FIRST AMENDMENT AND WAIVER TO
FIFTH AMENDED AND RESTATED LOAN AGREEMENT
This is the first amendment and waiver (the "Amendment") dated March 24,
2000, to the Fifth Amended And Restated Loan Agreement dated November 12, 1999
(the "Loan Agreement") by and between Blonder Tongue Laboratories, Inc. having
an office at One Jake Brown Road, Old Bridge, New Jersey 08857 (the "Borrower"),
and First Union National Bank having an office at 190 River Road, Summit, New
Jersey 07901 (the "Bank").
RECITALS
A. On November 12, 1999 the Bank and the Borrower entered into the Loans
Agreement.
B. Borrower is in breach of certain covenants under the Loan Agreement and
has requested and waiver and amendment of same.
C. The Bank is willing to provide such a waiver and to amend the Loan
Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the agreement of the parties contained
herein, and intending to be legally bound, the parties hereto agree as follows:
1. Definitions.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the Loan Agreement as amended by any prior amendments.
2. Amendments to Loan Agreement.
a. Section 2.1 is hereby amended to replace "$7,500,000" with the
following: "$7,500,000 until March 24, 2000, $7,000,000 from March 24, 2000
until April 13, 2000, $6,250,000 from April 14, 2000 to June 15, 2000,
$5,750,000 from June 16, 2000 to July 31, 2000, $5,500,000 from August 1,
2000 to September 30, 2000, $0 after September 30, 2000".
b. Section 2.1(a) is hereby amended to replace "June 30, 2000" with
"September 30, 2000".
3. Waivers.
a. Subject to the terms and conditions set forth in this Amendment,
the Bank waives compliance with the financial covenants set forth in
Section 7.1 of the Loan Agreement (i) as of December 31, 1999, provided
that as of December 31, 1999 the Company had a Leverage Ratio of not more
than 4.50 to 1.00, a Fixed Charge Ratio of
not less than 0.80 to 1.00 and a Tangible Net Worth of not less than
$17,480,000; and (ii) as of March 31, 2000, provided that as of March 31,
2000 the Company has a Leverage Ratio of not more than 4.00 to 1.00, a
Fixed Charge Ratio of not less than 0.90 to 1.00 and a Tangible Net Worth
of not less than $18,500,000.
b. Subject to the terms and condition set forth in this Amendment, the
Bank waives any Default or Event of Default that may have arisen from the
capitalization of Blonder Tongue Investment Company.
4. General.
This Amendment is made pursuant to the Loan Agreement, and the parties
hereto acknowledge that all provisions of the Loan Agreement, except as amended
hereby, shall remain in full force and effect.
5. Restated Line of Credit Note.
In order to evidence and continue the Line of Credit Loans as amended and
modified pursuant to this Amendment, Borrower shall execute and deliver to the
Bank a replacement note in the form attached hereto as Exhibit A (the "Restated
Line of Credit Note"). The Restated Line of Credit Note amends, restates,
replaces and continues (but not a novation or repayment of) the Line of Credit
Note. Amounts owing under the Line of Credit Note shall be deemed to be
evidenced and continued by the Restated Line of Credit Note. Accrued and unpaid
interest due and owing under the Line of Credit Note as of the date of execution
of this Amendment shall be due at the time that the first payment of interest
under the Restated Line of Credit Note is due and payable. The Line of Credit
Note will be marked "replaced" and returned to the Borrower by the Bank.
6. Definitions.
Whenever appearing in the Loan Agreement or any other Loan Document, the
term "Agreement" shall be deemed to mean the Loan Agreement as amended hereby.
Whenever appearing in the Loan Agreement or any other Loan Document, the term
"Line of Credit Note" shall be deemed to mean the Restated Line of Credit Note.
