Exhibit 10.1

 

SIXTEENTH AMENDMENT TO REVOLVING CREDIT,

TERM LOAN AND SECURITY AGREEMENT

 

THIS SIXTEENTH AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
(the “Agreement”) is entered into on August 25, 2016, by and among BLONDER
TONGUE LABORATORIES, INC., a corporation organized under the laws of the State
of Delaware (“BTL”), R. L. DRAKE HOLDINGS, LLC, a limited liability company
organized under the laws of the State of Delaware (“RL Drake” and collectively
with BTL, the “Borrower”), the financial institutions which are now or which
hereafter become a party hereto (collectively, the “Lenders” and individually a
“Lender”) and SANTANDER BANK, N.A. (formerly known as Sovereign Bank, N.A.)
(“Santander”), as agent for Lenders (Santander, in such capacity, the “Agent”).

 

RECITALS

 

Whereas, the Borrower and the Lenders entered into a Revolving Credit, Term Loan
and Security Agreement dated August 6, 2008, as amended by that certain First
Amendment to Revolving Credit Term Loan and Security Agreement dated January 14,
2011, that certain Second Amendment to Revolving Credit Term Loan and Security
Agreement dated February 1, 2012, that certain letter agreement dated August 10,
2012 (constituting the third amendment to the Revolving Credit, Term Loan and
Security Agreement), that certain Fourth Amendment to Revolving Credit, Term
Loan and Security Agreement dated March 27, 2013, that certain Fifth Amendment
to Revolving Credit, Term Loan and Security Agreement dated November 13, 2013,
that certain Sixth Amendment to Revolving Credit, Term Loan and Security
Agreement dated March 28, 2014, that certain Seventh Amendment to Revolving
Credit, Term Loan and Security Agreement dated January 21, 2015, that certain
Eighth Amendment to Revolving Credit, Term Loan and Security Agreement dated May
14, 2015, that certain Ninth Amendment to Revolving Credit, Term Loan and
Security Agreement dated August 12, 2015, that certain Tenth Amendment to
Revolving Credit, Term Loan and Security Agreement dated October 14, 2015, that
certain Eleventh Amendment to Revolving Credit, Term Loan and Security Agreement
dated November 14, 2015, that certain Twelfth Amendment to Revolving Credit,
Term Loan and Security Agreement dated as of December 16, 2015, that certain
Thirteenth Amendment to Revolving Credit, Term Loan and Security Agreement dated
as of February 1, 2016, that certain Fourteenth Amendment to Revolving Credit,
Term Loan and Security Agreement dated as of March 1, 2016, and that certain
Fifteenth Amendment to Revolving Credit, Term Loan and Security Agreement dated
as of June 1, 2016, as the same shall be further amended by this Agreement (as
may be further amended, restated, replaced and/or modified from time to time,
the “Loan Agreement”); and

 

Whereas, the Borrower and the Lenders have agreed to modify the terms of the
Loan Agreement as set forth in this Agreement to, among other things, modify the
interest rate accrual under the loans set forth in the Loan Agreement, amend
certain financial covenants set forth in the Loan Agreement, and extend the
availability and termination date of the loans under the Loan Agreement.

 

Now, therefore, in consideration of the Lender’s continued extension of credit
and the agreements contained herein, the parties agree as follows:

 

AGREEMENT

 

1)ACKNOWLEDGMENT OF BALANCE. The Borrower acknowledges that the most recent
statement of account sent to the Borrower with respect to the Obligations is
correct.

 

2)MODIFICATIONS. The Loan Agreement be and hereby is modified as follows:

 

(A)The following definition in Section 1.2 of the Loan Agreement is hereby
deleted, and is replaced to read as follows:

 

“Maximum Revolving Advance Amount” shall mean $3,500,000.00.

 

“Termination Date” shall mean December 1, 2016 or such other date as the Lenders
may agree in writing to extend the Termination Date until, without there being
any obligation on the part of the Lenders to extend the Termination Date.

