STOCK PURCHASE AGREEMENT

BY AND AMONG

RCM TECHNOLOGIES, INC.,

THE OTHER PURCHASERS NAMED HEREIN

AND

THE SELLING STOCKHOLDERS NAMED HEREIN

June 2, 2020

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of June 2, 2020, by and among RCM Technologies, Inc., a Nevada corporation (the “Company”), Bradley S. Vizi, Kevin D. Miller, and Roger H. Ballou (each an “Individual Purchaser” and together with the Company, each a “Purchaser” and collectively the “Purchasers”), and each of the stockholders of the Company listed on Schedule A hereto (each a “Selling Stockholder” and collectively the “Selling Stockholders”). The Purchasers and the Selling Stockholders are sometimes referred to herein collectively as the “Parties.”

RECITALS

WHEREAS, the Selling Stockholders collectively beneficially own in the aggregate 2,958,139 shares (the “Shares”) of the Company’s common stock, par value $0.05 per share (“Common Stock”), and together constitute a “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended; and

WHEREAS, the Purchasers now desire to purchase, and each of the Selling Stockholders desires to sell, the Shares (the “Sale Transaction”) for a purchase price equal to $1.20 per share of Common Stock, such that the aggregate purchase price for the Shares shall be $3,549,766.80 (the “Purchase Price”), pursuant to this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, agreements and representations contained in this Agreement, the Parties agree as follows:

ARTICLE I
Purchase and Sale

Section 1.1 Agreement to Purchase and Sell.  Upon the terms contained in this Agreement and subject to the conditions set forth herein, on the Closing Date (as hereinafter defined), each Selling Stockholder will sell, assign, transfer and deliver to the Purchasers the number of Shares set forth opposite the name of such Selling Stockholder on Schedule A hereto, and each Purchaser will purchase from the Selling Stockholders the number of Shares set forth opposite the name of such Purchaser on Schedule B hereto.

Section 1.2 Purchase Price.  In consideration for the sale, assignment, and transfer of the Shares on the Closing Date, the Purchasers will purchase the Shares by (i) making an aggregate cash payment to the Selling Stockholders of $1,320,000 (the “Cash Purchase Price”), which Cash Purchase Price shall be paid in the manner and at the times set forth in Section 3.2 and shall be allocated among the Purchasers in the amounts set forth opposite the name of such Purchaser on Schedule B hereto and (ii) delivering to each Selling Stockholder an unsecured subordinated promissory note (collectively, the “Promissory Notes”) representing the balance of the Purchase Price due and owing to each Selling Stockholder, as set forth on Schedule A hereto. Each Selling Stockholder will deliver a certificate representing the Shares to the Purchasers, or provide evidence of the electronic transfer of the Shares to the Purchasers, in the respective numbers of Shares set forth opposite the name of such Purchaser on Schedule B hereto, at, or as soon as practicable after, the Closing (as hereinafter defined).

Section 1.3 Time and Place of Closing.  The Sale Transaction shall take place remotely via the exchange of documents and signatures contemporaneously with the execution of this Agreement on the date hereof or such other date or place as shall be mutually agreed upon by the Parties (the “Closing Date” or the “Closing”).

Section 1.4 Payment Method.  Payment of the Cash Purchase Price shall be made in full on the Closing Date.  Any payment of cash to a Selling Stockholder to be made under this Agreement shall be made in immediately available funds by wire transfer to an account designated by such Selling Stockholder.  Payment of the remainder of the Purchase Price shall be made in the form of delivery to the Selling Stockholders of the Promissory Notes.

Section 1.5 Share Transfer.  Each Selling Stockholder shall render assistance and support to the Purchasers in order for the share certificates representing the Shares to be registered in the name of each Purchaser or for electronic delivery of the Shares to the Purchasers to be effected, as applicable.

ARTICLE II
Representations and Warranties

Section 2.1 Representations and Warranties of the Selling Stockholders.  Each Selling Stockholder represents and warrants, severally and not jointly, to the Purchasers as of the Closing Date as follows:

a. Authority and Capacity.  Such Selling Stockholder has the legal authority and capacity to enter into this Agreement.  Such Selling Stockholder has good, valid and marketable title to all of the Shares to be sold by such Selling Stockholder to the Purchasers under the terms of this Agreement and such Selling Stockholder has the full and absolute right, power and authority to sell the Shares to be sold by such Selling Stockholder to the Purchasers, free and clear of all liens, pledges, security interest, and encumbrances, except for such restriction thereon imposed by applicable securities laws. There are no outstanding securities, options, warrants, calls, rights, conversion rights, preemptive rights, rights of first refusal, redemption rights, repurchase rights, plans, “tag-along” or “drag along” rights, commitments, agreements, arrangements or undertakings giving any person other than the Purchasers a right to acquire, directly or indirectly, any of the Shares held by such Selling Stockholder. The execution and delivery of this Agreement is such Selling Stockholder’s legal, valid, and binding obligation, enforceable in accordance with the terms of this Agreement, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting enforcement of creditors’ rights generally, and general principles of equity.

b. No Conflicts.  Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which such Selling Stockholder is subject or (ii) conflict with, or result in a breach of, constitute a default under, result in the

acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which such Selling Stockholder is a party or by which it is bound or to which the Shares to be sold by such Selling Stockholder are subject (or result in the imposition of any security interest upon the Shares to be sold by such Selling Stockholder) other than such breaches or violations as have been cured or otherwise waived by the counterparty thereto and such Selling Stockholder is released from liability for such breaches.  To such Selling Stockholder’s knowledge, such Selling Stockholder is not required to give notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the Sale Transaction.

c. Community Property.  The Shares being sold under this Agreement by such Selling Stockholder may be owned by such Selling Stockholder as community property under the laws of the state where such Selling Stockholder is domiciled.  Accordingly, the Shares being sold by such Selling Stockholder under this Agreement shall also include the community property interest, if any, of such Selling Stockholder’s spouse, as evidenced by such spouse’s consent to sale executed prior to or as of the Closing Date.

d. Information Available to the Selling Stockholders.  The Selling Stockholders acknowledge that:

(i) One or more of the Purchasers may have or be deemed to have possession of, or may have or be deemed to have received or obtained, material, non-public information concerning the Shares and/or the Company (collectively, the “Excluded Information”)  that the Selling Stockholders do not possess or have access to, and as a consequence, there may exist a disparity of information between the Purchasers and the Selling Stockholders with respect to the Shares and/or the Company.

(ii) The Excluded Information could be indicative of a value of the Shares that is higher than the purchase price reflected in the Sale Transaction or could otherwise be adverse to the Selling Stockholders and such Excluded Information may be material to a decision by the Selling Stockholders to sell the Shares.

(iii) None of the Purchasers shall be obligated to disclose any Excluded Information to any Selling Stockholder or have any liability with respect to any such non-disclosure.  As a conditions to the Purchasers’ agreement to buy the Securities, to the fullest extent permitted by law, each Selling Stockholder hereby releases and waives any and all claims, causes of action, actions, proceedings, suits, judgments, liens and executions, claims and causes of action, whether known or unknown, now or hereafter arising against Purchasers, based upon or relating to such non-disclosure or the Selling Stockholder’s failure to review the Excluded Information and further covenants not to sue the Purchasers for any loss, damage or liability arising from or relating to the Sale Transaction.

(iv) Each Selling Stockholder: (a) is a sophisticated purchaser with respect to the Shares, (b) has adequate information concerning the Shares, (c) has adequate information concerning the business and financial condition of the Company and all controlled affiliates of the Company, (d) has conducted, to the extent he deemed necessary, an independent

investigation of such matters as, in such Selling Stockholder’s judgment, is necessary for such Selling Stockholder to make an informed investment decision with respect to the Shares, the Company and the Sale Transaction, and (e) has not relied upon any of the Purchasers for any investigation into, assessment of, or evaluation with respect to the Shares, the Company and/or the Sale Transaction.  Each Selling Stockholder further acknowledges that no Purchaser has made any representation or warranty whatsoever with respect to the business, condition (financial or otherwise), properties, prospects, creditworthiness, status or affairs of the Company or with respect to the value, terms or enforceability of the Shares.

Section 2.2 Representations and Warranties of the Purchasers.  Each Purchaser represents and warrants, severally and not jointly, to the Selling Stockholders as of the Closing Date as follows:

a. Authority.  Such Purchaser has the requisite corporate or individual power and authority, as applicable, to execute and deliver this Agreement and to consummate the Sale Transaction.  The execution, delivery and performance of this Agreement and each of the documents contemplated herein to which such Purchaser is a party have been duly authorized and approved.  All necessary action has been taken by or on behalf of such Purchaser, and no further action or approval is necessary to deliver and perform such Purchaser’s obligations hereunder.

b. Binding Effect.  This Agreement has been, and, as of the Closing Date, each of the other documents contemplated herein to which such Purchaser is a party will have been duly executed and delivered by such Purchaser.  This Agreement constitutes and, as of the Closing Date, each of the other documents contemplated herein, will constitute the legal, valid and binding obligations of such Purchaser, enforceable against such Purchaser in accordance with their respective terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting enforcement of creditors’ rights generally, and general principles of equity.

c. No Conflicts.  Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which such Purchaser is subject or (ii) conflict with, or result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which such Purchaser is a party or by which it is bound other than such breaches or violations as have been cured or otherwise waived by the counterparty thereto and such Purchaser is released from liability for such breaches.  To such Purchaser’s knowledge, such Purchaser is not required to give notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the Sale Transaction.

d. Purchase for Investment.  Each Individual Purchaser acknowledges that the Selling Stockholders are entering into this Agreement in reliance upon such Individual Purchaser’s representation to the Selling Stockholders, which by such Individual Purchaser’s execution of this Agreement such Individual Purchaser hereby confirms, that the Shares to be acquired by such Individual Purchaser will be acquired for investment for such Individual Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Individual Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, such Individual Purchaser further represents that such Individual Purchaser does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Shares.

e. Restricted Securities. Each Individual Purchaser understands that the Shares have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Individual Purchaser’s representations as expressed herein. Such Individual Purchaser understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, such Individual Purchaser must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Such Individual Purchaser acknowledges that the Company has no obligation to register or qualify the Shares for resale. Such Individual Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to the Company which are outside of such Individual Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.

