551 (as amended and supplemented, “Section 551”) and Vendor further agrees to comply with all requirements and provisions of Section 551.  The provisions of this Section 9 shall survive the expiration or termination of this Agreement.

SECTION X

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END USER, END USER INFORMATION AND CROSS-MARKETING

10.1    All actual customers who contact Vendor concerning the Comcast Products are customers of Comcast (and not customers of Vendor).  Comcast and Vendor hereby agree that Comcast holds all title, right, possession in its customers and that no such title, right, possession and dominion shall pass to Vendor hereunder. As between Vendor and Comcast, Vendor and/or its other clients hold title, rights and possession to any customer information Vendor receives as a result of Vendor’s relationship with its third party clients. 

10.2    All Comcast customer information, including, but not limited to, customer names, addresses, telephone numbers, email addresses, service selections and the like, shall constitute Comcast Proprietary Information, regardless of whether or not such information is specifically identified as such.  Vendor shall use such Comcast customer information for no other purpose or purposes other than those expressly authorized in this Agreement.

10.3    Vendor, its affiliates and subsidiaries, and their respective employees and agents, while providing services under this Agreement, hereby agree that they shall not directly or indirectly induce, influence or suggest that any actual or prospective Comcast customer purchase, contract for, or switch to any non-Comcast product or service.  Comcast shall have the right to enforce this Section X by obtaining an injunction or specific performance from any court of competent jurisdiction.  Additionally, if Vendor violates this Section X, Comcast, in addition to the right to terminate the Agreement pursuant to Section XI, shall be entitled to recover reasonable attorneys' fees in redressing said breach.  The provisions of this Section X shall survive the termination of this Agreement.  The remedies set forth herein are cumulative and are in addition to, and not in limitation of, other remedies available at law or in equity.  None of the remedies specified in this Section X for any default or breach of this Agreement shall be exclusive.

SECTION XI

TERM AND TERMINATION

11.1    This Agreement is effective on the date first written above and shall continue for a period of three years, unless terminated sooner in accordance with the provisions hereof.  This Agreement may be renewed or extended thereafter for an additional period of time as mutually agreed to by both parties.

11.2    The Company may, at its election, terminate this Agreement and/or any Statement of Work without cause after ninety (90) days written notice to the Vendor.
  
11.3    Comcast may, at its election, terminate this Agreement and/or any Statement of Work immediately if an order by any court or governmental authority with proper jurisdiction deems the activities of either party to be in conflict with an applicable law, rule or regulation, if Comcast loses any authorization, franchise or permit necessary to provide the Comcast Products, or if Comcast ceases to provide such Comcast Products.

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11.4    Comcast may, at its election, terminate this Agreement, including any Exhibits hereto, and/or any Statement of Work if a material breach by Vendor occurs, and such material breach continues for a period of thirty (30) days after written notice from Comcast to Vendor.  Such notice will specify the default.  Comcast does not limit the rights and remedies available when it exercises its termination right under this subsection.

11.5    Vendor may, at its election, terminate this Agreement and/or any Statement of Work if a material breach by Comcast occurs, and such material breach continues for a period of thirty (30) days after written notice from Vendor to Comcast.  Such notice will specify the default.  Vendor does not limit the rights and remedies available when it exercises its termination right under this subsection.

11.6    Comcast may, at its election, terminate this Agreement and/or any Statement of Work  if Vendor becomes insolvent or makes an assignment for the benefit of its creditors, or if a committee of creditors or other representative is appointed to represent its business, or if a voluntary or involuntary petition under any section of a bankruptcy or similar act shall be filed by or against the Vendor and the Vendor fails to discharge the petition or to obtain dismissal of the petition within **** days following the appointment of such committee or representative.

11.7    Vendor may, at its election, terminate this Agreement and/or any Statement of Work if Comcast becomes insolvent or makes an assignment for the benefit of its creditors, or if a committee of creditors or other representative is appointed to represent its business, or if a voluntary or involuntary petition under any section of a bankruptcy or similar act shall be filed by or against Comcast and Comcast fails to discharge the petition or obtain dismissal of the petition within **** days following the appointment of such committee or representative.

11.8    Except as expressly set forth in this Agreement, no termination of this Agreement and/or any Statement of Work shall affect any accrued rights or obligations of either party as of the effective date of such termination, nor shall it affect any rights or obligations of either party which are intended by the parties to survive any such termination.

SECTION XII

RELATIONSHIP OF PARTIES

12.1    Neither party to this Agreement is an agent, partner or employee of the other; rather, the parties are independent contractors.  Vendor shall not be treated as an employee of Comcast for state or federal income tax purposes, nor will Vendor be an employee of Comcast for purposes of the Federal Unemployment Tax Act, Federal Insurance Contributions Act, the Social Security Act or any other state, federal, provincial or other unemployment or employment security act.  Vendor is not authorized to make any promise, warranty or representation on Comcast's behalf with respect to the Comcast Products or to any other matter, except as expressly authorized in writing by Comcast.

12.2    Each party acknowledges that it has separate responsibility for all applicable federal, 

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state, provincial and local taxes for itself and any of its employees and each party agrees to indemnify and hold the other harmless from any claim or liability therefore.     

12.3    Each party understands and agrees that its employees shall not be entitled to participate in health or disability insurance, retirement or pension benefits, if any, to which employees of the other party may be entitled.

               

SECTION XIII

EEO REQUIREMENTS

The parties agree to comply with the EEO provisions of the 1984 Cable Act and the Comcast EEO policy, which requires employers to seek the broadest recruitment base in order that a representative cross-section of applicants might be obtained.  It is Comcast’s policy to afford equal employment opportunity to qualified individuals regardless of their race, color, religion, sex, national origin, age, non-qualifying physical or mental handicap, and to disabled veterans, and to conform to laws and regulations applicable thereto.

SECTION XIV

REPRESENTATIONS AND WARRANTIES

Vendor represents and warrants that (i) the execution, delivery and/or performance of this Agreement or any Statement of Work will not conflict with or result in any breach of any provision of the charter, by-laws or other governing instruments of Vendor or any agreement, contract or legally binding commitment or arrangement to which Vendor is a party, and (ii) Vendor is not subject to any limitation or restriction (including, without limitation, non-competition, and confidentiality arrangements) that would prohibit, restrict or impede the performance of Vendor's obligations under this Agreement or any Statement of Work.  If any of the foregoing representations or warranties should prove untrue, Vendor shall be deemed in material breach of this Agreement.

Comcast warrants and represents that at no time during the Term of this Agreement will the use of any services, information, materials, techniques, or products directly provided by Comcast infringe upon any third party's patent, trademark copyright, or other intellectual property right, nor make use of any misappropriated trade secret.  No statements contained in any written information furnished to Vendor by or on behalf of Comcast in connection with this Agreement contain any untrue statement of a material fact or omit any material fact necessary to make the statement not misleading.

NEITHER PARTY HEREBY MAKES, AND BOTH PARTIES HEREBY DISCLAIM, ANY AND ALL OTHER EXPRESS AND/OR IMPLIED WARRANTIES, INCLUDING, BUT NOT 

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LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NEITHER PARTY WARRANTS THAT TECHNOLOGY IT PROVIDES THE OTHER PARTY IN CONNECTION WITH THIS AGREEMENT WILL BE UNINTERRUPTED, ERROR-FREE, OR COMPLETELY SECURE.

SECTION XV

MISCELLANEOUS
15.1        Assignability.  This Agreement is fully assignable by Comcast, provided, however, that Vendor will be able to give **** days notice of termination.  Vendor acknowledges that Vendor has been selected to participate in Comcast’s call handling program after evaluation by Comcast of Vendor’s financial stability and reputation in the business community, as well as the individual abilities and reputation of Vendor’s management and work force. **** In the event of any assignment or transfer, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their authorized successors and assigns.

15.2    Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument.

15.3    Severability. In the event any provision of this Agreement and/or Statement of Work is held to be illegal or unenforceable, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement and/or Statement of Work shall otherwise remain in full force and effect and be enforceable.

15.4     Force Majeure.  Neither party shall be responsible for any delay or failure in performance of any part of this Agreement and/ or any Statement of Work to the extent such delay or failure is caused by any force majeure condition, including, but not limited to, act of God, labor dispute, strike or government requirement.  If any such condition occurs, the party delayed or unable to perform shall promptly give notice to the other party, and, among other remedies, the affected party may, at its discretion, extend the term of this Agreement up to the length of time the condition has endured.

15.5    Waiver. The failure of either Party to enforce at any time any provision of this Agreement and/or any Statement of Work, or its failure to exercise any option that is herein provided, or its failure to require at any time performance of any provision herein by that Party shall in no way affect the validity of, or act as a waiver of, this Agreement and/or any Statement of Work, or any part thereof, or any right of that Party thereafter to enforce it.

15.6    Amendment and Modification. Except as provided in this Agreement, any amendment or modification of any provision in this Agreement, including modification of any Statement of Work attached hereto, will not be effective unless the amendment or modification is in writing and signed by both parties, and such amendment and modification shall be enforceable by its terms when signed by both parties.

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15.7     Governing Law. This Agreement shall be governed and construed in all respects in accordance with the laws of the State of New York. The parties agree that any controversy or dispute arising out of or relating to this Agreement shall be settled by binding arbitration in New York, NY, in accordance with the rules of the American Arbitration Association then in force.  The arbitration shall be governed by the United States Arbitration Act, and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof

 15.8     Notices. All notices required or permitted hereunder shall be in writing and addressed to the respective parties as set forth below, which may from time to time be modified, and such notice shall be delivered by hand or by registered or certified mail, postage prepaid.
 

	
		
	

If to Comcast:

	Comcast 
Attention:  Sr. Vice President of Customer Service 
1500 Market St.
Philadelphia, PA 19102

	

with a copy to:

	

Comcast Cable Communications Management, LLC
1500 Market St.
Philadelphia, PA 19102
Attn: General Counsel, Cable Legal

	

If to Vendor:

	 
Rainmaker Systems Inc.
Legal
900 E Hamilton Ave., Ste 400
Campbell, CA 95008

	

with a copy to:

	________________________
________________________
Attention:  _______________

15.9     Entire Agreement.  This Agreement, together with any Statement of Work, recitals and all exhibits incorporated therein by reference, constitutes the entire agreement of the parties hereto and supersedes all prior representations, proposals, discussions and communications, whether oral or in writing. 

           15.10   Captions and Headings.  The captions and headings of this Agreement are for convenience and reference only and in no way define, limit, or describe the scope or intent of this Agreement or any portion thereof, nor affect it in any way the meaning or interpretation of this Agreement. 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

	
		
	

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC
	

RAINMAKER SYSTEMS, INC.

	BY:       /s/ Peter Kiriacoulacos
	BY:      /s/ Timothy Burns

	 
	 

	NAME:   Peter Kiriacoulacos
	NAME:  Timothy Burns

	 
	 

	TITLE:   Chief Procurement Officer
	TITLE: Chief Financial Officer

	 
	 

	DATE:   April 9, 2012
	DATE:  March 21, 2012

 

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EXHIBIT A: STATEMENT OF WORK

Statement of Work #2
between
Rainmaker Systems, Inc.
and
Comcast Cable Communications Management, LLC

Business Class Signature Support (BCSS)

June 1st, 2012

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This Statement of Work #2 (“SOW”) is between Rainmaker Systems, Inc. and any of its operating subsidiaries and affiliates providing services to Comcast (“Vendor”) and Comcast Cable Communications Management, LLC and any of its operating subsidiaries and affiliates that receive services from Vendor (“Comcast”).  This SOW sets forth the terms and conditions under which Vendor shall provide specific services and Comcast shall receive and pay for such services as well as the parties’ respective duties and obligations and shall otherwise govern the provision of services by Vendor to Comcast. This SOW incorporates and is governed by the terms and conditions contained in the Master Services Agreement dated March 21, 2012, as amended (the “Agreement”), by and between Comcast and Vendor.

