UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Current Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 8, 2018

 

Blonder Tongue Laboratories, Inc.

(Exact Name of registrant as specified in its charter)

 

Delaware   1-14120   52-1611421
(State or other jurisdiction
of incorporation) 		  (Commission File Number)   (I.R.S. Employer
Identification No.)

 

One Jake Brown Road, Old Bridge, New Jersey    08857

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (732) 679-4000

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

  

 

 

 

Item 1.01   Entry into a Material Definitive Agreement.

 

As previously disclosed, on August 3, 2018, Blonder Tongue Laboratories, Inc. (the “ Company ”) entered into an Agreement of Sale (the “ Original Sale Agreement ”) with Jake Brown Rd LLC (the “ Buyer ”), providing for the sale by the Company of its Old Bridge, New Jersey facility (the “ Old Bridge Facility ”), which houses the Company’s principal manufacturing, engineering, sales and administrative functions, to the Buyer. Also as previously disclosed, on September 20, 2018, the Company, at the Buyer’s request, agreed to extend the due diligence period under the Sale Agreement until the close of business on October 4, 2018 (the “ First Amendment ,” and together with the Original Sale Agreement, the “ Agreement ”). On October 4, 2018, through an exchange of emails, the due diligence period was extended to the close of business on October 8, 2018.

 

On October 8, 2018, the Company and the Buyer entered into a Second Amendment to Agreement of Sale (the “ Second Amendment ”). In the Second Amendment, the parties acknowledged that the due diligence period expired as of 4:00 p.m. on October 8, 2018, and the Buyer stated its intention to proceed to closing of the sale and purchase of the Old Bridge Facility, subject to the fulfillment by the Seller of all conditions of closing under the Agreement. In addition, pursuant to the Second Amendment:

 

● the parties have agreed that the closing of the sale and purchase of the Old Bridge Facility will occur, subject to the fulfillment by the Seller of all conditions of closing under the Agreement, on or before January 10, 2019, unless on or before the close of business on January 4, 2018, the Buyer (i) notifies the Seller that it requires up to an additional 20 calendar days to close and (ii) such notice is accompanied by a non- refundable additional deposit of $150,000 (“ Extension Deposit ”);

 

● the parties have agreed to execute and deliver a release to the escrow agent holding the $250,000 initial deposit (the “ Initial Deposit ”) paid by the Buyer in connection with execution of the Original Sale Agreement, providing for the release of such Initial Deposit to the Seller;

 

● the Buyer has agreed to fund the second deposit of $250,000 provided under the Original Sale Agreement (the “ Second Deposit ,” and together with the Initial Deposit, the “ Deposit ”) not later than the close of business on October 9, 2018;

 

● the Buyer has acknowledged and agreed that the Deposit is the Seller’s property, subject to the Seller’s obligation to return an amount equal to the Deposit if the Seller fails to fulfill a condition to closing; and

 

● the parties agreed that if the Seller defaults under the Agreement, as amended, the Buyer has the right to either (i) terminate the Agreement and be paid by the Seller $500,000 in the amount of liquidated damages or (ii) seek specific performance of the Seller’s obligations under the Amendment. If, in connection with the request for a further extension of the closing date, the Extension Deposit is paid, such amount will not be refundable to the Buyer under any circumstances.

 

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The Second Amendment also includes the Seller’s acknowledgment that the Buyer has not yet received a survey of the property and that the Seller remains obligated to address any exceptions to title raised by the title company or the Buyer’s lender as a result of the survey which would prevent a title company from removing the survey exception from the title insurance policy. In addition, the Second Amendment contains the Seller’s acknowledgment that the Buyer has identified the possible need for certain repairs to the parking lot and roof of the Old Bridge Facility in an aggregate amount of up to $220,000, and the Seller has agreed that it will pay its allocated share of the actual amount of the repair-related expenses pursuant to the terms of the lease between the Buyer and the Seller, which will be entered into at the closing of the purchase and sale of the Old Bridge Facility.

 

The foregoing description of the Second Amendment is qualified in its entirety by reference to the Second Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

“Safe Harbor” Statement

 

The information set forth above includes “forward-looking” statements and accordingly, the cautionary statements contained in Blonder Tongue’s Annual Report and Form 10-K for the year ended December 31, 2017 (See Item 1: Business, Item 1A: Risk Factors, Item 3: Legal Proceedings and Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations), and other filings with the Securities and Exchange Commission are incorporated herein by reference. The words “believe”, “expect”, “anticipate”, “project”, “target”, “intend”, “plan”, “seek”, “estimate”, “endeavor”, “should”, “could”, “may” and similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to projections for our future financial performance, our anticipated growth trends, if any, in our business, our expected use of the proceeds of the transactions described herein and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. Blonder Tongue undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Blonder Tongue’s actual results may differ from the anticipated results or other expectations expressed in Blonder Tongue’s “forward-looking” statements.

