FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED LOAN AGREEMENT
This is the first amendment (the "Amendment") dated March 23, 1998, to
the Third Amended and Restated Loan Agreement dated October 29, 1997 (the
"Existing Loan Agreement") by and between Blonder Tongue Laboratories, Inc (the
"Borrower"), and CoreStates Bank, National Association (the "Bank").
RECITALS
A. The Borrower and the Bank entered into the Existing Loan Agreement on
October 29, 1997 which provided for or reaffirmed (i) a working capital line of
credit in the maximum principal amount of $15,000,000 (the "Working Capital Line
of Credit"), (ii) a term loan which was used to refinance the purchase of the
land and buildings located at One Xxxx Xxxxx Road, Old Bridge, New Jersey (the
"Real Estate Loan"), and (iii) an acquisition facility in the maximum principal
amount of $15,000,000 (the "Acquisition Facility").
B. Borrower and Bank entered into a letter amendment to the Existing Loan
Agreement dated January 2, 1998 the terms of which amendment are superceded
hereby.
C. The obligations of the Borrower to the Bank under the Existing Loan
Agreement including, the Working Capital Line of Credit, the Real Estate Loan
and the Acquisition Facility, are secured by a Mortgage, Assignment of Leases
and Security Agreement dated May 23, 1996 (the "Mortgage").
D. In connection with the Existing Loan Agreement the Borrower executed
and delivered to the Bank a Reaffirmation and Amendment of Blonder Security
Agreement dated October 29, 1997 in which, among other things, the Borrower
reaffirms and amends the Amended and Restated Security Agreement dated October
2, 1995 as amended (the "Security Agreement") to expressly provide, among other
things, that the security interest granted thereunder shall continue to secure
the obligations of the Borrower to the Bank under the Existing Loan Agreement.
E. In connection with the Existing Loan Agreement the Borrower executed
and delivered to the Bank a Reaffirmation and Amendment of Patent Security
Agreement dated October 29, 1997 in which, among other things, the Borrower
reaffirms and amends the Patent Security Agreement dated March 30, 1989 as
amended (the "Patent Security Agreement"), to expressly provide, among other
things, that the security interest granted thereunder shall continue to secure
the obligations of the Borrower to the Bank under the Existing Loan Agreement.
F. In connection with the Existing Loan Agreement the Borrower executed
and delivered to the Bank a Reaffirmation and Amendment of Trademark Security
Agreement dated October 29, 1997 in which, among other things, the Borrower
reaffirms and amends the Trademark Security Agreement dated March 30, 1989 as
amended (the "Trademark
Security Agreement"), to expressly provide, among other things, that the
security interest granted thereunder shall continue to secure the obligations of
the Borrower to the Bank under the Existing Loan Agreement.
G. The Borrower has requested that the Bank increase the maximum amount
that may be outstanding under the Acquisition Facility to $20,000,000 and the
Bank, subject to the terms and conditions set forth below, has agreed to
Borrower's request.
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. Recitals and Definitions. Borrower and Bank acknowledge and agree that
the foregoing recitals are true and correct as of the date of this Amendment.
Capitalized terms used herein and not defined shall have the meanings assigned
to them in the Existing Loan Agreement.
2. Amendments to Article I.
a. Article I of the Existing Loan Agreement is amended to add to the
definition of "Acquisition Loan Adjusted Overnight Base Rate" the following
language at the end of the existing definition: "Adjustments to the
Acquisition Loan Adjusted Overnight Base Rate arising from changes in the
ratio of Senior Debt to Capital Funds as determined with respect to the end
of any fiscal quarter shall be made effective as of the first Business Day
of the immediately following fiscal quarter based upon the financial
statements delivered under Subsection 6.2(a) or Subsection 6.2(b). In the
event of an increase resulting from such a change, the Borrower shall pay
the difference between the amount of interest paid and the amount due
taking into account such increase within five days following written notice
from the Bank. In the event of a decrease resulting from such a change, the
Bank shall promptly refund any overpayment of interest taking into account
such decrease."
b. Article I of the Existing Loan Agreement is amended to add a new
definition as follows:
"CFM Agreement" shall mean the CoreStates Funds
Manager Legal Agreement signed by the Borrower on
January 29, 1997.
c. Article I of the Existing Loan Agreement is amended to add to the
definition of "Line of Credit Adjusted Overnight Base Rate" the following
language at the end of the existing definition: "Adjustments to the Line of
Credit Adjusted Overnight Base Rate arising from changes in the ratio of
Senior Debt to Capital Funds as determined with respect to the end of any
fiscal quarter shall be made effective as of the first Business Day of the
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following fiscal quarter based upon the financial statements delivered
under Subsection 6.2(a) or Subsection 6.2(b) hereof. In the event of an
increase resulting from such a change, the Borrower shall pay the
difference between the amount of interest paid and the amount due taking
into account such increase within five days following written notice from
the Bank. In the event of a decrease resulting from such a change, the Bank
shall promptly refund any overpayment of interest taking into account such
decrease."