In the event and to the extent of a conflict between the Agreement and / or any SOW, the following shall govern in the noted order:
		
	1)
	SOW

		
	2)
	Agreement

Except where otherwise defined herein, the defined terms in the Agreement shall have the same meaning in this SOW.

1.TERM

This SOW shall commence on June 1st 2012 (“SOW Effective Date”) and continue until December 31, 2014, unless terminated sooner in accordance with the provisions of the Agreement and/or SOW (“SOW Initial Term”).  Upon the mutual written agreement of Comcast and Vendor through the Change Management process described herein, the term of this SOW may be extended beyond the SOW Initial Term. 

2.DESCRIPTION OF SERVICES

For purposes of this SOW, the “Services” shall mean the services provided by Vendor under this SOW. Services may be provided by Vendor or any affiliate of Vendor.

2.1 Vendor Obligations

Included Vendor Service Offerings:
The following Vendor Service Offerings are included as part of this statement of work:
		
	•
	Sales Center – Inbound and Outbound telephone Calls

		
	•
	Sales Center – Inbound and Proactive Chat

		
	•
	Sales Center – Inbound Billing Calls

		
	•
	Sales Center – Inbound Retention Desk

		
	•
	GrowCommerce SaaS Sales Platform with integrated chat and telephone support

2.1.1 Sales Center
		
	a)
	Vendor shall establish and maintain a sales call center (“Sales Center”) with a trained full-time staff (“FTE”) to sell and support Comcast’s Business Class Signature Support (“BCSS”) sales offerings as further described in Sections 2.4 and 2.5 below (including but not limited to subscriptions offerings, one-time service offerings) (each, a “SKU” or “Sales Offering”)

		
	b)
	In such manner and at such times as the parties may agree in a Change Management Form 

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to this SOW (but in no event on less than **** days’ prior notice), such sales call center shall also sell other additional BCSS SKUs. Staffing for such sales call center shall be maintained in accordance to the service level agreements outlined in the Service Level Terms attached as Attachment A, incorporated herein. 

		
	c)
	In addition to selling to Comcast customers transferred from Comcast customer service, Vendor’s sales group shall be equipped to take inbound leads generated from Comcast marketing and other lead generation channels. 

		
	d)
	Vendor will make follow-up outbound-targeted calls to specific segments (ie. employee size, vertical industry) of the BCSS customer base. Vendor will follow outbound contact rules jointly agreed in writing by both parties.

 
2.1.1.1 Sales Center: Inbound/Outbound Telephone Calls
The following describes the characteristics of all Sales Center Service Offerings included in this agreement.  This includes Sales Centers for both inbound and outbound telephone calls.
		
	•
	Vendor will provide Sales Center facility with automated call distribution (“ACD”)/integrated voice response (“IVR”) as required to appropriately support and route inbound telephone traffic.

		
	•
	Vendor will staff Sales Center with personnel trained to handle types of customer interactions described in Section 2.5, including telephone and live chat interactions (“Sales Agents”).

		
	•
	Vendor will staff Sales Center with personnel trained on Comcast’s product and service offerings covered in Section 2.5.

		
	•
	Vendor will perform sales calls and sales chat interactions with Sales Agents located in United States.

		
	•
	****

		
	•
	Data entry required to enter the sales transactions into Comcast and its 3rd party vendor systems will be performed by Vendor Sales Agents or FTE dedicated to billing (“Billing Specialist”) in real time either manually or via an Application Program Interface (“API”) that is mutually agreeable to both the Vendor and Comcast

		
	•
	Vendor will staff the Sales Center, taking inbound telephone calls and chat requests according to the following coverage schedule which will require a mutually agreed upon Change Management Form to modify:

		
	◦
	Agents will be available to answer sales calls **** local to the customer’s time zone.  Coverage times may be adjusted subject to a mutually agreed upon written change order.

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	Territory
	Avail Date

	Northeast
	7/9/2012

	Central
	9/24/2012

	West
	11/12/2012

 
		
	◦
	Inbound leads generated outside of agreed coverage hours will be sent to Support.com. 

		
	◦
	Comcast will ensure hours of operation are clearly identified on the Comcast Business Class Signature Services web-pages near the chat and telephone contact widgets.

2.1.1.2  Sales Center: Inbound and Proactive Chat 
Vendor will provide inbound chat services to Comcast from any online property approved by Comcast, including BCSS marketing landing pages, HTML emails, or BCSS online storefront. Vendor will provide Comcast with (1) hosted technology and, (2) live inbound Sales Agents. 
		
	•
	Vendor will provide hosted chat functionality via a widget placed by Comcast on the Business Class Signature Support microsite and at Comcast’s discretion on the Business Class customer facing web pages or Business Class web portals.

		
	•
	Comcast will integrate the widget and widget placement into the appropriate Business Class web pages and will review with the Vendor prior to implementation.

2.1.2 Grow Commerce SaaS Platform and Support
The following describes the characteristics of the GrowCommerce SaaS Sales Platform Service Offering included in this SOW.  The GrowCommerce Platform will support customer-entered sales via BCSS Microsite.
		
	•
	Comcast will design, implement and host the BCSS Microsite that will incorporate the basic shopping cart functionality of the GrowCommerce platform (See Attachment B, Grow Commerce Standard Functionality).

		
	•
	Comcast Business Class web pages and portals will also have integrated widgets for Live Chat and Telephone Contact features that link the customer to Vendor chat or telephone Sales Agents at Comcast’s discretion.

		
	•
	Comcast will provide payment gateway and associated merchant account required for the Grow Commerce Platform to accept payments for Single Use Solutions.

		
	•
	Data entry required to enter the sales transaction into Comcast and 3rd Party Vendor systems will be performed by Vendor provided Sales Agents or Billing Specialists in real time either manually or via an Application Program Interface (API) that is mutually agreeable to both the Vendor and Comcast

		
	•
	If additional functionality is required outside of the standard Grow Commerce Functional Specifications, a mutually agreed Change Management Form will be required.  

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2.1.3 BCSS Related Retention/Save Desk
Vendor shall establish and maintain a retention group either through dedicated FTE staff or by up-skilling existing or new staff to be used intermediately as retention staff (“Retention Agents”).
		
	a)
	Vendor Retention Agents will be responsible for retaining Comcast customers from direct inbound calls and from transfers from Comcast Customer service, BCSS Sales agents, and BCSS Service Delivery agents.

		
	b)
	Staffing for the Retention Agents shall be maintained in accordance to the service level agreements outlined in the Service Level Terms attached as Attachment A, incorporated herein.

		
	c)
	The Vendor will be responsible for establishing key performance indicators (“KPIs”) that encourage Retention Agents to retain customers.  Comcast will evaluate these KPIs and their effectiveness within **** of Vendor establishment of the retention group. Changes to KPI’s will be mutually agreed by both parties via a Change Management Form.

2.1.4 Billing Inquiries (Customer Administration)
		
	a)
	Vendor will provide a billing customer administration service for BCSS customers that require changes to services outlined in Section 2.5 Service SKUs.

		
	b)
	Billing inquiries related to Comcast Business Class core services (Voice, Video and High Speed Data) will be transferred to Comcast billing department for resolution

2.1.5 Billing
To the extent Vendor receives sales orders over the phone or online directly from Customers to be paid by credit card, Vendor will process such orders on Comcast’s behalf using a mutually agreed Comcast merchant account through a Comcast designated the Payment gateway and the Comcast Biller platform, when that option becomes available, which provide tracking of credit card purchases authentication, refunds and other charges or credits.  Vendor does not anticipate any credit card transaction fees throughout the term of this SOW since all transactions will go through Comcast Biller or Comcast Merchant Account. If under any circumstances Vendor accrues credit card transaction fees then payment of those fees is Vendor’s responsibility.

Comcast has legal liability for exercising due diligence over sales tax collections in all US jurisdictions.  Vendor will provide sales tax compliance controls which meet Comcast’s approval.  Vendor will supply ongoing auditable access to tax compliance software.

2.2 Launch Date 
The “Launch Date” will be July 9, 2012. The parties acknowledge that Vendor’s obligation to meet the Launch Date is dependent on the good faith efforts of both parties, including the timely provision (as needed) by Comcast of its applicable inputs and approvals as specified in this SOW.   

2.3 Territory
The “Territory” for the Services shall be the Comcast national footprint as well as additional zip codes within the continental United States and Canada to be provided by Comcast and mutually agreed upon by the parties within 90 days following the Launch Date.  The Services will be provided in English.  Following the Launch Date, at such times and in such manner as the parties will mutually agree via a signed Change Management Form, Vendor shall provide Services in Spanish as well as English.  The parties shall enter into a Change Order reflecting this change or any other change in Territory prior to such change becoming effective. 

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2.4 Target Market
For Comcast Business Class customers with fewer than **** employees (“Very Small Businesses”), the following Vendor Service Offerings will be utilized:
		
	•
	Sales Center – Inbound Telephone Calls

		
	•
	Sales Center – Inbound Chat

		
	•
	GrowCommerce SaaS Sales Platform with integrated chat and telephone support

For Comcast Business Class customers with **** or more employees (“Small Businesses”), the following Vendor Service Offerings will be utilized:
		
	•
	Sales Center – Inbound Telephone Calls

		
	•
	Sales Center – Outbound Telephone Calls

		
	•
	Sales Center – Inbound Chat

		
	•
	GrowCommerce SaaS Sales Platform with integrated chat and telephone support

The parties may mutually agree through a Change Management Form to modify the definitions of Very Small Businesses and Small Businesses and the Service Offerings, methods and processes offered and used with each class.  

2.5 Service SKUs 
The SKUs to be sold by Vendor fall into three categories: (1) Subscription Plans SKUs, (2) Single Use Solutions and (3) Bolt-On Services.  Bolt-On Services can only be purchased if the customer first purchases either a Subscription Plan or Single Use Solution.  The following list of BCSS Service Offerings will be sold by Vendor on behalf of Comcast as part of this agreement.

	
			
	Product Category
	Product Name (SKU)
	Retail Price

	Subscription Plans
	Essentials
	$29.95 per user per month

	 
	Preferred
	$39.95 per user per month

	 
	Premier
	$49.95 per user per month

	 
	Premier for Server
	$199.95 per server per month

	Single Use Solutions
	Solve
	$179.95 each

	 
	Set-Up
	$149.95 initial Workstation/PC

	 
	Set-Up
	$49.95 each additional computer

	Bolt-On Services:
	Each Additional 1 Hour of Onsite Service
	$119.95 One-Time Fee

	 
	Expedited Onsite Service
	$79.95 One-Time Fee

	 
	New PC Setup or PC to PC Migration
	$29.95 One-Time Fee

	 
	Cloud Back-up Add-on
	$5.95 One-Time Fee

	 
	Windows Server Installation
	$299.95 One-Time Fee

	 
	Mac Server Installation
	 $799.95 One-Time Fee

	 
	Data Migration Service
	 $199.95 One-Time Fee

	 
	Expedited Depot Service  - Warranty Repair
	$200.00 One-Time Fee

	 
	Warranty Service Deductible
	$75.00 One-Time Fee

	 
	Same Day Onsite Service
	$149.95 One-Time Fee

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	◦
	Comcast will provide to Vendor required information that needs to be captured with each purchase. 

		
	◦
	The SKUs above may be changed by Comcast from time to time. Rainmaker will be informed of changes in writing.

		
	◦
	Vendor will take orders only via the telephone for Single Use Solutions and Bolt-On Services. 

