EXHIBIT 10.2
SECOND AMENDMENT TO
CREDIT AND SECURITY AGREEMENT
SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT, executed on the
14th day
of
December
2006,
to be
effective
on the 15th day of
December,
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, a national banking association, as the Issuer (the "Issuer")
(this "Second
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,
as amended by that certain (i) First Amendment to Credit
and Security
Agreement,
effective
March 30, 2006, by and among the Borrowers,
the Guarantors party thereto,
the Lender and the Issuer, (ii) Letter Agreement,
dated
September
11, 2006, by and among the
Borrowers,
the
Guarantors
party
thereto,
the Lender and the Issuer,
(iii) Letter Agreement,
dated November 8,
2006, by and among the Borrowers,
the Guarantors party thereto,
the Lender and
the Issuer,
(iv) Letter
Agreement,
dated
December 1, 2006,
by and among the
Borrowers,
the
Guarantors
party thereto,
the Lender and the Issuer,
and (v)
Letter
Agreement,
dated
December 15, 2006,
by and among the
Borrowers,
the
Guarantors
party
thereto,
the
Lender
and the
Issuer
(the
"Fourth
Letter
Agreement")
(as
amended,
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);
WHEREAS,
pursuant to the Fourth Letter Agreement,
the Lender, among other
things,
consented to the sale by the BTL of all of the
outstanding
membership
interest in BDR to a third
party,
which
necessitates
the removal of BDR as a
"Borrower" under the Credit Agreement; 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 deleting the
following definitions in their entirety:
"BDR"
"Covenant Compliance Date"
"Eligible Rights of Entry"
"Eligible Rights of Entry Amortization Amount"
"Rights of Entry"
3. Section 1.01 of the Credit
Agreement is hereby
amended by amending and
restating the following definitions as follows:
"Borrower"
shall
mean BTL and any
other
Person
who may
hereafter
become a party hereto as a borrower and "Borrowers" shall
collectively mean
all such Persons.
"Contract Rate" shall mean, as applicable, the Revolving Interest
Rate
or the Term Loan Rate.
"Fixed Charges" shall mean, with respect to any fiscal period, the
sum
of (a)
interest
expense
of BTL
and
its
Subsidiaries
determined
on a
consolidated
basis with
respect to such period in
accordance
with GAAP,
plus
(b)
scheduled
principal
payments
on
Indebtedness
of BTL and its
Subsidiaries on a consolidated basis with respect to such period,
plus (c)
for the fiscal year 2006,
an amount equal to Two Hundred
Twenty
Thousand
Seven Hundred Ten and 00/100 Dollars ($220,710.00).
"Pledge
Agreement" shall mean (i) the Pledge
Agreement
executed and
delivered
by BTL to the
Lender
for the
benefit of itself and the Issuer
with
respect to all of the issued and
outstanding
capital
stock of BTIC
owned by BTL,
(ii) the Pledge
Agreement
executed and delivered by BTL to
the Lender for the benefit of itself and the Issuer with
respect to all of
the
issued
and
outstanding
capital
stock of Hybrid
Networks,
LLC,
a
Delaware limited liability company, owned by BTL and (iii) any
other Pledge
Agreement
executed
and
delivered
by any Loan Party to the
Lender
with
respect to the Subsidiary Stock, together with all amendments,
supplements,
modifications,
substitutions
and
replacements
thereto
and
thereof and
"Pledge Agreements" means collectively, all such Pledge Agreements.
4. Section (h) of the definition of "Collateral"
contained in Section 1.01
of the Credit
Agreement
is hereby
deleted in its entirety and in its stead is
inserted the following:
(h) [Reserved];
-2-
5. 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, minus
(iii) the
aggregate
amount of
outstanding
Letters
of Credit,
minus
(iv) such reserves as the Lender may
reasonably
deem proper and
necessary from time to time.
The amount
derived from the sum of Sections
2.1(a)(i)
and (ii)
minus the sum of
Section
2.1(a)
(iii) and (iv) at any time and