ARTICLE III

Closing

Section 3.1 Form of Documents.  At the Closing, the Parties shall deliver the documents, and shall perform the acts, which are set forth in this Article III.  All documents to be delivered shall be in form and substance reasonably satisfactory to the party to whom such documents are to be delivered.

Section 3.2 The Purchasers’ Deliveries.  The Purchasers shall execute and/or deliver or make available to the Selling Stockholders at the Closing, as applicable, all of the following:

a.	the Cash Purchase Price, by wire transfer of immediately available funds to an account designated by the Selling Stockholders;

b.	the counterpart of this Agreement duly executed by each Purchaser as of the Closing;

c.	the Promissory Notes duly executed by the Company as of the Closing; and

d.	any other documents or instruments that the Selling Stockholders may reasonably deem necessary or desirable to effect or evidence the transactions contemplated hereby.

Section 3.3 The Selling Stockholders’ Deliveries.  The Selling Stockholders shall execute and/or deliver or make available to the Purchasers at the Closing, as applicable, all of the following:

a.	the counterpart of this Agreement duly executed by each Selling Stockholder as of the Closing;

b.	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

c.	any other documents or instruments that the Purchasers may reasonably deem necessary or desirable to effect or evidence the Sale Transaction.

ARTICLE IV

Miscellaneous

Section 4.1 Expenses.  The Parties shall pay their own expenses in connection with the authorization, preparation, execution and performance of this Agreement, including, without limitation, all fees and expenses of agents, representatives, counsel, accountants and consultants.

Section 4.2 Notices.  All notices, requests, demands and other communications provided for hereunder shall be in writing and directed to each applicable party at the address set forth hereafter or at such other address as to which such party may inform the other Parties in writing in compliance with the terms of this Section 4.2:

If to the Selling Stockholders, to the addresses set forth on Schedule A hereto.

If to the Purchasers:

c/o RCM Technologies, Inc.

2500 McClellan Avenue, Suite 350

Pennsauken, NJ 08109

Attention: Chief Financial Officer

E-mail:  kevin.miller@rcmt.com

with copies (which will not constitute notice) to:

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103

Attention: Justin W. Chairman

E-mail:  justin.chairman@morganlewis.com

Notices shall be deemed properly delivered and received when (i) if personally delivered, upon receipt thereof, (ii) if sent via electronic mail, upon transmission to the electronic mail address of the party to be notified, (iii) if sent by a commercial overnight courier for delivery on the next business day, on the first business day after deposit with such courier for delivery on the next business day, or (iv) if sent by registered or certified mail, three days after deposit thereof in the U.S. mail.

Section 4.3 Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and assigns.  No party shall assign any of its rights or obligations hereunder without the prior written consent of the other Parties. Any such assignment without the other Parties’ prior written consent shall be null and void.

Section 4.4 Further Assurances.  Each party hereto shall execute and deliver such additional instruments and other documents and shall take such further actions as may be necessary or appropriate to effectuate, carry out and comply with all of its obligations under this Agreement.

Section 4.5 Entire Agreement; Amendment.  This Agreement, including the exhibits and documents referred to herein, constitutes the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings.  The Parties may, by mutual consent, amend or modify and supplement this Agreement in such manner as may be agreed upon in writing.

Section 4.6 Waiver, Discharge, etc.  This Agreement may not be released, discharged or modified except by an instrument in writing signed on behalf of each of the Parties hereto.  The failure of a party to enforce any provision of this Agreement shall not be deemed a waiver by such party of any other provision or subsequent breach of the same or any other obligation hereunder.

Section 4.7 Governing Law.  This Agreement and all documents referred to in this Agreement shall be construed, and the rights of the Parties shall be governed by, laws of the State of Nevada, without regard to the conflicts of law principles thereof.

Section 4.8 Counterparts; Facsimile.  This Agreement and all documents referred to in this Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one Agreement.  Originally signed documents delivered by facsimile or other electronic means (e.g., pdf or electronic mail) shall have the same force and effect as original signatures.

Section 4.9 Severability.  Any portion of this Agreement which a court of competent jurisdiction shall determine to be void or unenforceable against public policy, or for any other reason, shall be deemed to be severable from this Agreement and shall have no effect on the other covenants or provisions in this Agreement.  It is agreed that the court shall be empowered to reform and construe any provision which would otherwise be void or unenforceable in a manner that will be valid and enforceable to the maximum extent permitted by law.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

SELLING STOCKHOLDERS:

IRS PARTNERS NO. 19, L.P.
By:	/s/ Michael F. O’Connell
	Name: Michael F. O’Connell
	Title: President
THE LEONETTI/O’CONNELL FAMILY FOUNDATION
By:	/s/ Michael F. O’Connell
	Name: Michael F. O’Connell
	Title: CFO
M20, INC
By:	/s/ Michael F. O’Connell
	Name: Michael F. O’Connell
	Title: President
THE MICHAEL F. O’CONNELL AND MARGO L. O’CONNELL REVOCABLE TRUST
By:	/s/ Michael F. O’Connell
	Name: Michael F. O’Connell
	Title: Trustee
By:	/s/ Michael F. O’Connell
	Michael O’Connell, an individual

HARVEST FINANCIAL CORPORATION

By:	/s/ Bradley S. Vizi
	Name: Bradley S. Vizi

By:	/s/ Bradley S. Vizi
	Bradley S. Vizi, an individual

[Additional Signature Page to Follow.]

PURCHASERS:

RCM TECHNOLOGIES, INC.

By:	/s/ Kevin D. Miller
	Name:  Kevin D. Miller
	Title:  Chief Financial Officer
By:	/s/ Bradley S. Vizi
	Bradley S. Vizi, an individual
By:	/s/ Kevin D. Miller
	Kevin D. Miller, an individual
By:	/s/ Roger H. Ballou
	Roger H. Ballou, an individual

THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (THE “SUBORDINATION AGREEMENT”) DATED AS OF JUNE 2, 2020, AMONG THE PAYEE (AS DEFINED BELOW), RCM TECHNOLOGIES, INC., A NEVADA CORPORATION, AND CITIZENS BANK, N.A.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE.  NEITHER THIS NOTE, NOR ANY PORTION THEREOF, NOR ANY INTEREST THEREIN, MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH STATE LAWS.

9.00% SUBORDINATED NOTE

U.S. $2,229,766.80

JUNE 2, 2020

FOR VALUE RECEIVED, and intending to be legally bound, RCM Technologies, Inc., a Nevada corporation (the “Maker”), on this ___ day of June, 2020, hereby promises to pay, in lawful money of the United States of America, which shall be legal tender for payment of public and private debts, to the order of IRS Partners No. 19, L.P. (the “Payee”), at the address of c/o Harvest Financial Corporation, 1600 Benedum-Trees Bldg., 223 Fourth Ave., Pittsburgh, PA 15222, or at such other place as the Payee shall from time to time designate in writing, the principal amount of TWO MILLION TWO HUNDRED TWENTY-NINE THOUSAND SEVEN HUNDRED SIXTY-SIX DOLLARS AND EIGHTY CENTS ($2,229,766.80) in accordance with the terms contained in this 9.00% Subordinated Note (this “Note”), the Subordination Agreement and that certain Stock Purchase Agreement dated as of the date hereof, by and among the Maker, the other Purchasers named therein and the Selling Stockholders named therein (the “Purchase Agreement”). In addition, the Maker hereby agrees to pay interest on the unpaid principal balance of this Note from September 1, 2020 until paid at the annual rate of 9.00% (the “Interest Rate”), compounded annually, calculated on the basis of a 360-day year consisting of twelve 30-day months in accordance with the terms set forth below in this Note.  Each holder of this Note, by its acceptance hereof, irrevocably agrees to be bound by the terms set forth herein.

1. Scheduled Payments.  Subject to the provisions of the Subordination Agreement, the Maker shall pay interest quarterly in arrears commencing on September 1, 2020 and continuing on each December 1, March 1, June 1 and September 1 thereafter.  Subject to the provisions of the Subordination Agreement, the Maker shall pay the principal amount of this Note on or before August 10, 2023 (the “Maturity Date”). To the extent permitted by the Subordination Agreement, the outstanding principal amount of this Note may be prepaid, in whole or in part, at any time and without penalty or premium.