2.6 Customer Interactions and Transactions

Sales Interactions Supported
The types of customer interactions and transactions are included in the scope of this agreement are as follows:

	
						
	Customer Interaction/Transaction Types
	Sales Center
Telephone
	Sales Center 
Chat
	Grow Commerce Sales - Online
	Retention Save Desk
Telephone
	Billing Specialist
Telephone

	BCSS subscriber service request
	Supported - 
Transferred to Service Delivery*
	Not Supported
	Not Supported
	N/A
	N/A

	New sale of subscription plan
	Supported
	Supported
	Supported
	Supported
	Supported – Transfer to Sales Center*

	New sale of single-use solution
	Supported
	Supported
	Supported
	Supported
	Supported – Transfer to Sales Center

	Customer upgrade of subscription plan level
	Supported
	Supported
	Not Supported
	Supported
	Supported – Transfer to Sales Center

	Customer downgrade of subscription plan level
	Supported – Transfer to Retention Desk
	Supported - Transfer to Retention Desk
	Not Supported
	Supported
	Supported – Transfer to Retention Desk

	Change to existing subscription plan (new laptop) or migration of plan to a new user
	Supported – Transfer to Retention Desk
	Supported - Transfer to Retention Desk
	Not Supported
	Supported
	Supported – Transfer to Retention Desk

	Cancel existing subscription plan
	Supported – Transfer to Retention Desk
	Supported - Transfer to Retention Desk
	Not Supported
	Supported
	Supported – Transfer to Retention Desk

	Customer add computer to One-Time Tech Set-up
	Supported
	Supported
	Supported
	Supported
	Supported – Transfer to Sales Center

	Change to existing single-use solution (reschedule)
	Supported – Transfer to Service Delivery
	Not Supported
	Not Supported
	Not Supported
	Not Supported

	Cancel existing single-use solution
	Supported – Transfer to Retention Desk
	Supported – Transfer to Retention Desk
	Not Supported
	Supported
	Supported – Transfer to Retention Desk

	Customer move physical location
	Supported – Transfer to Billing Specialist
	Supported – Transfer to Billing Specialist
	Not Supported
	Supported – Transfer to Billing Specialist
	Supported

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	Customer change to name, billing address or other account information
	Supported – Transfer to Billing Specialist
	Supported – Transfer to Billing Specialist
	Not Supported
	Supported – Transfer to Billing Specialist
	Supported

	Billing dispute to existing subscription plan
	Supported – Transfer to Billing Specialist
	Supported – Transfer to Billing Specialist
	Not Supported
	Supported – Transfer to Billing Specialist
	Supported

	Billing dispute to existing single-use solution
	Supported – Transfer to Billing Specialist
	Supported – Transfer to Billing Specialist
	Not Supported
	Supported – Transfer to Billing Specialist
	Supported

	Customer order or service request status inquiry
	Supported – Transfer to Service Delivery
	Supported – Transfer to Service Delivery
	Not Supported
	Supported – Transfer to Service Delivery
	Supported – Transfer to Service Delivery

* “Transferred to Service Delivery” means Sales Agents shall warm transfer customers to Comcast’s third party service delivery agent, as directed by Comcast.
** “Transferred to Sales Center” means Sales Agents shall warm transfer customers to Comcast’s sales support center, as directed by Comcast. 

Vendor will support bolt on SKUs only by phone.

2.6 Sales Process

2.6.1 Subscription sales process

Subscription offerings may be transacted in several different channels. For all sales that occur via Vendor phone sales, Sales Agent will:

		
	•
	Take Inbound Call or Inbound Chat

		
	•
	Qualify Customer needs

		
	•
	Look up customer record in **** 

		
	•
	Look up customer record in the Comcast Billers

		
	•
	Present options with a specific recommendation on the best / most appropriate service

		
	•
	Verbal approval or e-Sign of contract terms and conditions provided by Comcast

		
	•
	Transact the order in Comcast biller system and leave notes summarizing the experience in real time, during or immediately following a completed sales transaction.

		
	•
	Transfer the Customer to the Service Delivery Vendor when the customer has an immediate need.

		
	•
	If Customer call is outside of scope of the program (a “misdirected call”), transfer the Customer back to Comcast following a transfer process defined by Comcast. 

		
	•
	Within 48 hours of contract verbal acceptance, Vendor will formulate an email with contract specifics and in lieu of a signature send customer notification with reference ID, unless otherwise directed by Comcast.

Any changes to the sales processes above will require a mutually agreed Change Management Form.

2.6.2 Remote Incident sales process

For all one-time remote service offerings, Vendor’s Sales Agent will:
		
	•
	Take inbound call, inbound chat

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	•
	Qualify Customer needs

		
	•
	Look up customer record in **** 

		
	•
	Look up customer record in the Comcast Billers

		
	•
	Verbal approval or e-Sign of contract terms and conditions provided by Comcast

		
	•
	Transact an order in **** or engage an API to provide the Service Delivery Vendor an entitlement record.

		
	•
	Leave a notation on the customer’s Comcast Biller account summarizing the experience and what was sold

		
	•
	Transfer the Customer to the technician for service delivery

		
	•
	If Customer call is outside of scope of the program (a “misdirected call”), transfer the Customer back to Comcast following a transfer process defined by Comcast.

Any changes to the sales processes above will require a mutually agreed Change Management Form.

2.6.3 Onsite Incident sales process 

For all one-time onsite service offerings or one-time office setups, Vendor’s Sales Agent will:
Take inbound call, inbound chat
		
	•
	Qualify Customer needs

		
	•
	Look up customer record in **** 

		
	•
	Look up customer record in the Comcast Billers

		
	•
	Verbal approval or e-Sign of contract terms and conditions provided by Comcast

		
	•
	Leave a notation on the customer’s Comcast Biller account summarizing the experience and what was sold

		
	•
	All Onsite offers and appointment setting will be processed through Onsite Service Delivery Vendor’s Scheduling system.

		
	•
	Establish fulfillment of the onsite work

		
	◦
	For Onsite services, customer will have an appointment time scheduled by the Sales Agent in the Onsite Service Delivery Vendor CRM and the information will be sent to the Onsite Service Delivery Vendor. A note indicating the sale will also be made in the Comcast Billing systems

		
	◦
	Warranty Protection Plans will be transferred to Support.com for initial diagnostics. 

		
	•
	For one-time setup SKU, Vendor sends notification to **** with customers desired appointment date/time. No confirmation from **** is required.

		
	•
	If Customer call is outside of scope of the program (a “misdirected call”), transfer the Customer back to Comcast following process defined by Comcast.

		
	•
	By a mutually agreeable process on a date of Comcast’s specification, Vendor will refer out-of-scope service requests to a 3rd party.

Any changes to the sales processes above will require a mutually agreed Change Management Form.

2.7 Minimum Requirements for Delivery of Remote Services

The following minimum system requirements apply to all customer systems as a prerequisite for delivery of Services to such customer.  Vendor may not sell to any customer prior to verifying the following:

		
	a)
	Computer must be running Windows XP, Vista, Windows 7 or Mac OS 10.5 or above.

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	b)
	Computers must have a minimum 256MB of RAM for basic service. For any services requiring installation of software or connections to peripheral devices, the manufacturer’s minimum system requirements also must be met.

		
	c)
	For all services that entitle support for peripherals (i.e. printer, camera, digital music players, etc.): The Customer must have all necessary cables for attaching the computer to the peripheral.  The peripheral must be in good working order.  Peripherals must be unboxed with all parts readily available.

		
	d)
	Customer must have the required login information to gain Internet access and administrator level access to the computer and devices for which the services are being provided.

		
	e)
	The computer must have working High-Speed Internet access and must be able to connect to the Internet. If the customer cannot initiate and maintain an Internet connection, the customer can only be sold an onsite incident outlined in 7.2.3. 7.1.6 Services must be provided to residential Customers for personal use pursuant to a Comcast Terms of Service, which includes mutually agreed acceptable use policies.

		
	f)
	In the case of Services that are subscriptions, Customer computers must have and maintain valid and up-to-date anti-virus software installed during the subscription period, and Customers must also agree not to remove the Support.com Desktop Agent during the subscription term.

2.8 Pricing

2.8.1 Service Offering Fees.

Vendor will invoice and Comcast will pay fees (“Sales Fee”) for SKUs that are sold to customers by Vendor according to the table outlined below.  All prices are stated in U.S. dollars.

The following terms are defined as set forth below:

“Initial Term” means the 12 month period commencing on the date a customer purchases its first Subscription SKU for one or more users (“Commencement Date”).  In the event additional users are added during the Initial Term, the expiration date for all users will be the date 12 months following the Commencement Date for the first user.       

“Qualifying Subscription” are those customers accounts or users that are (a) sold by a Vendor Sales Agent or through Vendor provided ecommerce/chat widgets and (b) at the end of the 2nd Comcast fiscal month following the month of the sale, are still “active.”  For the purposes of this paragraph, “active” means the Customer subscription has not been terminated or suspended for lack of payment, and the Customer remains entitled to the same or upgraded subscription SKU services.

“Retail Price” means the retail price as shown in the chart in Section 2.5

“Renewal Term” means the 12-month term that automatically commences upon expiration of the Initial Term, unless terminated in accordance with the agreement between Comcast and its customer. 

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	Offering
	Sales Fee*

	Subscription

	

****% of the Retail Price of the 1st month of the Initial Term through June 30th 2013. 

Commencing July 1 2013 sales fee will change to **** % of the Retail Price of the 1st month of the Initial Term.  

PLUS

**  ****% of the Retail Price in the month  the subscription is renewed 

4

	Single Use Solutions
And
Bolt-On Solutions
	****% of the standard (non-promotional) Retail Price of the SKU net of standard XSS subscriber discounts, if any, applicable to the SKU

* Sales Fees for Subscriptions are paid only on Qualifying Subscriptions.
** The ****% commission will be paid only if customer’s subscription renews for the first Renewal Term and at the end of the 2nd Comcast fiscal month following the month of the renewal, are still “active.”.   
**** In the event this SOW is terminated for any reason in the first 12 months, Vendor shall not be eligible for the ****% commission.  If the SOW is terminated at any time beyond the first 12 months, Vendor will be eligible for the ****% commission for any Subscriptions that Renew within ****months of termination of this SOW.  

Sales Fees are only paid for Offerings resulting from a direct offer from a Sales Agent to customer that is closed by that Sales Agent and/or closed through any use of Vendor provided ecommerce/chat widgets.  Vendor will not earn any Sales Fees for sales of products not directly resulting from Sales Agent or ecommerce/chat widget offers.  Comcast may enter into national agreements with customers during the term (“National Accounts”).  Vendors ability to sell to these National Accounts shall be at Comcast’s discretion and subject to a written addendum to this SOW.  

2.8.4 Retention Agent Fees

Comcast will pay U.S. based Retention Agent at rate of $**** per productive hour for 100% of the productive hours through June 20th 2013.

2.8.5 Billing Specialist Fees

Comcast will pay Billing Specialists a set rate per productive hour based on agent location. $**** per productive hour for US based agents and $**** per productive hour for Manilla based agents.

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 2.8.6 Setup Fees

Comcast will pay vendor a one-time fee (“NRE”) of $**** to cover Vendor’s costs associated with integrating with the Comcast billing system and the GrowCommerce SaaS Sales Platform.  

2.8.7 Training Fees

Comcast will pay the Applicable Rate per hour for up to **** of initial new hire training for new FTE joining the program, provided such training and the FTE included in are pre-approved by Comcast.

The Applicable Rate is set forth below for each type of FTE:

U.S. Call Center FTE
Sales Agents = $**** per hour
Retention Agents = $**** per hour
Billing Specialist = $**** per hour
        
Manila Call Center FTE
Billing Specialists = $****

Once on staff, if Comcast mandates more than **** minutes of off phone time during a calendar week, Comcast will pay the applicable training rate above for additional time over **** minutes.

