BLONDER TONGUE LABORATORIES INC (Form: 8-K, Received: 02/12/2016 15:35:22)

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): February 11, 2016
Blonder Tongue Laboratories, Inc. (Exact Name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation)	1-14120 (Commission File Number)	52-1611421 (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))

Item 1.01

Entry into a Material Definitive Agreement

Blonder Tongue Laboratories, Inc. (the “Company”) previously disclosed that it had received a commitment from Robert J. Pallé and Carol M. Pallé (the “Lenders”) to provide the Company with financing of up to $600,000 in the form of senior subordinated convertible debt. On February 11, 2016 the Company, R. L. Drake Holdings, LLC, its wholly-owned subsidiary (“RLD”), and the Lenders entered into a Senior Subordinated Convertible Loan and Security Agreement (the “Pallé Loan Agreement”), pursuant to which the Lenders will provide the Company with a delayed draw term loan facility of up to $600,000. The term loan facility consists of an initial advance of $200,000 (inclusive of a $100,000 advance previously provided by the Lenders) and a commitment to make additional advances up to an additional $400,000. Interest on the term loan will accrue at 12% per annum (subject to increase under certain circumstances) and is payable monthly in-kind by the automatic increase of the principal amount of the term loan on each monthly interest payment date, by the amount of the accrued interest payable at that time (“PIK Interest”); provided, however, that at the option of the Company, it may pay interest in cash on any interest payment date, in lieu of PIK Interest. The Lenders will have the option of converting the principal balance of the loan, in whole (unless otherwise agreed by the Company), into shares of the Company’s common stock at a conversion price of $0.54 per share (subject to adjustment under certain circumstances). This conversion right is subject to any necessary stockholder approval required by the rules of the NYSE MKT, and the Company has agreed to submit a proposal at its 2016 annual meeting to obtain stockholder approval. The obligations of the Company and RLD under the Pallé Loan Agreement are secured generally by the Company’s and RLD’s assets, including by the mortgage described below. The Pallé Loan Agreement terminates three years from the date of closing.

On February 11, 2016, the Company, RLD and the Lenders also entered into a Mortgage and Security Agreement (the “Mortgage”) pursuant to which the obligations of the Company and RLD under the Pallé Loan Agreement are secured by a mortgage (subordinate to a prior mortgage in favor of Santander Bank, N.A. (“Santander”)) on the Company’s headquarters property in Old Bridge, New Jersey.

In connection with the Pallé Loan Agreement, on February 11, 2016, the Company, RLD, the Lenders and Santander entered into a Subordination Agreement (the “Subordination Agreement”). Pursuant to the Subordination Agreement, the parties have acknowledged and agreed that the rights of the Lenders under the Pallé Loan Agreement and the Mortgage are subordinate to the rights of Santander under the Revolving Credit, Term Loan and Security Agreement dated August 6, 2008, as amended, between the Company, RLD and Santander, and the Term Note and Revolving Credit Note relating thereto. Further, under the Subordination Agreement, notwithstanding the terms of the Pallé Loan Agreement, the Company is precluded from making (and the Lender is precluded from accepting) cash payments of interest in lieu of PIK Interest, in the absence of the prior written consent of Santander.

The foregoing summary of the Pallé Loan Agreement, the Mortgage and the Subordination Agreement is not complete and is qualified in its entirety by reference to the full text of each of the Pallé Loan Agreement, the Mortgage and the Subordination Agreement, which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and incorporated herein by reference.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information contained in Item 1.01 above is hereby incorporated by reference into this Item 2.03. Upon a default under the Pallé Loan Agreement, including the non-payment of principal or interest, the obligations of the Company under the Pallé Loan Agreement may be accelerated and the Lender may (subject to the Subordination Agreement) pursue its rights under the Uniform Commercial Code and any other applicable law or in equity.

Item 8.01

Other Events

The Company previously disclosed that it had received a proposal from ZyCast Technology, Inc. (“ZyCast”) to invest $1,000,000 to purchase shares of the Company’s common stock. The Company and ZyCast were unable to reach a mutually-acceptable agreement and discussions between the parties as to a possible investment by ZyCast have ceased.

Item 9.01

Financial Statements and Exhibits

(d) Exhibits. The following exhibits are filed herewith:

Exhibit No.	Description

10.1	Senior Subordinated Convertible Loan and Security Agreement dated as of February 11, 2016 by and between Blonder Tongue Laboratories, Inc., R. L. Drake Holdings, LLC and Robert J. Pallé and Carol M. Pallé.

10.2	Mortgage and Security Agreement dated as of February 11, 2016 by and between Blonder Tongue Laboratories, Inc., as Mortgagor and Robert J. Pallé and Carol M. Pallé, as Mortgagee.

10.3	Subordination Agreement dated as of February 11, 2016 by and between Blonder Tongue Laboratories, Inc., R. L. Drake Holdings, LLC, Robert J. Pallé and Carol M. Pallé and Santander Bank, N.A.

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: February 12, 2016

EXHIBIT INDEX

Exhibit No.	Description

10.1	Senior Subordinated Convertible Loan and Security Agreement dated as of February 11, 2016 by and between Blonder Tongue Laboratories, Inc., R. L. Drake Holdings, LLC and Robert J. Pallé and Carol M. Pallé.

10.2	Mortgage and Security Agreement dated as of February 11, 2016 by and between Blonder Tongue Laboratories, Inc., as Mortgagor and Robert J. Pallé and Carol M. Pallé, as Mortgagee.

10.3	Subordination Agreement dated as of February 11, 2016 by and between Blonder Tongue Laboratories, Inc., R. L. Drake Holdings, LLC, Robert J. Pallé and Carol M. Pallé and Santander Bank, N.A.

EXHIBIT 10.1

SENIOR SUBORDINATED CONVERTIBLE LOAN AND SECURITY AGREEMENT

THIS SENIOR SUBORDINATED CONVERTIBLE LOAN AND SECURITY AGREEMENT (this “ Agreement ”) is made and entered into as of the 11 th day of February, 2016 by and between Blonder Tongue Laboratories, Inc., a Delaware corporation (the “ Company ”), R.L. Drake Holdings, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“ Drake ” and, collectively with the Company, “ Borrower ”), and Robert J. Pallé and Carol M. Pallé, jointly and severally (collectively, “ Lender ”).

BACKGROUND

A. Borrower has requested that Lender extend a certain credit facility to Borrower, which Lender is willing to do on the terms set forth herein.

B. Capitalized terms used herein will have the meanings set forth therefor in Section 1 of this Agreement.

NOW, THEREFORE, in consideration of the terms and conditions contained herein, and of any extensions of credit now or hereafter made to or for the benefit of Borrower by Lender, the parties hereto, intending to be legally bound hereby, agree as follows:

1	DEFINITIONS .

1.1 Defined Terms . The following words and phrases as used in capitalized form in this Agreement, whether in the singular or plural, shall have the meanings indicated:

(a) “ Accreted Principal Amount ” means, at any time, the outstanding principal amount of the Term Loan, including the aggregate amount of all Advances as well as all PIK Interest added thereto.

(b) “ Additional Shares of Common Stock ” shall be as defined in Section 4.4(e)(ii).

(c) “ Advance ” means any extension of credit by Lender to Borrower under the Term Loan, including, without limitation, the December Advance.

(d) “ Advance Request ” shall be as defined in Section 2.3 .

(e) “ Affiliate ” as to any Person, means (i) each other Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person in question and (ii) any person who is an officer, director, member, manager or partner of (A) such Person, (B) any Subsidiary of such Person, or (C) any Person described in the preceding clause (i) .

(f) “ Basic Interest Rate ” shall be as defined in Section 3.1 .

(g) “ Borrower ” means the Company and Drake, both individually and collectively (as applicable), and shall include all permitted successors and assigns of such Persons.

(h) “ Business Day ” means any day except a Saturday, Sunday or other day on which money center commercial banks located in New York, New York are authorized by law to close.

(i) “ Cash Interest ” shall be as defined in Section 4.1 .

(j) “ Collateral ” shall be as defined in Section 5.3 .

(k) “ Common Stock ” shall be as defined in Section 4.4(a) .

(l) “ Company ” shall have the meaning given such term in the introductory paragraph of this Agreement and shall include all permitted successors and assigns of such Person.

(m) “ Contingent Convertible Portion ” shall be as defined in Section 4.4(b) .

(n) “ Contract Period ” means the period of time commencing on the date hereof and continuing through and including the Final Maturity Date, subject to acceleration as provided herein following any Event of Default.

(o) “ Conversion Price ” shall be as defined in Section 4.4(a).

(p) “ Corporation ” means a corporation, partnership, limited liability company, trust, unincorporated organization, association, joint stock company or joint venture.

(q) “ December Advance ” means and refers to the $100,000 loan extended by the Lender to the Company on December 24, 2015, and intended to constitute an Advance hereunder, entitled to all of the rights and benefits of this Agreement, including without limitation the security interests, accrual of interest and conversion rights described herein and applicable to all Advances under the Term Loan.

(r) “ Default ” means any event which with the giving of notice, passage of time or both, could constitute an Event of Default.

(s) “ Drake ” shall have the meaning given such term in the introductory paragraph of this Agreement and shall include all permitted successors and assigns of such Person.

(t) “ Effective Price ” shall be as defined in Section 4.4(e)(ii) .

(u) “ Event of Default ” means each of the events specified in Section 9.1 .

(v) “ Final Maturity Date ” shall be as defined in Section 4.2 .

(w) “ GAAP ” means generally accepted accounting principles in the United States of America, in effect from time to time, consistently applied and maintained.

(x) “ Indebtedness ” , as applied to a Person, means:

(i) all items (except items of capital stock or of surplus) which in accordance with GAAP would be included in determining total liabilities as shown on the liability side of a balance sheet of such Person as at the date as of which Indebtedness is to be determined;

(ii) to the extent not included in the foregoing, all indebtedness, obligations, and liabilities secured by any mortgage, pledge, lien, conditional sale or other title retention agreement or other security interest to which any property or asset owned or held by such Person is subject, whether or not the indebtedness, obligations or liabilities secured thereby shall have been assumed by such Person; and

(iii) to the extent not included in the foregoing, all indebtedness, obligations and liabilities of others which such Person has directly or indirectly guaranteed, endorsed (other than for collection or deposit in the ordinary course of business), sold with recourse, or agreed (contingently or otherwise) to purchase or repurchase or otherwise acquire or in respect of which such Person has agreed to supply or advance funds (whether by way of loan, stock purchase, capital contribution or otherwise) or otherwise to become directly or indirectly liable.

-2-

(y) “ Interest Payment Date ” shall be as defined in Section 4.1 .

(z) “ Initial Advance ” shall be as defined in Section 2.1 .

(aa) “ Lender ” shall have the meaning given such term in the introductory paragraph of this Agreement and shall include all permitted successors and assigns of such Person(s).

(bb) “ Lender Indebtedness ” means all Indebtedness of Borrower to Lender, whether now or hereafter owing or existing, including, without limitation, all obligations under the Loan Documents, all other obligations or undertakings now or hereafter made by or for the benefit of Borrower to or for the benefit of Lender under any other agreement, promissory note or undertaking now existing or hereafter entered into by Borrower with Lender, together with all interest and other sums payable in connection with any of the foregoing.