 

Item 9.01   Financial Statements and Exhibits

 

(d) Exhibits. The following exhibit is filed herewith:

 

  Exhibit No.   Description
       
  10.1   Second Amendment to Agreement of Sale dated October 8, 2018.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  BLONDER TONGUE LABORATORIES, INC.
     
  By: /s/ Eric Skolnik
    Eric Skolnik
    Senior Vice President and Chief Financial Officer

 

Date: October 8, 2018

 

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EXHIBIT INDEX

 

Exhibit No.   Description
     
10.1   Second Amendment to Agreement of Sale dated October 8, 2018.

 

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Exhibit 10.1

 

SECOND AMENDMENT TO AGREEMENT OF SALE

 

THIS SECOND AMENDMENT TO AGREEMENT OF SALE (“Second Amendment”), is made and entered into on this 8 th day of October, 2018, by and between BLONDER TONGUE LABORATORIES, INC., as Seller and JAKE BROWN RD, LLC, as Buyer.

 

Background

 

A. Seller and Buyer entered into an Agreement of Sale dated August 3, 2018 (the “ Original Agreement ”) for the sale and purchase of real property identified as (i) 19.407 acres of land, together with all rights, easements and interests appurtenant thereto, situate at Lot 8, Block 9000, also known as 1 Jake Brown Road, Old Bridge Township, New Jersey 08857 (the “ Land ”); and (ii) all improvements located thereon, including, but not limited to, a commercial building consisting of approximately 128,747 square feet (“the “ Building ,” and Land and Building, collectively, the “ Property ”) and more particularly described on Exhibit “A” attached to the Original Agreement, as amended by Seller’s letter dated September 20, 2018, which extended the Due Diligence Period expiration date, at Buyer’s request, to October 4, 2018 (the “ First Amendment. ”). The Original Agreement, as amended by the First Amendment is referred to herein as the “ Agreement ”).

 

B. Buyer has now requested an extension of the Closing Date and Seller has requested certain consideration from Buyer in order to agree to Buyer’s request.

 

NOW, THEREFORE, the parties, intending to be legally bound agree that, in exchange for the consideration described below, the Agreement shall, notwithstanding anything therein to the contrary, be modified as follows:

 

1. All capitalized terms use in this Second Amendment and not otherwise defined herein shall have the same meanings as ascribed to them in the Agreement.

 

2. The parties acknowledge that the Due Diligence Period has expired as of 4:00 NY time on October 8, 2018 (the “ Due Diligence Expiration ”) and Buyer intends to proceed to Closing subject to the fulfillment by Seller of all conditions of Closing required by the Agreement. Seller acknowledges that Buyer has not yet received a survey performed for Buyer’s behalf and that Seller remains obligated to address any exceptions to title raised by the title company or Buyer’s lender as a result of said survey which would prevent a title company from removing the survey exception form the title insurance policy, as and to the extent required by the Agreement.

 

3. The Closing shall occur or before January 10, 2019, TIME BEING OF THE ESSENCE; provided that Buyer shall have a one-time right to extend the Closing Date up to an additional 20 calendar days on the condition that (i) written notice of such extension is provided to the Seller on or before 5:00 p.m. New York Time on January 4, 2018 (“ Extension Notice Date ”), (ii) such written notice is accompanied by the wire transfer of an additional amount of $150,000 (the “ Extension Deposit ”), to be paid on the Extension Notice Date directly into Sellers designated bank account into which the Second Deposit is required to be deposited under Section 4 below, and (iii) such Extension Deposit shall become non-refundable in all events if there is a failure to close for any reason.

 

4. The Second Deposit shall be funded, no later than close of business on October 9, 2018, by Buyer by wire transfer of immediately available funds directly into Seller’s designated bank account, the details and wire transfer instructions of which are set forth in the Escrow Release Authorization attached as Exhibit “A” hereto.

 

5. The parties shall, simultaneously with the execution of this Second Amendment, execute the Release Authorization attached as Exhibit “A” hereto, which directs the Escrow Agent to wire transfer the First Deposit funds into Seller’s designated bank account no later than the close of business on October 9, 2018 and shall each forward the fully executed Escrow Release Authorization to the Escrow Agent by electronic mail.

 

 

 

 

6. Buyer further acknowledges and agrees that, as of the Due Diligence Expiration, the Deposit is Seller’s property, subject to an obligation to return an amount equal to the Deposit as set forth in Section 8 below, to be used at Seller’s discretion and subject to no restrictions. Buyer shall not be entitled to any interest on such funds at Closing and Seller shall not be required to provide an accounting of the use of the Deposit to Buyer. The parties agree to execute the memorandum of the Agreement in the form attached as Exhibit “B” hereto and send the original of such memorandum to Escrow Agent to record said memorandum. Seller agrees to execute any further documents which may be required to record the memorandum and shall have any and all documents required to execute the memorandum properly notarized as may be required to record same within three (3) business days of Buyer’s request for same.