2.8.8  Upfront Fees

Comcast will pay Vendor **** up-front payments of $****, payable in **** (“Up-Front Payments”).  As Vendor invoices Comcast for Sales Fees, such amounts will first be deducted from these Up-Front Payments.  Notwithstanding the foregoing, in the event Vendor has not earned Commissions equal to $**** before the next Up-Front Payment is due, the next Up-Front Payment made by Comcast shall be reduced by the amount remaining of the previous Up-Front Payment.  By way of example only, if Comcast pays Vendor $**** in ****, but Vendor only earns $**** of Commissions by ****, Comcast shall owe Vendor only $**** as the **** Up-Front Payment.   

2.9 Invoicing

Vendor shall prepare invoices on a fiscal month end basis based on the Net Sales (Subscriptions or Single Use/Bolt-on) each month based on the Service Sales fees outlined in Section 2.8.1. Invoicing will be based on a Comcast Fiscal period (22nd to 21st).  Invoices shall reflect the charges as incurred monthly and shall be provided within **** business days post the close of the fiscal month.  ****
Payments owed by Comcast for training or retention and billing specialists, as set forth in Section 2.8, will be billed monthly in arrears. 

Invoices shall be provided to Comcast consistent in detail and categorization as the Final Forecast supplied by Vendor.  

****

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2.10 Wind Down Assistance

In the event this SOW expires or is terminated, unless the parties otherwise agree in writing, Vendor agrees to provide Comcast with up to **** wind down assistance as requested by Comcast in order for Comcast to orderly transition to another sales support provider. The parties shall execute a mutually agreeable SOW describing the transition services Vendor shall provide during the transition period. The rates charged by Vendor for such services shall be in accordance with the rates set forth in Section 3.2 of the Agreement.  Vendor’s obligation during any transition period may include, but not be limited to, providing transition messaging to Comcast customers and assisting in transferring customer data. During the **** of the wind down period, Comcast shall not reduce the Forecasted number of calls by more than ****% of average Forecast over the previous **** months (the “Locked Average”).  During **** of the wind down period Comcast shall not reduce the Forecasted number of calls by more than ****% of the Locked Average.  During **** of the wind down period, Comcast shall not reduce the Forecasted number of calls by more than ****% of the Locked Average.  

		
	2.11
	Termination for Convenience by Rainmaker  

If an officer of Vendor certifies in writing to Comcast that continuation of the Program Description will result in a net loss over the term of the Agreement, the parties shall meet to negotiate a revised Sales Fees.  In the event that parties cannot agree on a revised Sales Fee schedule, Vendor has the right to terminate this Agreement upon **** prior written notice to Company

2.12 Contacts

2.12.1 Comcast Address to which Notices/Invoices Should be Delivered

Comcast
One Comcast Center
Philadelphia, PA 19103
Attn: Dan Herscovici, Vice President, New Business Strategy and Development

With a copy to:

Comcast
One Comcast Center
Philadelphia, PA 19103
Attn: Cable Legal – Operations

2.12.2 Vendor Address to which Notices Should be Delivered

Rainmaker Systems, Inc.
900 East Hamilton Ave., Suite 400
Campbell, CA 95008
Attn: Nicole Mason

3.0TRAINING 

3.1    Initial and/or New-Hire Training 

Unless otherwise mutually agreed in the SOW, Vendor will provide training using mutually agreed upon curriculum as applicable to the SOW for each new-hire CSR that will handle the contacts identified under the applicable SOW.  For such CSRs to be eligible to be placed in the production 

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environment to handle live calls and/or contacts, such CSRs must meet or exceed ****% on the Training certification test(s) administered by Vendor’s training department (“Pass Requirement”).  Vendor may elect, in Vendor’s sole discretion, not to retrain or retain any CSRs who do not successfully complete the training program or meet the Pass Requirement.  ****.

3.2    Continuing Education Training

For any training that Comcast requests Vendor to perform because of changes to Comcast products and services or changes to Comcast policies and procedures or refresher training (collectively “Continuing Education Training” or “CET”), Comcast will make such request to Vendor in writing in the locked forecast process noted in the Forecasting Section.  The parties will mutually agree upon the length and substance of the training.  Types of refresher training may include but is not limited to subjects related to quality reviews, customer support, call handling, product knowledge, system navigation, sales tactics, and customer service. However, in the event any training arising from any changes to the program by Comcast reasonably will require more than **** minutes of training in a given fiscal month, upon the prior written consent of Comcast, Comcast will pay for necessary training for Vendor employees on new processes, procedures, products or programs beyond the initial **** minutes at the rate of:
 
U.S. Call Center FTE
Sales Agents = $****per hour
Retention Agents = $**** per hour
Billing Specialist = $**** per hour
        
Manila Call Center FTE
Billing Specialists = $****

Share rates shall apply only if Vendor employees have successfully completed initial training and have satisfactorily been performing Services under this SOW for not less than **** days.  

3.3    Remedial Training

“Remedial Training” is defined as training directed toward a specific CSR who has passed the certification test but does not know or has difficulties understanding the material in the live environment and so, it is to reinforce the training program for that specific CSR.  Remedial Training does not include CET.  While a CSR is in Remedial Training, Vendor will not charge Comcast the Agent Worked Hour Rate nor any training charges for the specific CSR for the time such CSR is in Remedial Training.

3.4    Train the Trainer

Vendor, with the reasonable assistance of Comcast, shall create “train the trainer” sessions.  Upon prior approval of Comcast of such sessions, Comcast agrees to conduct “train the trainer” sessions for Vendor trainers utilizing Vendor’s training curriculum at a pre-determined and mutually agreed-upon location(s) to Vendor’s designated trainers.  Comcast shall provide up to **** training sessions per year at Vendor’s expense for its own trainers and with no less than **** trainers required to attend each session. Any additional train the trainer sessions Comcast and Vendor will share the expense mutually. 

Vendor trainers must go through Comcast certification process when training is conducted by Comcast or a Comcast approved master trainer at Vendor’s site. Vendor trainers must also complete 

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an annual recertification program.  The parties will mutually agree to the length of the certification and recertification process and the party who will administer the test.  For avoidance of doubt, Comcast will pay the Agent Worked Hour Rate for the trainers while attending the certification and recertification training.  Vendor will utilize only those trainers who have been certified through the Train the Trainer program provided by Comcast.

Vendor’s certified trainers will deliver CSR training sessions and training materials to CSRs in Vendor’s facility.

Comcast may request Vendor to develop training curriculum materials, which shall not include any Vendor Works, to support the Comcast provided training curriculum and any such development request will be handled pursuant to the Change Management process.

3.5    Cultural Training (CCT) (For offshore agents only, if applicable)

Cultural training shall be added to the Initial / New Hire Training program for CSRs located outside of the U.S. and Canada.  Unless otherwise stated in a SOW, the number of hours per CSR for cultural training, if applicable, will be **** hours in the Philippines.  ****, and CCT training, if applicable, will be addressed in the forecasting process outlined in Section 4.  Any CSRs that have already taken and passed Vendor’s CCT are not required to re-take CCT.

3.6    Training Curriculum

Each Program will have a designated new hire training curriculum.  Vendor must not forgo any aspect of Comcast specific training unless Comcast agrees and provides written approval, which approval shall not be unreasonably withheld or delayed.

Comcast requires current curriculum materials be used.  Facilitator guides and participant guides, including job aids and personnel handbooks, must be ordered from Comcast’s approved content provider.  Vendor will be responsible for the cost of printing and distributing the materials. Each class participant must have his or her own participant guide and each facilitator must have his or her own facilitator guide.  Most current version of materials must be used.  It’s the responsibility of the vendor to ensure these materials are ordered in time for start of the training class.  

3.7    Training Communication

If and when applicable, Vendor will provide a monthly training plan to Comcast outlining estimated training plans in all categories including Initial / New Hire, Continuing Education Training and Remedial Training, if any.

3.8    Attrition Training

From time to time CSRs may leave a Program, and that is referred to as “Attrition.”  Depending on a number of factors, for example, expected contact volume; Vendor may or may not replace such CSR.  If Vendor decides to replace such CSR then such replacement will go through training (“Attrition Training”).  ****.
 

3.10    Emergency/Flexible training

Emergency/Flexible Training, defined as reduced or specific training designed to expedite CSRs for a particular Line of Business.  Both parties agree that there are situations, driven by unforeseen volumes and/or circumstances, in which additional capacity is required quickly.  The parties agree 

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to determine how new hiring training can be reduced in order to provide fast, flexible, and effective staffing for rapid increase in call or chat handling capacity with shorter cycle times than agreed upon standard curriculum will allow.  

These situations will be worked on an as-needed basis via the Change Management process.

3.11    Vendor Training Tools
When performing training under a SOW, Vendor may utilize its proprietary internal learning tools and methods as approved by Comcast (such approval not to be unreasonably withheld or delayed), which may include Vendor’s simulations and automation technology. Vendor can utilize Comcast’s training platforms. including Cable Country, for all new hire and cross training and up training assessment methods and tools, at no cost to Vendor, and will provide mutually agreed upon documentation that confirms that each CSR providing the Services has successfully completed the training for the particular SOW and have passed the training certification test as described in Section 3.4 above.

3.12    Comcast Monitoring of Vendor Training Session

Upon advance notice from Comcast and subject to Vendor’s security and privacy policies and procedures, Comcast shall have the option to attend and monitor Vendor training sessions with respect to training pursuant to this SOW. Each Vendor will create, with Comcast approval, the course curriculum, length of training, and training calendar required for the specific Services and any other training related terms and conditions as the parties deem applicable.  

3.13    General Training Process
If Comcast requests any additions, deletions, enhancements or other modifications to the training set forth in the SOW such requests will be handled pursuant to the Change Management process.

4.0Forecasts

		
	4.1
	       Forecast Process

Comcast will develop a forecast for the Services (described below, for example: 12-Month Outlook, 90 Day Forecast, 60 Day Forecast, etc.) to support the proper planning of the infrastructure required to support the Services (individually or collectively, as applicable, “Forecast(s)”).  Comcast will send such Forecasts to Vendor via email.

After the 12-Month Outlook (defined below), each Forecast will include the following data, for each day for the applicable fiscal month (i.e., 22nd – 21st of the applicable month): expected call/contact/FTE volumes; average handle times (in seconds) of such calls and/or contacts; and any other information which would be relevant for Vendor to provide the Services in accordance with the SOW (the “Forecast Information”).   

Additionally, items requiring planning above the monthly Forecast (e.g., Cross Training, Up Training, or Comcast requested focus groups etc.) will need to be identified with the received Forecast

12 — Month Outlook:

Comcast’s team will deliver a 12 – month Forecast annually on or before December 1st and such annual Forecast will be used by Vendor for staff and location planning purposes and to plan ramp projections and planning outlooks for offshore FTEs only (“12-Month Outlook”).  Such plan ramp projections are critical for offshore ramps larger than ****% increases over any **** month periods.  The 12-Month Outlook will consist 

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of expected call or chat/contact/FTE volumes, average handle times (in seconds) of such calls or chats and/or contacts, applicable Public Utility Commission (“PUC”) requirements and any other information which would be relevant for Vendor to provide the Services in accordance with the SOW.  The 12-Month Outlook does not in anyway represent a commitment by Comcast or Vendor with regard to call/contact volumes and/or staffing requirements but Comcast will use best efforts to provide, based on what Comcast knows at that time, a reasonably accurate view of Forecast Information for the next 12 months for Vendor’s staff and location planning purposes.

