Nevada
(State or Other
Jurisdiction of
Incorporation)
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1-10245
(Commission File
Number)
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95-1480559
(I.R.S. Employer
Identification No.)
|
2500 McClellan Avenue, Suite 350
|
||
Pennsauken, NJ
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08109-4613
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(Address of Principal Executive Offices)
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(Zip Code)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).
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[ ]
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)).
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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||
Common Stock, par value $0.05 per share
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RCMT
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The NASDAQ Stock Market LLC
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Number
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Description
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10.1 |
Stock Purchase Agreement, dated as of June 2, 2020, by and among RCM Technologies, Inc., the other Purchasers named therein and the
Selling Stockholders named therein.
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10.2 |
9.00% Subordinated Note, dated as of June 2, 2020, made by RCM Technologies, Inc. in favor of IRS Partners No. 19, L.P.
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10.3 |
Subordination Agreement, dated as of June 2, 2020, by and among RCM Technologies, Inc., the subsidiaries of RCM Technologies, Inc. listed on the signature pages thereto, IRS Partners No.
19, L.P. and Citizens Bank, N.A.
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10.4 |
Amendment No. 2 to Third Amended and Restated Loan Agreement, dated as of June 2, 2020, by and among RCM Technologies, Inc., all of the subsidiaries of RCM Technologies, Inc. and
Citizens Bank, N.A., a national banking association (as successor by merger to Citizens Bank of Pennsylvania), in its capacities as lender and as administrative agent and arranger.
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RCM TECHNOLOGIES, INC.
(Registrant) |
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Date: June 2, 2020
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By:
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/s/ Kevin D. Miller
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|
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Name: Kevin D. Miller
Title: Chief Financial Officer
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a.
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the Cash Purchase Price, by wire transfer of immediately available funds to an account designated by the Selling Stockholders;
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b.
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the counterpart of this Agreement duly executed by each Purchaser as of the Closing;
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c.
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the Promissory Notes duly executed by the Company as of the Closing; and
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d.
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any other documents or instruments that the Selling Stockholders may reasonably deem necessary or desirable to effect or evidence the transactions contemplated
hereby.
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a.
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the counterpart of this Agreement duly executed by each Selling Stockholder as of the Closing;
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b.
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certificates for the Shares duly issued to the Purchasers, together with stock powers duly signed for all right, title, and interest in the Shares, or evidence of the
electronic transfer of such Shares; and
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c.
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any other documents or instruments that the Purchasers may reasonably deem necessary or desirable to effect or evidence the Sale Transaction.
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IRS PARTNERS NO. 19, L.P.
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By:
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/s/ Michael F. O’Connell
|
Name: Michael F. O’Connell
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Title: President
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THE LEONETTI/O’CONNELL FAMILY FOUNDATION
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By:
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/s/ Michael F. O’Connell
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Name: Michael F. O’Connell
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Title: CFO
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M20, INC
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By:
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/s/ Michael F. O’Connell
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Name: Michael F. O’Connell
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Title: President
|
|
THE MICHAEL F. O’CONNELL AND MARGO L. O’CONNELL REVOCABLE TRUST
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By:
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/s/ Michael F. O’Connell
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Name: Michael F. O’Connell
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Title: Trustee
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By:
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/s/ Michael F. O’Connell
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Michael O’Connell, an individual
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By:
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/s/ Bradley S. Vizi |
Name: Bradley S. Vizi
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By:
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/s/ Bradley S. Vizi
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Bradley S. Vizi, an individual
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By:
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/s/ Kevin D. Miller
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Name: Kevin D. Miller
|
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Title: Chief Financial Officer
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By:
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/s/ Bradley S. Vizi
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Bradley S. Vizi, an individual
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By:
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/s/ Kevin D. Miller
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Kevin D. Miller, an individual
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By:
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/s/ Roger H. Ballou
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Roger H. Ballou, an individual
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Name of Selling
Stockholder
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Number of
Shares To Be
Sold Under This Agreement
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Principal
Amount of Promissory
Note
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Address
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IRS Partners No. 19, L.P.
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2,692,065
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$2,229,766.80
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c/o Harvest Financial Corporation
1600 Benedum-Trees Bldg.
223 Fourth Ave., Pittsburgh, PA 15222
E-mail:
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The Leonetti/O’Connell Family Foundation
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266,074
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--
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c/o Harvest Financial Corporation
1600 Benedum-Trees Bldg.
223 Fourth Ave., Pittsburgh, PA 15222
E-mail:
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M20, Inc.
