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  EXHIBIT 10.21    
    

 
    EMPLOYMENT AGREEMENT    
    

        This Employment Agreement (this "Agreement") is entered into as of July 27, 2011
(the "Effective Date") by and between Vitesse Semiconductor Corporation, a Delaware corporation
("Vitesse") and Martin McDermut (the "Executive"). 

        In
consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Vitesse and Executive hereby agree as follows: 

        1.    POSITION AND COMPENSATION.    It is hereby agreed that Executive shall be employed by Vitesse as its Senior Vice
President, Finance and Chief Financial Officer. Executive shall be employed at a base salary of $285,000 per year. Vitesse and Executive further agree that Executive's base salary shall be reviewed
not less than once per year from the Effective Date of this Agreement. Executive shall be eligible to participate in Vitesse's bonus plan for senior executives as from time to time in effect, subject
to the terms and conditions in the governing documents of such plan. Any award to Executive under such plan for fiscal year 2011 shall be prorated in proportion to the time between the Effective Date
and September 30, 2011. Under this plan, the Executive shall have a target bonus of 40% of his base salary and a maximum bonus of 60% of his base salary. Commencing with the Company's new
fiscal year, October 1, 2011, and each fiscal year thereafter, Executive may participate fully in such bonus plan pursuant to the terms and conditions in the governing documents of such plan. 

        2.    EMPLOYEE STOCK INCENTIVE PLAN    

        (a)   Executive
shall be eligible to receive equity compensation awards under the Vitesse Semiconductor Corporation 2010 Incentive Plan ("2010
Incentive Plan") as determined by the Board of Directors of Vitesse or any duly authorized committee thereof (the "Board") and
consistent with his position as Chief Financial Officer. An initial grant, subject to Board approval, would consist of 100,000 shares of Vitesse stock, equally allocated between options and restricted
stock units. Such options and restricted stock units will vest over two years in 24 (twenty-four) equal monthly amounts. Vitesse and Executive further agree that Executive's equity
compensation position shall be reviewed not less than once per year from the Effective Date of this Agreement. Moreover, subject to approval from Vitesse's Compensation Committee, Executive may be
eligible for evergreen grants pursuant to Vitesse's applicable policies and plan. 

        (b)   Acceleration
of Vesting: In the event of a Change of Control Event (as defined in the 2010 Incentive Plan) of the Company (or its successor) and any involuntary
termination other than For Cause (as defined below) or Constructive Termination (as defined below) of Executive's employment within one year of such Change of Control Event, then, any vesting
associated with any equity compensation awards which Executive has been granted prior to any such Change of Control Event shall be accelerated and shall immediately become vested as though Executive
had completed an additional two (2) years of service with Vitesse, and shall be exercisable for an additional 90 days following the date of termination of Executive's employment with the
Company. 

        (c)   "Constructive Termination" shall mean Executive's resignation for Good Reason; provided, however, that the term
Constructive Termination is applicable only to Section 2(b) of this Agreement, and this Agreement shall not be deemed to establish or evidence that Executive's resignation for Good Reason
constitutes a constructive termination, as that term is used under California law. 

        3.    BENEFITS.    Employment benefits shall be provided to Executive in accordance with Vitesse's programs then
available to its senior executives, as amended from time to time. Executive will be eligible for sick leave as needed, subject to Vitesse's then-effective policies. Executive may
participate in Vitesse's Employee Stock Purchase Plan, on the terms and conditions set out in such plan. Vitesse will provide Executive with life insurance, with a benefit payable in the amount of
$280,000. Vitesse will provide Executive with long-term disability insurance, with a benefit payable in the monthly amount of 60% of Executive's monthly salary, up to a limit of $10,000.
Executive may, at his own expense, 

 

purchase
additional long-term disability insurance, with a benefit payable in the monthly amount of 66.6% of Executive's monthly salary, up to a limit of $15,000. Executive shall also be
eligible to participate in such health and other voluntary insurance plans as may then be in effect for Vitesse employees. 

        4.    VACATION.    Executive shall be entitled to three weeks of paid vacation per year. Unused vacation time is
subject to a limit on accrual and may be carried forward only to the extent consistent with Vitesse's then current policy with respect to vacation time. 