(cc) “ Loan Documents ” means this Agreement, the Subordination Agreement and all other documents, executed or delivered by Borrower or any other Person pursuant to this Agreement or in connection herewith, as they may be amended, modified or restated from time to time.

(dd) “ Mortgage ” means that certain Mortgage and Security Agreement, dated on or about the date of this Agreement, between the Company and Lender, granting to Lender a mortgage lien on the Mortgaged Property.

(ee) “ Mortgaged Property ” means and refers to the premises situate at One Jake Brown Road, Old Bridge NJ 08857 and all improvements thereon and all rights, licenses, permits and approvals relating thereto, together with an assignment of all rents and leases related thereto.

(ff) “ NYSE MKT Threshold ” shall be as defined in Section 4.4(b) .

(gg) “ Person ” means an individual, a Corporation or a government or any agency or subdivision thereof, or any other entity.

(hh) “ PIK Interest ” shall be as defined in Section 4.1 .

(ii) “ Requested Advance Date ” shall be as defined in Section 2.3 .

(jj) “ Santander ” means Santander Bank, N.A.

(kk) “ Santander Credit Agreement ” means the Revolving Credit, Term Loan and Security Agreement dated August 6, 2008 between the Company and Santander, as amended.

(ll) “ Senior Indebtedness ” means (i) the Indebtedness of Borrower and/or one or more of Borrower’s Affiliates owed to Santander under the Santander Credit Agreement, (ii) any Indebtedness of Borrower and/or one or more of Borrower’s Affiliates that may arise under, out of, or in connection with any obligation of any of such entities to commercial lenders for money advanced to any of such entities and (iii) any renewal, replacement or refinancing of any of the foregoing, in each case whether or not such Indebtedness is expressly subordinated hereto.

(mm) “ Senior Indebtedness Debt Cap ” means the sum of (a) the aggregate principal amount of Senior Indebtedness (including the undrawn or unreimbursed amount of all letters of credit constituting Senior Indebtedness up to the sum of Six Million Dollars ($6,000,000) plus (b) the amount of all overadvances by the holder of Senior Indebtedness, up to $1,000,000; plus (c) 85% of all Eligible Receivables, plus (d) 50% of all Eligible Inventory (as such terms are defined in the Santander Credit Agreement or any subsequent credit agreement memorializing Senior Indebtedness) acquired in connection with any acquisition by Borrower of the assets of a person that is not a Borrower; plus (e) amounts in respect of accrued, unpaid interest, fees and expenses attributable to the items described in clauses (a) through (d) above.

-3-

(nn) “ Subordination Agreement ” means the Subordination Agreement dated on or about the date hereof between Lender and Santander or between Lender and any subsequent holder of Senior Indebtedness.

(oo) “ Subsidiary ” means a Corporation (i) which is organized under the laws of the United States or any State thereof, or any other county or jurisdiction, (ii) which conducts substantially all of its business and has substantially all of its assets within the United States and (iii) of which more than fifty percent (50%) of its outstanding voting stock of every class (or other voting equity interest) is owned by Borrower or one or more of its Subsidiaries.

(pp) “ Supplemental Interest’ means cash interest at the rate of five percent (5%) per annum, paid in addition to Base Rate Interest, on the outstanding amount of the Contingent Convertible Portion of the Term Loan, in accordance with Section 3.1 .

(qq) “ Supplemental Interest Commencement Date ”, shall be as defined in Section 4.4(b) .

(rr) “ Term Loan ” shall be as defined in Section 2.1 .

(ss) “ Undrawn Availability ” at a particular date means an amount equal to (i) $600,000.00, minus (ii) the aggregate amount of all Advances made under the Term Loan as of such date.

1.2 Accounting Terms . As used in this Agreement, or any certificate, report or other document made or delivered pursuant to this Agreement, accounting terms not defined elsewhere in this Agreement shall have the respective meanings given to them under GAAP.

1.3 UCC Terms . All terms used herein and defined in the Uniform Commercial Code as in effect in the State of Delaware from time to time shall have the meanings given therein unless otherwise defined herein.

2	THE TERM LOAN; USE OF PROCEEDS .

2.1 Term Loan . Lender will establish for Borrower for and during the Contract Period, subject to the terms and conditions hereof, a convertible, delayed draw term loan facility (the “Term Loan” ) pursuant to which (i) on the closing date hereunder or within one Business Day thereafter, Lender will make an initial advance to Borrower, which taken together with the December Advance, will be in the aggregate amount of $200,000 (the “ Initial Advance ”), and from time to time thereafter, upon the request of Borrower, Lender will make additional Advances to Borrower in an aggregate amount, which, taken together with the Initial Advance, do not exceed $600,000. The Term Loan is not a revolving loan, so that if Borrower repays all or any portion of the Term Loan at any time, such amount so repaid may not be re-borrowed. The Term Loan shall be subject to all terms and conditions set forth in all of the Loan Documents, which terms and conditions are incorporated herein.

2.2 Use of Proceeds . Borrower agrees to use Advances under the Term Loan for working capital and general corporate purposes.

2.3 Method of Advances . On any Business Day, Borrower may request an Advance by delivering to Lender a written request therefor (each an “Advance Request” ), which Advance Request may be submitted by the Chief Financial Officer of the Company, subject to the prior approval of the Chief Executive Officer of the Company; provided , however, if (a) the Chief Executive Officer is unavailable for a period of more than 24 hours from the time an Advance Request is proposed to be delivered by the Chief Financial Officer or (b) the Chief Executive Officer determines not to approve an Advance Request proposed to be delivered by the Chief Financial Officer, then under either of such circumstances, the Advance Request proposed by the Chief Financial Officer may be presented to the Board of Directors of the Company for its consideration and approval (either at a meeting or by consent in writing of a majority of the Board), which, if given, would supersede any failure of approval or disapproval by the Chief Executive Officer. Each such request shall specify (i) the amount of the requested Advance, which shall be at least $50,000.00 or, if less, the current amount of Undrawn Availability, and (ii) the date (the “Requested Advance Date” ) upon which Borrower desires Lender to fund the Advance, which date shall be at least one (1) Business Day subsequent to Lender's receipt of the Advance Request. Any Advance Request made after 1:00 p.m. on any Business Day shall be deemed to be made on the next following Business Day. Following Lender's receipt of an Advance Request, Lender will make the requested Advance on the Requested Advance Date, by transferring immediately available funds via wire transfer or ACH transfer to an account previously designated to Lender in writing by Borrower.

-4-

3	INTEREST .

3.1 Interest Rate . Interest on outstanding Advances will accrue from the date of advance until final payment (or conversion, as contemplated by Section 4.4 below) thereof, at the rate of twelve percent (12%) per annum (the “ Basic Interest Rate ”), which interest may be paid as Cash Interest or as PIK Interest, in the discretion of Borrower, as more fully contemplated by Section 4.1 below. If following receipt by the Company of a Notice of Conversion with respect to the Contingent Convertible Portion of the Term Loan, conversion thereof into Common Stock has not occurred on or prior to the Supplemental Interest Commencement Date, then Supplemental Interest will accrue on the outstanding Contingent Convertible portion of the Term Loan from the Supplemental Interest Commencement Date until final payment (or conversion, as contemplated by Section 4.4 below) thereof, as more fully contemplated by Section 4.1 below. Interest will be computed on the basis of a year of 360 days and paid for the actual number of days elapsed.

3.2 Limitation of Interest to Maximum Lawful Rate . In no event will the rate of interest payable hereunder exceed the maximum rate of interest permitted to be charged by applicable law (including the choice of law rules) and any interest paid in excess of the permitted rate will be refunded to Borrower. Such refund will be made by application of the excessive amount of interest paid against any sums outstanding hereunder and will be applied in such order as Lender may determine. If the excessive amount of interest paid exceeds the sums outstanding, the portion exceeding the sums outstanding will be refunded in cash by Lender. Any such crediting or refunding will not cure or waive any default by Borrower. Borrower agrees, however, that in determining whether or not any interest payable hereunder exceeds the highest rate permitted by law, any non-principal payment, including without limitation prepayment fees and late charges, will be deemed to the extent permitted by law to be an expense, fee, premium or penalty rather than interest.

4	PAYMENTS AND CONVERSION .

4.1 Interest Payments . Accrued interest shall be due and payable monthly in arrears on the first day of each calendar month (an “ Interest Payment Date ”) commencing on the first day of the first calendar month following the date of the initial Advance to Borrower hereunder. Interest will be payable in-kind (“ PIK Interest ”) on the Accreted Principal Amount of the Term Loan by the automatic increase of the principal amount of the Term Loan on each Interest Payment Date by the amount of accrued interest payable at that time. Notwithstanding the foregoing, at the option of Borrower, Borrower may pay interest in cash (“ Cash Interest ”) on any one or more Interest Payment Dates in lieu of PIK Interest. Supplemental Interest if due and payable, shall be due and payable monthly in arrears on each Interest Payment Date commencing on the Supplemental Interest Commencement Date.

4.2 Principal Payments . If not paid earlier (or converted into Common Stock as contemplated by Section 4.4 ), Borrower will pay the entire Accreted Principal Amount of the Term Loan, and any other sums due pursuant to the terms hereof, on the third anniversary of the date of this Agreement (the “ Final Maturity Date ”).

-5-

4.3 Prepayment . Borrower may prepay all or any part of the amounts due on the Term Loan at any time without any premium or penalty, following delivery of not less than five (5) Business Days prior written notice to Lender. All prepayments will be applied to the regularly scheduled payments in the inverse order in which they are due.

4.4 Conversion .

(a) Subject to Section 4.4(b) below, at any time Lender may convert all but not less than all (unless prior written consent of Borrower is obtained) but in no event in excess of the NYSE MKT Threshold, of the Accreted Principal Amount of the Term Loan plus any accrued and unpaid interest into shares of the Company’s common stock, $0.001 par value per share (the “ Common Stock ”) at a conversion price (the “ Conversion Price ”) equal to $0.54 per share (subject to adjustment as provided below), by delivering written notice thereof to the Company. Such notice of conversion or any subsequent notice of conversion (each, a “ Notice of Conversion ”) shall be irrevocable once given and shall specify the amount of the Term Loan intended to be converted. The Company shall effect such conversion as promptly as practicable following its receipt of such Notice of Conversion (such date the “ Conversion Date ”) and interest on the portion of the Term Loan so converted shall cease to accrue on such Conversion Date.

