FIRST AMENDMENT TO
CREDIT AND SECURITY AGREEMENT
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT,
executed on the 29th day
of March,
2006, to be effective on the 30th day of March,
2006 (the "Effective
Date"), by and among Blonder Tongue
Laboratories,
Inc., a Delaware corporation
("BTL"),
BDR Broadband,
LLC, a Delaware limited liability company ("BDR") (BTL
and BDR are each, a
"Borrower"
and
collectively,
the
"Borrowers"),
Blonder
Tongue
Investment
Company,
a
Delaware
corporation
"BTIC"),
National
City
Business Credit,
Inc., an Ohio
corporation
(the "Lender"),
and National City
Bank of
Pennsylvania,
a
national
banking
association,
as the
Issuer
(the
"Issuer") (this "First Amendment").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit and Security Agreement,
effective
December 29, 2005, by and among the Borrowers, the Guarantors party
thereto, the
Lender and the Issuer (the "Credit Agreement"),
the Lender, among other things,
extended
to the
Borrowers a (i)
revolving
credit
facility in the
aggregate
principal
amount not to exceed Ten Million and 00/100 Dollars
($10,000,000.00)
and (ii) a term loan facility in the original
principal amount of Three Million
Five Hundred Thousand and 00/100 Dollars ($3,500,000.00); and
WHEREAS,
the Borrowers
desire to amend
certain
provisions of the Credit
Agreement,
and the
Lender
and the
Issuer
desire to permit
such
amendments
pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises contained herein
and other
valuable
consideration,
the
receipt
and
sufficiency
of
which
are
hereby
acknowledged, and intending to be legally bound hereby, the parties
hereto agree
as follows:
1. All
capitalized
terms
used
herein
which are
defined
in the Credit
Agreement shall have the same meaning herein as in the Credit
Agreement
unless
the context clearly indicates otherwise.
2. Section 1.01 of the Credit
Agreement is hereby amended by inserting the
following definition in the appropriate alphabetical order:
"Covenant
Compliance Date" shall mean the date on which the
Lender
receives
a
certificate
of BTL
signed
by BTL's
Chief
Financial
Officer
pursuant
to
Section
9.8 of this
Agreement
demonstrating, among other things, compliance with Section 6.5 of
this
Agreement
as of the end of such
fiscal
quarter
and such
certificate shall constitute the second
consecutive
certificate
received by the Lender demonstrating
compliance with Section 6.5
(i.e., Section 6.5 shall have been complied with as of the end of
two (2) consecutive fiscal quarters).
3. Section 1.01 of the Credit
Agreement is hereby
amended by amending and
restating the definitions of "EBITDA" and "Contract Rate" as
follows:
"EBITDA"
shall
mean for any
fiscal
period the sum of (i)
Earnings
Before
Interest and Taxes for such
period,
plus (ii)
depreciation expenses of BTL and its Subsidiaries determined on a
consolidated
basis
for such
period,
plus
(iii)
amortization
expenses of BTL and its Subsidiaries determined on a consolidated
basis,
plus (iv) non-cash
charges
incurred with respect to the
granting
of
options
to
acquire
the
stock
of
BTL
and
its
Subsidiaries
determined on a consolidated
basis,
each for such
period in
accordance
with
GAAP;
provided,
however,
that the
amount
permitted to be added pursuant to subsection (iv) of this
definition shall not exceed Two Hundred Fifty Thousand and 00/100
Dollars ($250,000.00) for such period.
"Contract
Rate" shall mean,
as
applicable,
the Revolving
Interest Rate or the Term Loan Rate; provided, however, that from
and
including
March 30, 2006 through and including the Covenant
Compliance
Date, the "Contract
Rate" shall mean, as applicable,
the
Revolving
Interest
Rate plus one
quarter
of one
percent
(0.25%)
or the Term Loan Rate plus one
quarter
of one
percent
(0.25%).
4. Section 2.1(a) of the Credit Agreement is hereby deleted in its
entirety
and in its stead is inserted the following:
Subject
to the
terms
and
conditions
set
forth
in this
Agreement
including,
without
limitation,
Section 2.1(b),
the
Lender will make Revolving Advances to the Borrowers in aggregate
amounts
outstanding
at any time
equal to the lesser of (x) the
Maximum
Revolving
Advance
Amount less the aggregate
amount of
outstanding
Letters of Credit or (y) an amount
equal to the sum
of:
(i)
up
to
eighty-five
percent
(85%),
subject
to
the
provisions of Section 2.1(b) hereof ("Receivables Advance Rate"),
of Eligible Receivables, plus
(ii) up to the lesser of (A)
eighty-five
percent
(85%) of
the Gross Orderly Liquidation Value (expressed as a percentage of
cost based on the most recent
inventory
appraisal)
of Eligible
Inventory,
subject to the
provisions
of Section
2.1(b) hereof
(the "Inventory Advance Rate") (the Receivables
Advance Rate and
the
Inventory
Advance
Rate
are
collectively,
the
"Advance
Rates"),
or (B) Three
Million Five Hundred
Thousand and 00/100
Dollars ($3,500,000.00) in the aggregate at any one time, plus
(iii) One Million
Four Hundred
Seventy One
Thousand
Four
Hundred and 00/100 Dollars
($1,471,400.00);
provided,
however,
that for each fiscal
quarter
ending
after the Closing Date the
amount set forth in this Section
2.1(a)(y)(iii)
shall reduce by
the Eligible Rights of Entry Amortization Amount, minus
(iv) the aggregate amount of outstanding
Letters of Credit,
minus
(v) from and including
March 30, 2006 through and including
the Covenant
Compliance
Date, Five Hundred
Thousand and 00/100
Dollars ($500,000.00), minus
(vi)