        5.    TERMINATION OF EMPLOYMENT.    Vitesse and Executive understand and agree that Executive's employment may be
terminated under the circumstances and in accordance with the terms set forth below: 

        (a)   By
mutual agreement at any time with or without notice; provided that such agreement must be stated in writing and signed and dated by Executive and an authorized agent
of Vitesse. 

        (b)   By
either Vitesse or Executive at any time and for any reason in writing, with or without prior notice. 

        (c)   By
Vitesse For Cause. A termination of employment "For Cause" is defined as termination by reason of (i) Executive's conviction of a felony or plea of guilty or
nolo contendere to a felony; (ii) Executive's intentional failure or refusal to perform his employment duties and responsibilities; (iii) Executive's intentional misconduct that injures
Vitesse's business; (iv) Executive's intentional violation of any other material provision of this Agreement or Vitesse's code of business conduct and ethics; or (v) as provided in
Section 8 of this Agreement. Executive's inability to perform his duties because of death or Disability shall not constitute a basis for Vitesse's termination of Executive's employment For
Cause. Notwithstanding the foregoing, Executive's employment shall not be subject to termination For Cause without Vitesse's delivery to Executive of a written notice of intention to terminate. Such
notice must describe the reasons for the proposed employment termination For Cause, and must be delivered to Executive at least fifteen (15) days prior to the proposed termination date (the
"Notice Period"). Executive shall be provided an opportunity within the Notice Period to cure any such breach (if curable) giving rise to the proposed termination, and shall be provided an opportunity
to be heard before the Board. Thereafter, the Board shall deliver to Executive a written notice of termination after the expiration of the Notice Period stating that a majority of the members of the
Board have found that Executive engaged in the conduct described in this Paragraph 5.c. 

        (d)   Vitesse
may terminate Executive's employment immediately upon his death or upon Vitesse's provision to Executive of not less than fifteen (15) days written notice
to Executive that Vitesse has determined that Executive is unable to continue to perform his job duties due to Disability. "Disability" means a physical
or mental impairment of Executive as certified in a written statement from a licensed physician selected or approved by the Board that renders Executive unable to perform his duties under
this Agreement (after reasonable accommodation, if necessary, by Vitesse that does not impose an undue hardship on Vitesse) for one hundred and fifty (150) consecutive days or for at least two
hundred and ten (210) days (regardless of whether such days are consecutive) during any period of three hundred sixty-five (365) consecutive days, unless otherwise required
by law. In conjunction with determining the existence of a Disability, Executive consents to any reasonable medical examinations (at Vitesse's expense) that the Board determines are relevant to a
determination of Executive's Disability, and agrees that Vitesse is entitled to receive the written results of such examinations. To give effect to this provision, Executive agrees to sign a written
waiver of HIPAA rights in conjunction with such examination(s). Executive agrees to waive any applicable physician-patient privilege which may arise with respect to such examinations. 

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        6.    SEVERANCE PAY    

        (a)   If
Executive's employment is terminated (i) by mutual agreement, (ii) by Vitesse For Cause (iii) by Executive for other than Good Reason (as defined
below) or (iv) because of Executive's Disability or death, Executive (or Executive's estate in the case of Executive's death) shall receive Executive's base salary and accrued, but unused,
vacation pay through Executive's final day of employment and any fully accrued and unpaid bonus, if any has so accrued, but shall not be eligible to receive any Severance Pay (as defined below) or any
other bonus or other compensation, unless agreed upon by both parties. 

        (b)   Benefits
Payable Upon Certain Terminations. 

          (i)  If
Executive's employment is terminated by Vitesse other than For Cause or by Executive for Good Reason and such termination does not occur within the 12 month
period following a Change in Control Event, Executive shall receive (A) his base salary and accrued, but unused, vacation pay through the termination date of his employment, and
(B) Severance Pay, all of which shall be payable in a lump sum on the date of termination of employment. 

         (ii)  If
Executive's employment is terminated by Vitesse other than For Cause or by Executive for Good Reason and such termination occurs within the 12 months period
following a Change in Control Event, Executive shall receive the benefits specified in Section 6(b)(i), plus (A) an additional bonus equal to Executive's maximum potential annual bonus
for the fiscal year in which such termination occurs; (B) cash payment (subject to applicable withholding) for 24 months of Employee's medical premiums in effect on the day of
termination pursuant to COBRA or Cal-COBRA, all of which shall be payable in a lump sum on the date of termination of employment and (C) acceleration of Vesting as described in
Section 2(b). 