(b) Notwithstanding anything herein to the contrary, initially Lender’s conversion rights under this Section 4.4 shall be limited to a maximum number of shares of Common Stock that will not cause the ownership of the Company by Lender to reach or exceed the “change in control” threshold amount under Section 713(b) of the NYSE MKT Rules, as amended from time to time, so long as such Rules continue to be applicable to the Company (the “ NYSE MKT Threshold ”). The Company will, at its sole cost and expense, include within the agenda for its annual meeting of stockholders to be held in 2016, a proposal for stockholder approval of the transactions contemplated by this Agreement, including the conversion of the entire amount of the Term Loan (including, without limitation, the portion of the outstanding Term Loan that would cause the ownership of the Company by Lender to exceed the NYSE MKT Threshold (the “ Contingent Convertible Portion ”)) into shares of Common Stock at the Conversion Price. If the Company is unable to obtain stockholder approval or otherwise take alternative steps necessary to permit conversion of the Contingent Convertible Portion within fifteen (15) Business Days after the later of (i) the date of such annual meeting of stockholders, or (ii) the date on which Lender delivers a Notice of Conversion with respect to the Contingent Convertible Portion of the Term Loan to the Company (the “ Supplemental Interest Commencement Date”) , then the Company will be required to pay to Lender Supplemental Interest on such Contingent Convertible Portion of the Term Loan as provided in Section 3.1 above.

(c) The Company covenants and agrees that the shares of Common Stock that may be issued upon the exercise Lender’s conversion rights hereunder will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the time that principal or interest is owed pursuant to this Agreement, have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Common Stock to provide for the conversion rights set forth herein. If at any time while Lender has conversion rights hereunder, the number of authorized but unissued shares of Common Stock shall not be sufficient to permit conversion of amounts owed hereunder, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

(d) Upon a conversion hereunder, the Company shall not be required to issue stock certificates representing fractions of shares of Common Stock, and in lieu of any fractional shares which would otherwise be issuable, the Company shall issue the next lowest whole number of shares of Common Stock.

(e) (i) In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, splits, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, or the like, the Conversion Price shall be correspondingly adjusted to give Lender, on exercise for the same aggregate Conversion Price, the total number, class, and kind of shares as Lender would have owned had the Term Loan been converted prior to the event and had the Lender continued to hold such shares until after the event requiring adjustment.

-6-

(ii) If during the time that principal or interest is owed on the Term Loan, the Company issues or sells Additional Shares of Common Stock (as defined below) other than pursuant to clause (i) above for a price (the “ Effective Price ”) less than the then effective Conversion Price, then and in each such case, the then existing Conversion Price shall be reduced, as of the opening of business on the date of such issue or sale, to a price equal to such Effective Price. “ Additional Shares of Common Stock ” shall mean all shares of Common Stock, or options, warrants or other rights to acquire Common Stock, issued by the Company, other than (i) options, warrants or shares of Common Stock issued to employees, directors and consultants as a part of an equity incentive plan or agreement approved by the Company’s Board of Directors, (ii) shares of Common Stock issued as a consideration for a merger, acquisition or other business combination approved by the Company’s Board of Directors, (iii) options, warrants or shares issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by the Company’s Board of Directors; and (iv) shares issued upon the exercise of an option, warrant or other right to acquire Common Stock pursuant to which an adjustment of the Conversion Price under this Section 4.4(e) has already been made.

SECURITY.

5.1 Personal Property . As security for the full and timely payment and performance of all Lender Indebtedness, Borrower hereby grants to Lender a security interest in all existing and after-acquired property of Borrower of any nature including, without limitation:

(a) All present and future accounts, contract rights, chattel paper, instruments and documents and all other rights to the payment of money whether or not yet earned, for services rendered or goods sold, consigned, leased or furnished by Borrower or otherwise, together with (i) all goods (including any returned, rejected, repossessed or consigned goods), the sale, consignment, lease or other furnishing of which shall be given or may give rise to any of the foregoing, (ii) all of Borrower's rights as a consignor, consignee, unpaid vendor or other lien or in connection therewith, including stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all general intangibles related thereto, (iv) all guaranties, mortgages, security interests, assignments, and other encumbrances on real or personal property, leases and other agreements or property securing or relating to any accounts, (v) choses-in-action, claims and judgments, and (vi) any returned or unearned premiums, which may be due upon cancellation of any insurance policies.

(b) All present and future inventory of Borrower (including but not limited to goods held for sale or lease or furnished or to be furnished under contracts for service, raw materials, work-in-process, finished goods and goods used or consumed in Borrower's business) whether owned, consigned or held on consignment, together with all merchandise, component materials, supplies, packing, packaging and shipping materials, and all returned, rejected or repossessed goods sold, consigned, leased or otherwise furnished by such Borrower and all embedded software related thereto.

(c) All present and future general intangibles (including but not limited to payment intangibles, tax refunds and rebates, manufacturing and processing rights, designs, patents, patent rights and applications therefor, trademarks and registration or applications therefor, trade names, brand names, logos, inventions, copyrights and all applications and registrations therefor), licenses, permits, approvals, software and computer programs, license rights, royalties, trade secrets, methods, processes, know-how, formulas, drawings, specifications, descriptions, label designs, plans, blueprints, patterns and all memoranda, notes and records with respect to any research and development.

(d) All present and future machinery, equipment, furniture, fixtures, motor vehicles, tools, dies, jigs, molds and other articles of tangible personal property of every type together with all parts, substitutions, accretions, accessions, attachments, accessories, additions, components and replacements thereof, and all manuals of operation, maintenance or repair, and all embedded software related thereto.

-7-

(e) All present and future general ledger sheets, files, books and records, customer lists, books of account, invoices, bills, certificates or documents of ownership, bills of sale, business papers, correspondence, credit files, tapes, cards, computer runs and all other data and data storage systems whether in the possession of Borrower or any service bureau.

(f) All present and future letter of credit rights and supporting obligations, including without limitation, all letters of credit and letter of credit rights now existing or hereafter issued naming Borrower as a beneficiary or assigned to Borrower, including the right to receive payment thereunder, and all documents and records associated therewith.

(g) All present and future financial assets and investment property of Borrower.

(h) All funds, instruments, documents, policies and evidence and certificates of insurance and rights thereunder, securities, chattel paper and other assets of Borrower or in which Borrower has an interest and all proceeds thereof, now or at any time hereafter on deposit with or in the possession or control of Lender or owing by Lender to Borrower or in transit by mail or carrier to Lender or in the possession of any other Person acting on Lender's behalf, without regard to whether Lender received the same in pledge, for safekeeping, as agent for collection or otherwise, or whether Lender has conditionally released the same, and in all assets of Borrower in which Lender now has or may at any time hereafter obtain a lien, mortgage, or security interest for any reason.

(i) All products and proceeds of each of the items described in the foregoing subparagraphs (a)-(i) and all supporting obligations related thereto.

5.2 Real Property . As further security for the Lender Indebtedness, the Company shall grant to Lender a mortgage lien encumbering the Mortgaged Property, subject and junior to any liens thereon granted by the Company to Santander or any other institutional lender providing financing or refinancing to the Company secured by the Mortgaged Property. In the event of any refinancing of the Mortgaged Property, Lender will execute such subordination of mortgage, as reasonably requested by the new lender, bearing like tenor to and no less favorable to such new lender than the Santander Subordination Agreement.

5.3 General .

(a) The collateral described above in Sections 5.1 and 5.2 is collectively referred to herein as the “Collateral”. The above-described security interests, assignments and liens shall not be rendered void by the fact that no Lender Indebtedness exists as of any particular date, but shall continue in full force and effect until the Lender Indebtedness has been repaid or converted into Common Stock. Lender has no agreement or commitment outstanding pursuant to which Lender may extend credit to or on behalf of Borrower and Lender has executed termination statements or releases with respect thereto.

(b) Borrower hereby irrevocably authorizes Lender at any time and from time to time to file UCC financing statements with respect to the Collateral, naming Borrower as debtor, and agrees to provide Lender promptly with any information requested by Lender in connection with any such financing statements.

(c) Borrower shall furnish to Lender from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Lender may reasonably request, all in reasonable detail. Borrower shall promptly execute and deliver to Lender any instruments and documents, and shall promptly take such further action, as the Lender may reasonably request to obtain the benefit of the security interests granted by this Section 5 .

-8-

6	REPRESENTATIONS AND WARRANTIES . Borrower represents and warrants as follows:

6.1 Borrower Representations and Warranties . Borrower represents and warrants as follows:

(a) Valid Organization, Good Standing and Qualification . Borrower is duly formed, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority to execute, deliver and comply with the Loan Documents and to carry on its business as it is now being conducted.

(b) Due Authorization; No Legal Restrictions . The execution and delivery by Borrower of the Loan Documents, the consummation of the transactions contemplated by the Loan Documents and the fulfillment and compliance with the respective terms, conditions and provisions of the Loan Documents: (a) have been duly authorized by all requisite corporate action of Borrower, (b) will not conflict with or result in a breach of, or constitute a default (or might, upon the passage of time or the giving of notice or both, constitute a default) under, any of the terms, conditions or provisions of any applicable statute, law, rule, regulation or ordinance, or Borrower's organizational documents or any indenture, mortgage, loan, credit agreement or other document or instrument to which Borrower is a party or by which Borrower may be bound or affected, or any judgment or order of any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, and (c) will not result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of Borrower under the terms or provisions of any such agreement or instrument, except liens in favor of Lender.

(c) Enforceability . The Loan Documents have been duly executed by Borrower and delivered to Lender and constitute legal, valid and binding obligations of Borrower, enforceable in accordance with their terms, except as enforceability may be limited by any bankruptcy, insolvency, reorganization, moratorium or other laws or equitable principles affecting creditors' rights generally.

(d) Governmental Consents . No consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of Borrower is required in connection with the execution, delivery or performance by Borrower of the Loan Documents or the consummation of the transactions contemplated thereby.

(e) Title to Collateral . The Collateral is and will be owned by Borrower free and clear of all liens and other encumbrances of any kind (including liens or other encumbrances upon properties acquired or to be acquired under conditional sales agreements or other title retention devices), excepting only liens in favor of the Lender and those liens and encumbrances permitted under Section 7.4 below. Borrower will defend the Collateral against any claims of all persons or entities other than the Lender or such other permitted lienholders as are set forth in Section 7.4 .

6.2 Lender Representations and Warranties . Lender represents and warrants as follows:

(a) Qualification; No Legal Restrictions . Lender and has full power and authority to execute, deliver and comply with the Loan Documents. The execution and delivery by Lender of the Loan Documents, the consummation of the transactions contemplated by the Loan Documents and the fulfillment and compliance with the respective terms, conditions and provisions of the Loan Documents will not conflict with or result in a breach of, or constitute a default (or might, upon the passage of time or the giving of notice or both, constitute a default) under, any of the terms, conditions or provisions of any applicable statute, law, rule, regulation or ordinance, or any indenture, mortgage, loan, credit agreement or other document or instrument to which Lender is a party or by which Lender may be bound or affected, or any judgment or order of any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign.

(b) Enforceability . The Loan Documents have been duly executed by Lender and delivered to Borrower and constitute legal, valid and binding obligations of Lender, enforceable in accordance with their terms, except as enforceability may be limited by any bankruptcy, insolvency, reorganization, moratorium or other laws or equitable principles affecting creditors' rights generally.

-9-

(c) Governmental Consents . No consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of Lender is required in connection with the execution, delivery or performance by Lender of the Loan Documents or the consummation of the transactions contemplated thereby.

