SECOND AMENDMENT TO
AMENDED AND RESTATED LOAN AGREEMENT
THIS IS A SECOND AMENDMENT dated as of May 23, 1996, ("Second Amendment")
to the Amended and Restated Loan Agreement dated as of October 2, 1995, and
subsequently amended by a letter agreement dated December 11, 1995 (as amended,
modified and/or extended, the "Loan Agreement") between MERIDIAN BANK, a
Pennsylvania banking corporation (the "Bank"), and BLONDER TONGUE LABORATORIES,
INC., a Delaware corporation (the "Borrower").
BACKGROUND
A. Pursuant to the Loan Agreement the Bank has made available to the
Borrower a line of credit in the maximum principal amount of Fifteen Million
Dollars ($15,000,000) (the "Line of Credit").
B. The parties hereto now desire to amend the Loan Agreement to provide
for a real estate loan in the principal amount of $2,800,000 for the purpose of
refinancing certain real property owned by the Borrower.
Accordingly, the Bank and the Borrower, intending to be legally bound,
hereby agree as follows:
1. Effect of Prior Amendments.
This Second Amendment is intended to amend the Loan Agreement, as it
has been in effect to the date hereof and as it shall be amended on and after
the date hereof. Except as modified hereby, all capitalized terms used herein
which are defined in the Loan Agreement shall have the same meanings herein as
in the Loan Agreement unless herein provided to the contrary.
2. Amendments.
(a) New Definitions. The following new definitions are hereby added
to Article I of the Loan Agreement to read as follows:
"First Amendment" shall mean that certain letter agreement
between the Bank and the Borrower dated December 11, 1995.
"Mortgage" shall mean a mortgage, dated the Second Amendment
Closing Date, in form and substance satisfactory to the Bank, by which the
Borrower shall grant to the Bank a mortgage lien on real property located at One
Jake Brown Road, Old Bridge, New Jersey, together with all amendments,
modifications, exhibits and schedules thereto as may be in effect from time to
time.
"Second Amendment" shall mean the Second Amendment to the Amended
and Restated Loan Agreement dated the Second Amendment Closing Date.
"Second Amendment Closing Date" shall mean the date of the Second
Amendment.
"Second Amendment Loan Documents" shall mean the Second
Amendment, the Real Estate Loan Note, the Reaffirmations, the Mortgage and all
replacements, amendments, extensions and renewals of any of the foregoing.
"Reaffirmation of Blonder Security Agreement" shall mean that
certain reaffirmation by the Borrower of the Blonder Security Agreement, dated
the Second Amendment Closing Date.
"Reaffirmation of Patent Assignment" shall mean that certain
reaffirmation by the Borrower of the Patent Assignment, dated the Second
Amendment Closing Date.
"Reaffirmation of Trademark Assignment" shall mean that certain
reaffirmation by the Borrower of the Trademark Assignment dated the Second
Amendment Closing Date.
"Real Estate Loan" shall mean the loan made by the Bank to the
Borrower pursuant to Section 2.7 of the Loan Agreement.
"Real Estate Loan Note" shall have the meaning set forth in
Section 2.7(c) of the Loan Agreement, together with all replacements, amendments
and renewals thereof.
(b) Amended Definitions. The following definitions set forth in
Article I of the Loan Agreement are hereby amended and restated in their
entirety as follows:
"Loan Documents" shall mean this Agreement, the Security
Agreements, the Mortgage, the Notes, the Guaranty Agreements, the Patent
Assignment, the Trademark Assignment, the Life Insurance Assignments, the First
Amendment, the Second Amendment Loan Documents and all agreements, amendments,
certificates, financing statements, schedules, reports, notices, and exhibits
now or hereafter executed or delivered in connection with any of the foregoing,
as may be in effect from time to time.
"Loans" shall mean the Line of Credit Loans and the Real Estate
Loan.
-2-
"Notes" shall mean the Line of Credit Note, and the Real Estate
Loan Note and all replacements, amendments, extensions and renewals thereof.
"Reaffirmations" shall mean the Reaffirmation of Patent
Assignment, the Reaffirmation of Trademark Assignment and the Reaffirmation of
Blonder Security Agreement.
(c) Deleted Definitions. The following definitions set forth in
Article I of the Loan Agreement are hereby deleted in their entirety: Leasehold
Mortgage, International Guaranty, International Security Agreement,
Reaffirmation and Amendment of International Guaranty, Reaffirmation and
Amendment of International Security Agreement, Limited Guaranty, Pledge
Agreement.
(d) Section 2.5 of the Loan Agreement is hereby amended by changing
the word "Loans" on the second line of such Section to "Line of Credit Loans."
(e) Section 2.2 of the Loan Agreement is hereby deleted in its
entirety.