 

 

 

 

(B)The following definitions are hereby added to Section 1.2 of the Loan
Agreement to read as follows:

 

“Additional Availability Period” shall mean the period beginning on the date of
the Fifteenth Amendment and ending on the close of business on December 1, 2016.

 

“Sixteenth Amendment” shall mean that certain Sixteenth Amendment to Revolving
Credit, Term Loan and Security Agreement dated the Sixteenth Amendment Closing
Date by and among the Borrower, the Lenders and the Agent.

 

“Sixteenth Amendment Closing Date” shall mean as of August 25, 2016.

 

“Revolving Interest Rate” shall mean an interest rate per annum equal to the sum
of the Index plus five percent (5.00%)

 

“Term Loan Rate” shall mean an interest rate per annum equal to the sum of the
Index plus five percent (5.00%)

 

(C)Section 2.4 of the Loan Agreement is deleted, and is replaced by a new
Section 2.4 to read as follows:

 

2.4.      Term Loan. Subject to the terms and conditions of this Agreement, each
Lender, severally and not jointly, will make a Term Loan to the Borrower in the
sum equal to such Lender’s Commitment Percentage of $4,350,000. The Term Loan
shall be advanced on the Second Amendment Closing Date and shall be, with
respect to principal, payable as follows, subject to acceleration upon the
occurrence of an Event of Default under this Agreement or termination of this
Agreement: thirty six (36) consecutive monthly principal installments, the first
thirty five (35) of which shall be in the amount of $18,125.00 commencing on the
first Business Day of March, 2012, and continuing on the first Business Day of
each month thereafter, until the Seventh Amendment Closing Date, from and after
which date Borrower will continue to pay principal installments in the amount of
$18,125.00 on the first Business Day of each month through and including the
first Business Day of January, 2016, from and after which date Borrower shall
make one (1) interest-only installment in the amount of $14,550.76 on the first
Business Day of February, 2016, from and after which date the Borrower will
continue to pay principal installments in the amount of $18,125.00 commencing on
the first Business Day of March, 2016 and continuing on the first Business Day
of each month thereafter, through and including the first Business Day of May,
2016, from and after which date the Borrower will continue to pay principal
installments in the amount of $18,125.00 commencing on the first Business Day of
June, 2016 and continuing on the first Business Day of each month thereafter,
through and including the first Business Day of November, 2016, and a final
payment of any unpaid balance of principal and interest shall be due on the
first Business Day of December, 2016. Notwithstanding anything to the contrary
herein and/or in any Other Document, all outstanding principal and interest
hereunder is due and payable on December 1, 2016. The Term Loan shall be
evidenced by one or more secured promissory notes (collectively, the “Term
Note”) in substantially the form attached hereto as Exhibit 2.4. On the
Sixteenth Amendment Closing Date, Borrowers will execute and deliver to Agent
the Sixth Amended and Restated Term Note, in the form attached to the Sixteenth
Amendment as Exhibit A. Promptly following the execution and delivery by
Borrower of the Sixth Amended and Restated Term Note in the amount of
$3,445,625.00, which is the principal balance due on the Term Loan as of such
date, Agent will mark the original Fifth Amended and Restated Term Note dated
June 1, 2016 in the original principal amount of $3,481,875.00 “CANCELLED” and
will return the same to Borrower.

 

 

 

 

(D)Section 6.5(c) of the Loan Agreement is deleted, and is replaced by a new
Section 6.5(c) to read as follows:

 

(c)      Minimum EBITDA. Cause to be achieved EBITDA, tested quarterly (as of
the last day of each fiscal quarter) on a consolidated basis, of not less than
(i) negative (-) $300,000 as of March 31, 2015 calculated on a trailing three
(3) month basis, (ii) negative (-) $700,000 as of June 30, 2015 calculated on a
trailing six (6) month basis, (iii) $1,400,000 as of September 30, 2015
calculated on a trailing nine (9) month basis, (iv) negative (-) $3,897,000 as
of December 31, 2015 calculated on a trailing twelve (12) month basis, (v)
$50,000 as of March 31, 2016 calculated on a trailing three (3) month basis,
(vi) negative (-) $82,000 as of June 30, 2016 calculated on a trailing six (6)
month basis, and (vii) negative (-) $82,000 as of September 30, 2016 calculated
on a trailing nine (9) month basis.

