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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 ti
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