(f) Article II of the Loan Agreement is hereby amended by adding the
new Sections 2.7 and 2.8 which shall read in their entirety as follows:
2.7 Real Estate Loan.
(a) Generally. The Bank shall make available to the Borrower
on the Second Amendment Closing Date a term loan ("Real
Estate Loan") of $2,800,000, the proceeds of which shall be
used refinance certain land and the buildings and other
improvements thereon owned by the Borrower and located at
One Jake Brown Road, Old Bridge, New Jersey (the
"Property"). The Borrower shall repay the outstanding
principal of the Real Estate Loan in one hundred nineteen
(119) equal, consecutive, monthly installments in the amount
of $15,555.56 on the first day of each month beginning June
1, 1996, and a final installment, consisting of the entire
remaining principal balance of the Real Estate Loan,
together with all accrued interest thereon due and payable
May 1, 2006.
-3-
(b) Interest. Interest shall accrue on the outstanding
principal of the Real Estate Loan at an annual rate equal to
seven and one quarter of one percent (7.25%) for the period
commencing on the Second Amendment Closing Date and ending
on June 1, 1999. Thereafter, interest shall accrue at an
annual rate equal at all times to the National Commercial
Rate, which rate shall change simultaneously and
automatically upon each change in the Bank's National
Commercial Rate, or another fixed rate agreed upon between
the Bank and the Borrower. Interest shall be payable monthly
on the first day of each month beginning June 1, 1996.
(c) Real Estate Loan Note. The obligations of the Borrower
to repay the aggregate outstanding principal under the Real
Estate Loan and to pay accrued interest thereon shall be
evidenced by a promissory note, in form and substance
satisfactory to the Bank, to be executed and delivered to
the Bank on the Second Amendment Closing Date (the "Real
Estate Loan Note").
(d) Commitment Fee. In addition to the interest payable by
the Borrower to the Bank in respect of the Real Estate Loan,
the Borrower shall pay to the Bank on or prior to the Second
Amendment closing Date, a commitment fee of $7,000.00. The
Borrower hereby irrevocably authorizes the Bank to charge
any account maintained by the Borrower at the Bank for the
payment of such fee.
2.8 Prepayment and Repayment. The Borrower shall pay a prepayment
premium with respect to the Real Estate Loan bearing interest at
a fixed rate equal to the difference between (x) the aggregate
amount of interest which would otherwise have been payable on
such prepaid amount from the date of prepayment to the date when
such prepaid amount was due (but in no event beyond the date on
which interest on the Real Estate Loan converts from a fixed rate
to a floating rate as prescribed in Section 2.7(b) above), unless
the parties have agreed to a new fixed rate of interest to be
applicable after such date and (y) the aggregate amount of
interest which the Bank would earn if
-4-
such prepaid amount were invested at the Treasury Rate Security
Yield from the date of prepayment to the date when such prepaid
amount was due (but in no event beyond the date on which interest
on the Real Estate Loan converts from a fixed rate to a floating
rate as prescribed in Section 2.7(b) above), unless the parties
have agreed to a new fixed rate of interest to be applicable
after such date, which difference in interest earnings shall be
discounted to present value at the Treasury Rate Security Yield.
The term, "Treasury Rate Security Yield", means the bond
equivalent yield to maturity available on the secondary market on
a Treasury Security with a maturity as close as possible to the
scheduled maturity of the prepaid amount and a coupon as close as
possible to the bond equivalent yield. The Bank's determination
of the amount of any prepayment premium will be conclusive and
binding absent manifest error, however, the Bank will permit the
Borrower to rebut such amounts if they do so in writing, with
appropriate evidence thereof, within ten (10) Business Days from
the date of notification by the Bank. All prepayments of
outstanding principal shall be applied to installments of
principal due thereunder in the inverse order of maturity.
(f) Article VII of the Loan Agreement is hereby amended by adding the
new Section 7.15 which shall read in its entirety as follows:
"7.14 Blonder International. From and after the Second Amendment
Closing Date, and until satisfaction in full of all Obligations
of the Borrower to the Bank, unless the Bank shall otherwise
consent in writing, the Borrower shall not transfer assets having
a value in excess of $200,000 in the aggregate to Blonder
International, and shall not permit Blonder International to have
assets having an aggregate book value in excess of $200,000.
3. Sale of Blonder International. Notwithstanding any other provisions of
the Loan Agreement to the contrary, the Bank hereby consents to the sale of all
or substantially all of the assets or stock of Blonder International.