3. Amendments to Section 2.1. Subsection 2.1(a) of the Existing Loan
Agreement is amended as follows: (i) after the word "Borrower" at the beginning
of the fourth line of Subsection 2.1(a) insert the following words: "or pursuant
to the terms of the CFM Agreement related to the 'loan module'", and (ii) add to
the end of the third sentence of Subsection 2.1(a) the following words: "and the
CFM Agreement".
4. Amendments to Section 2.3. Section 2.3 of the Existing Loan Agreement
is amended as follows:
a. The first sentence of Section 2.3 is amended to add after
"$15,000,000" the words "and commencing on March 25, 1998 the maximum
principal amount of $20,000,000".
b. The last sentence of Subsection 2.3(a) is deleted.
c. Subsection 2.3(b) is amended as follows: (i) "and" is deleted
from the end of Subsection 2.3(b)(2), (ii) the period at the end of
Subsection 2.3(b)(3) is deleted and replaced with "; and", and (iii)
new Subsection 2.3(b)(4) is added as follows:
(4) copies of any purchase agreement or other agreement of sale
entered into by the Borrower in connection with the acquisition
to be financed with the proceeds of such Acquisition Loan,
together with copies of all other documents executed or delivered
in connection therewith.
d. Subsection 2.3(c) is amended to read in its entirety as
follows:
The Borrower shall deliver to the Bank within thirty (30)
days after the funding of the Acquisition Loan evidence
satisfactory to the Bank of the transfer of the assets or stock
acquired by the Borrower, free and clear of all liens and
encumbrances except those liens and encumbrances permitted under
Section 7.3.
e. Subsection 2.3(d) is amended to read in its entirety as
follows:
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(d) Repayment of Acquisition Loans; Interest.
(i) Five Business Days prior to the making of any Acquisition Loan the
Borrower shall specify whether it elects for such loan to have an "interest
only" period and, if so, the length of such period ending on the first
Business Day of any month up to six months following the date of the
closing of the Acquisition Loan. If an "interest only" period is elected,
then the Acquisition Loan shall bear interest during such period at the
Acquisition Loan Adjusted Overnight Base Rate which rate shall change
simultaneously and automatically upon each change of the Bank's Overnight
Base Rate or as otherwise provided in the definition of such rate.
(ii) At least five Business Days before the end of any "interest only"
period or the closing of the Acquisition Loan if the Borrower elects not to
have an "interest only" period, as the case may be, the Borrower shall
elect (A) a repayment period for the Acquisition Loan of up to 60 months,
and (B) for the Acquisition Loan to bear interest at either (1) the
Acquisition Loan Adjusted Overnight Base Rate, or (2) a fixed rate as
offered by the Bank with respect to the repayment period elected by the
Borrower.
(iii) If the Borrower elects for the Acquisition Loan to bear interest
at the Acquisition Loan Adjusted Overnight Base Rate, then (x) the
Acquisition Loan shall be repayable beginning on the first Business Day of
the month following the end of the "interest only" period or the closing of
the Acquisition Loan, as the case may be, in the number of equal monthly
installments of principal as elected by the Borrower (up to 60), and (y)
the Acquisition Loan shall bear interest during such period at the
Acquisition Loan Adjusted Overnight Base Rate which rate shall change
simultaneously and automatically upon each change of the Bank's Overnight
Base Rate or as otherwise provided in the definition of such rate. Interest
calculated at such rate in arrears shall be payable with each such payment
of principal.
(iv) If upon the expiration of any "interest only" period the Borrower
elects for the Acquisition Loan to bear interest at the fixed rate offered
by the Bank, then the Acquisition Loan shall be repayable beginning on the
First Business Day of the month following the end of the "interest only"
period, in the number of equal monthly installments of principal and
interest as elected by the Borrower (up to 60).
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(v) If the Borrower elects not to have an "interest only" period and
for the Acquisition Loan to bear interest at the fixed rate offered by the
Bank, the Acquisition Loan shall be repayable in the number of equal
monthly installments of principal and interest as elected by the Borrower
(up to 60), which payments shall begin on the first Business Day of the
month following the first full month following the closing of the
Acquisition Loan. A single payment of interest calculated at the fixed rate
shall also be payable in arrears on the first Business Day of the first
full month following the closing of the Acquisition Loan.