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--
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--
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c/o Harvest Financial Corporation
1600 Benedum-Trees Bldg.
223 Fourth Ave., Pittsburgh, PA 15222
E-mail:
|
The Michael F. O’Connell and Margo L. O’Connell Revocable Trust
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--
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--
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c/o Harvest Financial Corporation
1600 Benedum-Trees Bldg.
223 Fourth Ave., Pittsburgh, PA 15222
E-mail:
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Michael O’Connell
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--
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--
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c/o Harvest Financial Corporation
1600 Benedum-Trees Bldg.
223 Fourth Ave., Pittsburgh, PA 15222
E-mail:
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Harvest Financial Corporation
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--
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--
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c/o Harvest Financial Corporation
1600 Benedum-Trees Bldg.
223 Fourth Ave., Pittsburgh, PA 15222
E-mail:
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Bradley S. Vizi
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--
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--
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c/o Harvest Financial Corporation
1600 Benedum-Trees Bldg.
223 Fourth Ave., Pittsburgh, PA 15222
E-mail:
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Name of Purchaser
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Number of Shares To Be Purchased Under This Agreement
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Portion of Cash
Purchase Price Payable
by Purchaser
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RCM Technologies, Inc.
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1,858,139
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$0
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Bradley S. Vizi
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850,000
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$1,020,000
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Kevin D. Miller
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150,000
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$180,000
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Roger H. Ballou
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100,000
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$120,000
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U.S. $2,229,766.80
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JUNE 2, 2020
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MAKER:
RCM TECHNOLOGIES, INC.
By: /s/ Kevin D. Miller
Name: Kevin
D. Miller
Title: Chief
Financial Officer
Address: 2500
McClellan Avenue, Suite 350
Pennsauken, NJ 08109
Attention: Chief Financial Officer
E-mail Address: kevin.miller@rcmt.com
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IRS PARTNERS NO. 19, L.P., as Subordinated Creditor
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BY: M20, INC., its General Partner
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By: /s/ Michael F. O’Connell
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Name: Michael F. O’Connell
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Title: President
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CITIZENS BANK, N.A., in its capacity as Senior Agent
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By: /s/ Lisa S. Williams
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Name: Lisa S. Williams
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Title: SVP
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RCM TECHNOLOGIES, INC,, as a Borrower
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By: /s/ Kevin D. Miller
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Name: Kevin D. Miller
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Title: CFO
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RCM TECHNOLOGIES (USA), INC., as a Borrower
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By: /s/ Kevin D. Miller
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Name: Kevin D. Miller
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Title: CFO
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RCMT DELAWARE, INC., as a Borrower
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By: /s/ Kevin D. Miller
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Name: Kevin D. Miller
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Title: CFO
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RCM TECHNOLOGIES CANADA CORP., as a Borrower
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By: /s/ Kevin D. Miller
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Name: Kevin D. Miller
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Title: CFO
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RCMT EUROPE HOLDINGS, INC., as a
Borrower
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By: /s/ Kevin D. Miller
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Name: Kevin D. Miller
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Title: CFO
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(i)
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the Administrative Agent determines (which determination shall be conclusive absent manifest error) that
adequate and reasonable means do not exist for ascertaining the Adjusted LIBOR Rate or the LIBOR Rate, as applicable, for such Interest Period or
ascertaining the Daily LIBOR Rate for a Daily LIBOR Rate Borrowing, as the case may be; or
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(ii)
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the Administrative Agent is advised by the Required Lenders that the Adjusted LIBOR Rate or the LIBOR
Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost of making or maintaining their Loans included in such Borrowing for such Interest Period or that the Daily LIBOR Rate will not adequately and
fairly reflect the cost of making or maintaining of a Daily LIBOR Rate Borrowing;
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(i)
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Benchmark
Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, the
Administrative Agent and the Borrowers may amend this Agreement to replace the LIBOR Rate with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. on the fifth (5th)
Business Day after the Administrative Agent has posted such proposed amendment to all Lenders and the Borrowers so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders
comprising the Required Lenders. Any such amendment with respect to an Early Opt-in Election will become effective on the date that Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that
such Required Lenders accept such amendment. No replacement of the LIBOR Rate with a Benchmark Replacement pursuant to this Section 3.3(c) will occur prior
to the applicable Benchmark Transition Start Date.
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(ii)
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Benchmark
Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes
from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of
any other party to this Agreement.
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(iii)
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Notices;
Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrowers and the Lenders of (A) any occurrence of a Benchmark Transition Event or an Early Opt-in
Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (B) the implementation of any Benchmark Replacement, (C) the effectiveness of any Benchmark Replacement Conforming Changes and (D)
the commencement or conclusion of any Benchmark Unavailability Period, provided that the failure to give such notice under this clause (iii) shall not
affect the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or Lenders pursuant to this Section 3.3(c), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain
from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 3.3(c).
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(iv)
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Benchmark
Unavailability Period. Upon the commencement of a Benchmark Unavailability Period, the Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Rate
Loans to be made, converted or continued during such Benchmark Unavailability Period and, failing that, the Borrowers will be deemed to have converted any such request into a request for a Borrowing of or conversion to Prime Rate Loans.
During any Benchmark Unavailability Period, (A) the obligation of the Lenders to make or maintain LIBOR Rate Loans shall be suspended, and (B) any request for a Borrowing of, conversion to or continuation of LIBOR Rate Loans shall be
ineffective and will be deemed to have been a request for a Borrowing of or conversion to Prime Rate Loans.”
