EXHIBIT 10.6
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ASSIGNMENT OF RENTS AND LEASES
made by
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BLONDER TONGUE LABORATORIES, INC.,
a Delaware Corporation
("Assignor")
in favor of
COMMERCE BANK, N.A.,
a National Banking Association
("Assignee")
DATED: March 20, 2002
ASSIGNMENT OF RENTS AND LEASES
THIS ASSIGNMENT, made this 20th day of March, 2002, by BLONDER TONGUE
LABORATORIES, INC., a Delaware corporation ("Assignor"), to Commerce Bank, N.A.,
a national banking association ("Assignee").
W I T N E S S E T H:
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A. Pursuant to a certain Loan and Security Agreement of even date herewith
between Assignor and Assignee (the "Loan Agreement"), Assignor has executed and
delivered to Assignee a certain Revolving Credit Note bearing even date herewith
in the principal amount of Seven Million Dollars ($7,000,000) ("Revolving Credit
Note"), a certain Term Loan A Note bearing even date herewith in the principal
amount of Nine Million Dollars ($9,000,000) ("Term Loan A Note") and a certain
Term Loan B Note bearing even date herewith in the principal amount of Three
Million Five Hundred Thousand Dollars ($3,500,000) ("Term Loan B Note" and
together with the Revolving Credit Note and Term Loan A Note) (referred to as
the "Notes"), which Notes are secured by, among other things, a certain
mortgage, security agreement and fixture filing (the "Mortgage") of even date
herewith from Assignor to Assignee, encumbering real property situated in the
Township of Old Bridge, Middlesex County, State of New Jersey, and more fully
described as set forth in Exhibit "A" attached hereto (the "Property") and
certain other loan documents executed by Assignor and identified in the Loan
Agreement (the Notes, the Mortgage, the Loan Agreement and the other loan
documents are hereinafter collectively referred to as the "Loan Documents").
B. As a condition to Assignee making the loans to Assignor evidenced by the
Notes, Assignor has agreed to assign to Assignee all of Assignor's rights under
any leases affecting the Property and the rents thereunder pursuant to the terms
and conditions herein set forth.
C. Capitalized terms used without further definition herein shall have the
meaning set forth in the Loan Agreement.
NOW, THEREFORE, intending to be legally bound hereby, Assignor agrees as
follows:
1. Assignment of Leases. Assignor hereby conveys, transfers and assigns
unto Assignee, its successors and assigns, all the rights, interest and
privileges, (a) which Assignor as lessor has and may have in the leases now
existing or hereafter made and affecting the Property or any part thereof as
such leases may from time to time be hereafter, modified, extended and renewed
(collectively the "Leases" or individually a "Lease"), with all rents, income
and profits due and becoming due therefrom (including, but not limited to, any
sums in lieu of rent), and (b) which Assignor has and may have by virtue of any
guaranty or surety agreement (collectively "Guaranties") with respect to the
tenant's obligations under the Leases, as such Guaranties may have been, or may
from time to time be hereafter, modified and extended. Assignor will, on request
of Assignee, execute assignments of any future leases and assignments of any
Guaranties made in connection therewith. Within five (5) days after execution
thereof, Assignor shall deliver to Assignee a counterpart original of any Lease,
any amendment thereof or any Guaranties or amendment thereof. Within five (5)
days after request by Assignee, Assignor shall deliver to Assignee a counterpart
original of any Lease, any amendment thereof or any Guaranties or amendment
thereof. Anything to the contrary notwithstanding, Assignor also hereby assigns
to Assignee any award made hereafter
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to it in any court procedure involving any of the tenants in any bankruptcy,
insolvency, or reorganization proceedings in any state or Federal court, and any
and all payments made by tenants in lieu of rent. Assignor hereby appoints
Assignee as its irrevocable attorney-in-fact (which appointment is coupled with
an interest) to appear in any action and/or to collect any such award or
payment.
2. All Obligations. This Assignment shall remain in effect until all of the
Obligations have been paid in full and the Revolving Credit has been terminated.
The acceptance of this Assignment and the collection of rents or the payments
under the Leases or any sums under the Guaranties hereby assigned shall not
constitute a waiver of any rights of Assignee under the terms of the Loan
Documents.