Comcast will deliver interval-based forecasts for each of the Lines of Business as follows:

		
	a.
	90 — Day Forecast:

One month prior to the start of each fiscal month, Comcast will provide a ninety (90) day rolling forecast, which includes the Forecast Information for the next 90 days (“90 Day Forecast”).  For example, the forecast period of May 22-June 21, the 90 Day forecast would be provided on February 22nd for the 90 days from February 22nd through June 21st.  

On the first business day following Vendor’s receipt of the 90-Day Forecast, Vendor will acknowledge receipt of such 90 Day Forecast.   

		
	b.
	60 — Day Forecast:

One month prior to the start of each fiscal month, Comcast will provide a sixty (60) day rolling forecast, which includes the Forecast Information for the next 60 days (“60 Day Forecast”).  For example, the forecast period of May 22-June 21, the 60 Day Forecast would be provided on or before March 22nd for the 60 days from March 22nd through June 21st. 

On the first business day following Vendor’s receipt of the applicable 60-Day Forecast, Vendor will acknowledge receipt of such 60 Day Forecast. Vendor will within **** of receipt of the 60 Day Forecast due date: a) communicate Vendor’s acceptance of any increase in Forecast Information volumes b) make a recommendation for supporting the increased Forecast Information volumes and/or c) reject any increase in the Forecast Information.  If Vendor does not respond in such ****, the 60-Day Forecast will be considered accepted.  If Vendor receives the applicable 60 Day Forecast, Vendor will send a status report to Comcast confirming receipt of all components required in the 60 Day Forecast.  In the event some components are missing in the 60 Day Forecast Vendor will use the previous month’s 45 Day Final Locked Forecast as directional data for the missing components.

In the event that Comcast does not provide a 60 Day Forecast, the previous month’s 45 Day Final Locked Forecast will be utilized for purposes of the 60 Day Forecast and used for all applicable purposes (e.g., staffing, resource planning and training, Performance Objectives, etc.). 

 
		
	c.
	45 - Day Locked Forecast:

One month prior to the start of each fiscal month, Comcast will provide a forty-five (45) day rolling forecast, which includes the Forecast Information for the next 45 days (“45 Day Locked Forecast”).  For example, the forecast period of May 22-June 21, the 45 Day Locked Forecast would be provided on or before April 7th for the 45 days from April 7th through June 21st.

On the first business day following receipt of the applicable 45-Day Locked Forecast, Vendor will acknowledge receipt of the 45-Day Locked Forecast.  Vendor will within **** days of receipt of the applicable 45 Day Locked Forecast due date:  a) confirm acceptance (any rejections should be made at the 60 day forecast lock).  If Vendor does not respond in such **** days, the 45-Day Locked Forecast will be considered accepted.  In the event that Comcast does not provide a 45-Day Locked Forecast for 

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a Line of Business, the 60 Day Forecast will be utilized for purposes of the 45 Day Locked Forecast for all Lines of Business and used for all applicable purposes (e.g., staffing, resource planning and training, Performance Objectives, etc.). 

		
	d.
	Minimum Locked Forecast

Comcast must achieve a minimum of ****% fulfillment of the number of Calls identified in the 45-Day Locked Forecast. If Comcast fails to deliver at least ****% of the 45-Day Locked Forecast, then Vendor will bill Comcast for the under-delivery.  The rate of such under-delivery will equal the average One-Time Sales Fee paid per Call over the previous **** months multiplied by the number of Calls under ****% of the forecasted amount. For purposes of this Section 4.0, “Calls” shall include calls plus chat sessions. 

The minimum Locked Forecast penalty takes effect starting with the January 2013 forecast.

5.0    REPORTING & DATA REQUIREMENTS 

5.1    General Reporting

Vendor will provide, at no additional cost to Comcast, the following standard reports (“Standard Reports”):  

Productivity Reports: 

****

Staffing Reports:
****
****
****
****

Finance Reports:

****
****
****
****
        
Performance Reports:

****

****
****
****

Dashboard (Real Dash) Requirements: 

****
****
****
****

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Other Reports:

****

Additional standard reports, if any, that are mutually agreed upon will be listed in a change request.
 
Reports listed in this Section 5.1 will only be available for volume handled on the Vendor network.  Details regarding how reporting will be handled, costs associated with reprogramming of any existing reports, and timing associated with reprogrammed report requests if needed as a result of moving to Comcast’s VDI technology are to be determined. 

		
	5.2
	Business Intelligence Reporting

Vendor will meet with Comcast on a mutually agreed upon basis to provide business intelligence and reporting on the root drivers and causes of Comcast customer calls along with recommended solutions regarding ways to adjust volume of customer calls/contacts to forecasted expectations to reduce cost, drive revenue, increase average order value and increase conversion rates.

5.3    Call Recordings – Requirements for 3rd Party QA     

Vendor will provide access to ****% of all call recordings to Comcast’s 3rd party QA providers for quality assurance monitoring and process improvement initiatives.

5.4    CSR IDs / Profile – Data Requirements 

The parties agree that Vendor requires timely processing of Vendor’s request to Comcast for CSR ids to the appropriate billing platforms in order for Vendor to perform the Services.  

Vendor, no later than the ****  day of CSR training, will supply to Comcast a list of CSR names, tools requested, and products that CSRs will support, to the Comcast ID team. Comcast will supply CSR ids within **** business days of receipt, in order to ensure that such CSRs receive the needed CSR ids to receive the proper training.

5.5    Requests for Additional Reports

Comcast will submit any requests for changes, edits, updates, or modifications to Standard Reports and any requests for new reports through the Change Management process (Section 9.0).  

5.6    Reporting Consolidation

Vendor will initiate reporting consolidation efforts to improve the effectiveness of Standard Reports and the efficiency of the reporting team. From time to time, Vendor will present new reporting formats to Comcast to gain agreement on which reports may be retired as a result of improvements to overall reports formats.  These optimization efforts will be done at no additional cost to Comcast.

6.0    QUALITY ASSURANCE 

6.1    Quality Program
Vendor agrees to maintain dedicated quality assurance staff focused on monitoring the Comcast’s Quality Experience program and ensuring the CSR management teams are adhering to quality guidelines as set 

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forth by Comcast.  Vendor quality auditors need to be certified as QA auditors directly through Comcast.  

Comcast will provide a comprehensive process document outlining expectations and audit criteria for certification requirements for the Vendor quality auditors as described above. For avoidance of doubt, any expenses related to the certification requirements will be Comcast’s responsibility.

**** call recording is mandatory and recordings must be archived for **** months. Vendor will join calibration sessions at mutually agreed upon times with Comcast Call Centers and/or Comcast’s 3rd party QA firm upon request. Comcast agrees to require its third parties to sign a Vendor approved non disclosure agreement prior to such sessions.

6.2    Comcast Monitoring
Subject to applicable law, remote monitoring capability of recorded and live customer calls shall be made available to Comcast upon request.  Vendor will provide for call monitoring a remote access 800# and associated VDNs for all Vendor Locations. Vendor will provide authorized Comcast personnel and/or authorized Comcast service providers [users] access to CRP. Vendor will provide unimpeded password protected access to the remote monitoring system.  Vendor should ensure that the remote monitoring provided to Comcast complies with applicable State and Federal law and Comcast will comply with all applicable State and Federal law in its use of the recorded and/or live customer calls.  Comcast feedback will be provided in Comcast’s **** framework.  Any Comcast feedback resulting from this monitoring will include the date and time of call and the access codes used.

6.3    Interaction Observations

Vendor agrees to evaluate CSRs using Comcast quality guidelines.  Evaluations will be based on the customer’s experience as measured through the Comcast guidelines.  Vendor must be committed to continuous improvement through the use of the quality definitions of CSR competency. Vendor will also provide a one-to-one review of observed interactions with each level of CSR to team leader to manager in the observation feedback process.  This includes CSRs and supervisors.

Vendor will conduct **** observations per CSR per **** for any CSR that has more than **** calendar days taking calls on the CSR Line of Business.  Vendor will conduct **** observations per CSR per **** for any CSR having fewer than **** calendar days taking calls on the CSR’s assigned Line of Business.  The observations will be conducted by the team lead or dedicated Quality Assurance Specialist.  Vendor will a keep and maintain recordings for each reviewed call on a rolling **** day basis and will furnish the same to Comcast upon written request. 

 
6.4    Quality Vendor Hosted Interaction Sessions

Vendor agrees to host **** interaction session, designated for a Comcast BU, division, or region receiving Services across all SOWs under this SOW.  In the interaction session the following activities are to be performed:

		
	•
	****

		
	•
	****

		
	•
	****

		
	•
	****

		
	•
	****

As many interactions as can be reasonably completed in the allotted timeframe will be reviewed.

7.0    PERFORMANCE OBJECTIVES 

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Subject to the terms of the Agreement and this SOW, Vendor shall meet the objectives set forth in this SOW (the “Performance Objectives”), except that the Performance Objectives are not applicable to the Services provided by the Specialty Support Groups, if any.  Any changes to the Performance Objectives will be handled in accordance with Section 9, Change Management, below. 

7.1    Performance Objectives    

General Principles: Both parties agree that the purpose of Performance Objectives is to align critical success metrics, focus both parties on these metrics, and improve collaboration between the parties to drive better outcomes.  

		
	•
	Bonuses will be billed one month in arrears to allow time to calculate actual performance achieved and appeal and resolve disputes if necessary.

		
	•
	All performance objectives shall be measured on a **** basis. All Performance Objectives are measured from the time that a call connects to the Vendor CSR queue. All Performance Objectives shall be measured at the Program level and not at the individual CSR level.

		
	•
	Vendor and Comcast will review Vendor’s performance in comparison to the Performance Objectives at least quarterly and determine the priorities and plans for the execution of future work.  The reviews will be prepared in any reasonable format to meet the needs of Comcast.  Vendor will prepare a **** key performance indicator scorecard for review with Comcast.  Any changes to the Performance Objectives that Vendor and Comcast mutually agree on will be documented in accordance with the Change Management process.  If, during the reviews, the parties determine in writing that Vendor is not meeting the applicable Performance Objectives for a particular ****  and Vendor is not otherwise excused from meeting or exceeding such Performance Objectives, Vendor will propose to Comcast a corrective action plan.  If such corrective action plan does not bring Vendor into compliance with the then applicable Performance Objectives, Comcast may terminate the SOW in accordance with Section 7.4, Performance Objective Default, below.

7.2    Performance Objectives

The following Performance Objectives may apply to this SOW:  

		
	a)
	Voice of the Customer (VOC)  

Timing: Will be established no later than **** from SOW effective date or upon an alternative mutually agreed upon date between the Vendor and Comcast.

Definition: ****

****

Calculation: ****

****

Example: ****

Reporting:  ****

7.3    Excused Failures. 
Vendor shall be excused for failures to meet any Performance Objective, if any one of the following occurs:

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	1.
	If such failure is caused solely by: (a) the acts or omissions of Comcast; and/or (b) third parties (hired or contracted) providing services to or for Comcast (including telecommunications carriers) and not under the control or supervision of Vendor, then Vendor shall not be bound by, but shall use all reasonable efforts to handle the call volume and achieve the Performance Objectives.

		
	2.
	 If billing system is down for greater than ****% of the intervals in any given day than that day results will be negated from the fiscal overall performance results.

		
	3.
	If fiscal month end volume delivered is greater than ****% over forecast lock, service level penalties associated with call volume will be excused for that fiscal month..

		
	7.4
	Performance Objective Default:

		
	1.
	Except as provided herein or otherwise cured as provided in the SOW, Vendor’s failure to meet a particular Performance Objective for **** months shall constitute Vendor’s failure to perform to the stated Performance Objective (“Continuous Performance Default”).  In the event of a Continuous Performance Default, Comcast may terminate the applicable Program which is the subject of the Continuous Performance Default in accordance with this SOW and the Agreement.