        (iii)  Executive's
right to receive any of the benefits under Section 2(b) or under this Section 6 shall be conditioned upon Executive's execution of Vitesse's
then standard form of waiver and release of claims. 

        (c)   "Good Reason" means, without Executive's written consent, the occurrence of any of the following actions unless the
action is fully corrected (if possible) within fifteen (15) days after the Board receives written notice from Executive of such action (which notice shall have been provided by Executive within
thirty (30) days of the occurrence of such action), and provided that Executive actually terminates employment within thirty (30) days following the end of such fifteen (15) day
period: (i) Vitesse's material reduction in Executive's base salary; (ii) Vitesse's failure to pay Executive any material amount that is expressly required to be paid under this
Agreement; (iii) Vitesse's material and adverse reduction of the nature of Executive's duties and responsibilities, disregarding mere changes in title (for purposes of clarity, it is expressly
agreed that if there is a Change of Control Event (as defined below) and Executive is not offered the position of Chief Financial Officer of the ultimate parent entity resulting from the Change of
Control Event on terms that are substantially equivalent to the compensation paid to Chief Financial Officers of similarly sized technology companies, Executive shall have suffered a material and
adverse reduction of the nature of his duties and responsibilities); (iv) Vitesse's requirement that Executive perform his principal employment duties at an office that is more than sixty
(60) miles from Camarillo, California or (v) Vitesse terminates this Agreement in accordance with Section 16 hereof (it being understood by Executive that if prior to the
termination date of this Agreement Executive elects to terminate his employment for Good Reason based upon this clause (v), Executive shall not have the right to set a termination date for his
employment prior to the termination date of this Agreement). 

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        (d)   "Severance Pay" means twelve (12) months of Executive's base salary (at the amount before any proposed reduction)
and an "Earned Bonus" bonus equal to (I) Executive's maximum potential annual bonus (subject, however, to all threshold requirements in the bonus
plan adopted by Vitesse's Board of Directors for the fiscal year in which such termination occurs, including any performance standards or milestones that must be met before any such bonus is payable)
multiplied by (II) the number days in the fiscal year prior to the Executive's termination date (including the day of such termination) and divided by (III) 365, all of which shall be
payable in a lump sum on the date of termination of employment. (For example, if Executive is terminated 55 days following the start of the fiscal year and such termination meets the conditions
set forth in the first sentence of Section 6(b)(i), then Executive would receive a bonus amount equal to the maximum potential annual bonus * 55/365). 

        7.    EMPLOYMENT DUTIES.    Executive will report to Vitesse's Chief Executive Officer and shall perform all duties
assigned to him by the Chief Executive Officer. Executive's duties may be conveyed to him through a job description, or through other written or verbal instructions from Vitesse's Chief Executive
Officer. Executive's duties are expected to involve travel from time to time to various locations and events, and are expected to involve significant unpaid overtime. Executive will be deemed
an officer of Vitesse, and will be required to comply with and will be subject to all SEC regulations applicable to officers pursuant to Section 16 of the Securities Exchange Act of 1934. 

        8.    COMPLIANCE WITH VITESSE POLICIES AND PROCEDURES.    As a member of Vitesse management, Executive will be
expected to comply with all provisions of Vitesse's Policies and Procedures and Employee Handbook, as amended from time to time. Executive acknowledges, by signature on this Agreement, that failure to
comply with and ensure enforcement of Vitesse's policies and procedures and all federal and applicable state and local laws as well as any applicable laws of any foreign country or political
subdivision thereof in the jurisdiction of which Vitesse conducts business, as such laws relate to business operations, may result in immediate termination of employment For Cause. 

         CONFLICT OF INTEREST.    Executive acknowledges that his position is a full-time position and agrees to devote his entire productive time,
ability and attention to Vitesse's business. Executive further agrees that while employed by Vitesse, he will not directly or indirectly engage in outside employment, consulting or other business
activities unless he has obtained written consent from the Vitesse Board. 