7	GENERAL COVENANTS . Borrower will comply with the following:

7.1 Maintenance of Borrower’s Existence . Borrower shall keep in full force and effect: (a) its legal existence in good standing under the law of its jurisdiction of organization and (b) its qualification to do business in each jurisdiction in which such qualification is required.

7.2 Restrictions on Indebtedness . Borrower shall not, without the prior written consent of the Lender, incur any indebtedness for borrowed money except for (a) Senior Indebtedness and (b) Lender Indebtedness and (c) trade indebtedness incurred in the ordinary course of business.

7.3 Defaults . Borrower shall promptly notify Lender of any event of default under any document related to Senior Indebtedness, or any event or condition which with the passage of time or the giving of notice would become such an event of default.

7.4 Removal of Collateral . Except with the prior written consent of Lender, Borrower shall not (i) remove any of the Collateral from the location specified above other than in the ordinary course of business or (ii) change its name or its jurisdiction of incorporation, relocate its principal place of business or reincorporate or reorganize itself.

7.5 Maintenance of Collateral . Borrower shall keep the Collateral in good order and repair, not waste any Collateral, not use any Collateral in violation of law or any policy of insurance, comply in all material respects with its obligations with respect to the Collateral, and make the Collateral available for inspection by Lender (or its agents, attorneys or accountants) at all reasonable times.

8 CONDITIONS TO ADVANCES . Advances shall be conditioned upon the following conditions and each request by Borrower for an Advance shall constitute a representation by Borrower to Lender that each condition has been met or satisfied:

8.1 Representations and Warranties . All representations and warranties of Borrower contained herein or in any other Loan Document shall be true at and as of the date of such Advance as if made on such date, and each request for an Advance shall constitute reaffirmation by Borrower that such representations and warranties are then true.

8.2 No Default . No condition or event shall exist or have occurred at or as of the date of such Advance which would constitute a Default or Event of Default hereunder.

8.3 Other Requirements . Lender shall have received all certificates, authorizations, affidavits, schedules and other documents which are provided for hereunder or under the Loan Documents, or which Lender may reasonably request.

9	DEFAULT AND REMEDIES .

9.1 Events of Default . The occurrence of any one or more of the following events shall constitute an Event of Default hereunder:

-10-

(a) The failure of Borrower to pay any amount of principal, interest or any other amount payable hereunder, or any other Lender Indebtedness on the date on which such payment is due, whether at the stated maturity or due date thereof, or by reason of any requirement for the prepayment thereof, by acceleration or otherwise, and such failure continues unremedied for a period of ten (10) days after the date such payment is first due;

(b) The failure of Borrower to duly perform or observe any obligation, covenant or agreement on its part contained herein or in any other Loan Document not otherwise specifically constituting an Event of Default under this Section 9.1 and such failure continues unremedied for a period of thirty (30) days after notice from Lender to Borrower of the existence of such failure;

(c) The failure of Borrower to pay any Indebtedness for borrowed money due to any third Person or the existence of any other event of default under any loan, security agreement, mortgage or other agreement pertaining thereto binding Borrower, after the expiration of any notice and/or grace periods permitted in such documents;

(d) The adjudication of Borrower as a bankrupt or insolvent, or the entry of an order appointing a receiver or trustee for Borrower or any of its respective property or approving a petition seeking reorganization or other similar relief under the bankruptcy or other similar laws of the United States or any state or any other competent jurisdiction;

(e) A proceeding under any bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of debt or receivership law is filed by or against (unless dismissed within thirty (30) days and provided that Lender shall have no obligation to make Advances during such thirty (30) day period Borrower, or Borrower makes an assignment for the benefit of creditors, or Borrower takes any action to authorize any of the foregoing;

(f) The suspension of the operation of Borrower's present business, Borrower becoming unable to meet its debts as they mature or the admission in writing by Borrower to such effect, or Borrower calling any meeting of all or any material portion of its creditors for the purpose of debt restructure;

(g) All or any part of the Collateral or the assets of Borrower are attached, seized, subjected to a writ or distress warrant, or levied upon, or come within the possession or control of any receiver, trustee, custodian or assignee for the benefit of creditors;

(h) Any representation or warranty of Borrower in any of the Loan Documents is discovered to be untrue in any material respect or any statement, certificate or data furnished by Borrower pursuant hereto is discovered to be untrue in any material respect as of the date as of which the facts therein set forth are stated or certified;

(i) Any material uninsured damage to, or loss, theft, or destruction of, a material portion of the Collateral occurs;

(j) The loss, suspension, revocation or failure to renew any license or permit now held or hereafter acquired by Borrower, which loss, suspension, revocation or failure to renew will have a material adverse effect on the business profits, assets or financial condition of Borrower;

(k) The occurrence of an event of default under any of the other Loan Documents; or

(l) The validity or enforceability of this Agreement, or any of the Loan Documents, is contested by the Borrower or any stockholder of Borrower, or Borrower denies that it has any or any further liability or obligation hereunder or thereunder.

-11-

9.2 Remedies . At the option of the Lender, upon the occurrence of an Event of Default, or at any time thereafter:

(a) The entire unpaid principal of the Term Loan, all other Lender Indebtedness, or any part thereof, all interest accrued thereon, all fees due hereunder and all other obligations of Borrower to Lender hereunder or under any other agreement, note or otherwise arising will become immediately due and payable without any further demand or notice;

(b) The Term Loan will immediately terminate and the Borrower will receive no further extensions of credit thereunder;

(c) Lender may enter any premises occupied by Borrower and take possession of the Collateral and any records relating thereto; and/or

(d) Lender may exercise each and every right and remedy granted to it under the Loan Documents, under the Uniform Commercial Code and under any other applicable law or at equity.

If an Event of Default occurs under Section 9.1(d) or (e) , all Lender Indebtedness shall become immediately due and payable.

9.3 Sale or Other Disposition of Collateral . The sale, lease or other disposition of the Collateral, or any part thereof, by Lender after an Event of Default may be for cash, credit or any combination thereof, and Lender may purchase all or any part of the Collateral at public or, if permitted by law, private sale, and in lieu of actual payment of such purchase price, may set-off the amount of such purchase price against the Lender Indebtedness then owing. Any sales of the Collateral may be adjourned from time to time with or without notice. The Lender may cause the Collateral to remain on Borrower's premises or otherwise or to be removed and stored at premises owned by other persons, at Borrower's expense, pending sale or other disposition of the Collateral. Borrower, at Lender's request, shall assemble the Collateral consisting of inventory and tangible assets and make such assets available to Lender at a place to be designated by Lender. Lender shall have the right to conduct such sales on Borrower's premises, at Borrower's expense, or elsewhere, on such occasion or occasions as Lender may see fit. Any notice required to be given by Lender of a sale, lease or other disposition or other intended action by Lender with respect to any of the Collateral which is deposited in the United States mail, postage prepaid and duly addressed to Borrower at the address specified in Section 11.1 below, at least ten (10) business days prior to such proposed action, shall constitute fair and reasonable notice to Borrower of any such action. The net proceeds realized by Lender upon any such sale or other disposition, after deduction for the expenses of retaking, holding, storing, transporting, preparing for sale, selling or otherwise disposing of the Collateral incurred by Lender in connection therewith and all other costs and expenses related thereto including attorney fees, shall be applied in such order as Lender, in its sole discretion, elects, toward satisfaction of the Lender Indebtedness. Lender shall account to Borrower for any surplus realized upon such sale or other disposition, and Borrower shall remain liable for any deficiency. The commencement of any action, legal or equitable, or the rendering of any judgment or decree for any deficiency shall not affect Lender's security interest in the Collateral. Borrower agrees that Lender has no obligation to preserve rights to the Collateral against any other parties. Lender is hereby granted a license or other right to use, after an Event of Default, without charge, Borrower's labels, general intangibles, intellectual property, equipment, real estate, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale and selling any inventory or other Collateral and Borrower's rights under all contracts, licenses, approvals, permits, leases and franchise agreements shall inure to Lender's benefit. Lender shall be under no obligation to marshal any assets in favor of Borrower or any other party or against or in payment of any or all of the Lender Indebtedness.

9.4 Set-Off . Without limiting the rights of Lender under applicable law, Lender has and may exercise a right of set-off, a lien against and a security interest in all property of Borrower now or at any time in Lender's possession in any capacity whatsoever, including but not limited to any balance of any deposit, trust or agency account, or any other Lender account with Lender, as security for all Lender Indebtedness. At any time and from time to time following the occurrence of an Event of Default, or an event which with the giving of notice or passage of time or both would constitute an Event of Default, Lender may without notice or demand, set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by Lender to or for the credit of Borrower against any or all of the Lender Indebtedness and the Borrower's obligations under the Loan Documents.

-12-

9.5 Delay or Omission Not Waiver . Neither the failure nor any delay on the part of Lender to exercise any right, remedy, power or privilege under the Loan Documents upon the occurrence of any Event of Default or otherwise shall operate as a waiver thereof or impair any such right, remedy, power or privilege. No waiver of any Event of Default shall affect any later Event of Default or shall impair any rights of Lender. No single, partial or full exercise of any rights, remedies, powers and privileges by the Lender shall preclude further or other exercise thereof. No course of dealing between Lender and Borrower shall operate as or be deemed to constitute a waiver of Lender's rights under the Loan Documents or affect the duties or obligations of Borrower.

9.6 Remedies Cumulative; Consents . The rights, remedies, powers and privileges provided for herein shall not be deemed exclusive, but shall be cumulative and shall be in addition to all other rights, remedies, powers and privileges in Lender's favor at law or in equity. Whenever Lender's consent or approval is required, such consent or approval shall be at the sole and absolute discretion of Lender.

9.7 Certain Fees, Costs, Expenses, Expenditures and Indemnification . Borrower agrees to pay on demand all costs and expenses of Lender, including without limitation:

(a) all costs and expenses in connection with the preparation, review, negotiation, execution, delivery and administration of the Loan Documents, and the other documents to be delivered in connection therewith, or any amendments, extensions and increases to any of the foregoing (including, without limitation, attorney's fees and expenses); and

(b) all losses, costs and expenses in connection with the enforcement, protection and preservation of the Lender's rights or remedies under the Loan Documents, or any other agreement relating to any Lender Indebtedness, or in connection with legal advice relating to the rights or responsibilities of Lender (including without limitation court costs and attorney's fees).

In the event Borrower shall fail to pay taxes, insurance, assessments, costs or expenses which it is required to pay hereunder, or fails to keep the Collateral free from security interests or liens (except as expressly permitted herein), or fails to maintain or repair the Collateral as required hereby, or otherwise breaches any obligations under the Loan Documents, Lender in its discretion, may make expenditures for such purposes and the amount so expended (including attorney's fees and expenses, filing fees and other charges) shall be payable by Borrower on demand and shall constitute part of the Lender Indebtedness.

Borrower's obligations under this Section shall survive termination of this Agreement and repayment of the Lender Indebtedness.

9.8 Time is of the Essence . Time is of the essence in Borrower's performance of its obligations under the Loan Documents.