		
	2.
	If Comcast wishes to terminate the applicable Program, which is the subject of the Continuous Performance Default, Comcast shall give Vendor written termination notice within **** days of the Continuous Performance Default and provide the basis for the termination notice.  Vendor shall have **** days from receipt of the termination notice within which to cure the Continuous Performance Default.  If Vendor has been unable to cure the default within such **** day period, then Comcast shall be entitled to immediately terminate the Program that relates to the Continuous Performance Default upon written notice to Vendor providing the reason for the termination.  

		
	3.
	In the event Vendor is able to cure such Continuous Performance Default within such **** day period and sustain achievement of such Performance Objective for **** then Comcast’s notice of termination shall be automatically rescinded.  If Vendor does not achieve the Performance Objective within such **** period after “cure period”, then Comcast may terminate the applicable Program which was the subject of the Continuous Performance Default upon written notice to Vendor providing the reason for termination.

8.0     TECHNOLOGY 

8.1 Comcast Systems.  

Comcast will provide connectivity, including all hardware and software, necessary to connect Comcast’s billing and customer service systems to Vendor’s call center at Comcast’s expense. All long distance telecommunications costs for such connectivity, including third party providers are the responsibility of Comcast. Vendor shall continue to provide the toll free numbers currently provided to Comcast as of the Effective Date of the SOW, unless otherwise instructed by Comcast. 

8.2 Desktop Requirements

Vendor shall equip each CSR workstation with computers with the following configuration (or equivalent):  PC workstation with a minimum 2GB RAM, processor 2.13 GHz & 2.66GHz, and 80GB hard drive, and auxiliary power (UPS).

Vendor’s standard operation equipment (“SOE”) for bandwidth is as follows:
 

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Standard Bandwidth
 
• SOE bandwidth for desktop – 8 kbps per seat
 
• SOE bandwidth for VoIP traffic – 12 kbps per seat
 
Examples:
 
If SOE, then:
 
100 seats X ((8kbps (desktop) + 12kbps (voice)) = 2mb of bandwidth needed for each connection.
 
If Comcast requires more than the SOW, then Vendor will use the following configuration::
 
Comcast Requirement = 30kbps
 
100 seats x (30kbps + 12kbps) = 4.2mb of bandwidth needed
 
(20kbps – SOE, 22kbps – Non SOE = 42kbps Total per Seat)
 
Billing – 48% VENDOR, 52% BU/Client

In the event Comcast and Vendor determine that above workstation requirements are not adequate to perform the Services under the SOW, the parties shall reflect any agreed upon changes in the SOW or pursuant to the Change Management process if changes are made after execution of the SOW.

8.3 API INTEGRATION 

Vendor is required to consume Comcast and Third Party Vendor API functionality, within **** of functionality becoming production ready or at a Comcast defined date, whichever is later.  This functionality will be integrated into the Vendor CRM and be used during all relevant chat and call transactions by Vendor agents.

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	API Description
	Owner
	Use
	Vendor Use

	****
	****
	****
	****

	****
	****
	****
	****

	****
	****
	****
	****

	****
	****
	****
	****

	****
	****
	****
	****

	****
	****
	****
	****

8.4 Incident Data Feed
 
Vendor is required to provide a “data feed” of Incident Sales sold through the Vendor CRM in a file format consumable by Comcast CET reporting teams.  The data will be provided by 6 AM EST on the day after the sales transaction was initiated and will include data elements, including but not limited to Comcast customer account number, Incident / SKU sold, date and time of sale, and retail price of sale, in a Comcast provided format.
 
8.5 Desktop Requirements

Vendor shall equip each CSR workstation with computers with the following configuration (or equivalent):  PC workstation with a minimum 2GB RAM, processor 2.13 GHz & 2.66GHz, and 80GB hard drive, and auxiliary power (UPS).

Vendor’s standard operation equipment (“SOE”) for bandwidth is as follows:
 
Standard Bandwidth
 
• SOE bandwidth for desktop – 8 kbps per seat
 
• SOE bandwidth for VoIP traffic – 12 kbps per seat
 
Examples:
 
If SOE, then:
 
100 seats X ((8kbps (desktop) + 12kbps (voice)) = 2mb of bandwidth needed for each connection.
 
If Comcast requires more than the SOW, then Vendor will use the following configuration::
 
Comcast Requirement = 30kbps
 
100 seats x (30kbps + 12kbps) = 4.2mb of bandwidth needed
 
(20kbps – SOE, 22kbps – Non SOE = 42kbps Total per Seat)
 
Billing – 48% VENDOR, 52% BU/Client

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In the event Comcast and Vendor determine that above workstation requirements are not adequate to perform the Services under the SOW, the parties shall reflect any agreed upon changes in the SOW or pursuant to the Change Management process if changes are made after execution of the SOW.

		
	8.6
	Data Security

The Vendor must have a documented, instituted and mutually agreed upon security plan for all of Vendor’s systems that are necessary to support the Services.  The plan must include:

		
	•
	Security awareness programs are in place to communicate policies and best practices to personnel on a regular basis.

		
	•
	Technology assets are retrieved from employees / contractors upon separation from the company.

		
	•
	A formal process is in place to dispose of technology assets and management approval is obtained prior to disposal.

		
	•
	Sensitive data is removed from technology assets before disposal.

		
	•
	Operating system and application software is maintained at revision levels that are supported by the software provider to allow security and operational patches to be applied.

		
	•
	Critical security patches are evaluated and implemented based on business need.

		
	•
	User and Administrator accounts are reviewed on a regular basis to assure that access is commensurate with job responsibilities.

		
	•
	User accounts are reviewed on a regular basis to assure that employees and contractors who have separated from Vendor are removed in a timely manner.

		
	•
	Default system settings, such as default permissions, accounts and passwords have been configured in accordance with Vendor security policies.

		
	•
	Password controls are enabled to require strong passwords, mandatory password expiration intervals, and account lockouts after invalid access attempts.

		
	•
	User accounts are identified with a unique user name and assigned to only one individual.

		
	•
	First time passwords for new user accounts are set to a unique value and are required to be changed immediately upon first logon.

		
	•
	Two-factor authentication is used for remote access.

		
	•
	Strong cryptography and encryption techniques are used to safeguard sensitive customer and employee information.

		
	•
	Full disk encryption is deployed on all laptop systems with access to sensitive customer and employee information.

		
	•
	Audit logs are forwarded to a centralized log collection facility for mutually agreed upon systems for monitoring and archiving.

		
	•
	Audit logs, for mutually agreed upon systems, are monitored on a regular basis to identify security incidents.

		
	•
	Anti-virus software is deployed on all systems.

		
	•
	Anti-virus software is updated on a regular basis.

		
	•
	Host-based firewalls are deployed on all laptop systems with access to sensitive customer and employee information.

		
	•
	Backup tapes are secured.

		
	•
	Datasets containing sensitive customer and employee information stored on backup tapes are encrypted.

		
	•
	Physical access to the facilities housing critical technology components is restricted to authorized personnel only.

		
	•
	Physical access to the facilities is approved by authorized personnel prior to being granted access.

		
	•
	Physical access is reviewed on a regular basis to assure access is commensurate with job responsibilities.

		
	•
	Physical access to facilities is removed for employees and contractors in a timely manner upon 

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separation from Vendor.
		
	•
	Must apply similar security controls and framework for work from home CSRs as are applied for in-house CSRs.

8.7    Tools/Connectivity

Comcast is responsible for delivering voice and data communication from Comcast systems to Vendor’s desired termination point(s). 

Comcast is responsible for all costs associated with providing Vendor the appropriate access to Comcast’s billing and information systems noted below (“Comcast Tools”):

****
****
****
****
****
****
****
****

Vendor will, when applicable, be responsible for implementing and testing all systems to ensure they are fully functional for CSRs.  Vendor is responsible for providing terminating equipment, which reasonably satisfies technology requirements of Comcast.  Any changes to the Comcast Tools / connectivity, including but not limited to modifications of or updates or additions to the Tools themselves or proposed new tools or changing the contents of the tools, will be handled in accordance to the Change Management process.

Vendor is required to request access to Comcast’s systems for a Vendor agent as soon as possible but no later than the first day on which an agent is trained.  Requests for agent access to Comcast systems must be fully qualified with all required agent information.  Comcast requires up to **** to provision access to Comcast systems.

8.8    Telecom/ICM Requirements 

8.8.1     Call termination requirements

		
	•
	Vendor is responsible for providing a telecom routing model that allows Comcast to terminate calls to a domestic U.S. site.  

		
	•
	Vendor will comply with Comcast ICM standards where appropriate for modifying switch components to communicate with Comcast ICM/CTI applications to provide routing instruction and CTI capabilities to desktop applications. 

8.8.2    Telecom Services Connectivity 

		
	•
	Vendor will work with Comcast to provide sufficient circuits, bandwidth, and connectivity as required to handle Comcast’s traffic.  182kb per concurrent session loaded requirement for voice and data.  

		
	•
	Vendor must make every reasonable effort to provide the type and volume of connectivity 

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desired by Comcast including but not limited to TDM and SIP. 
		
	•
	This connectivity must be from the major carriers that Comcast uses to provide the advanced network features that help to support Comcast’s customer’s experience. This includes but is not limited to carriers such as Comcast, ATT, Verizon, Sprint, Level 3. In the event Comcast desires to change carriers then the parties will address such request  in accordance with the Change Management process.

		
	•
	Services should be provided over robust, diversely routed facilities routed in order to insure maximum availability and resiliency. 

		
	•
	Comcast has the option to have the telecom circuits/services terminating at Vendor’s Locations and in such event, the parties will handle such Comcast request in accordance with the Change Management process.   Comcast will be billed for any costs associated with the telecom circuits/services terminating at Vendor’s Locations.

		
	•
	Comcast should have access to major call traffic statistics and CDR data for calls made or received in support of Comcast and its customers. Vendor shall work with Comcast to implement tools (if needed by Comcast) to support this requirement. 

		
	8.8.4
	ICM requirements (Call Routing):

		
	•
	Provide 2 CVLAN links for redundancy for the Comcast ICM application.  

		
	•
	Provide Geotel RTA feed from each Avaya CMS box.

		
	•
	Add appropriate skills when necessary for RTA feed. 

		
	•
	Firewall configuration for access from remote ICM PG’s to Vendor Avaya CMS and RTA. 

		
	•
	Redundant data network from Comcast network to Vendor network.  

		
	•
	Appropriate vector changes to allow for adjunct routes for CTI and call routing.  

		
	•
	Lead time of 30 days for notification on planned maintenance for Avaya environment. 

		
	•
	Inclusion in project planning for upgrades to Avaya environment.  

		
	•
	Compatibility prerequisite to Comcast ICM for Avaya environment

		
	•
	Post Routing – a recommended method for call routing is a ‘Post Routing’ to the vendor which needs a Trans Route pool of toll free numbers for the site. The exact number would be determined after gathering additional info. We would also direct the partner on the written instructions needed to facilitate the request to our ICM for further routing instructions

9.0    CHANGE MANAGEMENT 

Either party may at any time during the delivery of the Services request additions, deletions or alterations (a “Change”) to the processes, infrastructure, SOW, or Services in writing; or any Changes that Comcast may make to its processes, quality guidelines, systems, etc.; or by using a Change Management Form similar to Attachment C. 

		
	1.
	Change Management Forms: (CMF): Examples of Changes include changes to new hire curriculum that Vendor is expected to adopt which materially impact the services provided today, requests to materially expand services or analysis provided by Quality Monitoring team, requests for reports beyond standard reports outlined within the SOW, major modifications to the Monthly Vendor Scorecard, additions or changes to Performance Objectives, changes to telephony and data infrastructures, addition of languages, Comcast offerings and other changes which materially impact the scope of support outlined in this agreement.