-5-
4. Representations and Warranties.
The Borrower hereby represents and warrants to the Bank that:
(a) It has the power and authority to execute, deliver and perform
the Second Amendment Loan Documents and all other documents referenced or
delivered in connection therewith, it has taken all necessary corporate action
to authorize the execution, delivery and performance of the Second Amendment
Loan Documents, and the Second Amendment Loan Documents constitute the legal,
valid and binding obligations of the Borrower, enforceable in accordance with
their respective terms;
(b) No default or Event of Default has occurred, and no event has
occurred which, with the passage of time, the giving of notice or both would
result in a default or an Event of Default under the Loan Agreement, or any
other documents executed in connection therewith except such as has been waived
in writing by the Bank;
(c) Since the date of execution and delivery of the Loan Agreement,
except to the extent previously disclosed by the Borrower to the Bank in
writing, there has not been any material adverse change in the business,
operations, properties or financial position of the Borrower;
(d) All of the representations and warranties made by the Borrower in
the Loan Agreement, and any other documents executed in connection therewith are
true and correct as of the date of this Second Amendment as if such
representations and warranties had been made on the date hereof.
5. Conditions Precedent.
In order to induce the Bank to enter into this Second Amendment, the
Borrower shall first satisfy the following conditions precedent:
(a) The Borrower shall have executed and delivered to the Bank the
Second Amendment and all such other documents and instruments as the Bank may
reasonably request;
(b) The Borrower shall have executed and delivered to the Bank the
Mortgage, in form suitable for recording;
(c) The Borrower shall have executed and delivered to the Bank the
Real Estate Loan Note;
-6-
(d) Each of the Reaffirmations shall have been duly executed by the
parties thereto and delivered to the Bank;
(e) The Borrower shall furnish to the Bank copies of resolutions of
its Board of Directors, which shall be certified as of the date hereof as being
true, correct and complete, authorizing the Borrower's execution and delivery of
the Second Amendment Loan Documents, its performance of the transactions
contemplated thereby, and the taking of all such other and further actions by
the Borrower in connection herewith and therewith as may be necessary or proper;
(f) The Borrower shall have furnished to the Bank a certificate,
dated as of the date hereof, as to the incumbency and signatures of the
officer(s) signing the Second Amendment Loan Documents and each other document
to be executed and delivered pursuant hereto;
(g) The Borrower shall have furnished to the Bank a certificate,
dated as of the date hereof, certifying that the Certificate of Incorporation
and the Bylaws of the Borrower have not been amended since October, 1995, except
as otherwise previously disclosed in writing to the Bank;
(h) The Borrower shall deliver a certificate of authority or good
standing for the Borrower issued by the secretary of state of the State of
Delaware and the State of New Jersey;
(i) The Borrower shall pay to the Bank the commitment fee of $7,000;
(j) An opinion from Borrower's counsel in form and substance
satisfactory to the Bank and its counsel;
(k) A commitment for a policy of title insurance issued by a title
company satisfactory to the Bank insuring the Mortgage as a valid mortgage lien,
subject only to such exceptions approved by the Bank shall be delivered to the
Bank.
6. Payment of Expenses.
The Borrower shall pay or reimburse the Bank promptly for all
reasonable counsel fees, costs and other expenses incurred by the Bank in
connection with the preparation and execution of the Second Amendment Loan
Documents and all documents and instruments executed in connection herewith.
-7-
7. Ratification and Confirmation.
Except as amended hereby or unless no longer applicable by their
terms, all of the terms and provisions of the Loan Agreement continue unchanged,
shall remain in full force and effect and are hereby ratified and confirmed. To
the extent that any term or provision of this Second Amendment is or may be
deemed expressly inconsistent with any term or provision in the Loan Agreement,
the terms and provisions hereof shall control.
8. Miscellaneous.
(a) All references to the "Agreement" or the "Loan Agreement" in the
Loan Documents shall be deemed to refer to the Loan Agreement as the same has
been amended through the date hereof, and as the same may be amended in the
future.
(b) This Second Amendment may be executed in two or more counterparts
and by the Bank and the Borrower on separate counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and
the same Second Amendment.
-8-
IN WITNESS WHEREOF, the Bank and the Borrower have caused this Second
Amendment to be executed by the duly authorized officers on the date first above
written.
MERIDIAN BANK
By:____________________________
Title:_________________________
Attest: BLONDER TONGUE LABORATORIES,
INC.
By:____________________________ By:____________________________
Title: James A. Luksch, President
-9-
STATE OF :
: SS
COUNTY OF :
I CERTIFY that on May __, 1996, James A. Luksch, the President of BLONDER
TONGUE LABORATORIES, INC., a Delaware corporation, personally appeared before
me, who I am satisfied to be the person who signed the foregoing instrument, and
acknowledged that he was authorized to execute the same as the act of said
corporation.
______________________________
Name:_________________________
Title:________________________
-10-