3. Assignor's Rights Notwithstanding Assignment. As used herein, the term
Event of Default shall have the meaning ascribed thereto in the Loan Agreement.
This Assignment is an absolute assignment of the Leases and Guaranties from
Assignor to Assignee, and is not merely the granting of a security interest in
the Leases and Guaranties. However, unless an Event of Default exists, Assignor
shall have (i) the right to exercise all of the rights of the landlord under the
Leases and Guaranties to the extent not prohibited by the provisions of this
Assignment and the Loan Documents and (ii) a revocable license to collect such
rents, income and profits from the Leases and Guaranties and to retain, use and
enjoy the same, in trust (but not in a separate account) to be applied first to
payment of (a) real estate taxes and assessments upon the Property, (b) cost of
maintaining the insurance policies on the Property required by the Mortgage, (c)
maintenance and repair of the Property, and (d) the payment of all sums becoming
due and payable under the Loan Documents, before Assignor may use any portion of
the rents, income or profits for any other purpose; provided, however, that even
before default occurs no rents more than one (1) month in advance shall be
collected or accepted without the prior written consent of Assignee. Upon an
acceleration after an Event of Default, such license shall be automatically
revoked without any further action or notice being required, and Assignee shall
thereupon solely be entitled to collect the rents, income and profits due or to
become due under the Leases and Guaranties whether or not Assignee has taken
possession of the Property pursuant to the other provisions of this Assignment.
4. Right to Possession. Assignor, upon an acceleration after an Event of
Default, hereby authorizes Assignee, at its option, to enter and take possession
of the Property and to manage and operate the same, to collect all or any rents
accruing therefrom and from the Leases, to collect all or any sums due or
becoming due under the Guaranties, to let or re-let the Property or any part
thereof, to cancel and modify Leases and Guaranties, evict tenants, bring or
defend any suits in connection with the possession of the Property in its own
name or Assignor's name, make repairs as Assignee deems appropriate, and perform
such other acts in connection with the management and operation of the Property
as Assignee, in its discretion, may deem proper, provided, however, that nothing
herein shall limit Assignee's remedies under the Loan Documents.
5. Use of Rents. Effective upon an acceleration after an Event of Default,
Assignor hereby irrevocably constitutes and appoints Assignee or any officer or
agent of Assignee to be Assignor's true and lawful attorney (which appointment
shall be irrevocable and shall be coupled with an interest), in Assignor's name,
place, and stead, (a) to exercise any right which Assignor may have to record
any Lease, (b) to endorse any checks payable to Assignor from tenants or
guarantors for the payment of rents, income or profits from the Property and to
deposit the checks or to further endorse them over to Assignee, and (c) to
demand, collect, xxx for, attach, levy, and recover
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any of the rents and any premium or penalty payable upon the exercise by any
tenant under any Lease of a privilege of cancellation originally provided in any
Lease, and to give proper receipts and releases therefor and, after deducting
all expenses of collection, to apply the net proceeds as a credit upon any
portion of the indebtedness secured hereby which may be selected by Assignee, in
such order as Assignee may elect, or, at Assignee's option, apply the net
proceeds to pay the costs of operation or maintenance of the Property. No other
person senior to Assignor in priority shall be appointed Assignor's attorney
with any of such powers so long as any part of the indebtedness secured hereby
remains unpaid. Nothing herein contained shall be construed as constituting
Assignee a mortgagee in possession in the absence of the taking of actual
physical possession of the Property by Assignee. In the exercise of the powers
herein granted Assignee, no liability shall be asserted or enforced against
Assignee, all such liability being expressly waived and released by Assignor.
The receipt by Assignee of any rents, issues or profits pursuant to this
Assignment after the institution of foreclosure or sale proceedings under the
Mortgage or execution proceedings under the Note or Loan Agreement shall not
cure such default or affect such proceedings or any sale pursuant thereto.