		
	2.
	Timing: Within **** days after a Comcast request for a Change, Vendor shall submit a proposal to Comcast which shall include any changes in Vendor’s pricing or in the delivery of the Services necessitated by the change.  Comcast shall within **** days of receipt of the proposal or a Change 

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request from Vendor, either (i) accept the proposal or Change; (ii) meet with Vendor to discuss the proposal or Change to determine if the proposal or the Change requires modification; or (iii) reject the proposal or Change and advise Vendor not to perform the Change in which event Vendor shall continue to perform the Services in accordance with this SOW and/or applicable SOW, as previously amended.  No such Change shall be considered nor shall Vendor be entitled to any compensation for work done pursuant to or in contemplation of a Change, unless such Change is authorized through either written amendment of this SOW (if applicable) and/or the applicable SOW or a Change Management Form executed by both parties.

		
	3.
	CMF Intake Process:

		
	•
	The party who initiates the Change is responsible for detailing the request in writing.

		
	•
	Each company will establish a Point of Contact (POCs) to and through whom all requests, responses and status of CMFs will be funnelled and logged.

		
	•
	The joint POCs will meet bi-weekly to review and update the CMF status log, as well as other relevant initiatives which may or may not require a CMF, but which are important to share. An example of relevant initiatives which may not require CMFs include Monthly Line of Business collision calendars. 

10.0    APPROVAL SIGNATURES

Each party represents to the other that the person signing on its behalf has the legal right and authority to execute, enter into and bind such party to the commitments and obligations set forth herein and in accordance with the terms and conditions as set forth in the Agreement. This SOW shall not be modified, amended, supplemented or revised except as set forth herein or by a written document signed by both parties pursuant to the Change Management process.

	
				
	COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC
	RAINMAKER SYSTEMS, INC.

	BY:       /s/ Peter Kiriacoulacos
	BY:      /s/ Timothy Burns

	 
	 

	NAME:   Peter Kiriacoulacos
	NAME:  Timothy Burns

	 
	 

	TITLE:   Chief Procurement Officer
	TITLE: Chief Financial Officer

	 
	 

	DATE:   April 9, 2012
	DATE:  March 30, 2012

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ATTACHMENT A
SERVICE LEVEL TERMS

		
	1.
	AVAILABILITY/UPTIME FOR THE VENDOR ENVIRONMENT

The “Vendor Environment” consists of the servers, storage and networking hardware, operating systems, database management systems and operating platforms and all application software, including Vendor desktop agent software, as well as computers owned by Vendor, that are required to be provided by Vendor to perform the Services contemplated in the Agreement. The “Comcast.com Environment” consists of the servers, storage and networking hardware, operating systems, database management systems and operating platforms and all application software, as well as computers owned by Comcast and those of its agents, that are required to be provided by Comcast to its customers and in relation to the Services contemplated in the Agreement.
For the purpose of this Exhibit, “Vendor Software” includes all software applications provided by Vendor (whether developed by Vendor or any third party) intended to run on the Vendor Environment to provide the Services contemplated in this Agreement.
The following Service Level Agreement (“SLA”) covers the following approach: 
	
		
	Comcast Environment Responsibilities
	Vendor Environment Responsibilities

	Host / manage:
•****
•****
•****
•****
Plus:
•Support API transactions between Comcast and Vendor (when Comcast design / development complete)
	Host / manage:
•Vendor desk top agent software
•Vendor ACD, IVR and voice circuits / data links
•Vendor CRM
•Vendor chat client
•All other servers, storage and networking hardware, operating systems, database management systems and operating platforms used by Vendor to support Signature Support services end to end
Plus:
•Vendor Software APIs 

Scheduled Maintenance.  Periodic maintenance on the servers and system elements that support the Vendor Environment, for purposes of system upgrades, maintenance, and backup procedures (“Scheduled Maintenance”) will be scheduled by Vendor and coordinated with Comcast personnel.  Primary hours of Vendor Service Level Standard Support operation are 24x7, less Scheduled Maintenance.  Scheduled Maintenance may take place on Tuesday, Wednesday, or Thursday evenings, or some combination thereof up to two (2) days per week, between the hours of 11:00 p.m. and 3:00 a.m, Pacific Time, or on some other schedule as mutually agreed by the Parties.  If emergency maintenance is needed to fix critical security vulnerabilities, Vendor will notify Comcast as soon as possible.  Comcast acknowledges that it may be necessary for Vendor to begin work and/or apply fixes prior to notification of Comcast. 
Unscheduled Maintenance.  The application of ad hoc updates to Vendor Software (“Updates”) will be scheduled by Vendor and coordinated with Comcast personnel in the event it is necessary for such Updates to occur outside of the Scheduled Maintenance times (“Unscheduled Maintenance”).
Vendor Environment Performance Guarantee.  In addition to Scheduled Maintenance and 

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Unscheduled Maintenance, there may be events that from time to time will make the Vendor Environment not Available (as defined below) for a limited amount of time due to unforeseen software, hardware, network, power and/or Internet outages (“Unscheduled Downtime”).  The Environment Performance Guarantee (defined below) set forth herein will exclude any outage condition not directly caused by the Vendor Environment (e.g., outages caused by plant issues, operational or maintenance errors by Comcast, or to the extent caused by third-party hardware or software operated by Comcast).
Notwithstanding anything herein to the contrary, Vendor shall have no liability for any failure to meet the Environment Performance Guarantee set forth herein in the event that:  (a) such failure is caused by independent circumstances that are not within the reasonable control of Vendor; or (b) Comcast’s failure to implement any fixes, patches or other workarounds recommended by Vendor to Comcast to the extent the implementation of such fixes, patches or other workarounds are technically feasible and commercially practical.
Vendor will operate the Vendor Environment, as set forth in Table 1.31 below, to be Available and functioning within the relevant SLA defined herein, measured on a monthly basis (the “Environment Performance Guarantee”).  For the purposes of this Exhibit, “Available” means that the Vendor Environment is accessible based on SLA measurement techniques for ****%) of the program hours. Program hours is defined in Section 2.1.1.1 of the Statement of Work, excluding Scheduled Maintenance or any loss or interruption of services resulting from actions or inactions of Comcast or the active subscribers, or their respective equipment or service providers.  Actual availability percentage will be calculated with the following formula:  
100 minus [((X) Total Unscheduled Downtime minutes in a month; divided by (Y) total minutes in said month)); multiplied by (Z) 100] = availability percentage

****
Vendor will employ commercially reasonable, mutually agreed load balancing and system redundancy procedures for all Environmental platforms.  Upon any failure event that causes Vendor’s systems to become partially or fully unavailable, Vendor is expected to immediately notify Comcast and provide hourly updates until the issue is mitigated or resolved.
For the purposes of this Exhibit, each specific “SLA” is assigned a Severity Level Tier defined as equal to low (L), medium (M) or high (H) in value. 
Table 1.31 - Vendor Environment Performance SLAs
	
						
	SLA #
	Area Covered
	SLA
	Tier
	Severe Miss

	1
	Vendor Environment hosted platform availability
Measure:  Uptime of the hosted elements of the Vendor Environment in production 
	

****% availability
	

H
	****%

	2
	Availability of Vendor ACD, IVR, and voice / data circuits Measure: Composite average of uptime of ACD, IVR,  voice / data circuits used to support Signature Support 
	****%
	H
	****%

Service Performance Guarantee.  

****

The Service Performance Guarantee set forth herein will exclude performance impacts of any outage or other condition not directly caused by the Vendor Environment (e.g. outages caused by plant issues, operational or maintenance errors by Comcast, or to the extent caused by third-party hardware or software 

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COMCAST CONFIDENTIAL

operated by Comcast). Notwithstanding anything herein to the contrary, Vendor shall have no liability for any failure to meet the Service Delivery Performance Guarantee set forth herein in the event that:  (a) such failure is caused by independent circumstances that are not within the reasonable control of Vendor; or (b) Comcast’s failure to implement any fixes, patches or other workarounds recommended by Vendor to Comcast to the extent the implementation of such fixes, patches or other workarounds are technically feasible and commercially practical.

If Comcast systems are unavailable and impact the Vendor in such a way as to make selling BCSS services impossible and no reasonable contingency can be established for greater than 24 hours, Comcast will pay the Vendor the equivalent of the actual calls over the outage period multiplied by the average One Time Service Fee, as outlined in the SOW section 2.7.2, over the previous six (6) months.  If the actual call volume over the outage period cannot be determined (IE: Sales calls cannot be delivered to Vendor switch) than the actual volume in the calculation will be replaced with the forecast call volume from the locked forecast for the outage period.

Table 1.41 - Vendor Operational Performance SLAs 

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	SLA #
	Area Covered
	SLA
	Tier
	Severe Miss

	1
	Customer Satisfaction Voice of the Customer (VOC) score
A VOC score baseline will be established beginning 60 days from the date Comcast can establish VOC scoring for Vendor
The Parties will reassess in good faith biannually with an expectation that VOC scores should increase from established baseline levels to a level consistent with Comcast sales center performance.
	To be mutually agreed
	H
	To be mutually agreed

	3
	Inbound Call Service Level (Sales calls)
Measure: Percentage of inbound Customer calls for a Sales Agent answered within 30 seconds.
	****% of calls answered within **** seconds
	M
	****% of calls answered within **** seconds

	4
	Inbound Call Service Level (Retention calls)
Measure: Percentage of inbound retention calls for a retention agent answered within 30 seconds.

Will be in effect 30 days after the establishment of the retention team
	****% of calls answered within **** seconds
	M
	****% of calls answered within **** seconds

	5
	Chat Service Level
Measure: Percentage of chat sessions initiated by Customers to which Vendor responds within 30 seconds. 
	****% within **** seconds
	M
	****% within **** seconds

	6
	MTTR for Comcast ESL tickets
Measure: MTTR for tickets from Comcast’s Executive Support Line (aka “Office of the President”) resolved (or response provided explaining why resolution not possible in timeframe) by Vendor 
	**** hours
	L
	**** hours

	7
	Scorecard Report
Reporting via scorecard by Vendor pursuant to Section 1.6 of this Exhibit, below, is timely made by the eighth (8th) business day following the end of each calendar month
	By **** business day following end of calendar month
	*L
	After **** business day following end of calendar month

* For the scorecard report, a miss of the SLA above is a “severe” miss on its own, regardless of whether the scorecard when delivered reveals other SLA misses at higher or lower levels.

    
1.5    Reporting via Scorecard.  On a monthly basis no later than the eighth (8th) business day following the end of each month, Vendor shall send an activity report to Customer in a mutually agreed upon form and format which includes (i) the status of Vendor’s compliance with the Environment Performance SLAs, (ii) compliance with Service Delivery Performance SLAs, (iii) a count and summary description of all Severity Level 1-4 Errors, and (iv) any other information or details as mutually agreed by the Parties relating to Vendor’s performance of the obligations set forth in this Exhibit D.  Vendor shall provide reports on additional key performance indicators on the daily, weekly and monthly cycles. 

1.6    Reporting Dashboards. 

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A. Environment Dashboard – By Launch Date, Vendor will use a mutually agreed template for a detailed services dashboard to provide timely updates on platform status of the Vendor Environment.  This will include information, as agreed by the Parties, relating to internal Vendor applications and services, as well as any interconnection points between Vendor and Comcast, including network and API connections.