        9.    NO SOLICITATION OF CUSTOMERS.    Executive promises and agrees that during the term of this Agreement, Executive
will not, directly or indirectly, individually or as a consultant to, or as an employee, officer, stockholder, director or other owner or participant in any business, influence or attempt to influence
customers, vendors, suppliers, joint venturers, associates, consultants, agents, or partners of Vitesse, either directly or indirectly, to divert their business away from Vitesse, to any individual,
partnership, firm, corporation or other entity then in competition with the business of Vitesse, and he will not otherwise materially interfere with any business relationship of Vitesse. 

        10.    SOLICITATION OF EMPLOYEES.    Executive promises and agrees that during the term of this Agreement and for a
period of two (2) years thereafter, Executive will not, directly or indirectly, individually or as a consultant to, or as an employee, officer, stockholder, director or other owner of or
participant in any business, solicit (or assist in soliciting) any person who is then, or at any time within six (6) months prior thereto was, an employee of Vitesse who earned annually $25,000
or more as an employee of Vitesse during the last six (6) months of his or her own employment to work for (as an employee, consultant or otherwise) any business, individual, partnership, firm,
corporation, or other entity whether or not engaged in competitive business with Vitesse. 

        11.    OBLIGATION TO RETURN BONUS PAYMENTS.    Executive agrees to disgorge to the Company certain bonus payments and
profits if the Company is required to prepare an accounting restatement to correct an accounting error on an interim or annual financial statement included in a report on Form 10-Q
or Form 10-K, due to material noncompliance with any financial reporting 

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requirement
under the federal securities laws, and the Board determines that misconduct by the Executive has occurred and caused such restatement. 'Misconduct' shall refer to any definition included
in the applicable statute(s) or applicable judicial precedents. The amounts that shall be disgorged shall be (i) any bonus or other incentive-based or equity-based compensation received by
Executive from the Company during the 12-month period following the first public issuance or filing with the SEC (whichever first occurs) of the financial document embodying such error;
and (ii)any net profits realized by Executive from the sale of the Company's stock during that 12-month period. In any dispute between the Company and Executive regarding such misconduct,
Executive will continue to be entitled to any indemnification or reimbursement for legal representation available to Executive pursuant to any statute, charter provision, By-law, contract
or other arrangement that insures or indemnifies Executive. 

        12.    LIMITATION ON PAYMENTS.    In the event that the severance and other benefits provided for in this Agreement or
otherwise payable to Executive (i) constitute "parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then Executive's benefits under this Agreement shall be either (a) delivered in full, or (b) delivered as to such lesser extent which would result in no
portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in
the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of
the Code. The payments or benefits subject to any such reduction shall be reduced by Vitesse in its reasonable discretion in the following order: (i) reduction of any payments and benefits
otherwise payable to Executive that are exempt from Section 409A of the Code, and (ii) reduction of any other payments and benefits otherwise payable to Executive on a
pro-rata basis or such other manner that complies with Section 409A of the Code, as determined by Vitesse. 

        Unless
Vitesse and Executive otherwise agree in writing, any determination required under this section shall be made in writing by Vitesse's independent public accountants (the
"Accountants"), whose determination shall be conclusive and binding upon Executive and Vitesse for all purposes. For purposes of making the calculations
required by this section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the
application of Section 280G and 4999 of the Code. Vitesse and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to
make a determination under this section. Vitesse shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this section. 

        13.    SECTION 409.    Vitesse makes no representations or warranties to Executive with respect to any tax,
economic or legal consequences of this letter or any payments or other benefits provided hereunder, including without limitation under Section 409A of the Code. However, the parties intend that
this Agreement and the payments and other benefits provided hereunder be exempt from the requirements of Section 409A of the Code to the maximum extent possible, whether pursuant to the
short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation pay plan exception described in Treasury Regulation
Section 1.409A-1(b)(9)(iii), or otherwise. To the extent Section 409A of the Code is applicable to this Agreement (and such payments and benefits), the parties intend that
this Agreement (and such payments and benefits) comply with the deferral, payout and other limitations and restrictions imposed under Section 409A of the Code. Notwithstanding any other
provision of this Agreement to the contrary, this Agreement shall be interpreted, operated and administered in a manner consistent with such intentions. Without limiting the generality of the
foregoing, and notwithstanding any other provision of this Agreement to the contrary, with respect to any payments and benefits under this letter to which Section 409A of the Code applies, all
references in this letter to the termination of Executive's employment are intended to mean Executive's "separation from service," within the meaning of Section 409A(a)(2)(A)(i) of the 

