THIRD AMENDMENT AND MODIFICATION TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
by and between
RCM Technologies, Inc. and All of Its Subsidiaries
with
Citizens Bank of Pennsylvania, as Administrative Agent and Arranger
And
Each of the Financial Institutions Now and Hereafter
Shown on the Signature Pages Hereof as Lenders
Dated: As of September ___, 2003
THIRD AMENDMENT AND MODIFICATION TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This THIRD AMENDMENT AND MODIFICATION TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT ("Amendment") is dated as of September ____, 2003, by RCM
TECHNOLOGIES, INC. ("RCM"), and ALL OF ITS SUBSIDIARIES (collectively referred
to as "Borrower"), CITIZENS BANK OF PENNSYLVANIA (formerly known as Mellon Bank,
N.A.), a Pennsylvania state chartered bank, in its capacity as administrative
agent and arranger (the "Agent"), and CITIZENS BANK OF PENNSYLVANIA (formerly
known as Mellon Bank, N.A.) ("Citizens"), and SUNTRUST BANK (formerly known as
SUNTRUST BANK ATLANTA), in its capacity as documentation agent and lender
("Suntrust"), and FLEET NATIONAL BANK, in its capacity as syndication agent and
lender ("Fleet") (Citizens, Suntrust and Fleet individually each being a
"Lender" and collectively referred to as "Lenders").
BACKGROUND
A. Pursuant to the terms of a certain Amended and Restated Loan and Security
Agreement dated as of May 31, 2002, between Borrower and Lenders, as amended by
a certain Amendment and Modification to Amended and Restated Loan and Security
Agreement dated as of December 30, 2002, and as further amended by a certain
Second Amendment and Modification to Amended and Restated Loan and Security
Agreement dated as of February 26, 2003 (collectively, the " Loan Agreement"),
Lender has made available to Borrower a revolving line of credit in the
aggregate amount of $25,000,000.00 (the "Revolving Credit"), and a term loan in
the amount of $7,500,000.00 ("Term Loan").
B. The Revolving Credit is evidenced by certain Second Amended and Restated
Revolving Credit Notes dated February 26, 2003, from Borrower to Lenders in the
aggregate amount of $25,000,000.00 ("Revolving Credit Notes").
C. The Term Loan was evidenced by certain Term Notes dated May 31, 2002 from the
Borrower to the Lenders in the aggregate amount of $7,500,000.00 ("Term Notes")
and all amounts outstanding under the Term Loan have been repaid in full by
Borrower to Lenders prior to the date hereof.
D. Pursuant to the terms and provisions of a certain Assignment and Assumption
dated as of the date hereof between Lenders (the "Assignment and Assumption"),
Fleet has agreed to sell and assign all of its Revolving Credit Facility Pro
Rata Share to SunTrust and Citizens and the parties are entering into this
Amendment to modify certain of the terms and provisions of the Loan Agreement to
reflect such sale and assignment.
E. All capitalized terms used herein without further definition shall
have the respective meaning set forth in the Loan Agreement and all other Loan
Documents.
NOW, THEREFORE, with the foregoing Background incorporated by reference
and intending to be legally bound hereby, the parties agree as follows:
1. Loan Agreement. The following amendments and modifications shall be made to
the Loan Agreement and shall be effective upon execution hereof:
a. The definition of "Lenders" set forth in the Loan Agreement
is hereby amended to delete all references to Fleet.
b. Schedule A currently attached to the Loan Agreement shall
be deleted in its entirety and replaced with the form of Schedule A attached to
this Amendment.
2. Representations and Warranties. Borrower warrants and represents to Lenders
that:
a. Prior Representations. By execution of this Amendment, Borrower reconfirms
that all warranties and representations made to Lenders under the Loan Agreement
and the other Loan Documents are true and correct in all material respects as of
the date hereof, all of which shall be deemed continuing until all of the
Obligations to Lenders are paid and satisfied in full. Lenders acknowledge that
Borrower has notified Lenders of various lawsuits and claims referred in Note 11
to Borrower's financial statements included in Borrower's Form 10-Q for the
period ending June 30, 2003. In the opinion of management and based upon the
advice of counsel, the Borrower has meritorious defenses to the lawsuits and
claims; however the Borrower expresses no opinion herein with respect to the
Xxxxxx Suit. However, if material adverse determinations on either the lawsuits
or claims were to be rendered, such determinations will have a material adverse
impact on the results of operations in the period of the respective charges as
well as a material adverse impact on the financial position and liquidity of the
Borrower.
b. Authorization. The execution and delivery by Borrower of this Amendment and
the performance by Borrower of the transactions herein contemplated (i) are and
will be within its powers and (ii) are not and will not be in contravention of
any order of court or other agency of government, of law or of any indenture,
agreement or undertaking to which Borrower is a party or by which the property
of Borrower is bound, or be in conflict with, result in a breach of or
constitute (with due notice and/or lapse of time) a default under any such
indenture, agreement or undertaking, or result in the imposition of any lien,
charge or encumbrance of any nature on any of the properties of Borrower.
c. Valid, Binding and Enforceable. This Amendment and any other instrument,
document or agreement executed and delivered in connection herewith, will be
valid, binding and enforceable in accordance with their respective terms subject
to bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and general equitable principles.
d. Costs. Upon execution hereof, Borrower shall pay all costs (including
attorneys' fees of Lenders) attendant to this Amendment.