10	SUBORDINATION .

10.1 Subordination . Notwithstanding anything to the contrary contained in this Agreement:

-13-

(a) The Loan Documents and all of the Lender Indebtedness shall be subordinate to the Senior Indebtedness, as provided in the Subordination Agreement. Lender agrees that upon any replacement, renewal or refinancing of Senior Indebtedness, it will enter into any new or replacement subordination documentation with respect to Senior Indebtedness as may be reasonably requested by the Company, so long as such subordination documentation is on terms substantially similar to the Subordination Agreement. Borrower will not permit the Senior Indebtedness to exceed the Senior Indebtedness Debt Cap, without the prior written consent of Lender.

(b) The Lender may enforce rights granted to it under this Agreement or any other Loan Document only in a manner not inconsistent with the Subordination Agreement. Any assignee of Santander, and any commercial lender providing financing to Borrower or any Affiliate (including financing undertaken for the purpose of refinancing Senior Indebtedness), shall have the benefit of this Article 10 and of the other provisions of this Agreement.

11	COMMUNICATIONS AND NOTICES .

11.1 Communications and Notices . All notices, requests and other communications made or given in connection with the Loan Documents shall be in writing and, unless receipt is stated herein to be required, shall be deemed to have been validly given if delivered personally to the individual or division or department to whose attention notices to a party are to be addressed, or by private carrier, or registered or certified mail, return receipt requested, or by telecopy (to the extent a telecopy number is set forth below) with the original forwarded by first-class mail, in all cases, with charges prepaid, addressed as follows, until some other address (or individual or division or department for attention) shall have been designated by notice given by one party to the other:

To Borrower:

Blonder Tongue Laboratories, Inc.

One Jake Brown Road

Old Bridge, New Jersey 088587

Attention: Eric Skolnik, Chief Financial Officer

Telecopy No.: 732 679-3259

To Lender:

Robert & Carol Pallé

21 Desai Court

Freehold, NJ 07728

Attention: Robert J. Pallé

WAIVERS .

12.1 Waivers . In connection with any proceedings under the Loan Documents, including without limitation any action by Lender in replevin, foreclosure or other court process or in connection with any other action related to the Loan Documents or the transactions contemplated hereunder, Borrower waives:

(a) all errors, defects and imperfections in such proceedings;

(b) all benefits under any present or future laws exempting any property, real or personal, or any part of any proceeds thereof from attachment, levy or sale under execution, or providing for any stay of execution to be issued on any judgment recovered under any of the Loan Documents or in any replevin or foreclosure proceeding, or otherwise providing for any valuation, appraisal or exemption;

(c) presentment for payment, demand, notice of demand, notice of non-payment, protest and notice of protest of any of the Loan Documents;

(d) any requirement for bonds, security or sureties required by statute, court rule or otherwise;

(e) any demand for possession of Collateral prior to commencement of any suit; and

-14-

12.2 F orbearance . Lender may release, compromise, forbear with respect to, waive, suspend, extend or renew any of the terms of the Loan Documents, without notice to Borrower.

13	SUBMISSION TO JURISDICTION .

13.1 Submission to Jurisdiction . Borrower hereby consents to the exclusive jurisdiction of any state or federal court located within the State of New Jersey, and irrevocably agrees that, subject to the Lender's election, all actions or proceedings relating to the Loan Documents or the transactions contemplated hereunder shall be litigated in such courts, and Borrower waives any objection which it may have based on lack of personal jurisdiction, improper venue or forum non conveniens to the conduct of any proceeding in any such court and waives personal service of any and all process upon it, and consents that all such service of process be made by mail or messenger directed to it at the address set forth in Section 11.1 . Nothing contained in this Section 13.1 shall affect the right of Lender to serve legal process in any other manner permitted by law or affect the right of Lender to bring any action or proceeding against Borrower or its property in the courts of any other jurisdiction.

14	MISCELLANEOUS .

14.1 Survival . All covenants, agreements, representations and warranties made by Borrower in the Loan Documents or made by or on its behalf in connection with the transactions contemplated herein shall be true at all times this Agreement is in effect and shall survive the execution and delivery of the Loan Documents, any investigation at any time made by Lender or on its behalf and the making by Lender of the loans or advances to Borrower. All statements contained in any certificate, statement or other document delivered by or on behalf of Borrower pursuant hereto or in connection with the transactions contemplated hereunder shall be deemed representations and warranties by Borrower.

14.2 No Assignment . Borrower may not assign any of its rights or obligations hereunder without the prior written consent of the Lender, and any such assignment without consent shall be void and of no force or effect. Lender may assign its rights and obligations hereunder in its discretion.

14.3 Binding Effect . This Agreement and all rights and powers granted hereby will bind and inure to the benefit of the parties hereto and their respective permitted successors and permitted assigns.

14.4 Severability . The provisions of this Agreement and all other Loan Documents are deemed to be severable, and the invalidity or unenforceability of any provision shall not affect or impair the remaining provisions which shall continue in full force and effect.

14.5 No Third Party Beneficiaries . The rights and benefits of this Agreement and the Loan Documents shall not inure to the benefit of any third party.

14.6 Modifications . No modification of this Agreement or any of the Loan Documents shall be binding or enforceable unless in writing and signed by or on behalf of the party against whom enforcement is sought.

14.7 Business Day Convention . If the day provided herein for the payment of any amount or the taking of any action falls on a Saturday, Sunday or public holiday at the place for payment or action, then the due date for such payment or action will be the next succeeding Business Day.

14.8 Law Governing . This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware without regard to conflict of law principles.

14.9 Integration . The Loan Documents shall be construed as integrated and complementary of each other, and as augmenting and not restricting Lender's rights, powers, remedies and security. The Loan Documents contain the entire understanding of the parties thereto with respect to the matters contained therein and supersede all prior agreements and understandings between the parties with respect to the subject matter thereof and do not require parol or extrinsic evidence in order to reflect the intent of the parties. In the event of any inconsistency between the terms of this Agreement and the terms of the other Loan Documents, the terms of this Agreement shall prevail.

-15-

14.10 Headings . The headings of the Articles, Sections, paragraphs and clauses of this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement.

14.11 Counterparts . This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart.

14.12 Waiver of Right to Trial by Jury . BORROWER AND LENDER WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER ANY OF THE LOAN DOCUMENTS OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF BORROWER OR LENDER WITH RESPECT TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. BORROWER AND LENDER AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF BORROWER AND LENDER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. BORROWER ACKNOWLEDGES THAT IT HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS SECTION, THAT IT FULLY UNDERSTANDS ITS TERMS, CONTENT AND EFFECT, AND THAT IT VOLUNTARILY AND KNOWINGLY AGREES TO THE TERMS OF THIS SECTION .

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

-16-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BLONDER TONGUE LABORATORIES, INC.

By:

Name:

Title:

R.L. DRAKE HOLDINGS, LLC

By:

Name:

Title:

ROBERT J. PALLÉ

CAROL M. PALLÉ

-17-

EXHIBIT 10.2

MORTGAGE AND SECURITY AGREEMENT

THIS MORTGAGE AND SECURITY AGREEMENT is dated as of the 11th day of February 2016 (the “Mortgage ”) by and between BLONDER TONGUE LABORATORIES, INC., a Delaware corporation (“ Mortgagor ”), with its place of business at One Jake Brown Road, Old Bridge, New Jersey and ROBERT J. PALLÉ AND CAROL M. PALLÉ, jointly and severally (the “ Mortgagee ”).

W I T N E S S E T H :

WHEREAS, Mortgagor has entered into a certain Senior Subordinated Convertible Loan and Security Agreement dated on or about the date hereof (the “ Loan Agreement ”; and together with this Mortgage and all other documents given as security for or in connection with the Loan Agreement, as the same may be amended, modified, or supplemented from time to time, are sometimes collectively referred to below as the “Loan Documents” ), wherein Mortgagor promises to pay to Mortgagee the principal sum of up to six hundred thousand and 00/100 Dollars ($600,000.00), lawful money of the United States of America, with interest thereon at rates and times, in the manner and according to the terms and conditions specified in the Loan Agreement, all of which are incorporated herein by reference; and

WHEREAS, the maximum principal amount of indebtedness intended to be secured hereby is six hundred thousand and 00/100 Dollars ($600,000.00).

NOW, THEREFORE, in order to secure the obligations of the Mortgagor as set forth in the Loan Agreement and the full and prompt payment of all the obligations due or to become due under the Loan Documents, or otherwise due or to become due under this Mortgage, or any extensions or modifications thereof or hereof, including all future advances, as well as to secure the performance of all of Mortgagor’s covenants and agreements contained in this Mortgage and the Loan Documents, or any amendments thereof, including without limitation, any advances made, with respect to the Mortgaged Property described below, for the payment of taxes, assessments, maintenance charges, insurance premiums or costs incurred for the protection of the Mortgaged Property or the lien of this Mortgage, expenses incurred by Mortgagee by reason of the default of the Mortgagor, or payment of all other sums advanced in accordance with this Mortgage to protect Mortgagee’s security, with interest on those sums, and all other obligations, liabilities and indebtedness of every kind, nature or description owing by Mortgagor to Mortgagee and/or its affiliates, including principal, interest, charges, fees and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether arising under the Loan Documents, or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Loan Documents or after the commencement of any case with respect to Mortgagor under the United States Bankruptcy Code or any similar statute, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, original, renewed or extended, and whether arising directly or howsoever acquired by Mortgagee including from any other entity outright, conditionally or as collateral security, by assignment, merger with any other entity, participations or interests of Mortgagee in the obligations of Mortgagor to others, assumption, operation of law, subrogation or otherwise (all of the foregoing are hereinafter collectively referred to as the “Obligations” ), plus interest thereon from the date of demand for payment hereunder plus any and all costs of collection hereunder (including without limitation reasonable attorney’s fees and other expenses) and in consideration of the premises and the further sum of Ten Dollars ($10.00) paid to the Mortgagor by Mortgagee at or before the ensealing and delivery hereof, the receipt whereof is hereby acknowledged, the Mortgagor has granted, bargained and sold, aliened, enfeoffed, released, remised, conveyed, confirmed and mortgaged, and by these presents does grant, bargain and sell, alien, enfeoff, release, remise, convey, confirm, and mortgage unto the Mortgagee and its successors and assigns, that certain tract or parcel of land known as One Jake Brown Road, Old Bridge, New Jersey, and the improvements thereon, as the same is more particularly described in Exhibit “A” attached hereto and made a part hereof (collectively, the “Real Estate” );

TOGETHER with the appurtenances and all the estates and rights of mortgagor in and to the Real Estate, including without limitation the rents, fixtures, equipment, reversions, remainders, easements, issues and profits arising or issuing from the Real Estate and the improvements thereon including, but not limited to the rents, issues and profits arising or issuing from the Real Estate and the improvements thereon, including but not limited to the rents, fixtures, equipment, issues and profits arising or issuing from all insurance policies, sale agreements, licenses, options, leases and subleases now or hereafter entered into covering any part of said Real Estate or the buildings, structures and improvements thereon, all of which insurance policies, sale agreements, licenses, options, leases, subleases, rents, issues and profits are hereby assigned and shall be caused to be assigned to Mortgagee by Mortgagor. Mortgagor will execute and deliver to Mortgagee on demand such assignments as Mortgagee may require to implement this assignment;

