First Union National Bank
190 River Road - NJ 0000
Xxxxx Xxxxx
Xxxxxx, XX 00000
August 13, 2001
Blonder Tongue Laboratories, Inc.
Xxx Xxxx Xxxxx Xxxx
Xxx Xxxxxx, Xxx Xxxxxx 00000
Gentlemen:
Reference is made to the Fifth Amended and Restated Loan Agreement
between First Union National Bank (the "Bank") and Blonder Tongue Laboratories,
Inc. (the "Company") dated as of November 12, 1999 as amended (the "Loan
Agreement"). As you know, the information that the Company has provided to the
Bank for the second fiscal quarter of 2001 demonstrates that, as of the end of
that quarter, the Company is not in compliance with the financial covenant set
forth in Subsection 7.1(a) of the Loan Agreement. Capitalized terms contained in
this letter agreement which are not otherwise defined shall have the meaning set
forth in the Loan Agreement.
At your request, subject to the terms and conditions set forth in this
letter agreement, and subject to and in consideration of the Company's agreement
to the terms and conditions of this letter agreement, the Bank waives compliance
with the financial covenant set forth in Subsections 7.1(a) of the Loan
Agreement as of June 30, 2001; provided that as of June 30, 2001 the Company had
a Leverage Ratio of not greater than 3.30 to 1.00.
In consideration of the waiver granted by the Bank hereunder, the
Company agrees to immediately pay to the Bank a waiver fee of $10,000. Any
failure to comply with the foregoing agreement of the Company shall be an "Event
of Default" under the Loan Agreement.
As further consideration, and without limiting any of the Bank's rights
under the Loan Agreement, the Company agrees to reimburse the Bank for an
additional appraisal of its fixed assets which shall be ordered by the Bank.
The Company acknowledges that all provisions of the Loan Agreement,
except as expressly waived by the Bank, remain in full force and effect.
The Company represents and warrants to the Bank that: (i) it has the
power, and has taken all necessary action to authorize, execute and deliver its
acknowledgment of and agreement to this letter agreement and perform its
obligations in accordance with the terms of this letter agreement, (ii) this
letter agreement is the legal, valid and binding obligation of the Company
enforceable against the Company in the accordance with its terms, (iii) the
execution, delivery and performance of this letter agreement by the Company 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 letter
agreement, no Event of Default has occurred and is continuing, and (v) the
financial information provided by the Company to the Bank in connection with the
Company's request the Bank enter into this letter agreement is true and correct
in all material respects.
The Company shall pay the fees and expense of XxXxxxxx & English,
counsel to the Bank related hereto. This letter shall be governed by and
construed under the laws of the State of New Jersey and is binding upon the
Company and the Bank and their respective successors and/or assigns, as the case
may be. The Company confirms and acknowledges that as of the date of this
letter, the Company has no defenses, off-sets or counterclaims against any of
the Company's obligations to the Bank under the Loan Documents, including the
Loan Agreement.
Please have a copy of this letter signed on behalf of the Company
acknowledging and agreeing to the foregoing.
Very truly yours,
First Union National Bank
By: /s/ Xxxxx X. Xxx
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Xxxxx X. Xxx
Vice President
Acknowledge and Agreed:
Blonder Tongue Laboratories, Inc.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President