 

7. Seller acknowledges that Buyer has identified the possible need for certain repairs to the parking lot which in aggregate Seller has estimated will cost up to $60,000 and certain repairs to the lower roof of the Building which in aggregate Buyer has estimated will cost up to $160,000 (the “ Property Repairs ”). The Property Repairs constitute “CapX Expense” under and as defined in Section 3.08(d) of the Lease. Buyer agrees that, in the event Buyer’s lender requires, as a condition of financing the transaction, the establishment of an escrow at Closing in the amount of the cost estimate of the Property Repairs, as such estimate may be modified by further agreement of the parties and the Buyer’s lender, that Seller shall pay, from the Purchase Price, its allocated share of such CapX Expense, as contemplated by the Lease.

 

8. Section 6.01 of the Agreement is deleted in its entirety and replaced with the following:

 

If Seller defaults hereunder, including a failure by Seller to fulfill a condition to closing as required in this Agreement of Sale, Buyer shall have the right as its sole remedy to choose to either (a) terminate this Agreement and be paid by Seller, no later than five (5) business days after Seller’s receipt of Buyer’s written request therefor, $500,000 in the amount of liquidated damages plus any and all legal costs and expenses to collect same if Seller does not comply with Buyer’s request for the liquidated damages, or (b) seek specific performance of Seller’s obligations hereunder.

 

9. Except to the extent explicitly modified herein, all terms and conditions of the Agreement shall otherwise remain in full force and effect.

 

: 

SELLER:
   
  BLONDER TONGUE LABORATORIES, INC.
   
  By: /s/ Robert J. Pallé
  Name: Robert J. Pallé, Chief Executive Officer
   
: BUYER:
   
  JAKE BROWN RD, LLC
   
  By: /s/ Arvee Claravall
  Name: Arvee Claravall
  Title: CFO

 

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EXHIBIT “A”

 

ESCROW RELEASE AUTHORIZATION

 

  October 8, 2018

 

Riverside Abstract

Attention: Azi Mindick

 

Re: Agreement of Sale dated August 3, 2018 between Blonder Tongue Laboratories, Inc. as Seller and Jake Brown Rd, LLC as Buyer, as amended.

 

Reference is made to the Agreement of Sale referred to above and specifically the provisions of Article Thirteen thereof relating to the duties of the Escrow Agent. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement of Sale.

 

The undersigned hereby jointly direct the Escrow Agent to immediately distribute, no later than close of business on October 9, 2018, the amount of $250,000 plus any accrued interest, via wire transfer funds, to Blonder Tongue Laboratories, Inc. in accordance with the following wiring instructions:

 

  Bank Name: Sterling National Bank
  Address: 400 Rella Blvd., Suite 308
  ABA#:  
  Account Name: Blonder Tongue Laboratories, Inc.
  Account #:  

 

Upon disbursal, the balance of the Escrow will be $0.00.

 

IN WITNESS WHEREOF , the undersigned has executed this Escrow Release Authorization as of the date first above written.

 

JAKE BROWN RD, LLC, a New Jersey limited liability company
   
By: /s/ Arvee Claravall  
  Arvee Claravall, CFO  
     
BLONDER TONGUE LABORATORIES, INC., a Delaware corporation
     
By:   /s/ Robert J. Pallé  
  Robert J. Pallé, Chief Executive Officer  

 

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Return to :

 

Jeffrey Dayon, Esq.

Montgomery McCracken Walker & Rhoads LLP

437 Madison Avenue

New York, NY 10022

 

Property: One Jake Brown Road, Lot 8 of Block 9000, Old Bridge Township, Middlesex County

 

MEMORANDUM OF AGREEMENT OF SALE

 

KNOW ALL MEN BY THESE PRESENTS that Blonder Tongue Laboratories, Inc. (hereinafter referred to as “Seller”) has entered into a certain Agreement of Sale (“Agreement”) with Jake Brown Rd, LLC (“Buyer”) dated August 3, 2018, pertaining to (i) a certain piece or parcel of land consisting of 19.407 acres, together with all rights, easements and interests appurtenant thereto, situate at Lot 8, Block 9000, also known as 1 Jake Brown Road, Old Bridge Township, New Jersey; and (ii) all improvements located thereon, including, but not limited to, a commercial building consisting of approximately 128,747 square feet and more particularly described on Exhibit “A” attached hereto (hereinafter the “Property”).

