SECOND AMENDMENT AND WAIVER TO
FIFTH AMENDED AND RESTATED LOAN AGREEMENT
This is the second amendment and waiver (the "Amendment") dated August
11, 2000, to the Fifth Amended And Restated Loan Agreement dated November 12,
1999 as amended by the first amendment dated March 24, 2000 (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. As of June 30, 2000 Borrower was in breach of certain covenants
under the Loan Agreement and has requested a waiver of same together with an
amendment extending the "Termination Date" of the Loan Agreement to February 15,
2001.
B. 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.
Section 2.1(a) is hereby amended to replace "September 30, 2000" with
"February 15, 2001".
3. Waivers.
Subject to the terms and conditions set forth in this Amendment, the
Bank waives compliance with the financial covenants set forth in Subsections
7.1(b) and 7.1(c) of the Loan Agreement as of June 30, 2000, provided that as of
June 30, 2000 the Company had a Fixed Charge Ratio of not less than 1.17 to 1.00
and a Tangible Net Worth of not less than $22,250,000.
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 existing
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 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 $35,000 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
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the Bank in connection, with a collateral audit to be conducted by Boston &
Associates. 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; and
c. 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 been modified
since November 12, 1999), (ii) attesting to authorization of the person
signing this Amendment on behalf of the Borrower, and (iii) setting
forth the name and sample signature of the officers of the Borrower
authorized to execute and deliver this Amendment.
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
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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 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/Peter Pugielli
---------------------------------
Name: Peter Pugielli
Title: C.F.O.
FIRST UNION NATIONAL BANK
By: /s/Larry Lee
---------------------------------
Name: Larry Lee
Title: Vice President
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Exhibit A
SECOND RESTATEMENT OF THE
FIFTH AMENDED AND RESTATED LINE OF CREDIT NOTE
$5,500,000 As of November 12, 1999
Restated on March 24, 2000
Further restated August 11, 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 FIVE
MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000) 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 March 24, 2000 and the Second 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 is not a
novation or repayment of) the First Restatement of the Fifth Amended and
Restated Line of Credit Note dated March 24, 2000.
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.