2. Default.  The Maker shall be in default hereunder upon the occurrence of any of the following events (each an “Event of Default”): (a) if the Maker fails to pay the unpaid principal amount of this Note on the Maturity Date and such failure continues for at least five days after notice of the failure; (b) if any written representation or warranty now or hereafter made by the Maker in connection with the debt evidenced by this Note is false or incorrect in any material respect and is not cured within 30 days of written notice thereof; (c) if the Maker shall (i) apply for or consent to the appointment of a receiver,

custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) be generally unable to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the United States Bankruptcy Code (11 U.S.C. § 101 et seq.), as amended (the “Federal Bankruptcy Code”), or any successor statute, (v) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vi) fail to controvert in a timely or appropriate manner, or acquiesce in writing to, any petition filed against the Maker in any involuntary case under such Federal Bankruptcy Code, or (vii) take any corporate action for the purpose of effecting any of the foregoing; or (d) if a proceeding or case shall be commenced against the Maker in any court of competent jurisdiction for (i) the winding up, or composition or readjustment of debts, of the Maker, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of the Maker or of all or any substantial part of its assets, or (iii) similar relief in respect of the Maker under any law providing for the relief of debtors, and such proceeding or case shall continue undismissed, or unstayed and in effect, for a period of 60 days, or an order for relief against the Maker shall be entered in an involuntary case under such Federal Bankruptcy Code. 

3. Remedies.

(a) Upon the occurrence of an Event of Default that shall be continuing, the balance of principal of and all accrued interest upon this Note shall become immediately due and payable (i) without any action or notice of any kind on the part of the Payee in the case of the occurrence of an Event of Default described in paragraphs (c) or (d) of Section 2 above; or (ii) in the case of other Events of Default, only upon declaration of such default by the Payee.

(b) The rights, powers and remedies provided herein in favor of the Payee shall not be deemed exclusive, but shall be cumulative, and shall be in addition to all other rights and remedies in favor of the Payee existing at law or in equity, including all of the rights, powers and remedies available to a creditor under the Uniform Commercial Code as in effect in the State of Nevada or any other appropriate jurisdiction, and may be exercised concurrently, independently or successively by the Payee in its discretion.

(c) The Maker shall pay on demand all costs of collection, including reasonable attorneys’ fees, incurred by the Payee with respect to any default by the Maker hereunder.  Such amounts, until paid by the Maker, shall be added to the principal hereof and bear interest at the Interest Rate.

4. Transfer. Neither this Note nor the right to receive payments hereunder may be transferred, assigned, pledged, hypothecated or otherwise encumbered, nor may any interest be granted herein or therein  without the prior written consent of the Maker.

5. Waivers; Amendments.  No delay on the part of the Payee in exercising any of its options, powers or rights, and no partial or single exercise thereof, shall constitute a waiver thereof or of any other option, power or right.  The Payee shall not be deemed by any act or omission to have waived any such right or remedy or any default by the Maker hereunder unless such waiver is in writing, and then only to the extent specifically set forth in the writing.  Any such waiver shall not be construed as a continuing waiver or as a bar to or waiver of any right or remedy with respect to any other default by the Maker.  None of the terms and conditions of this Note may be amended, modified or waived, except in a writing properly delivered by the parties hereto; provided, that no such amendment, modification or waiver shall be effective to reduce the principal and/or interest payable on this Note, or to alter or amend the consent mechanism provided for under this Section 5, without the consent of the Payee.

6. Notices.  All notices, requests, demands, directions, declarations and other communications provided for herein shall be in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) (i) three days after notice shall be deposited with the United States Post Office, by registered or certified mail, postage prepaid, or (ii) one day after notice shall be sent if sent for next day delivery via a U.S. nationally recognized overnight courier service, in either case addressed to the party to be notified, which shall be (A) if to the Maker, at the address specified for such party on the signature page hereof, and (B) if to the Payee at the address designated for payments hereunder from time to time, which unless otherwise indicated shall be deemed to be the address set forth on Schedule A to the Purchase Agreement, or (c) upon transmission, when sent by electronic mail to the electronic mail address of the party to be notified, which shall be (A) if to the Maker, at the electronic mail address specified for such party on the signature page hereof, and (B) if to the Payee, at the electronic mail address of such Payee, which unless otherwise indicated shall be deemed to be the electronic mail address set forth on Schedule A to the Purchase Agreement. Any party may change its address or electronic mail address for notice purposes by giving advance notice hereunder to the other party in accordance with this Section 6.

7. Governing Law; Consent to Jurisdiction, etc. This Note shall be construed and interpreted in accordance with the laws of the State of Nevada without regard to its provisions concerning choice of laws or choice of forum.  Each of the Maker and the Payee hereby irrevocably submit themselves to the non-exclusive jurisdiction of the state and federal courts sitting in the State of New Jersey and agree and consent that service of process may be made upon them in any legal proceedings relating hereto by any means allowed under state or federal law.

8. Certain Waivers; Integration, etc.

(a) The Maker waives presentment for payment, demand, notice of nonpayment, notice of protest, protest and notice of dishonor of this Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Note.

(b) This instrument, together with the Purchase Agreement, states the entire agreement of the parties concerning the subject matter hereof, and it is acknowledged that there are no customs, usages, representations, or assurances referring to the subject matter, and no inducements leading to the execution or delivery hereof, other than those expressed herein and in the Purchase Agreement.

9. Loss; Theft.  Upon receipt by the Maker of evidence satisfactory to it of the loss, theft, destruction, or mutilation of this Note and (in the case of loss, theft or destruction) of an indemnity reasonably satisfactory to it, and upon surrender and cancellation of this Note, if mutilated, the Maker will deliver a new Note of like tenor in lieu of this Note.  Any Note delivered in accordance with the provisions of this Section 9 shall be dated as of the date of this Note.

10. Miscellaneous.  This Note shall bind and inure to the benefit of the Maker and the Payee and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns, except that the Maker shall not have the right to assign any of the Maker’s rights hereunder or interests herein without the written consent of the Payee.  No persons other than the Maker and the Payee and the respective permitted assignees of the Payee are intended to be benefited hereby or shall have any rights hereunder, as third‑party beneficiaries or otherwise.  This Note may not be pledged, sold, hypothecated, assigned, sold, transferred or otherwise disposed, nor may the Payee grant any security or other interest in, or otherwise encumber this Note, without the prior written consent of the Maker.  The Maker acknowledges that this Note and the obligations of the Maker hereunder have constituted, and were intended by the Maker to constitute, a material inducement to the Payee to enter into this Note and make the loan contemplated hereby, knowing that the Payee will rely upon the terms of this Note.  The Maker intends to be legally bound hereby.  Any provision of this Note that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without affecting the validity or enforceability of the remainder of this Note or the validity or enforceability of such provision in any other jurisdiction.  The term “Payee” shall apply equally to the initial Payee specified above and to any holder to which this Note is assigned properly.  The term “including” shall have the inclusive meaning frequently identified with the phrase “including without limitation.”

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[SIGNATURE PAGE TO SUBORDINATED NOTE]

IN WITNESS WHEREOF, the Maker has executed this Note, or has caused the same to be executed in its name, intending to be legally bound as of the day and year first written above.

EXECUTION VERSION

SUBORDINATION AGREEMENT

THIS SUBORDINATION AGREEMENT (this “Agreement”) dated as of June 2, 2020, is made by and among IRS PARTNERS NO.  19, L.P., a Delaware limited partnership (the “Subordinated Creditor”) for itself and its affiliates, RCM TECHNOLOGIES, INC., a Nevada corporation (“RCM”), the subsidiaries of RCM listed on the signature pages hereto (collectively, with RCM, the “Borrowers”), and CITIZENS BANK, N.A., as administrative agent (together with its successors and assigns in such capacity, the “Senior Agent”) for itself and the other Lenders (as that term is defined in the Credit Agreement defined below).

Background

A. The Senior Agent, the Borrowers, and the Lenders entered into that certain Third Amended and Restated Loan Agreement dated as of August 9, 2018 (as amended through the date hereof and as the same may be further amended, restated, modified, supplemented and/or replaced from time to time, the “Credit Agreement”), pursuant to which the Lenders agreed to extend credit to the Borrowers on the terms and conditions described therein.

B. Subject to the terms of that certain Amendment No. 2 to Third Amended and Restated Loan Agreement dated as of the date hereof (the “Amendment”), the Borrowers have requested that the Senior Agent and the Lenders amend the Credit Agreement to allow, among other things, RCM to (i) purchase 1,858,139 shares of its common stock pursuant to the terms and provisions of that certain Stock Purchase Agreement dated as of the date hereof to which RCM is a party (as the same may be amended, restated, modified, supplemented and/or replaced from time to time, the “SPA”), and (ii) incur, in favor of the Subordinated Creditor, certain indebtedness in connection therewith in the principal amount of $2,229,766.80, which indebtedness is to be evidenced by that certain 9% Subordinated Note, dated as of the date hereof, executed by RCM in favor of the Subordinated Creditor (as the same may be amended, restated, modified, supplemented and/or replaced from time to time, the “Subordinated Note” and, together with the SPA, the “Subordinated Debt Documents”), and one of the conditions to the effectiveness of the Amendment is that the Subordinated Creditor, the Borrowers and the Senior Agent enter into this Agreement pursuant to which the Subordinated Creditor and the Borrowers agree that certain obligations of the Borrowers owed to the Subordinated Creditor shall be subordinate to the obligations of the Borrowers owed to the Senior Agent and/or the Lenders (collectively, the “Senior Creditors”).