TOGETHER with all the right, title and interest of Mortgagor in and to all streets, roads and public places, opened or proposed, adjoining the Real Estate, and all easements and rights of way, public or private, now or hereafter created or used in connection therewith;

TOGETHER with all the right, title and interest of Mortgagor, now owned or hereafter acquired, in and to any and all sidewalks and alleys adjacent to the Real Estate;

TOGETHER with all buildings and improvements of every kind and description now or hereafter erected or placed on the Real Estate;

TOGETHER with all of Mortgagor’s right, title and interest now owned or hereafter acquired in and to all heating, plumbing, sprinkler, water, gas, electric power, lighting and air conditioning equipment, elevators, machinery, fixtures, equipment, furniture, building materials of any kind or nature, together with all replacements thereof and additions thereto, now, or at any time hereafter, affixed or attached to said Real Estate, buildings, structures and improvements (collectively the “Personal Property” ), all of which Mortgagor represents and warrants are and will be owned by Mortgagor free from any prior conditional sales, chattel mortgages, security interests, liens, pledges, hypothecations, charges or encumbrances and is intended to be subject to the lien of this Mortgage as if part of the realty. This provision shall be self-operative and this Mortgage, to the extent that any such Personal Property or other property subject to this Mortgage shall not be deemed to be part of the realty, shall constitute a security agreement under the New Jersey Uniform Commercial Code ( “UCC” ), and Mortgagor shall execute and deliver to Mortgagee on demand, and hereby irrevocably appoints Mortgagee, or any person designated by Mortgagee, the attorney-in-fact of Mortgagor to execute, deliver and file such financing statements and other instruments as Mortgagee may reasonably require in order to perfect and maintain such security interest under the UCC;

TOGETHER with all accounts, contract rights (including, but not limited to, architectural contracts, construction contracts, and management contracts), accounts receivable, agreements of sale, and claims of any sort relating to or arising out of the Real Estate whether now owned or hereafter acquired;

TOGETHER with all awards, damages, payments and other compensation, and claims therefor and rights thereto, which may result from a taking or injury by virtue of the exercise of the power of eminent domain of or to, or from any damage, injury or destruction by casualty or otherwise caused to, the Real Estate and said improvements and personalty, or any part thereof, including insurance proceeds, or from any change of grade or vacation of any street abutting thereon, all of which are hereby assigned to Mortgagee to the fullest extent permitted by law, Mortgagee being hereby irrevocably appointed attorney-in-fact for Mortgagor to collect and receive any such awards, damages, payments and compensation from the authorities or insurers making the same, and to give receipts and acquittances therefor, and to institute, appear in and prosecute any proceeding therefor, it being agreed that all sums collected by or paid to Mortgagee pursuant to this assignment, net of any cost incurred by Mortgagee in collecting the same (including attorneys’ fees), shall be applied to the payment of the Obligations whether or not then due and payable, or to the restoration of the Mortgaged Property (hereafter defined) as Mortgagee shall elect, unless otherwise set forth herein; and

TOGETHER with any and all proceeds (including insurance and condemnation proceeds and proceeds of other proceeds) of any of the foregoing.

All of the property and rights hereinabove described or mentioned being hereinafter collectively called the “Mortgaged Property” .

TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee, its successors and assigns, forever;

AND, at all times until the Obligations are paid in full with interest and faithfully and strictly performed, Mortgagor does hereby covenant, promise and agree with Mortgagee as follows:

ARTICLE I

Covenants As To Taxes and Assessments

1.1. Mortgagor will pay and discharge (i) all the taxes, general and special, levies and assessments heretofore or hereafter charged, assessed or levied against the Mortgaged Property or any part thereof by any lawful authority, or which otherwise may become a lien thereon (all of which are herein collectively the “ Taxes ”); and (ii) all water and sewer rents which may be assessed or become liens on the Mortgaged Property, not less than ten days before the date on which any interest or penalties shall commence to accrue thereon, and produce to Mortgagee evidence of such payment not less than ten days thereafter. In default of any of the above-described payments, Mortgagee may, but shall not be obligated to, pay the same, and such payment by Mortgagee shall be repaid by Mortgagor to Mortgagee on demand, shall be secured hereby, and shall bear interest at the rate set forth in the Loan Agreement from the date Mortgagee makes such payment until such sums are repaid in full. Mortgagor shall promptly cause to be paid and discharged, any lien or charge whatsoever which by any present or future law may be or become superior, either in lien or in right of distribution out of the proceeds of any judicial sale of the Mortgaged Property, to the liens created hereby. Mortgagor will cause to be paid, when due, all charges for utilities whether public or private.

1.2. At such time or times when Mortgagee is the holder of the senior mortgage against the Mortgaged Property, upon the request of Mortgagee, Mortgagor will pay to Mortgagee, contemporaneously with each monthly payment of interest, principal or principal and interest, a sum equal to one-twelfth (1/12) of the real estate taxes, water rents, sewer rents, payments in lieu thereof, special assessments and any other tax, assessment, lien, claim or encumbrance which may at any time be or become a lien on the Mortgaged Property prior to, or on a parity with, the lien of this Mortgage so as to enable Mortgagee to pay the same at least thirty (30) days before they become due. If special assessments against the Mortgaged Property may be paid in installments and Mortgagor elects to do so, the monthly payments to Mortgagee for such special assessments shall be one-twelfth (1/12) of the then current annual installment.

Any such amounts so paid shall be deemed to be trust funds and may not be co-mingled with general funds of Mortgagee, but rather shall be deposited into a separate escrow account for the benefit of Mortgagor, provided, however, no interest shall be payable thereon. If, pursuant to any provision of this Mortgage, the whole amount of said principal debt remaining or any installment of interest, principal or principal and interest becomes due and payable, Mortgagee shall have the right, at its election, to apply any amounts so held against all or any of the Obligations, any interest thereon or in payment of the premiums or payments for which the amounts were deposited. Mortgagor will furnish to Mortgagee tax bills in sufficient time to enable Mortgagee to pay such taxes, assessments, levies, charges and fees, before interest and penalties accrue thereon.

1.3. Mortgagor covenants and agrees to pay to Mortgagee the principal and interest hereby secured without deduction or credit for any amount for Taxes assessed or to be assessed against the Mortgaged Property.

ARTICLE II

General Representations and Covenants of Mortgagor

2.1. Mortgagor will observe and perform all of the terms, covenants and conditions on the part of Mortgagor to be observed and performed under this Mortgage and shall pay and faithfully and strictly perform all of the Obligations.

2.2. Mortgagor warrants and covenants that it has good and marketable fee simple title to the Mortgaged Property, subject to no liens, claims, security interests, pledges, hypothecations or other encumbrances or charges. Mortgagor warrants that it has full power and lawful authority to execute and deliver this Mortgage and to mortgage to Mortgagee all of the property and rights purported to be mortgaged by it hereunder. Mortgagor will forever warrant and defend the title to the Mortgaged Property unto Mortgagee against the claims and demands of all persons whomsoever.

2.3. Mortgagor will not, without the prior written consent of Mortgagee, cause or permit any building or improvement comprising part of the Mortgaged Property to be removed, demolished or structurally altered, in whole or in part, or any material fixture therein to be removed or destroyed. Mortgagor will not abandon the Mortgaged Property or cause or permit any waste thereto and will at all times maintain the Mortgaged Property in substantially its current condition, normal wear and tear excepted.

2.4. Throughout the term of this Mortgage, Mortgagor, at its sole cost and expense, will take good care of the Mortgaged Property and will keep the same in good order and condition.

2.5. Mortgagor will permit Mortgagee and Mortgagee’s representatives to enter the Mortgaged Property at reasonable times and during regular business hours to inspect the same. In case of any Event of Default, as defined hereinafter, Mortgagee may, at its option, enter the Mortgaged Property to protect, restore or repair any part thereof, but Mortgagee shall be under no obligation to do so. Mortgagor will repay to Mortgagee on demand any sums paid by Mortgagee to protect, restore or repair any part of the Mortgaged Property, with interest thereon at the rate set forth in the Loan Agreement, and, until so paid, the same shall be secured by this Mortgage.

2.6. Throughout the term of this Mortgage, Mortgagor, at its sole cost and expense, shall promptly comply with all present and future laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, courts, departments, commissions, boards and officers, any national or local Board of Fire Underwriters, or any other body exercising functions similar to those of any of the foregoing, which may be applicable to the Mortgaged Property, the maintenance and use thereof and the sidewalks and curbs adjoining the Mortgaged Property whether or not such law, ordinance, order, rule, regulation or requirement shall necessitate structural changes or improvements, or the removal of any encroachments or projections, ornamental, structural or otherwise, onto or over property contiguous or adjacent thereto, any such structural changes or improvements or removal of encroachments to be performed with the consent of Mortgagee, which consent will not be unreasonably withheld. Mortgagor will comply with all orders and notices of violation thereof issued by any governmental authority. Mortgagor will pay all license fees and similar municipal charges for the use of the Mortgaged Property and the other areas now or hereafter comprising part thereof or used in connection therewith and will not, unless so required by any governmental agency having jurisdiction, discontinue use of the Mortgaged Property without prior written consent of Mortgagee. If Mortgagor shall fail to perform any covenant herein, Mortgagee may (but shall be under no obligation to) perform such covenant for the account of Mortgagor and any sums paid by Mortgagee in such event shall be repaid by Mortgagor to Mortgagee with interest thereon at the rate set forth in the Loan Agreement and, until so paid, the same shall be secured by this Mortgage.

2.7. Mortgagor shall not, without the prior written consent of Mortgagee, by deed, mortgage, pledge, lease, easement or other instrument grant, mortgage, pledge, convey, assign, devise or otherwise transfer all or any part of the Mortgaged Property or any interest therein, directly or indirectly, nor shall Mortgagor suffer or permit such conveyance, assignment or transfer by execution sale or operation of law or otherwise.

2.8. Mortgagor shall promptly pay upon demand, and presentation of invoices or bills, with interest thereon at the rates set forth in the Loan Agreement, all expenses and costs incurred by Mortgagee, including reasonable attorney’s fees in connection with any action, proceeding, litigation or claim instituted or asserted by or against Mortgagee or in which Mortgagee becomes engaged, wherein it becomes necessary in the reasonable opinion of Mortgagee to defend or uphold the lien of this Mortgage, or the validity or effectiveness of any assignment of any claim, award, payment, property damage, insurance policy or any other right or property conveyed, encumbered or assigned by Mortgagor to Mortgagee hereunder, or the priority of any of the same, and all such expenses and costs, and interest thereon, may be added to and become part of the principal indebtedness of Mortgagor hereunder, bear interest at the rate set forth in the Loan Agreement and be secured by this Mortgage.