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Code.
In addition, if Executive is a "specified employee," within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent necessary to avoid subjecting Executive to the
imposition of any additional tax under Section 409A of the Code, amounts that would otherwise be payable under this Agreement during the six-month period immediately following
Executive's "separation from service," within the meaning of Section 409A(a)(2)(A)(i) of the Code, will not be paid to Executive during such period, but will instead be accumulated and paid to
Executive (or, in the event of Executive's death, Executive's estate) in a lump sum on the first business day following the earlier of (a) the date that is six months after Executive's
separation from service or (b) Executive's death. It is intended that each installment, if any, of any severance payments shall be treated as a separate "payment" for purposes of
Section 409A. 

        14.    ARBITRATION.    In the event of any dispute, controversy, or claim relating to or arising out of Executive's
employment relationship with Vitesse; this Agreement or any alleged breach, default, or misrepresentation in connection with any of the provisions of this Agreement; or the termination of Executive's
employment with Vitesse for any reason (including, but not limited to, any claims of breach of contract, wrongful termination, or age, sex, race, national origin, sexual orientation, religion,
disability or other discrimination or harassment), Executive and Vitesse agree that all such disputes shall be fully, finally, and exclusively resolved by binding arbitration before a sole neutral
arbitrator to the fullest extent permitted by law. The arbitration will be conducted by JAMS in Ventura County, California in accordance with its "Employment Arbitration Rules & Procedures" or
such later-adopted successor rules then in effect and shall be subject to JAMS Policy on Employment Arbitration Minimum Standards of Procedural Fairness. Information regarding the rules of JAMS and
copies of such rules can be found at http://www.jamsadr.com/. The parties will select a neutral arbitrator, or if they cannot agree on one, JAMS will select a neutral arbitrator. The Company will pay
any costs of arbitration, including the arbitrator's fees, that would not be borne by an individual filing an action in court. Each party shall have the right to such discovery as is reasonably
necessary to develop and prosecute his, her, or its case. The parties agree that in any proceeding with respect to such matters, each party shall bear its own attorney's fees and costs, unless the
arbitrator otherwise orders. The arbitrator may grant any relief that would be available in a court of competent jurisdiction. The arbitrator will render a written decision that sets out his or her
findings and reasoning in sufficient
detail to allow for review of the decision. This is a mutual agreement; Executive and Vitesse are both required to arbitrate all such disputes relating to or arising out of Executive's employment
relationship with Vitesse. The parties acknowledge and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against
the other in connection with any matter whatsoever arising out of or in any way connected with any of the matters referenced in this Section 15. Except with respect to actions seeking
injunctive relief pursuant to Code of Civil Procedure section 1281.8, Executive and Vitesse both waive their rights to file an action in court with regard to any matter referred to in this
Section 15. Judgment on the arbitrator's award may be entered in any court having jurisdiction. 

        15.    TERM.    Subject to the provisions of Section 5 of this Agreement, the term of this Agreement shall end
on the second anniversary of the Effective Date. If not terminated in writing by either party at least ninety (90) days prior to the end of the applicable term (which termination shall be
effective at the end of such term), this Agreement shall automatically renew for an additional twenty-four (24) months from the end of such term. 

        16.    PARTIAL INVALIDITY.    It is the desire and intent of Vitesse and Executive that the provisions of this
Agreement be enforced to the fullest extent permissible under applicable federal, state and municipal laws. Accordingly, if any specific provision or portion of this Agreement is determined to be
invalid or unenforceable within the particular jurisdiction in which enforcement is sought, that portion of the Agreement will be considered as deleted for the purposes of adjudication. All other
portions of this Agreement will be considered valid and enforceable within that jurisdiction. 

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        17.    ENTIRE AGREEMENT.    Vitesse and Executive understand and agree that this Agreement constitutes the full and
complete understanding and agreement between them regarding the terms of Executive's employment and supersedes all prior understandings, representations, and agreements with respect to the employment.
Vitesse and Executive understand that the Vitesse SIP and the Compensation Adjustment forms (if any) referred to in this Agreement shall be fully incorporated into this Agreement by reference. The
parties rights and obligations hereunder may not be assigned without the consent of each party hereto, except that Vitesse may assign its rights and obligations hereunder to any successor entity.
Executive agrees that following a Change in Control Event, "Vitesse" shall refer to any successor entity. 