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, and in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows:

1. DEFINITIONS.  Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.  The following terms, as used herein, shall have the following meanings:

“Enforce Remedies” or “Enforcing Remedies” shall mean any action to enforce or attempt to enforce any right or remedy available to the Subordinated Creditor or the Senior Agent, as applicable, with respect to the Subordinated Obligations or the Senior Obligations under the Subordinated Debt Documents or the Loan Documents, as applicable, or under any applicable law.  Without expanding any rights available to any Person (including, for the avoidance of doubt, not implying that any rights as a secured creditor would be applicable to a holder of the Subordinated Obligations) such rights and remedies may include, among other things, any action to (a) repossess, replevy, attach, garnish, levy upon, collect the proceeds of, foreclose or realize any lien upon, sell, liquidate or otherwise dispose of or otherwise restrict or interfere with the use of, any collateral, whether by judicial action, under power of sale, by self-help repossession, by recoupment, by notification to account obligors or by the exercise of any rights or remedies of a “secured party” under Article 9 of the UCC, or otherwise, (b) commence or pursue any judicial, arbitral or other proceeding or legal action of any kind seeking injunctive or other equitable relief to prohibit, limit or impair the commencement or pursuit by the Senior Agent of any of its rights or remedies with respect to the Collateral under or in connection with the Loan Documents or otherwise available under applicable law with respect to collateral; (c) take from or for the account of any Borrower or subsidiary or affiliate thereof by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by such Borrower, (d) sue for payment of, or to initiate or participate with others in any suit, action or proceeding against a Borrower or any subsidiary or affiliate thereof to (i) enforce payment or to collect the whole or any part of the applicable debt or (ii) commence judicial enforcement of any of the rights and remedies under the Subordinated Debt Documents, the Loan Documents or applicable law, (e) accelerate debt, (f) require a Borrower or any subsidiary or affiliate thereof to sell assets or engage in a plan to sell assets as a condition to an amendment or waiver, or (g) join with any other creditor in the commencement of any Insolvency Proceeding (as defined below) or take any action under the provisions of any state or federal law, including, without limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell any property or assets of a Borrower or any subsidiary or affiliate thereof.

“Senior Obligations” shall mean all obligations, liabilities and indebtedness of any nature of each Borrower from time to time owed to the Senior Agent or any other Senior Creditor or any affiliate thereof under the Loan Documents or any supplements thereto (including any credit, if any, extended in an Insolvency Proceeding by any Senior Creditor), including, without limitation, the principal amount of all debts, claims and indebtedness, obligations under hedging agreements or in connection with banking, cash management and treasury services, if any, accrued and unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the institution of Insolvency Proceeding, including any amendments, modifications, increases, supplements, renewals or extensions thereof (and expressly including any interest accruing thereon after the commencement of an Insolvency Proceeding whether or not such interest is an allowed claim) and expressly including the Secured Obligations.

“Subordinated Obligations” shall mean all obligations now existing or hereafter arising, contingent or absolute, matured or unmatured, of RCM or any other Borrower to the Subordinated Creditor under, arising out of or in connection with the Subordinated Debt Documents or any agreement entered into in connection therewith or related thereto, whether arising before, during or after the initial term or any renewal term of the Subordinated Debt Documents or before or after the commencement of any Insolvency Proceeding (and including, without limitation, any interest, fees, costs, expenses and other amounts, which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such Insolvency Proceeding), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured.

“Termination Date” shall mean the date that is 91 days after the date that the Senior Obligations (other than unasserted contingent indemnification and unasserted expense reimbursement obligations, in each case, not yet due and payable) have been paid in full in cash and all commitments to extend additional credit thereunder shall have terminated.

2. REPRESENTATIONS AND WARRANTIES.  The Subordinated Creditor hereby represents and warrants to the Senior Agent as follows:

2.1 Existence.  It is a limited partnership duly formed and validly existing in good standing under the laws of the jurisdiction of its formation.

2.2 Authority.  The execution, delivery and performance of this Agreement (a) have been duly authorized by all necessary limited partnership action on behalf of the Subordinated Creditor, and (b) do not violate any provision of the organizational documents of the Subordinated Creditor.

2.3 No Conflict.  The execution, delivery and performance of this Agreement do not violate any law, rule or regulation applicable to the Subordinated Creditor, any judicial, governmental or regulatory order binding upon the Subordinated Creditor and do not violate, result in the breach of, constitute a default or require any consent under any contract, agreement, indenture or instrument to which the Subordinated Creditor is a party or by which it or its property may be bound other than those consents that have been obtained and are in full force and effect.

2.4 Enforceability.  This Agreement has been duly and validly executed and delivered by the Subordinated Creditor and constitutes the legal, valid and binding obligation of the Subordinated Creditor, enforceable against it in accordance with its terms, subject as to enforceability (a) under applicable insolvency law in an Insolvency Proceeding of the Subordinated Creditor and (b) to the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law).

2.5 Approvals.  No governmental or other approval is required in connection with the execution and delivery by, and the performance of the obligations of, the Subordinated Creditor under this Agreement.

2.6 Subordinated Obligations.  The Subordinated Obligations are unsecured and create no encumbrances on any assets of RCM or any other Borrower.

3. SUBORDINATION PROVISIONS.

3.1 Subordination.  The Subordinated Creditor hereby agrees that the Subordinated Obligations are and shall be subordinate and subject in right of payment to (a) the prior termination of all commitments of the Senior Creditors to advance any funds to the Borrowers under the terms of the Loan Documents and (b) the prior indefeasible payment in full in cash of all of the Senior Obligations (other than unasserted contingent indemnification and unasserted expense reimbursement obligations, in each case, not yet due and payable), whether or not the Senior Obligations have been voided, disallowed or subordinated pursuant to Sections 510, 547 or 548 of the Bankruptcy Code or any applicable state or federal fraudulent conveyance, preference or similar laws.  Without limiting the foregoing, the Subordinated Creditor also hereby agrees that, except as otherwise expressly provided in Section 3.2 of this Agreement, (i) it will not ask, demand, sue for, take or receive from RCM or any other Borrower, by set-off or in any other manner, payment of the whole or any part of the Subordinated Obligations, and (ii) without limiting the generality of clause (i) of this Section 3.1, it will not take any action to collect, demand payment of or accelerate all or any portion of the Subordinated Obligations (other than the filing of appropriate proofs of claim or any other similar action necessary to preserve its claim against a Borrower) or Enforce Remedies against the Borrower that it may have in respect of the Subordinated Obligations.

3.2 Permitted Payments and Accruals.  Nothing in this Agreement shall limit the right of the Subordinated Creditor to:

(a) accrue any amounts owing in respect of the Subordinated Obligations at any time; or

(b) so long as no Event of Default is then outstanding, receive from RCM or any other Borrower regularly scheduled payments of interest pursuant to the terms of the Subordinated Debt Documents.

3.3 Blockage in Connection with Senior Obligations Default.  The Subordinated Creditor and the Borrowers hereby agree that, if an Event of Default is then outstanding, no Borrower shall make and the Subordinated Creditor shall not accept, prior to the Termination Date, any payments on the Subordinated Obligations (including without limitation regularly scheduled payments of interest), whether or not the Senior Obligations have been voided, disallowed or subordinated pursuant to Sections 510, 547 or 548 of the Bankruptcy Code or any applicable state or federal fraudulent conveyance, preference or similar laws.

3.4 Distributions, Etc.  In furtherance of, and not in limitation of, the subordination provided for herein, the Subordinated Creditor further agrees as follows:

(a) In the event of any distribution, division or application, partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of the assets of a Borrower or the proceeds thereof, to creditors of a Borrower, or upon any repayment of indebtedness of a Borrower, by reason of (1) the liquidation, dissolution or other winding up, partial or complete, of such Borrower, such Borrower’s assets, or such Borrower’s business, or (2) any receivership, insolvency proceeding, assignment for the benefit of creditors or other proceeding under any Debtor Relief Laws (each, an “Insolvency Proceeding”), then and in any such event:

(i) the Subordinated Creditor will receive no payments until the Senior Obligations have been indefeasibly paid in full in cash;

(ii) any payment or distribution of any kind or character, whether in cash, securities or other property which, but for this Agreement, would be payable or deliverable upon or with respect to any or all of the Subordinated Obligations, shall instead be paid or delivered directly to the Senior Agent for application to the Senior Obligations, whether then due or not due, until the Senior Obligations (other than unasserted contingent indemnification and unasserted expense reimbursement obligations, in each case, not yet due and payable) shall have been indefeasibly paid in full in cash; and

(iii) the Subordinated Creditor hereby irrevocably authorizes and empowers the Senior Agent to demand, sue for, collect and receive every such payment or distribution and give acquittance therefor, and to file and/or vote claims and take such other action in any Insolvency Proceeding, in the Senior Agent’s (or any Lender’s) name or in the name of the Subordinated Creditor, or otherwise, as the Senior Agent may deem necessary or advisable for the enforcement of this Agreement (including, without limitation, the filing of any proof of claim in respect of the Subordinated Obligations and voting such claim in any Insolvency Proceeding of a Borrower).  In furtherance of the foregoing, the Subordinated Creditor agrees duly and promptly (in each case at the sole cost and expense of the Borrowers) (A) to take such action as may be reasonably requested by the Senior Agent to assist in the collection of the Subordinated Obligations for the account of the Senior Agent (and the Lenders), (B) to file appropriate proofs of claim in respect of the Subordinated Obligations, and (C) to execute and deliver to the Senior Agent on demand such powers of attorney, proofs of claim, assignments of claim or other instruments as may be reasonably requested by the Senior Agent to enable the Senior Agent to enforce any and all claims upon or with respect to the Subordinated Obligations, and to collect and receive any and all payments or distributions which may be payable or deliverable at any time upon or with respect to the Subordinated Obligations.