2.9. To further secure payment of the Obligations, Mortgagor hereby pledges, assigns and grants to Mortgagee a continuing security interest in and lien on all of Mortgagor’s Personal Property, accounts, contract rights, accounts receivable now owned or existing or hereafter acquired and all proceeds therefor, whether now owned or hereafter acquired and all proceeds of all of the foregoing. The parties hereto agree that the security interest created hereunder is valid under the UCC and is a presently existing security interest and attaches to Mortgagor’s above-mentioned Personal Property as of the date hereof.

2.10. Mortgagor will not, without the prior written consent of Mortgagee, create or suffer to be created any security interest under the UCC, or other encumbrance in favor of any party other than Mortgagee, or create or suffer any reservation of title by any such other party, with respect to any Personal Property nor shall any such Personal Property be the subject matter of any lease or other transaction whereby the ownership or any beneficial interest in any of such Personal Property is held by any person or entity other than Mortgagor (or Mortgagee as provided herein). All such Personal Property shall be purchased for cash or in such manner that no lien shall be created thereon except the lien of this Mortgage, unless Mortgagee shall agree in writing to the contrary before a contract to purchase any such Personal Property is executed. Mortgagor will deliver to Mortgagee on demand, any contracts, bills of sale, statements, receipted vouchers or agreements, under which Mortgagor claims title to any Personal Property incorporated in the improvements or subject to the lien of this Mortgage.

2.11. Mortgagor shall at its expense, promptly upon request of Mortgagee (i) do all acts and things, including but not limited to the execution of any further assurances, deemed necessary by Mortgagee, to establish, confirm, maintain and continue the lien created and intended to be created hereby, all assignments made or intended to be made pursuant hereto, and all other rights and benefits conferred or intended to be conferred on Mortgagee hereby, and Mortgagor shall pay all costs incurred by Mortgagee in connection therewith, including all filing and recording costs, cost of searches, and reasonable counsel fees incurred by Mortgagee; and (ii) furnish Mortgagee with a written certification signed by Mortgagor, or an officer of Mortgagor on Mortgagor’s behalf, as to all then existing leases for space covering any part of the Mortgaged Property, the names of the tenants, the rents payable thereunder and the dates to which such rents are paid, together with executed copies of all such leases.

2.12. Mortgagor will promptly perform and observe, or cause to be performed or observed, all of the terms, covenants and conditions of all instruments of record affecting the Mortgaged Property, noncompliance with which may affect the security of this Mortgage or which may impose any duty or obligation upon Mortgagor or any lessee or other occupant of the Mortgaged Property or any part thereof, noncompliance with which may affect the security of this Mortgage, and Mortgagor shall do or cause to be done all things necessary to preserve intact and unimpaired any and all easements, appurtenances and other interests and rights in favor of or constituting any portion of the Mortgaged Property.

2.13. To further secure payment of the Obligations, Mortgagor hereby assigns and sets over unto Mortgagee the interest of such Mortgagor as lessor in and to all leases, written or oral, of the Mortgaged Property or any part thereof now or hereafter made, executed or delivered. Mortgagor hereby authorizes and empowers Mortgagee to collect the rents under the aforesaid leases as they become due, and hereby directs each and all of the tenants of the Mortgaged Property, upon demand made by Mortgagee, to pay such rents as they become due to Mortgagee; provided, however, no such demand shall be made unless and until there has occurred an Event of Default under the terms of this Mortgage, and until such demand is made, Mortgagor is authorized to collect the aforesaid rents; but such privilege of Mortgagor to collect rents as aforesaid shall not operate to permit the collection by Mortgagor of any installment of rent for more than one month in advance.

2.14. Mortgagor will not, without the prior written consent of Mortgagee, assign the rents of the Mortgaged Property or any part thereof, nor consent (other than in the ordinary course of business) to the cancellation, modification or surrender of any lease now or hereafter covering the Mortgaged Property, or any part thereof; nor accept any prepayment of rents under any such lease more than one month in advance; and any such purported assignment, cancellation, modification, surrender or prepayment made without consent of Mortgagee shall be void as against Mortgagee.

2.15. Mortgagor shall, upon the request of Mortgagee, given 15 days in advance, furnish a duly acknowledged written statement to Mortgagee, or any proposed assignee of this Mortgage, setting forth the amount of the Obligations and stating either that no off-sets or defenses exist against the Obligations, or, if such off-sets or defenses are alleged to exist, the nature and amount thereof.

2.16. Mortgagor agrees not to do or suffer any act or thing which would impair the security of the Obligations or of the lien of this Mortgage upon the Mortgaged Property, or the rents, issues or profits thereof.

2.17. Mortgagor shall, at its sole cost and expense, within ninety (90) days after the termination of each calendar year, furnish Mortgagee with a copy of Mortgagor’s audited financial statements, for the preceding fiscal year relating to the operation of Mortgagor’s business.

ARTICLE III

Environmental Matters, Representations and Warranties.

3.1. Mortgagor shall comply in all material respects with all Applicable Environmental Laws. As set forth herein, “Applicable Environmental Laws” shall mean any and all existing or future federal, state and local statutes, ordinances, regulations, rules, executive orders, standards and requirements, including the requirements imposed by common law, concerning or relating to industrial hygiene and the protection of heath and the environment including, without limitation: (i) the Comprehensive Environmental Response, Compensation and Liability act of 1980, as amended, 42 U.S.C. 9601 et seq . ( “CERCLA” ); (ii) the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. 6901 et . seq . ( “RCRA” ); (iii) the Clean Air Act, as amended, 42 U.S.C. 7901 et seq .; (iv) the Clean Water Act, as amended, 33 U.S.C. 1251 et seq .; (v) the Hazardous Materials Transportation Act, as amended, 49 U.S.C. 1801 et seq .; (vi) the New Jersey Industrial Site Recovery Act, formerly known as the Environmental Cleanup Responsibility Act, as amended, N.J.S.A. 13:1K-6 et seq . ( “ISRA” ); (vii) the New Jersey Spill Compensation and Control Act, as amended, N.J.S.A. 58:10-23.11b et seq . ( “Spill Act” ); (viii) the New Jersey Underground Storage of Hazardous Substances Act, as amended, N.J.S.A. 58:10A-21 et seq .; and (ix) the New Jersey Water Pollution Control Act, as amended, N.J.S.A. 58:10A-1 et seq . Any terms mentioned herein which are defined in any Applicable Environmental Law shall have the meanings ascribed to such terms in said laws; provided, however, that if any of such laws are amended so as to broaden any term defined therein, such broader meaning shall apply subsequent to the effective date of such amendment.

3.2. Mortgagor represents and warrants that Mortgagor has not and will not engage in operations upon the Mortgaged Property, which involve the generation, manufacture, refining, transportation, treatment, use, storage, handling, release, or disposal of any Hazardous Materials (as herein defined) other than in compliance with all applicable laws.

3.3. For the purposes of this Mortgage, the term “Hazardous Materials” shall include, but shall not be limited to, petroleum fuel products, any petroleum or petroleum byproducts, PCBs, asbestos, friable asbestos or asbestos-containing material, transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million, any flammable explosives, radioactive materials, any “Hazardous Substance”, as such term is defined in 42 U.S.C. 9601(14) or N.J.A.C.7:1E-1.7, (herein, “Hazardous Substance” ), any “Hazardous Waste”, as such term is defined in 42 U.S.C. 6903 (5) (herein, “Hazardous Waste” ), or any other material, substance, pollutant or contaminant that is considered hazardous, radioactive or toxic under any applicable federal, state or local statues, ordinances, rules or regulations now or at any time hereafter in effect. “ Toxic Mold ” shall mean any fungal or bacterial bioaerosol (including, without limitation, Stachybotrys chartarum (“black mold”), spores, mycotoxins, endotoxins, bacterial cells, and volatile organic compounds (VOCs)), or any other mold or fungus, in, on or affecting the Mortgaged Property, which is of a type determined by the application of reasonably acceptable scientific practices to pose a risk to human health or the environment or could have a material adverse effect on the value of the Mortgaged Property.

3.4. Mortgagor shall not cause or permit to exist, as a result of any intentional or unintentional action or omission on its part, or any tenant’s part, any releasing, spilling, leaking, pumping, pouring, emitting, emptying, growing or dumping from, on or about the Mortgaged Property of any Hazardous Materials. Mortgagor will promptly cause the removal and remediation of any Hazardous Materials which may hereafter be found on the Mortgaged Property, to a level consistent with Mortgagor’s intended use of the Mortgaged Property.

3.5. Mortgagor represents and warrants that there is no Toxic Mold, or wet or dry rot on or about the Mortgaged Property.

3.6. Mortgagor will permit Mortgagee and Mortgagee’s representatives to enter the Mortgaged Property at reasonable times to inspect the same, for purposes of making site and building investigations and performing soil, groundwater, structural and other tests, upon three days prior notice to Mortgagor. Mortgagor shall provide Mortgagee, its agents, employees, and representatives from time to time upon request with access to and copies of any and all data and documents relating to or dealing with any potentially Hazardous Materials used, generated, manufactured, found, stored or disposed of, on, under, or about the Mortgaged Property or transported to or from the Mortgaged Property within thirty (30) days of a request therefore. Mortgagor shall bear the cost of such copies and reimburse Mortgagee for all reasonable attorneys’ fees, copy costs, and other related costs incurred to procure such information as Mortgagee, in its sole discretion deems necessary.

3.7. Mortgagor shall furnish to Mortgagee, immediately upon receipt or dispatch, a copy of any notice, summons, citation, directive, letter or other written communication from or to any federal, state or local environmental agency or department, which may evidence or result in a liability under any Environmental Law such that the costs of correcting, or of paying penalties assessed in connection with, such liability would have a material adverse effect upon the business of Mortgagor as now conducted or upon Mortgagor’s business, operations, properties or condition, financial or otherwise. In such event, Mortgagor shall use diligent efforts to complete all remediation which may be required by such communication from any federal, state, county, municipal or other administrative, investigative, prosecutorial or enforcement agency or environmental or occupational safety regulatory agency ( “Environmental Regulator” ) and to obtain from all such Environmental Regulators having jurisdiction thereof, and deliver to Mortgagee as received, such approvals and certifications as can be obtained from such agencies from time to time to confirm Mortgagor’s completion of all remediation and Mortgagor’s compliance with all governmental requirements applicable thereto.

3.8. In the event of failure of Mortgagor to comply with any provision of this Mortgage or any other Loan Document relating to Hazardous Substances, Environmental Laws or Environmental Regulators, or if Mortgagee shall have reason to believe that any Hazardous Substance has been or is likely to be released or grow on, in or under the Mortgaged Property (except in compliance with all Environmental Laws), Mortgagee may do any or all of the following: (i) Mortgagee shall have the right to investigate, or to demand that Mortgagor investigate and report to Mortgagee on (in which case Mortgagor shall investigate and report to Mortgagee on) the result of the investigation of such location, and if Mortgagee requests, provide this investigation through an independent reputable environmental consulting or engineering firm acceptable to Mortgagee; (ii) without obligation to do so, to cure such default or to comply or cause compliance, or to demand that Mortgagor cure such default or comply or cause compliance, with any or all Environmental Laws. All of the foregoing shall be at the expense of Mortgagor, and any expense incurred by Mortgagee in connection with any of the foregoing (including without limitation its expenses relating to attorneys’ fees and any environmental consultants or engineers) shall be additional obligation of Mortgagor hereunder which shall be payable to Mortgagee upon demand, with interest computed at the rate set forth in the Loan Agreement from the date(s) upon which said costs and expenses were incurred by Mortgagee.