5. Amendment to Section 2.7. Section 2.7 of the Existing Loan Agreement
is amended as follows: the words "Philadelphia, Pennsylvania" are deleted and
replaced with the words "Eastern Standard or Daylight Savings time as then in
effect in Philadelphia, Pennsylvania".
6. Amendment to Section 6.2. Section 6.2 of the Existing Loan Agreement
is amended as follows:
(i) in Subsection 6.2(a) the words "one hundred and twenty (120) days"
are deleted and replaced with "one hundred ten (110) days";
(ii) the word "and" at the end of Subsection 6.2(c) is hereby deleted;
(iii) the period at the end of 6.2(d) is deleted and replaced with
";and"; and
(iv) a new Subsection 6.2(e) is inserted as follows:
(e) at the time the statements required in 6.2(a) and 6.2(b) are
provided to the Bank the Borrower shall also furnish a certificate of
the chief financial office of the Borrower, (i) certifying that to the
best of his or her knowledge no default or Event of Default has
occurred and is continuing hereunder (including but not limited to no
default under any financial covenant or covenants contained herein) or
under any other instrument or agreement between the Borrower and the
Bank or, if such default or Event of Default has occurred and in
continuing, a statement as to the nature thereof and the action which
is proposed to be taken with respect thereto, and (ii) containing
computations demonstrating compliance with any financial covenant or
covenants contained in this Agreement.
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7. Amendment to Section 6.14. Section 6.14 of the Existing Loan Agreement
is amended as follows: a period is added after the word "exist" in the
thirteenth line of the section and the remaining text is deleted.
8. Amendment to Section 6.20. Section 6.20 of the Existing Loan Agreement
is amended as follows: (i) the first comma and the number "1998" which appear in
the second line of Section 6.20 are deleted and replaced with the words "of each
fiscal year"; and (ii) the number "1998" in the fourth line is deleted and
replaced with the words "then current"
9. Amendment to Section 10.2. Notices to the Bank shall be sent to the
following addresses:
CoreStates Bank, N.A.
000 Xxxxxx Xxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Vice President
Fax: (000) 000 0000
with a copy to:
XxXxxxxx & English
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Esq.
Fax: (000) 000 0000
10. Amendment to Exhibit A. Exhibit A to the Existing Loan Agreement is
deleted and replaced with Exhibit A to this Amendment.
11. Confirmation of Security.
a. By executing this Amendment, the Borrower confirms and
acknowledges that the Collateral (as defined in the Security
Agreement) shall continue to secure Borrower's obligations under the
Existing Loan Agreement (as herein amended) and the other Loan
Documents (as amended and confirmed hereby). Borrower confirms its
grant of a security interest in the Collateral and hereby grants to
the Bank a security interest in such Collateral as collateral for the
repayment to the Bank of the obligations of Borrower as described
therein and herein. For all purposes of the Security Agreement, the
term "Obligations" as defined therein shall include all obligations
described therein and the obligations of the Borrower under the
Existing Loan Agreement as hereby amended. All other terms and
provisions of the Security Agreement remain unchanged and the Security
Agreement continue in full
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force and effect on the date hereof. The Borrower represents that
as of the date of this Amendment its chief executive office, the
location of its books and records and the location of its entire
inventory and equipment is One Xxxx Xxxxx Xxxx, Xxx Xxxxxx, Xxx Xxxxxx
00000.
b. By executing this Amendment, the Borrower confirms and
acknowledges that the Mortgaged Property (as defined in the Mortgage)
shall continue to secure Borrower's obligations under the Existing
Loan Agreement (as herein amended) and the other Loan Documents (as
amended and confirmed hereby). Borrower confirms its grant of a
mortgage lien on the Mortgaged Property as collateral for the
repayment to the Bank of the obligations of Borrower as described
therein and herein. All other terms and provisions of the Mortgage
remain unchanged and the Mortgage continues in full force and effect
on the date hereof.