3.5 Turnover.  If any payment, distribution of any assets or security or proceeds of any assets or security are received by the Subordinated Creditor upon or in respect of the Subordinated Obligations in contravention of the provisions hereof (including, without limitation, Sections 3.1 and 3.4(a)), the Subordinated Creditor will forthwith deliver the same to the Senior Agent in the form received (except for the endorsement or assignment of the Subordinated Creditor where necessary), for application to the Senior Obligations, whether then due or not due, and, until so delivered, the same shall be held in trust by the Subordinated Creditor for the benefit of the Senior Agent and the Lenders.  In the event of the failure of the Subordinated Creditor to make any such endorsement or assignment, the Senior Agent, or any of its officers or employees, are hereby irrevocably authorized to make the same.

3.6 Continuing Subordination, Etc.  The subordination effected by this Agreement is a continuing subordination, and shall remain in full force and effect until the Termination Date.  Without limiting the generality of the foregoing, the obligations of the Subordinated Creditor shall not be released, discharged or in any way affected by any circumstance or condition (whether or not the Subordinated Creditor shall have any notice or knowledge thereof) including, without limitation, any amendment or modification of or supplement to the Credit Agreement or any other Loan Document (including, without limitation, increasing the amount or extending the maturity of the Senior Obligations); any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreements or instruments, or any exercise or failure to exercise of any right, remedy, power or privilege under or in respect of any such agreements or instruments, or any exercise or failure to exercise of any right, remedy, power or privilege under or in respect of any such agreements or instruments; any invalidity or unenforceability, in whole or in part, of any term hereof or of the Credit Agreement or any other Loan Document; any failure on the part of a Borrower or any other Person for any reason to perform or comply with any term of the Credit Agreement or any other Loan Document; any furnishing or acceptance of any additional security or guaranty; any release of the Subordinated Creditor or any other Person or any release of any or all security or any or all guarantees for the Senior Obligations, whether any such release is granted in connection with a Insolvency Proceeding or otherwise; any Insolvency Proceeding with respect to the Subordinated Creditor or any other Person or their respective properties or creditors; the application of payments received by the Senior Agent or any Lender from any source that were lawfully used for some other purpose, which lawfully could have been applied to the payment, in full or in part, of the Senior Obligations; or any other occurrence whatsoever, whether similar or dissimilar to the foregoing.  Without limiting the generality of the foregoing, at any time that the Credit Agreement is amended to increase the amount of the Secured Obligations or any supplement including any credit extended in an Insolvency Proceeding, the amount of the Senior Obligations shall be accordingly increased.

3.7 Waiver of Notice.  The Subordinated Creditor hereby unconditionally waives notice of the incurring of the Senior Obligations or any part thereof and reliance by the Senior Agent or any Lender upon the subordination of the Subordinated Obligations to the Senior Obligations and any other similar notice provided by law or contract.

3.8 Subrogation.  The Subordinated Creditor hereby waives any and all rights of subrogation, reimbursement, or indemnity whatsoever in respect of the Subordinated Obligations arising out of remedies exercised by the Senior Agent hereunder until after the Termination Date.

3.9 Certain Covenants of Subordinated Creditor.

(a) The Subordinated Creditor agrees that (i) promptly upon the written request of the Senior Agent, the Subordinated Creditor shall take such other action as may be reasonably requested by the Senior Agent to protect the rights of the Senior Agent and the other Senior Creditors under this Agreement or effectuate the subordination provided herein (at the sole cost and expense of the Borrowers), (ii) the Subordinated Obligations shall not at any time be secured by any lien or security interest on property of any Borrower or affiliate thereof nor shall they be guaranteed by any Borrower or any affiliate of any Borrower, and (iii) none of the Subordinated Obligations shall be sold, pledged, encumbered, assigned or otherwise transferred to any Person or shall be compromised or forgiven; provided, however, that the Subordinated Creditor may assign the Subordinated Obligations if (a) the Senior Agent provides written consent, such consent not to be unreasonably withheld, conditioned or delayed, and (b) such assignee or assignees agree to be bound by the terms of this Agreement.

(b) The Subordinated Creditor agrees not to initiate, prosecute or participate in any claim, action or other proceeding challenging the enforceability, amount, validity, perfection or priority of any portion of the Senior Obligations or any liens and security interests securing any portion of the Senior Obligations either in the context of an Insolvency Proceeding or otherwise.

(c) The Subordinated Creditor agrees that it will not object to or oppose any cash collateral usage or debtor-in-possession financing or any sale or other disposition of any property securing all of any part of the Senior Obligations free and clear of the Subordinated Obligations under Section 363 of the Bankruptcy Code or any other law applicable in an Insolvency Proceeding, if the Senior Agent has consented to such sale or disposition.

(d) The Subordinated Creditor agrees that the Senior Obligations shall continue to be treated as Senior Obligations and the provisions of this Agreement shall continue to govern the relative rights and priorities of the Senior Creditors and the Subordinated Creditor even if all or part of the Senior Obligations or the Liens or security interests securing the Senior Obligations are subordinated, set aside, avoided, invalidated, or disallowed in connection with any such Insolvency Proceeding, and this Agreement shall be reinstated if at any time any payment of any of the Senior Obligations is rescinded or must otherwise be returned by any holder of Senior Obligations or any representative of such holder.

(e) The Subordinated Creditor agrees to execute, verify, deliver, and file any proofs of claim in respect of the Subordinated Obligations reasonably requested by the Senior Agent in connection with any Insolvency Proceeding and hereby irrevocably authorizes the Senior Agent to file proofs of claim on behalf of the Subordinated Creditor upon the failure of the Subordinated Creditor to do so.  For the avoidance of doubt, the Senior Agent shall have no affirmative obligation to file any such proof of claim on behalf of the Subordinated Creditor.  The Subordinated Creditor agrees not to support any plan of reorganization in any Insolvency Proceeding that does not provide for the prior payment in full in cash of the Senior Obligations (other than unasserted contingent indemnification and unasserted expense reimbursement obligations, in each case, not yet due and payable) and will not oppose a plan supported by Senior Creditors or take other actions inconsistent with this Agreement.  The Senior Agent shall be allowed to prosecute the claims of the Subordinated Creditor on behalf of the Subordinated Creditor in any Insolvency Proceeding.

(f) The Subordinated Creditor shall cause the Subordinated Note, at all times, to bear a prominent legend stating that the Subordinated Note is subject to the terms of this Agreement and may not be paid or transferred in violation of this Agreement.

3.10  Amendments to Subordinated Debt Documents.  The Subordinated Creditor agrees that, without the prior written consent of the Senior Agent (which consent may be withheld by the Senior Agent in its sole discretion), it will not enter into any amendments to the Subordinated Debt Documents. Without limiting the foregoing, the Subordinated Debt Documents shall have no negative pledge, no financial covenants and no covenants which are more stringent than those set forth in the Loan Documents.  The Subordinated Creditor and RCM agree to enter into such amendments to the Subordinated Debt Documents as may be necessary to incorporate the terms of this Section 3.10 but the failure to do so shall not impair the effectiveness of this Section 3.10, the terms of which shall be deemed incorporated into the Subordinated Debt Documents.

3.11 Standstill on Enforcement of Remedies.  The Subordinated Creditor agrees that at any time prior to the Termination Date, if there is an “event of default” under the Subordinated Debt Documents, the Subordinated Creditor will refrain from Enforcing Remedies until the Termination Date has occurred.

3.12 No Cross-Default.  The Subordinated Creditor agrees that the Subordinated Debt Documents and any other document executed in connection with the Subordinated Obligations shall not contain a cross-default or cross-acceleration to Defaults or Events of Default under the Credit Agreement.

3.13 Reliance By Senior Creditors.  The Subordinated Creditor acknowledges that the Senior Creditors, in determining to acquire and retain the Senior Obligations, have relied upon the subordination of the Subordinated Obligations to the Senior Obligations as provided herein.

4. TERMINATION OF AGREEMENT.  On the Termination Date, this Agreement and all other rights and obligations granted hereby or arising hereunder shall terminate.  If, for any reason, any or all of the Senior Creditors are required to return any funds they received in respect of the Senior Obligations, this Agreement and all obligations hereunder shall be reinstated.

