FIRST AMENDMENT TO REPAYMENT AND SECURITY AGREEMENT
This First Amendment to Repayment and Security Agreement (the "Amendment")
is made as of this 29th day of February 2008, by and among (I) RCM TECHNOLOGIES,
INC. and RCM TECHNOLOGIES SERVICES COMPANY, INC. (collectively, "RCM"), (II)
IDEAL INTERIORS, INC. ("IDEAL"), CREATIVE INTERIORS PLUS, LLC ("CREATIVE"), DJJ,
INC. ("DJJ") and IDEAL STRUCTURAL SECURITY, INC. ("STRUCTURAL", together with
IDEAL, CREATIVE, DJJ and STRUCTURAL, collectively the "Trade Debtors"), and
(III) Xxxxx X. XxXxxxxx, Xxxxxxx X. Xxxxxx, Cadil Xxxxxxxxx and Xxxxx Xxxxxxxx
(collectively the "Guarantors", together with the Trade Debtors, collectively
the "Obligors").
WHEREAS, RCM and the Obligors entered into the Repayment and Security
Agreement dated as of February 26, 2008 (the "Repayment Agreement"). Capitalized
terms not otherwise defined in this Amendment shall have the meanings assigned
to them in the Repayment Agreement.
WHEREAS, the Trade Debtors have requested that RCM agree to extend (i)
the date of payment of the Down Payment, and (ii) the Closing Deadline, and RCM
is willing to do so in accordance with the terms and conditions of this
Amendment.
WHEREAS, one or more of the Trade Debtors is trading and conducting
business and/or has traded and/or conducted business under the trade name "Ideal
Construction" and named and/or designated "Ideal Construction" as the contractor
in certain construction contracts in which one or more of the Trade Debtors is a
party (collectively, the "Ideal Construction Contracts"; each an "Ideal
Construction Contract"), including but not limited to that certain AIA Standard
Form of Agreement Between Owner and Contractor dated July 5, 2007, between Ideal
Construction and YMCA of Greater New York attached hereto as Exhibit "A" (the
"YMCA Contract").
WHEREAS, the Obligors have agreed to provide certain assurances to RCM
with regard to their use of the trade name "Ideal Construction" and the Ideal
Construction Contracts in accordance with the terms of this Amendment.
NOW THEREFORE, for and in consideration of the foregoing recitals which
are incorporated herein by reference, the agreements and terms set forth below,
and intending to be legally bound hereby, the parties hereto agree to amend the
Repayment Agreement as follows:
1. The Repayment Agreement is amended to add the following
representation and warranty immediately preceding the last sentence of Section 8
thereof:
"To further induce RCM to enter into this Agreement, Obligors
agree and represent and warrant to RCM that:
a. no Obligor, either directly or indirectly through
any other person or entity, owns, controls or has any interest
in any of the separate legal entities listed on Exhibit "B"
attached hereto (collectively, the "Ideal Construction
Corporations") or any other separate legal entity which has a
name that contains "Ideal Construction" or that trades as
"Ideal Construction";
b. the name "Ideal Construction" is used solely as a
trade name by one or more of the Trade Debtors;
c. the interest of the contractor in any and all of
the Ideal Construction Contracts, including especially and
without limitation the YMCA Contract, is the sole property of
one or more of the Trade Debtors; and
d. RCM has a valid and enforceable security interest
in and lien upon the Collateral, regardless of whether such
Collateral arises out of any of the Ideal Construction
Contracts, including especially and without limitation the
YMCA Contract.
2. Upon the parties' execution of this Amendment:
a. Trade Debtors shall execute and deliver to RCM a Note dated
as of February 26, 2008 in the amount of $7,456,252.93 for the repayment of the
Trade Debt in the form attached hereto as Exhibit "C" (the "Replacement Note").
Effective upon RCM's receipt of the original, fully-executed Replacement Note:
(i) the Replacement Note shall replace and supersede the Note that Trade Debtors
executed and delivered to RCM pursuant to the Repayment Agreement, and RCM
agrees to promptly return the Note to Trade Debtors; (ii) all references to the
Note in the Repayment Agreement shall refer to the Replacement Note; and (iii)
Guarantors agree and confirm that their Guarantees shall remain in full force
and effect, apply to Trade Debtors' obligations under the Replacement Note and
that the "Note" (as defined in the Guarantees) shall mean and refer to the
Replacement Note.
b. Ideal and RCM shall execute and deliver to Prestige the
Subordination and Intercreditor Agreement among RCM, Prestige and Ideal in the
form attached hereto as Exhibit "D" (the "Replacement Intercreditor Agreement")
which the parties agree shall replace and supersede the Intercreditor Agreement.
All references to the Intercreditor Agreement in the Repayment Agreement shall
refer to the Replacement Intercreditor Agreement.
3. Notwithstanding anything to the contrary in the Repayment Agreement,
satisfaction of the Closing Conditions shall no longer be required as a
condition to the effectiveness of the Repayment Agreement. RCM acknowledges
receipt of the Note, Guarantees and certified list of construction contracts and
agrees to extend the time for payment of the $1,200,000.00 Down Payment as
follows: (a) $1,000,000.00, plus accrued interest on the Trade Debt, shall be
paid on or before March 4, 2008; and (b) $200,000.00, plus accrued interest on
the outstanding Trade Debt shall be paid on or before March 14, 2008. The Down
Payment shall be paid by wire transfer of immediately available funds payable to
RCM directly out of the proceeds of financing to be provided to Ideal by
Prestige, with the Trade Debtors remaining liable to RCM for any deficiencies.
The Down Payment, to the extent received by RCM, shall be applied to the Trade
Debt in any manner that RCM sees fit in its sole discretion.
4. The parties hereto agree and confirm that the Repayment Agreement is
in full force and effect and remains unmodified, except as amended in this
Amendment. To the extent there is any inconsistency or conflict between the
Repayment Agreement and this Amendment, the terms and provisions of this
Amendment shall govern and control.
IN WITNESS WHEREOF, the
parties hereto have
executed this Amendment
as of this 29th day of
February, 2008. RCM
TECHNOLOGIES SERVICES
COMPANY, INC.
By:
Name:
Title:
RCM TECHNOLOGIES, INC.
By: __________________________________
Name:
Title:
IDEAL INTERIORS, INC.
By:
Name:
Title:
CREATIVE INTERIORS PLUS, LLC.
By:
Name:
Title:
DJJ, INC..
By:
Name:
Title:
IDEAL STRUCTURAL SECURITY, INC.
By:
Name:
Title:
Guarantors:
------------------------------
Xxxxx X. XxXxxxxx, individually
-------------------------------
Xxxxxxx X. Xxxxxx, individually
-------------------------------
Cadil Xxxxxxxxx, individually
-------------------------------
Xxxxx Xxxxxxxx, individually
EXHIBIT "A"
[AIA Standard Form of Agreement Between Owner and Contractor dated
July 5, 2007, between Ideal Construction and YMCA of Greater New York]
EXHIBIT "B"
[Ideal Construction Corporations]
EXHIBIT "C"
[RELACEMENT NOTE]
EXHIBIT "D"
[REPLACEMENT INTERCREDITOR AGREEMENT]