6. Assignee Not Bound to Perform Under Leases. Assignee shall not be
obligated to perform or discharge any obligation or duty to be performed or
discharged by Assignor under any of the Leases, and Assignor hereby agrees to
indemnify, defend and hold Assignee harmless of and from any and all liability
or expense (including, but not limited to, reasonable attorneys' fees, court
costs and other disbursements) arising from any of the Leases, Guaranties, this
Assignment, or by reason of any action taken by Assignee pursuant to this
Assignment, except to the extent caused wholly or in part by the gross
negligence or willful misconduct of Assignee, and this Assignment shall not
place responsibility for the control, care, management or repair of the Property
upon Assignee, or make Assignee responsible or liable for any negligence in the
management, operation, upkeep, repair or control of the Property resulting in
loss or injury or death to any tenant, licensee, employee or other person. The
amount of any liability or expense with respect to which Assignor is obligated
to indemnify Assignee pursuant to the provisions of this paragraph, together
with interest at the default rate (as specified in the Loan Agreement), shall
immediately and without notice be due and payable by Assignor to Assignee.
7. Representations and Covenants. Assignor covenants and represents that
(a) Assignor has title to, and full right to assign the Leases, Guaranties, and
the rents, income and profits due or to become due thereunder; (b) no other
assignment of any interest in the Leases and Guaranties senior to this
Assignment has been made which remains in effect; (c) other than in the ordinary
course of business, Assignor shall not materially discount or compromise any of
such rents, income or profits to become due; (d) other than in the ordinary
course of business, Assignor will not enter into any Lease for the Property
without the prior approval of the Lease by Assignee unless otherwise expressly
permitted by the Mortgage; and (e) Assignor will not hereafter (i) assign or
transfer in any manner any future payment of the rents, income or profits or any
of Assignor's rights under any Lease to any person other than a person lawfully
succeeding, subject to the Mortgage, to all of Assignor's right, title and
interest in and to all or part of the Property (nothing contained in this clause
shall be construed as a modification or waiver of any transfer restrictions
contained in the Mortgage); (ii) other than in the ordinary course of business,
waive the performance or observance by the tenant, guarantor or surety under any
Lease or Guarantee of any material covenant or condition, as determined by
Assignee (including, without limitation, any covenant or condition relating to
rent or additional rent or the lease term, all of which terms and conditions are
hereby deemed to be material) to be performed or observed by such tenant,
guarantor or surety thereunder;
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(iii) other than in the ordinary course of business, commence an action of
ejectment or any summary proceeding for dispossession of any tenant under any
Lease; (iv) other than in the ordinary course of business, exercise any right of
recapture provided in any Lease; (v) other than in the ordinary course of
business, modify or in any way alter the terms of any Lease; (vi) other than in
the ordinary course of business, consent to any subletting of any or all of the
portion of the Property or to any assignment of any Lease by any tenant
thereunder or to any assignment or further subletting of any sublease; or (vii)
do or permit to be done anything which will cause any Lease to be subordinate to
any mortgage covering any or all of the Property which is subordinate to the
Mortgage. Any act of Assignor enumerated in the immediately preceding sentence
which is done without Assignee's prior written consent thereto shall be void and
of no force or effect.
8. Notice to Tenants. Assignor hereby authorizes Assignee to give notice in
writing of this Assignment at any time after an Event of Default to any tenant
under the Leases and to any guarantor of the Leases. Assignor hereby consents to
any such tenant or guarantor paying all rent, income and profits to Assignee
following receipt by such tenant or guarantor of a notice from Assignee that an
Event of Default exists, and Assignor waives any right to demand from any such
tenant or guarantor, payment to Assignor of such rent, income or profits after
Assignee has sent any such notice to such tenant or guarantor. Each tenant and
guarantor shall be entitled to rely upon any notice from Assignee and shall be
protected with respect to any payment of rent, income and profits made pursuant
to such notice. Irrespective of whether a dispute exists between Assignor and
Assignee with respect to the existence of a default or the rights of Assignee
under this Assignment, each tenant and guarantor who receives a notice from
Assignee pursuant to this Assignment shall not be required to investigate or
determine the validity or accuracy of such notice or the validity or
enforceability of this Assignment. Assignor hereby agrees to indemnify, defend
and hold each such tenant harmless from and against any and all loss, claims,
damage or liability arising from or related to any payment of rent, income and
profits or performance of obligations under any Lease by such tenant and
guarantor made in good faith in reliance on and pursuant to such notice. The
provisions of this Paragraph are expressly made for the benefit of, and shall be
binding on and enforceable by, each tenant and guarantor under a Lease.