5. PAYMENT OF COSTS AND EXPENSES.

5.1 Payment of Costs and Expenses.  Without limiting any other cost reimbursement provisions in the Loan Documents, upon demand, RCM shall pay to the Senior Agent the amount of any and all reasonable expenses incurred by the Senior Agent hereunder or in connection herewith, including, without limitation those that may be incurred in connection with (a) the administration of this Agreement, (b) the exercise or enforcement of any of the rights of the Senior Agent hereunder or (c) the failure of the Subordinated Creditor to perform or observe any of the provisions hereof.

5.2 Senior Obligations.  Any amounts payable pursuant to this Section 5 shall be Senior Obligations.

6. MISCELLANEOUS.

6.1 Counterparts; Integration; Effectiveness.  This Agreement, the Loan Documents and any separate letter agreements with respect to fees payable to the Senior Agent constitute the entire agreement among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  This Agreement shall become effective when it shall have been executed by the Senior Agent, the Subordinated Creditor and the Borrowers and when the Senior Agent shall have received counterparts hereof that, when taken together, bear the signature of each of the parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery of an executed signature page counterpart hereof by telecopy, emailed .pdf or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart hereof.  The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic association of signatures and records on electronic platforms, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, any other similar state laws based on the Uniform Electronic Transactions Act or the Uniform Commercial Code, each as amended, and the parties hereto hereby waive any objection to the contrary, provided that (a) nothing herein shall require the Senior Agent to accept electronic signature counterparts in any form or format and (b) the Senior Agent reserves the right to require, at any time and at its sole discretion, the delivery of manually executed counterpart signature pages to this Agreement and the parties hereto agree to promptly deliver such manually executed counterpart signature pages.

6.3 Successors and Assigns.  Except as otherwise provided in the Credit Agreement, the Senior Agent may assign or transfer this Agreement and any or all rights or obligations hereunder without the consent of the Subordinated Creditor.  The Subordinated Creditor shall not assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the Senior Agent or as expressly provided in this Agreement.  Notwithstanding the foregoing, if there should be any assignment of any rights or obligations by operation of law or in contravention of the terms of this Agreement or otherwise, then all covenants, agreements, representations and warranties made herein or pursuant hereto by or on behalf of the Subordinated Creditor shall bind the successors and assigns of the Subordinated Creditor, together with the preexisting Subordinated Creditor, whether or not such new or additional Persons execute a joinder hereto or assumption hereof.  The rights and privileges of the Senior Agent under this Agreement shall inure to the benefit of its successors and assigns.  All promises, covenants and agreements of the Subordinated Creditor contained in this Agreement shall be binding upon personal representatives, heirs, successors and assigns of such Person.

6.4 Amendments and Waivers.  The terms of this Agreement may be waived, altered or amended only by an instrument in writing duly executed by the Subordinated Creditor and the Senior Agent.

6.5 Notices.  All notices, requests, demands, directions and other communications provided under this Agreement shall be in writing (which includes electronic mail (“e-mail”)), and shall be deemed to have been duly delivered and received if delivered (i) personally at the time delivered in person, (ii) by facsimile transmission to the facsimile number specified below at the time of written confirmation of receipt, (iii) if sent by e-mail to the e-mail address specified below between the hours of 8:30 AM and 4:30 PM Eastern Time on a Business Day, on such Business Day (and if not sent between 8:30 AM and 4:30 PM Eastern Time, then on the subsequent Business Day to the date such e-mail is sent), unless such sender received a “bounce-back” or similar message upon transmission, (iv) by overnight delivery to the address specified below with a reputable national overnight delivery service on the Business Day following the date the notice is given to the overnight service, or (v) by mail or by certified mail to the address specified below, return receipt requested and postage prepaid, two Business Days after the date such notice is deposited with the United States Postal Service.  If notice is given to a party, it shall be given at the address, facsimile number or e-mail address for such party set forth below.  It shall be the responsibility of the parties to notify the other parties in writing of any name, e-mail address, mailing address or facsimile number changes.  With respect to notice given under clause (ii) or (iii) above, the party giving notice may also deliver notice by another method described above, which subsequent delivery shall not affect the deemed timing of delivery and receipt of such notice.

If to the Subordinated Creditor, then to:

IRS Partners No.  19, L.P.

c/o M20, Inc., its General Partner

515 South Figueroa, Suite 650

Los Angeles, California 90071

Attn: Michael F. O’Connell, President

Email:____________________

Phone:____________________

If to a Borrower, then to:

RCM Technologies, Inc.

2500 McClellan Avenue, Suite 350

Pennsauken, New Jersey 08109

Attn:  Kevin D. Miller, Chief Financial Officer

Email: kevin.miller@rcmt.com

Phone: (856) 356-4569

With a copy (which shall not constitute notice) to:

White & Williams, LLP

1800 One Liberty Place

Philadelphia, Pennsylvania  19103

Attention: Jennifer Santangelo, Esquire

Email: santangeloj@whiteandwilliams.com

Phone: (215) 864-7199

If to the Senior Agent, then to:

Citizens Bank, N.A.

One Logan Square

130 N. 18th Street, Suite 1310

Philadelphia, PA 19103

Attention: Lisa S. Williams, Senior Vice President

Email: lisa.williams@citizensbank.com

Phone: (267) 671-1203

With a copy (which shall not constitute notice) to:

Archer & Greiner, P.C.

One Centennial Square

33 East Euclid Avenue

Haddonfield, NJ 08033

Attention: Deborah Hays, Esquire

E-mail: dhays@archerlaw.com

Phone: 856-354-3089

6.6 Descriptive Headings.  The descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not affect the meaning or construction of any of the provisions of this Agreement.

6.7 Severability.  Every provision of this Agreement is intended to be severable.  If any term or provision of this Agreement shall be invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired thereby.  Any invalidity, illegality or unenforceability of any term or provision of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of any such term or provision in any other jurisdiction.

6.8 Governing Law.  This Agreement and the rights and obligations of the parties hereunder shall be construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania (excluding the laws applicable to conflicts or choice of law).

6.9 Submission to Jurisdiction.  Each of the parties hereto irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the federal and state courts of the Commonwealth of Pennsylvania located in Philadelphia County and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Pennsylvania State court or, to the fullest extent permitted by applicable law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that the Senior Agent may otherwise have to bring any action or proceeding relating to this Agreement against a Borrower or Subordinated Creditor or any of their respective properties in the courts of any jurisdiction.

6.10 Waiver of Objection to Venue.  Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement in any court referred to in the preceding Section 6.9.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

6.11 Service of Process.  Each of the parties hereto irrevocably consents to service of process in the manner provided for notices in Section 6.5.  Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

6.12 Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

[Signature Pages Follow]

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

IRS PARTNERS NO.  19, L.P., as Subordinated Creditor

BY: M20, INC., its General Partner

By: /s/ Michael F. O’Connell

Name:  Michael F. O’Connell

Title:  President

CITIZENS BANK, N.A., in its capacity as Senior Agent

By: /s/ Lisa S. Williams

Name: Lisa S. Williams

Title: SVP

RCM TECHNOLOGIES, INC,, as a Borrower

By: /s/ Kevin D. Miller

Name:  Kevin D. Miller

Title:  CFO

RCM TECHNOLOGIES (USA), INC., as a Borrower

By: /s/ Kevin D. Miller

Name:  Kevin D. Miller

Title:  CFO

RCMT DELAWARE, INC., as a Borrower

By: /s/ Kevin D. Miller

Name:  Kevin D. Miller

Title:  CFO

AMENDMENT NO. 2 TO THIRD AMENDED

AND RESTATED LOAN AGREEMENT

This Amendment No. 2 to Third Amended and Restated Loan Agreement, dated as of June 2, 2020 (the “Amendment”), is made by and among RCM Technologies, Inc., a Nevada corporation, and all of its subsidiaries (collectively, the “Borrowers”), Citizens Bank, N.A., a national banking association (as successor by merger to Citizens Bank of Pennsylvania), in its capacity as administrative agent and arranger (the “Agent”), and Citizens Bank, N.A., a national banking association (as successor by merger to Citizens Bank of Pennsylvania), as lender (the “Lender”).

BACKGROUND

A. The Agent, the Lender and the Borrowers, together with Programming Alternatives of Minnesota, Inc. (an entity which was dissolved as of January 18, 2019), made, executed and delivered a Third Amended and Restated Loan Agreement, dated as of August 9, 2018, as amended by that certain Amendment No. 1 to Third Amended and Restated Loan Agreement, dated as of October 18, 2019 (collectively, the “Original Loan Agreement”).

B. In connection with the Original Loan Agreement, the Borrowers and the Agent entered into a certain Amended and Restated Pledge and Security Agreement, dated August 9, 2018, pursuant to which the Borrowers granted to the Agent, for the benefit of the Lenders, a first priority security interest in the Collateral (as defined therein) (the “Original Pledge and Security Agreement”).

C. In connection with the Original Loan Agreement, the Borrowers executed and delivered a Tenth Amended and Restated Revolving Credit Note payable to the order of the Lender, dated August 9, 2018 (the “Existing Restated Credit Note”).

D. As security for (a) the punctual performance in full by the Borrowers of their obligations under the Loan Documents (as such term is defined in the Original Loan Agreement), (b) the punctual payment in full of all amounts owing or to be owing under any Loan Document, and (c) the punctual payment of any other amounts which at any time may be due and payable from the Borrowers to the Agent or the Lenders, in each case whether presently existing or hereafter arising (collectively, the “Secured Obligations”), the Borrowers have granted a security interest to the Agent, for the benefit of the Lenders, in the Collateral (as such term is defined in the Original Pledge and Security Agreement), pursuant to the terms and provisions of the Original Pledge and Security Agreement.