7. Representations and Warranties.
The Borrower represents and warrants to the Bank that: (i) it has the
power, and has taken all necessary action to authorize, execute and deliver this
Amendment and the Restated Line of Credit Note and perform its obligations in
accordance with the terms thereunder, (ii) the Amendment and the Restated Line
of Credit Note are the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with their terms without any
offsets, counterclaims or defenses, (iii) the execution, delivery and
performance of this Amendment by the Borrower will not (a) require any
governmental approval or any other consent or approval; or (b) violate, conflict
with, result in a breach of, constitute a default under any agreement to which
it is a party, or result in or require the creation of any lien upon any of
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the assets of the Company or any Subsidiary, (iv) other than the financial
covenant non-compliance which is the subject of this Amendment, no Event of
Default has occurred and is continuing or will result from the execution by the
Borrower of this Amendment, and (v) the financial information provided by the
Borrower to the Bank in connection with the Borrower's request that the Bank
enter into this Amendment is true and correct in all material respects.
8. Amendment Fee.
The Borrower shall pay to the Bank a fee of $50,000 in connection with this
Amendment which fee shall be due and payable upon the signing of this Amendment.
9. Audits and Valuations.
Without changing any of the Bank's other rights under the Loan Agreement,
the Borrower agrees to cooperate, and to pay the fees and expenses of the Bank
in connection, with: (i) a collateral audit to be conducted by Boston &
Associates, (ii) an appraisal of the property which is the subject to the
Mortgage, and (iii) a valuation or appraisal of patents owned by the Borrower.
Reimbursement for or payment of any such fees and expenses shall be made within
ten business days following presentation of an invoice to the Borrower by the
Bank.
10. Fees of Bank's Counsel.
The Borrower shall pay the fees and expenses of McCarter & English in
connection with the preparation and negotiation of this Amendment and all
related documents.
11. Conditions to Effectiveness.
It shall be a condition to the effectiveness of this Amendment that the
Bank has received the following:
a. This Amendment, duly executed on behalf of the Borrower and the
Bank;
b. The Restated Line of Credit Note, duly executed by the Borrower
c. The Guaranty of Blonder Tongue Investment Company
d. The Security Agreement of Blonder Tongue Investment Company
e. UCC financing statements listing Blonder Tongue Investment Company
as debtor and Bank as secured party describing the collateral in which the
Bank is granted a security interest in the foregoing security agreement to
be filed in such jurisdictions as the Bank may require;
f. A certificate from the Secretary the Borrower (i) to which is
attached a copy of the Certificate of Incorporation certified by the
Secretary of State of Delaware and a copy of the By-laws of the Borrower
(or a certification that such documents have not
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been modified since November 12, 1999), (ii) to which is attached a
resolution of the Board of Directors authorizing the execution, delivery
and performance of this Amendment, and (iii) setting forth the name and
sample signature of the officers of the Borrower authorized to execute and
deliver this Amendment; and
g. A certificate from the Secretary the Blonder Tongue Investment
Company (i) to which is attached a copy of the Certificate of Incorporation
certified by the Secretary of State of Delaware and a copy of its By-Laws,
(ii) to which is attached a resolution of the Board of Directors
authorizing the execution, delivery and performance of its guaranty and
security agreement, and (iii) setting forth the name and sample signature
of the officers of the Blonder Tongue Investment Company authorized to
execute and deliver its guaranty and security agreement.
12. Integration.
This Amendment together with the Loan Agreement constitute the entire
agreement and understanding among the parties relating to the subject matter
hereof and thereof and supersedes all prior proposals, negotiations, agreements
and understandings relating to such subject matter.
13. Severability.
If any provision of this Amendment shall be held invalid or unenforceable
in whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or enforceability
without in any manner affecting the validity or enforceability of such provision
in any other jurisdiction or the remaining provisions of this Amendment in any
other jurisdiction.
14. No Defenses, Off-Sets or Counterclaims.
By executing this Amendment, Borrower confirms and acknowledges that as of
the date of execution hereof, Borrower has no defenses, off-sets or
counterclaims against any of Borrower's obligations to the Bank under the Loan
Documents, including the Loan Agreement (as amended hereby). Borrower hereby
acknowledges and agrees that the actual amounts outstanding on the date of
execution hereof are owing the Bank without defense, offset or counterclaim.