 

3)INVENTORY ADVANCE RATES. During the Additional Availability Period, the
Inventory Advance Rate set forth in Subsection 2.1(a)(ii) of the Loan Agreement
will remain at 35%, reverting back to 25% immediately upon the expiration of
such Additional Availability Period. In further clarification of the foregoing,
upon the expiration of the Additional Availability Period, the Inventory Advance
Rate will be 25%.

 

4)FIELD AUDITS. The Borrower hereby acknowledges, agrees and consents to the
Agent retaining the services of an auditor in the sole discretion of the Agent
to perform field audits with regard to the Mortgage Premises and the Borrower’s
business operations on no less than a quarterly basis hereafter at the sole cost
and expense of the Borrower.

 

5)SECRETARY’S CERTIFICATES AND RESOLUTIONS. By not later than August 25, 2016,
the Borrower shall provide the Agent with secretary’s certificates and
resolutions, in form and substance acceptable to the Agent, which approve the
modification contemplated hereby.

 

6)ACKNOWLEDGMENTS. The Borrower acknowledges and represents that:

 

(A)the Loan Agreement and Other Documents, as amended hereby, are in full force
and effect without any defense, claim, counterclaim, right or claim of set-off;

 

(B)to the best of its knowledge, no default by the Agent or the Lenders in the
performance of their duties under the Loan Agreement or the Other Documents has
occurred;

 

(C)all representations and warranties of the Borrower contained herein and in
the Other Documents are true and correct in all material respects as of this
date, except for any representation or warranty that specifically refers to an
earlier date;

 

(D)the Borrower has taken all necessary action to authorize the execution and
delivery of this Agreement; and

 

(E)this Agreement is a modification of an existing obligation and is not a
novation.

 

7)PRECONDITIONS. As a precondition to the effectiveness of any of the
modifications, consents, or waivers contained herein, the Borrower agrees to:

 

(A)provide the Agent with this Agreement, properly executed;

 

(B)pay to the Agent an amendment fee in the amount of $5,000.00 simultaneously
with the execution of this Agreement, and an amendment fee in the amount of
$15,000.00 to be collected on November 30, 2016 in the event that Borrower fails
to pay all outstanding principal, interest, fees and costs under the loans; and

 

(C)pay, promptly upon presentation of an invoice therefor, all other fees and
costs incurred by the Lenders in entering into this Agreement, including, but
not limited to, all reasonable legal fees incurred by the Agent.

 

 

 

 

8)MISCELLANEOUS. This Agreement shall be construed in accordance with and
governed by the laws of the State of New Jersey, without reference to that
state’s conflicts of law principles. This Agreement and the Other Documents
constitute the sole agreement of the parties with respect to the subject matter
thereof and supersede all oral negotiations and prior writings with respect to
the subject matter thereof. No amendment of this Agreement, and no waiver of any
one or more of the provisions hereof shall be effective unless set forth in
writing and signed by the parties hereto. The illegality, unenforceability or
inconsistency of any provision of this Agreement shall not in any way affect or
impair the legality, enforceability or consistency of the remaining provisions
of this Agreement or the Other Documents. This Agreement and the Other Documents
are intended to be consistent. However, in the event of any inconsistencies
among this Agreement and any of the Other Documents, the terms of this
Agreement, then the Loan Agreement shall control. This Agreement may be executed
in any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed an original, but all such
counterparts shall together constitute one and the same agreement.

 

9)DEFINITIONS. The terms used herein and not otherwise defined or modified
herein shall have the meanings ascribed to them in the Loan Agreement. The terms
used herein and not otherwise defined or modified herein or defined in the Loan
Agreement shall have the meanings ascribed to them by the Uniform Commercial
Code as enacted in New Jersey.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned have signed and sealed this Agreement the
day and year first above written.