E. The Borrowers, the Agent and the Lender desire, subject to the terms and conditions set forth herein, to amend the Original Loan Agreement (the Original Loan Agreement, as amended by this Amendment, and as the same may be further amended, restated, modified and/or supplemented from time to time, being referred to as the “Loan Agreement”).

NOW, THEREFORE, in consideration of the mutual promises herein contained, and each intending to be legally bound hereby, the parties hereto hereby agree as follows:

1. Defined Terms.  Except as expressly defined herein, all terms used herein shall have the meanings ascribed to them in the Original Loan Agreement.  This Amendment is intended to amend the Original Loan Agreement, and the Original Loan Agreement shall be so amended, from and as of the date hereof.

2. Amendment to Section 1.1 of Original Loan Agreement.  Section 1.1 of the Original Loan Agreement is hereby amended to add the following definitions thereto in appropriate alphabetical order:

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate (which may include Term SOFR or another rate based on SOFR) that has been selected by the Administrative Agent and the Borrowers giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the LIBOR Rate for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.

“Benchmark Replacement Adjustment”  means, with respect to any replacement of the LIBOR Rate with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrowers giving due consideration to: (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBOR Rate with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBOR Rate with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement).

“Benchmark Replacement Date” means the earlier to occur of the following events with respect to the LIBOR Rate:

(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of the LIBOR Rate permanently or indefinitely ceases to provide the LIBOR Rate; or

(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the LIBOR Rate:

(1) a public statement or publication of information by or on behalf of the administrator of the LIBOR Rate announcing that such administrator has ceased or will cease to provide the LIBOR Rate, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR Rate;

(2) a public statement or publication of information by the regulatory supervisor for the administrator of the LIBOR Rate, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for the LIBOR Rate, a resolution authority with jurisdiction over the administrator for the LIBOR Rate or a court or an entity with similar insolvency or resolution authority over the administrator for the LIBOR Rate, which states that the administrator of the LIBOR Rate has ceased or will cease to provide the LIBOR Rate permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR Rate; or

(3) a public statement or publication of information by the regulatory supervisor for the administrator of the LIBOR Rate or a governmental authority having jurisdiction over the Administrative Agent in effect announcing that the LIBOR Rate is no longer representative.

“Benchmark Transition Start Date” means (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90^th  day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication), and (b) in the case of an Early Opt-in Election, the date specified by the Administrative Agent or the Required Lenders, as applicable, by notice to the Borrowers, the Administrative Agent (in the case of such notice by the Required Lenders) and the Lenders.

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the LIBOR Rate and solely to the extent that the LIBOR Rate has not been replaced with a Benchmark Replacement, the period (a) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the LIBOR Rate for all purposes hereunder in accordance with the Section titled “Effect of Benchmark Transition Event” and (b) ending at the time that a Benchmark Replacement has replaced the LIBOR Rate for all purposes hereunder pursuant to the Section titled “Effect of Benchmark Transition Event”.

 “Early Opt-in Election” means the occurrence of:

(1) (a) a determination by the Administrative Agent or (b) a notification by the Required Lenders to the Administrative Agent (with a copy to the Borrowers) that the Required Lenders have determined that U.S. dollar-denominated syndicated credit facilities being executed at such time, or that include language similar to that contained in the Section titled “Effect of Benchmark Transition Event”, are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace the LIBOR Rate, and

 (2) (a) the election by the Administrative Agent or (b) the election by the Required Lenders to declare that an Early Opt-in Election has occurred and the provision, as applicable, by the Administrative Agent of written notice of such election to the Borrowers and the Lenders or by the Required Lenders of written notice of such election to the Administrative Agent.

 “Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

“LIBOR Rate Loan” means a Loan (including a Daily LIBOR Rate Loan) bearing interest based on the Adjusted LIBOR Rate.

 “Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

 “SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.

 “Term SOFR” means the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

 “Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

3. Amendment to Section 3.3 of Original Loan Agreement. Section 3.3 of the Original Loan Agreement is hereby amended and restated to read in its entirety as follows:

“Section 3.3 General LIBOR Rate Provisions.

 (a) Interest; LIBOR Notification.   The interest rate on LIBOR Rate Loans is determined by reference to the LIBOR Rate, which is derived from the London interbank offered rate.  The London interbank offered rate is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market.  In July 2017, the U.K. Financial Conduct Authority announced that, after the end of 2021, it would no longer persuade or compel contributing banks to make rate submissions to the ICE Benchmark Administration (together with any successor to the ICE Benchmark Administrator, the “IBA”) for purposes of the IBA setting the London interbank offered rate.  As a result, it is possible that, in the future, the London interbank offered rate may become unavailable or may no longer be deemed an appropriate reference rate upon which to determine the interest rate on LIBOR Rate Loans.  In light of this eventuality, public and private sector industry initiatives are currently underway to identify new or alternative reference rates to be used in place of the London interbank offered rate.  In the event that the London interbank offered rate is no longer available or in certain other circumstances as set forth in Section 3.3(c), an alternative rate of interest may be selected and implemented in accordance with the mechanism contained in such Section 3.3(c).  The Administrative Agent will notify the Borrowers, pursuant to Section 3.3(c), in advance of any change to the reference rate upon which the interest rate on LIBOR Rate Loans is based.  However, the Administrative Agent does not warrant, nor accept responsibility for, nor shall the Administrative Agent have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBOR Rate” or with respect to any comparable or successor rate thereto or replacement rate thereof, including, without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate, as it may or may not be adjusted pursuant to Section 3.3(c), will be similar to, or produce the same value or economic equivalence of, the LIBOR Rate or have the same volume or liquidity as did the London interbank offered rate prior to its discontinuance or unavailability.

(b) Temporary Unavailability of LIBOR Rate.  If prior to the commencement of any Interest Period for a LIBOR Borrowing or any request for a Daily LIBOR Rate Borrowing:

(i)

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

(ii)

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;

then the Administrative Agent shall give notice thereof to the Borrowers and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrowers and the Lenders that the circumstances giving rise to such notice no longer exist, (x) any Committed Loan Notice that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a LIBOR Borrowing shall be ineffective, (y) if any Request for Credit Extension requests a LIBOR Borrowing or a Daily LIBOR Rate Borrowing, such Borrowing shall be made as a Prime Rate Borrowing, and (z) notwithstanding anything to the contrary contained herein, each Daily LIBOR Rate Loan shall bear interest at the Prime Rate plus the Applicable Margin.

(c) Effect of Benchmark Transition Event.

(i)

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.

(ii)

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.

(iii)

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).

4. Amendment to Section 7.7(b) of Original Loan Agreement.  Section 7.7(b) of the Original Loan Agreement is hereby amended and restated to read in its entirety as follows:

“(b) The Borrowers will not, and will not permit any of their respective Subsidiaries to: (i) declare or pay or make any forms of distribution to the holders of their respective Equity Interests, or their successors or assigns, other than (A) the Permitted Dividend, (B) the repurchase by RCM of 1,858,139 shares of RCM’s outstanding stock effective as of  June 2, 2020 (the “Permitted 2020 Stock Repurchase”), and (C) distributions constituting the repurchase of RCM’s outstanding stock, provided that from and after December 12, 2014, the total amount of such distributions (excluding the Permitted 2020 Stock Repurchase) shall not exceed $7,500,000.00, in the aggregate; (ii) make any prepayments on any existing or future Indebtedness for borrowed money to any Person without the prior written consent of the Administrative Agent, which consent will not be unreasonably withheld; or (iii) hereafter borrow money other than from the Lenders hereunder, except (A) in connection with borrowed money giving rise to a Permitted Encumbrance under clause (o) of the definition of Permitted Encumbrance, (B) in connection with Permitted Acquisitions and Indebtedness evidenced by Sellers Notes subordinated on terms and conditions reasonably acceptable to the Administrative Agent, and (C) Indebtedness in the principal amount of $2,229,766.80 incurred by RCM in connection with the consummation of the Permitted 2020 Stock Repurchase so long as such Indebtedness is evidenced by documentation, and subordinated on terms and conditions, acceptable to the Administrative Agent in its sole discretion. Solely for purposes of this Section 7.7(b), any Earn-Out Obligation which may be required to be paid by a Borrower shall not be considered to be “borrowed money”.”

5. Amendment to Section 7.10(c) of Original Loan Agreement.  Section 7.10(c) of the Original Loan Agreement is hereby amended and restated to read in its entirety as follows:

“(c) Consolidated Total Funded Debt to Consolidated EBITDA Ratio:

(i) After March 31, 2018, but on or prior to June 30, 2018, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 3.25 to 1.00.

(ii) After June 30, 2018, but on or prior to June 30, 2019, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 3.00 to 1.00.

(iv) After December 31, 2019 but on or prior to March 31, 2020, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 3.00 to 1.00.

(v)	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.

(vi)	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.

(vii)

After September 30, 2020, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 3.00 to 1.00.”