15. Incorporation by Reference.
This Amendment is incorporated by reference into the Loan Agreement and the
other Loan Documents. Except as otherwise provided herein, all of the other
provisions of the Loan Agreement and the other Loan Documents are hereby
confirmed and ratified and shall remain in full force and effect as of the date
of this Amendment.
16. Governing Law; Successors and Assigns.
This Amendment is governed by the laws of the State of New Jersey and is
binding upon
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the Borrower and the Bank and their respective successors and/or assigns and/or
heirs and executors, as the case may be.
17. Counterparts.
This Amendment may be executed by one or more of the parties on any number
of separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, on the date
first above written.
BLONDER TONGUE LABORATORIES, INC.
By: /s/ James A. Luksch
----------------------------
James A. Luksch, President
FIRST UNION NATIONAL BANK
By: /s/ Larry Lee
------------------------
Name: Larry Lee
Title: Vice President
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Exhibit A
FIRST RESTATEMENT OF THE
FIFTH AMENDED AND RESTATED LINE OF CREDIT NOTE
$7,000,000 As of November 12, 1999
Restated on March 24, 2000
FOR VALUE RECEIVED, BLONDER TONGUE LABORATORIES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of FIRST UNION
NATIONAL BANK (the "Bank") on the Termination Date the principal amount of SEVEN
MILLION DOLLARS ($7,000,000) or, if less, the aggregate outstanding principal
under the Line of Credit extended under the Fifth Amended and Restated Loan
Agreement dated November 12, 1999 by and between the Borrower and the Bank as
amended by the First Amendment and Waiver to the Fifth Amended and Restated Loan
Agreement dated the date hereof as may be further amended, modified or restated
from time to time (the "Loan Agreement"). Terms capitalized but not defined
herein shall have the meanings given to them respectively in the Loan Agreement.
Reference is made to the Loan Agreement for a statement of the terms and
conditions under which the loans evidenced hereby have been made, secured, and
may be prepaid or accelerated. This Note amends and restates and replaces (but
does not discharge) the obligations of the Borrower under the Fifth Amended and
Restated Line of Credit Note dated as of November 12, 1999, as such note has
been amended, modified and/or extended.
Until maturity (whether by acceleration or otherwise) interest shall accrue
on the outstanding principal balance hereof at the rate set forth in the Loan
Agreement. Interest shall be calculated on the basis of a 360-day year, counting
the actual number of days elapsed. Subsequent to maturity or the occurrence of
any Event of Default, and continuing after entry of any judgment against the
Borrower with respect to the obligations evidenced by this Note, interest shall
accrue at an annual rate which shall be two percent (2%) above the rate of
interest otherwise payable hereunder. Accrued interest shall be payable monthly
on the first day of each month commencing with the month immediately following
date hereof and if not paid when due, shall be added to the principal. All
amounts payable by the Borrower to the Bank hereunder shall be paid directly to
the Bank at 190 River Road, Summit, New Jersey 07901 (or at such other address
of which the Bank shall give notice to the Borrower in accordance with the Loan
Agreement) in immediately available funds.
The Borrower hereby waives the requirements of demand, presentment,
protest, notice of protest and dishonor and all other demands or notices of any
kind in connection with the delivery, acceptance, performance, default, dishonor
or enforcement of this Note. The internal law of the State of New Jersey shall
govern the construction, interpretation and enforcement of this Note.
This note amends, restates, replaces and continues (but not a novation or
repayment of) the Fifth Amended and Restated Line of Credit Note dated November
12, 1999.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Borrower
has caused this Note to be executed by its duly authorized officer as of the day
and year first above written.
BLONDER TONGUE LABORATORIES, INC.
BY:
------------------------------
James A. Luksch, President
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