 B. KPI Dashboard  - Vendor will use a mutually agreed template for a Key Performance Indicator (KPI) dashboard that includes Operational Performance SLAs and other daily, weekly and monthly roll-ups of key performance indicators as agreed by the Parties, consistent with Comcast’s vendor support specifications as provided to Vendor.  Vendor will be responsible for making available data feeds based on a mutually agreed technical specification that includes without limitation data format, transport mechanism, and frequency, and Comcast will integrate such data feeds into its existing dashboard system and application.  Unless otherwise mutually agreed by the Parties, data feeds in relation to chat activity will not be required in this effort, and the Parties will cooperate to make chat-related data feeds available subsequently in a commercially reasonable period of time

		
	2.
	Financial Penalties. 

2.1 ****
	
				
	Severity Level Tier
	Number of Failures during month
	Service Level Credit to Comcast per failure
	Severe Miss Penalty

	L
	**** or more
	$****
	$****

	M
	**** or more
	$****
	$****

	H
	**** or more
	$****
	$****

Severe Miss:  A Severe Miss can add up to $**** on top of any SLA Penalty, based on the above table.  For example, ****
2.2 Catastrophic Failure Penalty.  A Catastrophic Failure is:

		
	(i) 
	a Severity 1 Level Error, as defined in Paragraph 4 of this Exhibit, that affects ****% or more of Comcast System Subscribers and lasts a total of ****hours or more; and / or 

		
	ii)
	a Severity 1 Level Error, as defined in Paragraph 4 of this Exhibit, that affect ****% or more of Comcast System Subscribers for **** amount of time; and/or

iii) ****; and/or
iv) Inbound Call Service Level of less than ****%); 

Upon the occurrence of a Catastrophic Failure, Vendor shall issue a credit to Comcast equal to $**** for the calendar month in which the event occurred. This fee is in addition to Service Level Credits above for incidents that are separate from the Catastrophic Failures—for example, ****.  A single event that constitutes a Catastrophic Failure under this section and an SLA failure under Paragraph 2.1 will only result in one credit to Comcast, namely the Catastrophic Failure Penalty. 

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ATTACHMENT B:
GROW COMMERCE STANDARD FUNCTIONAL SPECIFICATION

	
	
	Grow Platform

	CORE FEATURES

	Fully-managed SaaS Platform

	Customizable Customer-facing Storefront

	Easy-to-use Administrative Interface

	Role-based Access to Features & Functions

	True Multi-Tenancy

	Configurable Profiles:  Roles, Menu Access and Module Permissions

	 

	Customer-Facing Storefront

	STORE-WIDE FEATURES

	Customizable Look & Feel via CSS

	Pricing and Add-to-cart APIs to Facilitate Client-hosted Pages

	Role-sensitive Content Bucket Editing Directly on Storefront (Catalog, Product, Order)

	Default Store with provisioned accounts

	CATALOG & HOME PAGE FEATURES

	Customizable Navigation based on Configurable Category Tree

	HTML Content Buckets for Promotions, Banners, etc.

	Category Content Buckets to Display Pre-defined Products

	Display Titles, Images, Prices Based on Region/Currency

	Filter Criteria (Attribute, Price)

	SKU, Title, Key Word Search

	SEO-friendly Page URL/Meta Data, Clean CSS Design

	PRODUCT PAGE FEATURES

	Scrollable Product Image Gallery with Zoom

	Threshold Pricing Dynamically Displayed Based on Quantity

	Sale Price (% or Flate Rate) Displayed Alongside Original Price (Strike-through)

	SKU, Weight, UPC, and Many Additional Fields Displayed

	Related Cross-sell Results Displayed on Add-to-cart

	Related Upsell Product Displayed as Modal Popup on Add-to-cart

	Page Visible According to Publish Dates

	SEO-friendly Page URL/Meta Data, Clean CSS Design

	CHECKOUT & ORDER FLOW FEATURES

	Dynamic Pricing/Band Pricing Display on Cart/Order Screens

	Promotional Code Discount Pricing (% or Flat Rate) Available

	Anonymous Shopping Flows

	Anonymous ("Guest") Checkout Process

	Copy Billing Address to Shipping/Other Address

	Cross-sell Products Displayed on Cart

	Email List Opt-in on Checkout

	Option to Require EULA, Terms & Conditions to Complete Checkout

	Checkout Flow Progress "Breadcrumb" - Payment, Review Order, Order Complete

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	Dynamic Order Review Page:

	Edit Order Details

	Edit Payment Information

	Edit Address Information

	Order Confirmation Page Displays Fulfillment Details

	Template-based Confirmation Email

	
	
	Administrative Interface

	SYSTEM-WIDE FUNCTIONS

	Role-based Views & Permissions

	Role-driven Dropdown Menus Provide Access to All Functions

	Quick Cart - Provides Agent Persistent View of Active User Cart

	ORDER/QUOTE/CART MANAGEMENT FEATURES

	Create Carts on Behalf of Customers (Can be Completed by Agent or Customer)

	Create Quotes on Behalf of Customers

	Create Orders on Behalf of Customers

	Convert Carts to Quotes or Orders

	Convert Quotes to Orders

	Search Functionality:

	Search Carts by ID, Customer, Date Range, Creator/Role

	Search Quotes by ID, Customer Status, Date Range, Creator/Role

	Search Orders by ID, Customer, Pending Reason, Status, Date Range, Creator

	View Orders, Quotes and Carts:

	Created, Modified by, Status History

	Payment Information (if Applicable)

	Billing, Shipping & Custom Address Info (if Applicable)

	Multiple Order/Quote Notes

	Line Item Details & Totals

	Process Held/Pending Orders (Approve, Leave Pending or Reject by Status):

	Compliance – Flagged for Review Based on Inline Check Performed by eCustoms

	PRODUCT MERCHANDISING & PROMOTION FEATURES

	Configure Product Title, Description by Region/Language

	Upload Multiple Product Images and Drag & Drop to Sort Display Order

	Configure Product Release Date (for Pre-sale Items) and Publish/Remove Dates

	Configure Product Taxability

	Define Sale Discounts (% or Flate Rate by Region/Currency) and Sale Start Date & Duration

	Add Product to Any Number of Categories to Affect Its Place in the Catalog Pages/Navigation

	Define and Associate Product Attributes, such as Media Format, Size, Color, Etc.

	Associate Variable Number of Cross-sell Products to Display When Product Added to Cart

	Associate Upsell Product to Create Offer to Replace Current Product When Added to Cart

	Associate Bundled or Grouped Products Intended for Sale Together

	Configure SEO Information, Including Page URL, Title, Description, Keywords

	CONTENT MANAGEMENT FEATURES

	Edit Page-level or Widget-level HTML Content by Region/Culture

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	Sophisticated WYSIWYG Editor to Update Content via Design or Code View

	Built-in Image/File Manager with Region/Culture-specific Files

	Search Site-wide Content by Category, Page

	Integrated Systems & Processes

	FRAUD SCREENING

	Advanced Inline Fraud Screening through ****, provided by ****

	Manual Fraud Review through Rainmaker's Collection Organization

	Inline Address Verification (AVS) and GeoIP Detection through ****

	 

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COMCAST CONFIDENTIAL

 EXHIBIT B:  SECURITY PROTOCOLS

VENDOR hereby acknowledges that CLIENT has a special responsibility under the law to keep personally identifiable information of its customers (“PII”) private and confidential.  PII is subject to the subscriber privacy protections set forth in Section 631 of the Cable Communications Policy Act of 1984, as amended (47 USC Sec. 551), as well as other applicable federal and state laws.  VENDOR agrees that it shall use such information in strict compliance with Section 631, all other applicable laws governing the use, collection, disclosure and storage of such information, and the protocols set forth hereunder.

I.    Confidentiality Agreements.  VENDOR agrees to restrict disclosure of PII to those employees, contractors, or sub-contractors with a need to know and who are bound by contract to the confidentiality provisions herein.   Such confidentiality agreements shall further restrict disclosure of any and all PII and usage data, activity data or other information collected from or about or otherwise regarding CLIENT’s Subscribers whether in individual or aggregate form.    To the extent that VENDOR has access to or collects such usage data, it does so solely on behalf of CLIENT pursuant to its obligations hereunder and shall maintain the confidentiality of such data in accordance with CLIENT’s then applicable privacy policies, privacy statements and applicable law.  VENDOR shall not collect or maintain such usage data except to the extent necessary to perform its obligations under this Agreement.  VENDOR shall retain employee and contractor confidentiality agreements for a period of one year following termination of this Agreement.

II.    Building Security.    VENDOR shall take appropriate measures to ensure that any VENDOR facility, which is used to store or collect PII or usage data, is secured in accordance with standard industry practice, including after business hours.  All employees or contractors shall be issued and required to carry employee identification.

III.    Encryption.  Any PII or usage data that is collected or obtained by VENDOR must be stored and transmitted in encrypted or otherwise secure form.  In the event of a breach of security of any system, website, database, equipment or storage medium or facility that results in unauthorized access to PII or usage data by any third party (including any employee or subcontractor of Contractor that is not authorized to access such information), VENDOR shall notify CLIENT immediately and make best efforts to resecure its systems immediately.

IV.    Remote Access.  To the extent that VENDOR is authorized to gain remote access to CLIENT’s networks or equipment for purposes of performing its obligations hereunder, VENDOR shall ensure that (a) such access is restricted to authorized employees; (b) it provides CLIENT with a list of all such authorized employees upon request; (c) such remote access is used solely for purposes of fulfilling VENDOR’s obligations under this Agreement; (d) such remote access is obtained through a secure connection; (e) VENDOR uses such remote access capability only to access equipment or software that is directly involved in VENDOR’s performance of its obligations hereunder and does not access any other Client or third party systems, databases, equipment or software; and (f) VENDOR shall abide to the applicable policies, standards and or requirements set forth in Exhibit C.  Upon CLIENT’s request, VENDOR will perform and provide results of periodic security audits of its access system and methods and will change authentication elements periodically to maintain the integrity and security of VENDOR’s access.”

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VI.    User ID Administration.   VENDOR is responsible for the ongoing administration of USER IDs for CLIENT tools and systems.  As such, VENDOR must take appropriate and reasonable measures to ensure: 

		
	a.
	User ID’s are unique to each employee

		
	b.
	Access privileges do not exceed what is necessary for the performance of the CLIENT approved activity

		
	c.
	Terminated employee USER ID’s are disabled immediately

		
	d.
	USER ID’s are audited monthly and the results of the audit are provided to CLIENT upon request

VII.    VENDOR is responsible for taking appropriate and reasonable measures to ensure CLIENT related subject matter is not disseminated by VENDOR employees or contractors in public forums.  VENDOR shall further prohibit physical removal of any item containing PII from any VENDOR facility, regardless of the format in which it is stored, including but not limited to, disks, hard drives, or hard copy.

VIII.  Additional Insurance:  VENDOR shall carry crime insurance, including Employee Dishonesty and Computer Fraud coverages for theft of money or securities that VENDOR holds or for which VENDOR is legally liable, arising out of the dishonest acts committed by the employees of VENDOR or its contractors, or through the use of VENDOR’s computer systems, to fraudulently cause a transfer.  This coverage shall have a limit of liability of $7 million per loss.

IX.   PCI Compliance.   In the event Vendor engages in payment card transactions as a part of the services provided to Comcast, Vendor shall comply with the Payment Card Industry Data Security Standards ("PCI DSS") and any amendments or restatements of the PCI DSS during the term of this Agreement.  Vendor accepts responsibility for the security of customer credit card data in its possession, even if all or a portion of the services to Comcast are subcontracted to third parties.   

X.    Protocol Exceptions:    Exceptions to the stipulated protocols may be granted with prior written consent from CLIENT.

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COMCAST CONFIDENTIAL

EXHIBIT C: PARTNER CONNECTION REQUEST POLICIES

****

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