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(v)
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After March 31, 2020 but on or prior to June 30, 2020, the Consolidated Total Funded Debt to
Consolidated EBITDA Ratio shall at no time exceed 5.00 to 1.00.
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(vi)
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After June 30, 2020, but on or prior to September 30, 2020, the Consolidated Total Funded Debt to
Consolidated EBITDA Ratio shall at no time exceed 3.75 to 1.00.
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(vii)
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After September 30, 2020, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no
time exceed 3.00 to 1.00.”
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(i)
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The ratio of (A) 0.75 multiplied by the net book value of the Borrowers’ accounts receivable (as determined in
accordance with GAAP), to (B) the Total Revolving Outstandings shall at no time after March 31, 2020 but prior to September 30, 2020 be less than 1.10 to 1.00; and
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(ii)
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The ratio of (A) 0.75 multiplied by the net book value of the Borrowers’ accounts receivable (as determined in
accordance with GAAP), to (B) the Total Revolving Outstandings shall at no time on or after September 30, 2020 be less than 1.25 to 1.00.”
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BORROWERS:
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RCM TECHNOLOGIES, INC.
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||||
By:
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/s/ Kevin D. Miller |
||||
Print Name:
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Kevin D. Miller | ||||
Title:
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CFO | ||||
RCM TECHNOLOGIES (USA), INC.
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|||||
By:
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/s/ Kevin D. Miller | ||||
Print Name:
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Kevin D. Miller | ||||
Title:
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CFO | ||||
RCMT DELAWARE, INC.
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|||||
By:
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/s/ Kevin D. Miller | ||||
Print Name:
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Kevin D. Miller | ||||
Title:
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CFO | ||||
RCM TECHNOLOGIES CANADA CORP.
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|||||
By:
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/s/ Kevin D. Miller | ||||
Print Name:
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Kevin D. Miller | ||||
Title:
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CFO | ||||
RCM EUROPE HOLDINGS, INC.
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|||||
By:
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/s/ Kevin D. Miller | ||||
Print Name:
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Kevin D. Miller | ||||
Title:
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CFO |
AGENT:
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CITIZENS BANK, N.A.,
as Administrative Agent and Arranger |
|||||
By:
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/s/ Lisa S. Williams |
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Print Name:
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Lisa S. Williams | |||||
Title:
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SVP | |||||
LENDERS:
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CITIZENS BANK, N.A., as Lender
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|||||
By:
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/s/ Lisa S. Williams | |||||
Print Name:
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Lisa S. Williams | |||||
Title:
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SVP |
General Financial Data
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Latest 12 months
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||||
Funded Debt
|
|||||
Cash on balance sheet as of last day of fiscal period
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|||||
Determination of Actual EBITDA - Trailing Twelve Months ("LTM")
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|||||
(i)
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Operating Income
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||||
(ii)
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Depreciation & Amortization
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Add:
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(ii)
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Non-Cash Charges, Equity Based Compensation
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Add:
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(iii)
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Net loss if any arising solely from Permitted Asset or Stock
Sales (up to an amount, which when added to other net
losses previously recognized does not exceed
$5,000,000 in the aggregate)
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Add:
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Nonrecurring charges waiver
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Actual EBITDA LTM
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|||||
Acquired EBITDA LTM:
|
|||||
TKE
|
|||||
Total EBITDA LTM
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|||||
7.10 (a) Fixed Charge Ratio
|
|||||
EBITDA LTM
|
|||||
Divided By LTM:
|
|||||
Interest Paid
|
|||||
Income Taxes Paid
|
|||||
Scheduled Principal Payments
|
|||||
Capex
|
|||||
Dividends Paid
|
|||||
Total
|
|||||
Actual Fixed Charge Ratio
|
|||||
Minimum Fixed Charge Ratio
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1.50 to 1.00
|
||||
Compliance
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Yes_____
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No_____
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7.10 (b) Capital Expenditures
|
|||||
Actual Capex LTM
|
|||||
Purchase Money Financing
|
|||||
Total
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|||||
Maximum Capex
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$5,000
|
||||
Compliance
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Yes_____
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No_____
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7.10 (c) Total Funded Debt to EBITDA
|
|||||
Total Funded Debt
|
|||||
Cash on balance sheet as of last day of fiscal period,
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|||||
Max $2M
|
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EBITDA LTM
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|||||
Actual Funded Debt (less cash on balance sheet up to maximum of
$2,000) to EBITDA
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Maximum Funded Debt to EBITDA
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|||||
Compliance
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Yes_____
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No_____
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7.10 (d) Modified Current Ratio
|
|||||
Total Net Accounts Receivable
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|||||
0.75 times Total Net Accounts Receivable
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Total Revolving Outstandings
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|||||
Actual Current Ratio
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Minimum Current Ratio Required
|
|||||
Compliance
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Yes_____
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No_____
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