        18.    EXECUTIVE ACKNOWLEDGEMENT.    Executive acknowledges that he has read and understands this Employment Agreement
and agrees to the terms and conditions contained herein. Executive agrees that he has had the opportunity to confer with legal counsel of his choosing regarding this Agreement. Executive further
acknowledges that this Agreement has not been executed by Executive in reliance upon any representation or promise except those contained herein, and that Vitesse has made no guarantee regarding
Executive's employment other than those specified in this Agreement. 

        19.    GOVERNING LAW.    This Agreement shall be construed in accordance with and governed by the laws of the State of
California without regard to conflicts of law principles. 

 

 

					
	 	 	 "EXECUTIVE"
	
 Dated July 27, 2011	
 	
/s/ MARTIN MCDERMUT

  Martin McDermut
	

 	
 	
 VITESSE SEMICONDUCTOR CORPORATION,

a Delaware Corporation
	
 Dated July 27, 2011	
 	
By	
 	
/s/ CHRISTOPHER GARDNER

  Christopher Gardner

Chief Executive Officer

 

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EXHIBIT 10.21

EMPLOYMENT AGREEMENTBBamendment11.11

LOAN AND SECURITY MODIFICATION AGREEMENT

This Loan and Security Modification Agreement is entered into as of November 15, 2011, by and between Rainmaker Systems, Inc. (the “Borrower”) and Bridge Bank, National Association (“Bank”).

1.    DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other documents, a Loan and Security Agreement, dated November 17, 2009 by and between Borrower and Bank, as may be amended from time to time (the “Loan and Security Agreement”).  Capitalized terms used without definition herein shall have the meanings assigned to them in the Loan and Security Agreement.   

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as the "Indebtedness" and the Loan and Security Agreement and any and all other documents executed by Borrower in favor of Bank shall be referred to as the “Existing Documents.”

2.    DESCRIPTION OF  CHANGE IN TERMS.

		
	A.
	Modification(s) to Loan and Security Agreement:

		
	1)
	The following defined terms in Section 1.1 of the Agreement are hereby added, amended or restated as follows:

“Credit Extension” means each Advance, Letter of Credit, or any other extension of credit by Bank for the benefit of Borrower hereunder.

“Revolving Maturity Date” means the earlier of (i) December 10, 2012, or (ii) such date the Bank elects to terminate the Revolving Line pursuant to Section 9.1 hereof. 

		
	2)
	All references to the “Existing Equipment Advance”, the “Term Loan Advance”, and the “Term Loan 2 Advance” are hereby deleted and such advances are no longer available.    

		
	3)
	The first sentence of subsection 2.1 (a)(i) shall be amended to read as follows:  

(i)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 (i) the Borrowing Base plus $1,000,000, or (ii) the Revolving Line, minus, in each case, the aggregate face amount of all outstanding Letters of Credit.  

		
	4)
	Section 2.2, entitled “Overadvances”, is hereby amended to read as follows:

2.2    Overadvances.  If the aggregate amount of the outstanding Advances plus the aggregate face amount of all outstanding Letters of Credit exceeds the lesser of (i) the Borrowing Base plus $1,000,000, or (ii) the Revolving Line at any time, Borrower shall immediately pay to Bank, in cash, the amount of such excess.  
		
	5)
	The second sentence in Section 6.7 is hereby amended as follows:

Borrower shall, at all times maintain an amount no less than (i) the aggregate amount of all outstanding Obligations plus $1,000,000.00 or (ii) $2,000,000, whichever is greater, in its unrestricted cash deposit accounts maintained with Bank. 
		
	6)
	Borrower hereby agrees that all Credit Extensions after March 31, 2012 under the Loan and Security Agreement are contingent upon additional capital injection into Borrower, in a form and amount satisfactory to Bank at its sole discretion. 

3.    CONSISTENT CHANGES.  The Existing Documents are each hereby amended wherever necessary to reflect the changes described above.

4.    PAYMENT OF FEES. Borrower shall pay Bank a fee in the amount of $10,000 (“Facility Fee”) and a fee in the amount of $75 (“Renewal Due Diligence Fee”) plus all out-of-pocket expenses. 