c. By executing this Amendment, the Borrower confirms and
acknowledges that the Patents (as defined in the Patent Security
Agreement) shall continue to secure Borrower's obligations under the
Existing Loan Agreement (as herein amended) and the other Loan
Documents (as amended and confirmed hereby). Borrower confirms its
grant of a security interest in the Patents (as defined in the Patent
Security Agreement) and hereby grants to the Bank a security interest
in such Collateral as collateral for the repayment to the Bank of the
obligations of Borrower as described therein and herein. For all
purposes of the Patent Security Agreement, the term "Obligations" as
defined therein shall include all obligations described therein and
the obligations of the Borrower under the Existing Loan Agreement as
hereby amended. All other terms and provisions of the Patent Security
Agreement remain unchanged and the Patent Security Agreement continue
in full force and effect on the date hereof. Borrower's existing
patents and patent applications are as listed on Schedule A to the
Patent Collateral Assignment dated March 1989.
d. By executing this Amendment, the Borrower confirms and
acknowledges that the Trademarks (as defined in the Trademark Security
Agreement) shall continue to secure Borrower's obligations under the
Existing Loan Agreement (as herein amended) and the other Loan
Documents (as amended and confirmed hereby). Borrower confirms its
grant of a security interest in the Trademarks (as defined in the
Trademark Security Agreement) and hereby grants to the Bank a security
interest in such Collateral as collateral for the repayment to the
Bank of the obligations of Borrower as described therein and herein.
For all purposes of the Trademark Security Agreement, the term
"Obligations" as defined therein shall include all obligations
described therein and the obligations of the Borrower under the
Existing Loan Agreement as hereby amended. All other terms and
provisions of the
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Trademark Security Agreement remain unchanged and the Trademark
Security Agreement continue in full force and effect on the date
hereof. Borrower's existing trademarks, trademark applications and
notices of intent to use are as listed on Schedule A to the Trademark
Collateral Assignment dated March 30, 1989.
12. General. This Amendment is made pursuant to Section 10.11 of the
Existing Loan Agreement, and the parties hereto acknowledge that all provisions
of the Existing Loan Agreement, except as amended hereby, shall remain in full
force and effect.
13. No Defenses, Offsets 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 Existing 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.
14. Representations and Warranties - The Borrower hereby represents and
warrants to the Bank that, on and as of the date of this Amendment: (a) each of
the representations and warranties contained in the Existing Loan Agreement are
accurate, (b) such representations and warranties would continue to be accurate
if, in each representation or warranty where the term "Loan Documents" appears,
the term "Amendment" was to be substituted therefor, (c) no Event of Default has
occurred and is continuing or will result from the execution by the Borrower of
this Amendment, and (d) that the Loan Documents as amended herein are
enforceable in accordance with their terms.
15. Fees of Bank's Counsel - The Borrower shall pay the fees and expenses
of XxXxxxxx & English in connection with the preparation and negotiation of this
Amendment and all related documents.
16. 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 by the Borrower.
b. A certificate from the Secretary of the Borrower (i) stating that
there have been no amendments to the Certificate of Incorporation or
By-laws of the Borrower since the date of the Existing Loan Agreement, (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.
c. A reasonably current good standing certificate for the Borrower
from the Secretary of State of Delaware.
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d. A legal opinion of counsel to the Borrower satisfactory in form and
substance to the Bank.
17. Governing Law. This Amendment is governed by the laws of the State of
New Jersey and is binding upon the Borrowers and the Bank and their respective
successors and/or assigns and/or heirs and executors, as the case may be.
18. Integration. This Amendment together with the Existing 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.
19. 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.
20. 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/ Xxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx
President
CoreStates Bank, National Association
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Xxxx X. Xxxxx
Vice President
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Exhibit A
ACQUISITION LOAN NOTE
$ New Brunswick, New Jersey
------------------------
, 199
---------------- ---
FOR VALUE RECEIVED, BLONDER TONGUE LABORATORIES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of CORESTATES
BANK, NATIONAL ASSOCIATION (the "Bank") the principal amount of
______________________ ($___________). This Acquisition Loan Note is issued
under the Third Amended and Restated Loan Agreement dated October 29, 1997 by
and between the Borrower and the Bank, as amended by the First Amendment dated
March 23, 1998 and 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 loan evidenced hereby has been made, is secured, and may be prepaid or
accelerated.
At the election of the Borrower, and as set forth in the Loan Agreement,
interest only shall be payable under this Acquisition Loan Note for a period of
up to 6 months. Thereafter this Acquisition Loan Note shall be repayable in up
to 60 monthly installments as determined in accordance with the Loan Agreement.
Interest shall be determined in accordance with the Loan Agreement and
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 the 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 the date
hereof and if not paid when due, shall be added to the principal.
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 construction, interpretation and enforcement of this Note shall be
governed by the internal laws of the State of New Jersey.
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: This is an Exhibit - do not sign