 

ATTEST:   BLONDER TONGUE LABORATORIES, INC.                           By: /s/
Eric Skolnik   By: /s/ Robert J. Pallé   Name: ERIC SKOLNIK   Name: ROBERT J.
PALLÉ   Title: Assistant Secretary   Title: Chief Executive Officer            
              WITNESS:   R. L. DRAKE HOLDINGS, LLC                           By:
/s/ Eric Skolnik   By: /s/ Robert J. Pallé   Name: ERIC SKOLNIK   Name: ROBERT
J. PALLÉ   Title: Secretary   Title: President                                
SANTANDER BANK, N.A.,         (formerly known as Sovereign Bank, N.A.),        
as Lender and as Agent                                 By: /s/ John R.
Giangrossi         Name: JOHN R. GIANGROSSI         Title: Vice President  

 

 

 

 

EXHIBIT A

 

 

 

 

SIXTH AMENDED AND RESTATED TERM NOTE

 

$3,445,625.00 August 25, 2016   Newtown, Pennsylvania

 

This Sixth Amended and Restated Term Note (this “Note”) is executed and
delivered under and pursuant to the terms of that certain Revolving Credit, Term
Loan and Security Agreement dated August 6, 2008 (as amended, restated,
supplemented, extended and/or modified from time to time, the “Loan Agreement”)
by and among BLONDER TONGUE LABORATORIES, INC., a corporation organized under
the laws of the State of Delaware (“BTL”), R. L. DRAKE HOLDINGS, LLC, a limited
liability company organized under the laws of the State of Delaware (“RL Drake”
and collectively with BTL, the “Borrower”), the financial institutions which are
now or which hereafter become a party hereto (collectively, the “Lenders” and
individually a “Lender”) and SANTANDER BANK, N.A., formerly known as Sovereign
Bank, N.A. (“Santander”), as agent for Lenders (in such capacity, “Agent”).

 

FOR VALUE RECEIVED, Borrower promises to pay in lawful monies of the United
States of America to the order of Santander, at the office of the Agent located
at 3 Terry Drive, Newtown, Pennsylvania 18940 or at such place as the Agent may
from time to time designate in writing, the principal sum of Three Million Four
Hundred Forty-Five Thousand Six Hundred Twenty-Five AND 00/100 DOLLARS
($3,445,625.00), together with interest thereon, as hereinafter provided,
computed from the date hereof, to be paid in four (4) consecutive monthly
principal installments, the first three (3) of which shall be in the amount of
$18,125.00 plus interest commencing on the first Business Day of September,
2016, and continuing on the first Business Day of each month thereafter, with a
fourth (4th) and final payment of any unpaid balance of principal and interest
payable on the first Business Day of December, 2016, and subject to mandatory
prepayment and acceleration upon the occurrence of an Event of Default under the
Loan Agreement or earlier termination of the Loan Agreement pursuant to the
terms thereof. Notwithstanding anything to the contrary herein, in the Loan
Agreement and/or in any Other Document, all outstanding principal and interest
hereunder is due and payable on the Termination Date.

 

1. The unpaid principal amount from time to time outstanding hereunder shall
bear interest at the rate of interest per annum equal to the Term Loan Rate as
more fully described in the Loan Agreement, such rate of interest computed for
actual number of days elapsed on the basis of a year of 360 days, in an amount
not to exceed the maximum rate permitted by law.

 

2. Interest on this Note is payable in accordance with the Loan Agreement. All
payments, howsoever designated by the undersigned, are to be applied first on
account of interest on the unpaid principal balance of this Note, and the
remainder of such payments, if any, on account of the unpaid principal balance.

 

 

 

 

3. In the event that any payment shall not be received by the Agent within ten
(10) days of the due date, the undersigned shall, to the extent permitted by
law, pay the Lenders a late charge of five percent (5%) of the overdue payment
not to exceed $2,500.00. Any such late charge assessed is immediately due and
payable.