3. Ratification of Loan Documents. This Amendment is hereby incorporated into
and made a part of the Loan Agreement and all other Loan Documents respectively,
the terms and provisions of which, except to the extent modified by this
Amendment are each ratified and confirmed and continue unchanged in full force
and effect. Borrower acknowledges and agrees that, to its knowledge, it has no
defenses, set-offs, counterclaims or deductions of any nature with respect to
its obligations to Lender. Any reference to the Loan Agreement and all other
Loan Documents respectively in this or any other instrument, document or
agreement related thereto or executed in connection therewith shall mean the
Loan Agreement and all other Loan Documents respectively as amended by this
Amendment. The Loan Agreement and this Amendment shall be construed as
integrated and complementary of each other, and augmenting and not restricting
Lender's powers, rights, remedies and security. If, after applying the
foregoing, an inconsistency still exists, the provisions of this Amendment shall
control.
4. Effectiveness Conditions. This Amendment shall become effective upon the full
execution of this Amendment and the following:
a. The execution and delivery by the Borrower of a Third Amended and Restated
Revolving Credit Note for each of the Lenders for the total principal amount of
such Lender's Revolving Credit Facility Pro Rata Share, in the form set forth on
Exhibit 2.1 of the Loan Agreement;
b. Payment by Borrower of the Lender's legal fees attendant to this Amendment;
c. Payment by Fleet to Agent of the assignment fees required under the Loan
Agreement, in the aggregate amount of $7,000.00, for the assignment of interests
contemplated hereunder;
d. A Certificate of the Secretary or Assistant Secretary of the Borrower, dated
the date hereof, including (i) resolutions duly adopted by the Borrower
authorizing this Amendment, and (ii) evidence of the incumbency and signature of
the officers executing the Amendment on the Borrower's behalf;
e. The execution and delivery of the Assignment and Assumption by the Borrower
and each Lender; and
f. Any other documents reasonably required by Agent or Lenders.
5. Dissolution of Pinnacle Consulting, Inc. and Software Analysis & Management,
Inc. Provided the conditions precedent set forth in Paragraph 4 above are
satisfied and this Agreement becomes effective, Lenders consent to (i) the prior
dissolution of Pinnacle Consulting, Inc., and (ii) the dissolution of Software
Analysis & Management, Inc. promptly following the execution of this Agreement.
6. Governing Law. This Amendment and all instruments, documents and agreements
and the rights and obligations of the parties hereto and thereto shall be
governed by and interpreted in accordance with the substantive laws of the
Commonwealth of Pennsylvania.
7. Severability. The invalidity or unenforceability of any provision of this
Amendment shall not affect the validity or enforceability of the remaining
provisions.
8. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
9. Modification. This Amendment may not be modified, amended or terminated
except by an agreement in writing executed by the parties hereto.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement the day and year first above written.
BORROWER: RCM TECHNOLOGIES, INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
CATARACT, INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
RCM TECHNOLOGIES (USA), INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
PROGRAMMING ALTERNATIVES
OF MINNESOTA, INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
SOFTWARE ANALYSIS & MANAGEMENT, INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
RCMT DELAWARE, INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
RCM TECHNOLOGIES CANADA CORP.
By:_____________________________________
Name:___________________________________
Title:____________________________________
BUSINESS SUPPORT GROUP OF MICHIGAN, INC.
By:_____________________________________
Name:___________________________________
Title:____________________________________
AGENT: CITIZENS BANK OF PENNSYLVANIA, as Administrative Agent and Arranger
By:_____________________________________
Name:___________________________________
Title:____________________________________
LENDERS: CITIZENS BANK OF PENNSYLVANIA, as Lender
By:_____________________________________
Name:___________________________________
Title:____________________________________
SUNTRUST BANK, ATLANTA, as Documentation Agent and Lender
By:_____________________________________
Name:___________________________________
Title:____________________________________
FLEET NATIONAL BANK, as Syndication Agent and Lender
By:_____________________________________
Name:___________________________________
Title:____________________________________
SCHEDULE A
REVOLVING CREDIT FACILITY PRO RATA SHARES
Revolving Credit Revolving Credit Facility
Lender Facility Pro Rata Share Pro Rata Percentage
------ ----------------------- -------------------
Citizens Bank of Pennsylvania $15,000,000.00 60%
Sun Trust Bank $10,000,000.00 40%
TOTAL COMMITMENT $25,000,000.00 100%
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