9. Cross Default. Violation of any of the covenants, representations and
provisions contained in this Assignment by Assignor, after thirty (30) days'
written notice to Assignor (which period shall run concurrently with any other
notice period required), shall be deemed an Event of Default under the terms of
the Loan Documents.
10. Compliance with Leases. Assignor shall comply with all of the terms and
conditions of the Leases. Any expenditures made by Assignee, after any notice
required by the terms of the Mortgage, in curing Assignor's failure to so comply
with the Leases, with interest thereon at the default rate, shall become part of
the debt secured by this Assignment and the Loan Documents. Except to the extent
otherwise expressly provided herein, Assignor shall diligently enforce the
tenant's obligations under the Leases and shall diligently enforce the
obligations of any guarantor or surety under the Guaranties.
11. Satisfaction. The full performance of the obligations of Assignor
pursuant to the Loan Documents and the duly recorded satisfaction of the
Mortgage or release from the Mortgage of the Real Estate described therein shall
render this Assignment automatically void with respect to the Real Estate or
portion thereof described in any such satisfaction or release.
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12. "Lease" and "Rent" Defined. The term "Lease" shall include any lease of
all or any portion of the Property as well as any sublease of all or any portion
of the Property and any license, concession or other agreement with respect to
the use, occupancy or utilization of all or any portion of the Property. The
term "Rent" shall include all rent, additional rent, license fees or charges,
concession fees or charges, lease cancellation fees and all other payments of
any kind (including, without limitation, security deposits to the extent that
they may be lawfully assigned, and all payments made on account of operating
expenses and real estate taxes and other similar items whether categorized as
rent, additional rent or otherwise) with respect to the use, occupancy or
utilization of all or any portion of the Property.
13. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay of Assignee to
exercise any right, remedy, power or privilege under this Assignment shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence.
(b) Controlling Law. This Assignment and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the internal laws of the State of New Jersey,
and without the aid of any canon, custom or rule of law requiring construction
against the draftsman.
(c) Notices. All notices, requests, demands and other communications
required or permitted under this Assignment between Assignor and Assignee shall
be in writing and shall be deemed to have been duly given, made and received
only when delivered as set forth in the Mortgage.
(d) Execution in Counterparts. This Assignment may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Assignment shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
(e) Provisions Separable. The provisions of this Assignment are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(f) Amendment. This Assignment may not be modified or amended other
than by an agreement in writing signed by the party against which enforcement of
the change is sought.
(g) Paragraphs Headings. The paragraph headings in this Assignment are
for convenience only; they form no part of this Assignment and shall not affect
its interpretation.
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(h) Gender, Etc. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.
(i) Definitions. Definitions contained in this Assignment which
identify documents, including the Loan Documents, shall be deemed to include all
amendments and supplements to such documents from the date hereof, and all
future amendments and supplements thereto entered into from time to time with
the consent of Assignee. Reference to this Assignment contained in any of the
foregoing documents shall be deemed to include all amendments and supplements to
this Assignment.
(j) Effect. This Assignment shall be binding upon and inure to the
benefit of Assignor, Assignee and their respective successors and assigns. If
Assignor consists of more than one person or entity, the obligations of Assignor
under this Assignment shall be joint and several.
(k) Exhibits. All exhibits attached hereto are hereby incorporated by
reference into, and made a part of, this Assignment.
IN WITNESS WHEREOF, Assignor has duly executed this assignment the 20th day
of March, 2002.
BLONDER TONGUE LABORATORIES, INC.,
a Delaware Corporation
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President and CEO
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Exhibit "A"
Legal Description
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COMMONWEALTH OF PENNSYLVANIA :
: ss.
COUNTY OF PHILADELPHIA :
On the 20th day of March 2002, before me, the subscriber, a Notary Public
in for the Commonwealth and County aforesaid, personally appeared XXXXX X.
XXXXXX, who acknowledged himself to be the President and CEO of BLONDER TONGUE
LABORATORIES, INC., a Delaware corporation, and that he, as such officer, being
authorized to do so, executed the foregoing Assignment by the act and deed of
said corporation for the purposes therein contained by signing the name of the
corporation by himself as such officer, and desired that the same might be
recorded as such.
WITNESS my hand and seal the day and year aforesaid.
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Notary Public
My Commission Expires:
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