 

4. This Note is a “Term Note” referred to in the Loan Agreement. This Note
entitles the Lenders and the undersigned to all benefits set forth in the Loan
Agreement including, but not limited to, all the provisions for the acceleration
of the maturity of this Note and all other rights and remedies set forth
therein.

 

5. This Note is subject to mandatory prepayment pursuant to Section 2.11 of the
Loan Agreement, and may be voluntarily prepaid, in whole or in part, in each
case, on the terms and conditions set forth in the Loan Agreement.

 

6. Upon nonpayment of this Note at its stated or accelerated maturity, in
addition to such other and further rights and remedies provided by law or the
Loan Agreement, the Lenders may collect interest from the date of such maturity
on the principal balance owing hereon at the Default Rate.

 

7. As security for the payment of all Obligations, as such term is defined in
the Loan Agreement, of the undersigned to the Lenders (including this Note and
any renewals, extensions or modifications thereof), the Lenders have been
granted a security interest in the Collateral, as such term is defined in the
Loan Agreement.

 

8. All terms of the Loan Agreement are incorporated herein by reference and in
the event of any inconsistency between the terms of the Loan Agreement and the
terms hereof, the terms of the Loan Agreement shall prevail. All capitalized
terms not specifically defined herein shall have the meaning ascribed to them in
the Loan Agreement.

 

9. All parties hereto whether makers, endorsers, guarantors, or otherwise,
hereby waive demand, notice of non-payment, protest, notice of protest,
presentment and all other notices of any kind whatsoever, and do hereby consent
that without notice to and without releasing the liability of any party hereto,
the obligations of any party may from time to time, in whole or in part, be
renewed, extended, modified, accelerated, compromised, settled or released by
the Lenders.

 

10. No delay or omission on the part of the Lenders in exercising any right
hereunder shall operate as a waiver of such right or any other right under this
Note.

 

11. If this Note is referred to an attorney (whether or not a salaried employee
of the Lenders) for collection, each party liable for the payment hereof as
maker, endorser or guarantor agrees that reasonable attorney’s fees plus costs,
shall be added to such amount of this Note and shall be payable as part thereof.
Reasonable attorney’s fees may be collectible from any collateral to the extent
permitted under the Loan Agreement and the Bankruptcy Act or other law.

 

 

 

 

12. This Note is intended to amend, restate and replace a certain Fifth Amended
and Restated Term Note issued by Borrower in favor of the Lenders dated June 1,
2016 in the original principal amount of $3,481,875.00. The original principal
amount of this Note represents the remaining balance of the Term Loan as of the
date hereof. This Note is not a novation.

 

13. The provisions herein contained shall bind the undersigned and its
successors and assigns and inure to the benefit of the holder and its successors
and assigns.

 

14. Lenders may at any time pledge or assign all or any portion of their rights
under the Loan Agreement and the Other Documents (including any portion of this
Note) to any of the twelve (12) Federal Reserve Banks organized under Section 4
of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or assignment
or enforcement thereof shall release Lenders from their obligations under the
Loan Agreement or any of the Other Documents.

 

15. This Note shall be governed by and construed in accordance with the laws of
the State of New Jersey.

 

IN WITNESS WHEREOF, the undersigned has duly executed this Note on the date
first above written.

 

ATTEST:   BLONDER TONGUE LABORATORIES, INC.                           /s/ Eric
Skolnik   By: /s/ Robert J. Pallé   Name: ERIC SKOLNIK   Name: ROBERT J. PALLÉ  
Title: Assistant Secretary   Title: Chief Executive Officer                    
      WITNESS:   R. L. DRAKE HOLDINGS, LLC                           /s/ Eric
Skolnik   By: /s/ Robert J. Pallé   Name: ERIC SKOLNIK   Name: ROBERT J. PALLÉ  
Title: Secretary   Title: President