5.    NO DEFENSES OF BORROWER/GENERAL Release.  Borrower agrees that, as of this date, it has no defenses against the obligations to pay any amounts under the Indebtedness.  Each of Borrower and Guarantor (each, a “Releasing Party”) acknowledges that Bank would not enter into this Loan and Security Modification Agreement without Releasing Party’s assurance that it has no claims against Bank or any of Bank’s officers, directors, employees or agents.  Except for the obligations arising hereafter under this Loan and Security Modification Agreement, each Releasing Party releases Bank, and each of Bank’s and entity’s officers, directors and employees from any known or unknown claims that Releasing Party now has against Bank of any nature, including any claims that Releasing Party, its successors, counsel, and advisors may in the future discover they would have now had if they had known facts not now known to them, whether founded in contract, in tort or pursuant to any other theory of liability, including but not limited to any claims arising out of or related to the Agreement or the transactions contemplated thereby.  Releasing Party waives the provisions of California Civil Code section 1542, which states:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
The provisions, waivers and releases set forth in this section are binding upon each Releasing Party and its shareholders, agents, employees, assigns and successors in interest.  The provisions, waivers and releases of this section shall inure to the benefit of Bank and its agents, employees, officers, directors, assigns and successors in interest.  The provisions of this section shall survive payment in full of the Obligations, full performance of all the terms of this Loan and Security Modification Agreement and the Agreement, and/or Bank’s actions to exercise any remedy available under the Agreement or otherwise.
6.    CONTINUING VALIDITY.  Borrower understands and agrees that in modifying the existing Indebtedness, Bank is relying upon Borrower's representations, warranties, and agreements, as set forth in the Existing Documents.  Except as expressly modified pursuant to this Loan and Security Modification Agreement, the terms of the Existing Documents remain unchanged and in full force and effect.  Bank's agreement to modifications to the existing Indebtedness pursuant to this Loan and Security Modification Agreement in no way shall obligate Bank to make any future modifications to the Indebtedness.  Nothing in this Loan and Security Modification Agreement shall constitute a satisfaction of the Indebtedness.  It is the intention of Bank and Borrower to retain as liable parties all makers and endorsers of Existing Documents, unless the party is expressly released by Bank in writing.  No maker, endorser, or guarantor will be released by virtue of this Loan and Security Modification Agreement.  The terms of this paragraph apply not only to this Loan and Security Modification Agreement, but also to any subsequent Loan and Security modification agreements.
7.    REFERENCE PROVISION.

a.    In the event the Jury Trial waiver is not enforceable, the parties elect to proceed under this Judicial Reference Provision.

b.    With the exception of the items specified in Section 7(c) 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 state or federal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or district where venue 

is otherwise appropriate under applicable law (the “Court”).

c.    The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personal property, (ii) exercise of self-help 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 reference provision 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 reference provision as provided herein.

d.    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.  Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of the Court (or his or her representative).

e.    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.  

f.    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.

g.    Except as expressly set forth herein, 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.

h.    The referee shall be required to determine all issues in accordance with existing case law and the 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.  

i.    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.

j.    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.

8.    CONDITIONS.  The effectiveness of this Loan and Security Modification Agreement is conditioned upon payment of the Facility Fee and the Renewal Due Diligence Fee.

9.    COUNTERSIGNATURE.  This Loan and Security Modification Agreement shall become effective only when executed by Bank, Borrower, and Guarantor.

BORROWER:                    BANK:

RAINMAKER SYSTEMS, INC.             BRIDGE BANK, NATIONAL ASSOCIATION

By:          /s/  Timothy Burns                                  By:          /s/ Sarah Norris                              

Name:           Timothy Burns                                  Name:          Sarah Norris                              

Title:       Chief Financial Officer                            Title:           Vice President                             

    
Guarantor consents to the modifications to the Indebtedness pursuant to this Loan and Security Modification Agreement, hereby ratifies the provisions of the Guaranty and confirms that all provisions of that document are in full force and effect.

GUARANTOR:

SUNSET DIRECT, INC.             

By:           /s/ Timothy Burns                                  Date:  November 15, 2011

Name:           Timothy Burns                                  

Title:       Chief Financial Officer

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