6. Addition of Section 7.10(d) to the Original Loan Agreement. The Original Loan Agreement is hereby amended to add a new Section 7.10(d) thereto which shall reads in its entirety as follows:

“(d) Modified Current Ratio: If as of any measurement date the Consolidated Total Funded Debt to Consolidated EBITDA Ratio is equal to or greater than 3.00 to 1.00:

(i)	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

(ii)	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.”

7. Amendment to Exhibit D to Original Loan Agreement.  Exhibit D attached to the Original Loan Agreement is hereby replaced, in its entirety, with the form of Compliance Certificate attached hereto as Schedule I.

8.  Removal of Co-Borrower.  The parties hereto hereby acknowledge that Programming Alternatives of Minnesota, Inc. was legally dissolved effective as of January 18, 2019.  As a result of such dissolution,  Programming Alternatives of Minnesota, Inc. has been removed as a co-borrower under the Loan Documents and the Original Loan Agreement and each other Loan Document are hereby amended so that any reference to “Borrower” contained therein shall no longer include Programming Alternatives of Minnesota, Inc. effective from and as of the date hereof.

9. Reaffirmation.  Pursuant to the terms of the Original Pledge and Security Agreement, the Borrowers have provided to the Agent, for the benefit of the Lenders, as security for the payment and performance of any and all of the Secured Obligations and the performance of all other obligations and covenants of Borrowers under the Original Loan Agreement, the Existing Restated Credit Note, and each other Loan Document, certain or contingent, now existing or hereafter arising, which are now, or may at any time or times hereafter be owing by any Borrower to the Agent or the Lenders, a first priority, perfected security interest in the Collateral.  Each Borrower hereby ratifies and confirms the liens and security interests granted under Original Pledge and Security Agreement; and further ratifies and confirms, without condition, that (a) such liens and security interests shall secure the payment and performance of any and all of the Obligations and the performance of all other obligations and covenants of any Borrower under the Loan Agreement, the Existing Restated Credit Note, and each other Loan Document, certain or contingent, now existing or hereafter arising, which are now, or may at any time or times hereafter be owing by any Borrower to the Agent or the Lenders, and (b) the perfected status and priority of such liens and security interests shall not be affected in any way by the amendments to the Original Loan Agreement set forth herein.  Each Borrower acknowledges that the outstanding principal amount of the Existing Restated Credit Note is due and owing without any claim, defense or set-off.

10. Representations and Warranties.  Each Borrower hereby confirms that the representations and warranties set forth in the Original Loan Agreement remain true and correct in all material respects.  Each Borrower also represents and warrants that (a) no Default or Event of Default is presently outstanding under any of the terms and conditions of the Original Loan Agreement; (b) each Borrower has full power and authority to execute, deliver, and perform its obligations under this Agreement and under any document or instrument executed in connection with this Agreement; (c) the execution, delivery, and performance of this Agreement and of any document or instrument executed in connection with this Agreement will not violate any provision of any existing law or regulation applicable to any Borrower, any provision of its governing organizational documents, any order or decree of any court, arbitrator or governmental authority, or any contractual undertaking to which it is a party or by which it may be bound; (d) no consents, licenses, approvals or authorizations of, exemptions by or registrations or filings with, any governmental authority are required with respect to this Agreement or any of the documents or instruments executed by a Borrower in connection herewith; and (e) this Agreement constitutes the legal valid and binding obligations of each Borrower, enforceable in accordance with its terms.  All representations, warranties and covenants of the Borrowers, whether hereunder, or contained in the Original Loan Agreement or the other Loan Documents, shall remain in full force and effect until all amounts due under the Original Loan Agreement, as amended herein, the Existing Restated Credit Note and each other Loan Document, are satisfied in full.

11. Complimentary Nature of Documents.  Except as modified by the terms hereof, all terms, provisions and conditions of the Original Loan Agreement and each other Loan Document are in full force and effect and are hereby incorporated by reference as if set forth herein.  This Amendment and the Original Loan Agreement shall be deemed as complementing and not restricting the Agent’s or the Lender’s rights hereunder or thereunder.  If there is any conflict or discrepancy between the provisions of this Amendment and any provision of the Original Loan Agreement, the terms and provisions of this Amendment shall control and prevail.

12. Effectiveness Conditions.  This Amendment shall be effective upon execution of this Amendment by all parties hereto.

13. Release of Claims.  In consideration of the benefits provided to the Borrowers under the terms and provisions hereof, each Borrower hereby agrees as follows ("General Release"):

(a) Each Borrower, for itself and on behalf of its successors and assigns, does hereby release, acquit and forever discharge the Agent and the Lender, all of their respective predecessors in interest, and all of their respective past and present officers, directors, attorneys, affiliates, employees and agents, of and from any and all claims, demands, obligations, liabilities, indebtedness, breaches of contract, breaches of duty or of any relationship, acts, omissions, misfeasance, malfeasance, causes of action, defenses, offsets, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, each as though fully set forth herein at length (each, a "Released Claim" and collectively, the "Released Claims"), that any Borrower now has or may acquire as of the date that the Borrowers have executed and delivered this Amendment to the Agent (hereafter, the "Release Date"), including without limitation, those Released Claims in any way arising out of, connected with or related to any and all prior credit accommodations, if any, provided by the Agent or the Lender, or any of their respective predecessors in interest, to any Borrower, and any agreements, notes or documents of any kind related thereto or the transactions contemplated thereby or hereby, or any other agreement or document referred to herein or therein.

(b) Each Borrower hereby acknowledges, represents and warrants to the Agent and the Lender that it agrees to assume the risk of any and all unknown, unanticipated or misunderstood Released Claims which are released by the provisions of this General Release in favor of the Agent and the Lender, and each Borrower hereby waives and releases all rights and benefits which it might otherwise have under any state or local laws or statutes with regard to the release of such unknown, unanticipated or misunderstood Released Claims.

(c) Each person signing below on behalf of a Borrower acknowledges that he or she has read each of the provisions of this General Release.  Each such person fully understands that this General Release has important legal consequences, and each such person realizes that they are releasing any and all Released Claims that any Borrower may have as of the Release Date.  Each Borrower hereby acknowledges that it has had an opportunity to obtain an attorney’s advice concerning the legal consequences of each of the provisions of this General Release.

(d) Each Borrower hereby specifically acknowledges and agrees that:  (i) none of the provisions of this General Release shall be construed as or constitute an admission of any liability on the part of the Agent or the Lender; (ii) the provisions of this General Release shall constitute an absolute bar to any Released Claim of any kind, whether any such Released Claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable; and (iii) any attempt to assert a Released Claim barred by the provisions of this General Release shall subject a Borrower to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous or baseless claims or causes of action.

14. Counterparts; Electronic Signature.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery of an executed signature page counterpart hereof by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart hereof. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic association of signatures and records on electronic platforms,  deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, any other similar state laws based on the Uniform Electronic Transactions Act or the Uniform Commercial Code, each as amended, and the parties hereto hereby waive any objection to the contrary, provided that (x) nothing herein shall require the Agent or the Lender to accept electronic signature counterparts in any form or format and (y) the Agent and the Lender reserve the right to require, at any time and at its sole discretion, the delivery of manually executed counterpart signature pages to this Agreement and the parties hereto agree to promptly deliver such manually executed counterpart signature pages.

15. Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns (except that a Borrower may not assign or transfer its rights hereunder), and no other parties shall be a beneficiary hereunder.

16. Miscellaneous.  This Amendment (a) shall be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania; and (b) may only be amended or modified pursuant to a writing signed by the parties hereto.  If any provision hereof is in conflict with any statute or rule of law of the Commonwealth of Pennsylvania or any other statute or rule of law of any other applicable jurisdiction or is otherwise unenforceable, such provisions shall be deemed null and void only to the extent of such conflict or unenforceability and shall be deemed separate from and shall not invalidate any other provision of this Agreement.

17. WAIVER OF JURY TRIAL.  EACH BORROWER HEREBY WAIVES ANY AND ALL RIGHTS WHICH IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION COMMENCED BY OR AGAINST THE AGENT OR THE LENDER WITH RESPECT TO THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO.

18. Reimbursement of Costs.  The Borrowers hereby jointly and severally agree that they will pay, or cause to be paid or reimburse the Agent and the Lender for, all of costs and expenses incurred by them in connection with this Amendment, including without limitation the fees of their legal counsel.

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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be executed and delivered by their respective officers thereunto duly authorized, as of the 2nd day of June, 2020.

BORROWERS:	RCM TECHNOLOGIES, INC.
	By:	/s/ Kevin D. Miller
	Print Name:				Kevin D. Miller
	Title:		CFO
	RCM TECHNOLOGIES (USA), INC.
	By:	/s/ Kevin D. Miller
	Print Name:				Kevin D. Miller
	Title:		CFO
	RCMT DELAWARE, INC.
	By:	/s/ Kevin D. Miller
	Print Name:				Kevin D. Miller
	Title:		CFO
	RCM TECHNOLOGIES CANADA CORP.
	By:	/s/ Kevin D. Miller
	Print Name:				Kevin D. Miller
	Title:		CFO
	RCM EUROPE HOLDINGS, INC.
	By:	/s/ Kevin D. Miller
	Print Name:			Kevin D. Miller
	Title:		CFO

SCHEDULE I

See attached.