 

The parties agree that, to the extent there is a wrongful failure to discharge this Memorandum of Agreement of Sale from title by Buyer, Seller shall be entitled to be reimburse by Buyer for Seller’s legal and other costs and expenses incurred by Seller to have the Memorandum discharged or otherwise removed from title to the Property.

 

This Memorandum is intended for recording purposes only, and, except to the extent explicitly set forth herein, does not add to, diminish, amend or modify said Agreement in any respect.

 

IN WITNESS WHEREOF, the undersigned have executed this Memorandum of Agreement of Sale, this 8th day of October, 2018.

 

ATTEST:

SELLER:
   
  BLONDER TONGUE LABORATORIES, INC.
   
  By: /s/ Robert J. Pallé
  Name: Robert J. Pallé
  Title: President and CEO
     
ATTEST: BUYER:
   
  JAKE BROWN RD, LLC
   
  By: /s/ Arvee Claravall
  Name: Arvee Claravall
  Title: CFO

 

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STATE OF NEW JERSEY

:
  :  ss
COUNTY OF MIDDLESEX :

 

On this, the 8th day of October, 2018, before me, a Notary Public in and for the State of New Jersey, personally appeared _________________, who acknowledged himself to be the _________ of BLONDER TONGUE LABORATORIES, INC., a New Jersey corporation, and that he as such officer, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the corporation by himself as ____________________ for the purposes therein contained.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

 
  Notary Public

 

My Commission Expires:

  

STATE OF NEW YORK :
  :  ss
COUNTY OF _____________ :

 

On this, the ________ day of October, 2018, before me, a Notary Public in and for the State of New Jersey, personally appeared _________________, who acknowledged himself to be the _________ of JAKE BROWN RD, LLC, a New limited liability company, and that he as such ______, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the limited liability company by himself as ____________________ for the purposes therein contained.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

 
  Notary Public

 

My Commission Expires:

 

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EXHIBIT A

 

Legal Description

 

Real property in the Township of Old Bridge, County of Middlesex, State of New Jersey, described as follows:

 

ALL THAT CERTAIN lot, piece or parcel of land, situate, lying and being in the Township of Old Bridge, County of Middlesex, State of New Jersey:

 

BEGINNING at a point in the Easterly line of Jake Brown Road, variable width, distant 346.37 feet on a course bearing North 06 degrees 50 minutes 00 seconds East, from the intersection of the said line of Jake Brown Road extended Southerly with the Northerly line of Patio Greens Drive, extended Westerly, and running; thence

 

1. North 06 degrees 50 minutes 00 second East, 32.39 feet along the Easterly line of Jake Brown Road, as shown on a plat entitled Final Map Section 2 Patio Greens dated 9/5/84, filed with the Middlesex County Clerk on 8/20/85 as Map No. 4886, File No. 972, to a point of curvature; thence

 

2. Northerly along a curve to the left, having a radius of 1,000.00 feet, an arc length of 76.55 feet to a point of tangency; thence

 

3. North 02 degrees 26 minutes 50 seconds East, 541.66 feet along the Easterly line of Jake Brown Road to a point of curvature, being the beginning of the second course in Deed Book 2669, Page 827; thence

 

4. Northeasterly along a curve to the right, having a radius of 50.00 feet, an arc length of 78.54 feet to a point of tangency; thence

 

5. South 87 degrees 33 minutes 10 seconds East, 792.91 feet along the Southerly line of Jake Brown Road to a point of curvature; thence

 

6. Easterly along a curve to the left, having a radius of 200.00 feet, an arc length of 210.90 feet to a point of tangency; thence

 

7. North 32 degrees 01 minutes 44 seconds East, 244.08 feet to a point in the Easterly line of the present Jake Brown Road and the old Jake Brown Road, being the terminus of the 6th course in Deed Book 2660, Page 86, thence

 

8. South 53 degrees 58 minutes 40 seconds East, 396.54 feet along the line of Lot 9 to a point; thence

 

9. South 44 degrees 50 minutes 00 seconds West, 189.49 feet along the line of Lot 1 in Block 9002 as shown on a plat entitled Final Map Section 3 Patio Greens dated 3/31/82, filed in the Middlesex County Clerk's Office on 4/19/84 as Map No. 4690, File No. 970; thence

 

10. South 43 degrees 03 minutes 07 seconds West, 849.65 feet to a point, said point being 9.25 feet Easterly of the point of beginning in the Deed Book 3289, Page 68 and 9.25 feet Westerly of the terminus of the 3rd course in Deed Book 3289, Page 68, Tract 2; thence

 

11. North 88 degrees 14 minutes 26 seconds West, 792.62 feet to a point, being the point and place of beginning.

 

NOTE: FOR INFORMATION ONLY: Being Lot(s) 8, Block(s) 9000; Tax Map of the Township of Old Bridge, County of Middlesex, State of New Jersey.

 

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