3.9. To the maximum extent permitted by applicable law, Mortgagor, for itself and its successors (herein, “Indemnifying Parties” ), shall jointly and severally indemnify, hold harmless, and upon request defend Mortgagee and its shareholders, officers, directors, employees, attorneys and agents, and their respective successors and assigns (collectively, the “Indemnified Parties” ) from and against any and all claims and liabilities asserted against any Indemnified Party by any Indemnifying Party or any third party (including without limitation for negligence or gross negligence) (herein, “Claims” ), and will pay and reimburse to the Indemnified Parties all losses, payments, reasonable costs and expenses associated therewith, or with the defense of all Indemnified Parties (including without limitation reasonable attorneys’ fees) which any Indemnified Party may suffer, incur or be exposed to by reason of or in connection with or rising out of the transport, release, treatment, processing, manufacture, deposit, storage, disposal, burial, dumping, injecting, spilling, leaking or placement at any time heretofore or hereafter, by any person or entity, of any Hazardous Material, including but not limited to any of the following whether incurred by an Indemnified Party, an Indemnifying Party or any third party: (1) costs of or liability for investigation, monitoring, boring, testing and evaluation; (2) costs or liabilities for abatement, correction, response, cleanup, removal or remediation; (3) fines, damages, penalties and other liabilities; (4) liability for personal injury or property damage.

3.10. The Indemnifying Parties’ obligations under this Article III shall survive foreclosure, the satisfaction, release or cancellation of this Mortgage, or any other termination or release of the lien created hereby.

ARTICLE IV

Insurance, Damage or Destruction

4.1. Mortgagor will insure itself and the Mortgaged Property against such perils and to such limits as Mortgagee shall reasonably require for the full replacement value of the Mortgaged Property, and Mortgagor shall provide evidence of such coverages as Mortgagee may reasonably request. All such insurance shall be in such forms and with such companies, and written in such amounts and with such deductibles and endorsements, as may be reasonably satisfactory to Mortgagee from time to time, and losses thereunder shall be payable to Mortgagee under a standard form of mortgagee endorsement and shall require that the insurer provide Mortgagee with thirty (30) days notice in the event of cancellation.

4.2. Mortgagor will promptly notify Mortgagee of any loss thereunder, and Mortgagee may, after notice of its intention to do so to Mortgagor, make proof of loss thereof if not made within a reasonable time by Mortgagor. After default Mortgagee may, after notice of its intention to do so to Mortgagor, on behalf of Mortgagor, adjust and compromise any claims under such insurance and collect and receive the proceeds thereof and endorse drafts and Mortgagee is hereby irrevocably appointed attorney-in-fact of Mortgagor for such purposes. Mortgagee may deduct from such proceeds any expenses properly incurred by Mortgagee in collecting same, including reasonable counsel fees. Mortgagee shall hold such proceeds for the purposes set forth in Article VI of this Mortgage.

4.3. At least thirty (30) days prior to the expiration of the term of any insurance policy required hereunder, Mortgagor shall provide Mortgagee with satisfactory evidence of the renewal of such policy. If Mortgagor shall fail to procure, pay for and deliver to Mortgagee any policy or policies of insurance or renewals thereof, Mortgagee may at its option, but shall be under no obligation to do so, effect such insurance and pay the premiums therefor, and Mortgagor will repay to Mortgagee on demand any premiums so paid, with interest, at the rate set forth in the Loan Agreement, and until so paid, the same shall be secured by this Mortgage.

4.4. Upon the written request of Mortgagee, Mortgagor will pay to Mortgagee monthly one-twelfth of the annual premiums for the insurance required to be maintained under this Mortgage. The terms and conditions of Article I hereof relating to escrow payments for Taxes and similar charges shall also apply to such insurance premium escrow payments.

ARTICLE V

Condemnation

5.1. Mortgagor immediately upon obtaining knowledge of the institution of any proceedings for the condemnation of the Mortgaged Property or any part thereof shall notify Mortgagee of the pendency of such proceedings. Unless and until Mortgagee shall notify Mortgagor of Mortgagee’s intent to appear and prosecute such proceedings, pursuant to the appointment and assignment given herein by Mortgagor to Mortgagee, Mortgagor may appear in and prosecute such proceedings in any lawful manner; provided, however, that Mortgagor shall have no right or authority to execute any instrument of conveyance or confirmation in favor of the condemnor except subject hereto, nor to accept any payment or settle or compromise any claim of Mortgagor arising out of such condemnation proceedings without the consent of Mortgagee. Mortgagee’s election not to appear in or prosecute such proceedings shall not diminish any right Mortgagee may have to receive any amount paid in connection with such condemnation and to apply such funds as herein provided.

ARTICLE VI

Distribution Upon Damage, Destruction or Condemnation

6.1. In the event the whole or materially all of the Mortgaged Property shall be destroyed or damaged, Mortgagee shall have the right to collect the proceeds of any insurance and to retain and apply such proceeds, at its election, to the reduction of the Obligations or to restoration, repair, replacement, rebuilding or alteration (herein sometimes collectively called the “ Restoration ”) of the Mortgaged Property. In the event the whole or materially all of the Mortgaged Property shall be taken in condemnation proceedings or by agreement between Mortgagor and Mortgagee and the condemning authority, Mortgagee shall apply such award or proceeds thereof first to payment of the Obligations, and any balance then remaining shall be paid to Mortgagor. For the purposes of this Article VI, “materially all of the Mortgaged Property” shall be deemed to have been damaged, destroyed or taken if the portion of the Mortgaged Property not so damaged, destroyed or taken cannot be repaired or reconstructed so as to constitute a complete structure and facility usable in substantially the manner as prior to the damage, destruction or taking.

6.2. So long as no Event of Default has occurred, in the event of partial destruction or partial condemnation, all of the proceeds or awards shall be collected and held by Mortgagee, and shall be applied by Mortgagee to the payment of the Restoration, from time to time as the Restoration progresses, upon the written request of Mortgagor, so long as:

(a) Such proceeds are, in Mortgagee’s reasonable judgment, sufficient to cover the cost of such Restoration or, if insufficient, Mortgagor deposits with Mortgagee the amount of any such deficiency,

(b) Mortgagor shall deliver to Mortgagee contracts, plans and specifications for the Restoration which are satisfactory to Mortgagee,

(c) the work for which payment is requested has been done in a good and workmanlike manner and Mortgagor presents evidence satisfactory to Mortgagee of amounts owed or paid by Mortgagor for completed Restoration work,

(d) The Mortgaged Property, after such Restoration is or will be, in the reasonable judgment of Mortgagee, of an economic utility not less than that of the Mortgaged Property prior to the casualty or condemnation, and

(e) Mortgagor shall comply with such further conditions in connection with the use of such proceeds or award as Mortgagee may reasonably request.

Any balance remaining in the hands of Mortgagee after payment of such Restoration shall be retained by Mortgagee and applied to the payment of the Obligations.

6.3. Notwithstanding the foregoing provisions of this Article VI regarding insurance or condemnation proceeds, if no Event of Default has occurred, and if such proceeds do not exceed $250,000.00, and if the undamaged or uncondemned portion of the Mortgaged Property can be continuously used during the Restoration period as a complete structure and operating facility in substantially the same manner as prior to the damage, Mortgagor shall have the right to collect the insurance or condemnation proceeds and apply them to the Restoration.

6.4. No damage, destruction or condemnation of the Mortgaged Property nor any application of insurance or condemnation proceeds to the payment of the Obligations shall postpone or reduce the amount of any of the current installments of principal or interest becoming due under the Obligations which shall continue to be made in accordance with the terms of the Obligations until the Obligations and all interest due thereunder are paid in full.

ARTICLE VII

Events of Default and Remedies

7.1. Each of the following shall constitute an “Event of Default” under this Mortgage:

(a) Failure of Mortgagor to make any payment required to be made by it hereunder, within thirty (30) days of the date when due;

(b) Failure of Mortgagor to observe or perform any covenant, agreement, undertaking, performance or obligation of any provision hereof or if Mortgagor shall in any other way be in default hereunder or under any of the Loan Documents, except as otherwise specifically provided herein, and such failure continues for forty five (45) days after receipt by Mortgagor of written notice from Mortgagee specifying such failure; or

(d) The occurrence of an Event of Default as defined in the Loan Agreement; or

(e) Any assignment for the benefit of creditors made by Mortgagor; or

(f) Appointment of a custodian, receiver, liquidator or trustee of Mortgagor or of any of the property of Mortgagor; insolvency of Mortgagor; the filing by or against Mortgagor of any petition for the bankruptcy, reorganization or arrangement of Mortgagor pursuant to the Federal Bankruptcy Code or any similar federal or state statute and, in the case of any such petition filed against Mortgagor, such petition is not dismissed within ninety (90) days; or the institution of any proceeding for the dissolution or liquidation of Mortgagor.

7.2. Upon the occurrence of an Event of Default, Mortgagee shall have the right and is hereby authorized, but without any obligation to do so, to perform the defaulted obligation and to discharge Mortgagor’s obligations on behalf of Mortgagor, and to pay any sums necessary for that purpose, and the sums so expended by Mortgagee shall be an obligation of Mortgagor, shall bear interest at the rate of interest set forth in the Loan Agreement, be payable on demand, and be added to the Obligations. Mortgagee shall be subrogated to all the rights, equities and liens discharged by any such expenditure. Such performance by Mortgagee on behalf of Mortgagor shall not constitute a waiver by Mortgagee of such default and shall not limit Mortgagee’s rights, remedies and recourses hereunder, or the Obligations, or as otherwise provided at law or in equity. Notwithstanding that the Obligations shall not have been declared due and payable upon any such default, the Obligations shall bear interest at the rate of interest set forth in the Loan Agreement from the date of notice and demand therefor by Mortgagee until such default shall have been completely cured and removed to the satisfaction of Mortgagee.

7.3. Upon the occurrence of an Event of Default, the entire unpaid balance of the principal, accrued interest and all other sums secured by this Mortgage, shall, at the option of Mortgagee, become immediately due and payable without notice or demand and Mortgagee shall have and may exercise all the rights and remedies permitted by law, including without limitation the right to foreclose this Mortgage, and proceed thereon to final judgment and execution thereon for the entire unpaid balance of said Obligations, with interest, at the rate of interest set forth in the Loan Agreement and pursuant to the methods of calculation specified in the Loan Agreement, together with all other sums secured by this Mortgage, all costs of suits, interest at the rate of interest set forth in the Loan Agreement on any judgment obtained by Mortgagee from and after the date of any Sheriff’s Sale of the Mortgaged Property until actual payment is made by the Sheriff of the full amount due Mortgagee, and reasonable attorney’s fees, without further stay, any law, usage, or custom to the contrary notwithstanding. In any such foreclosure proceedings, the Mortgaged Property shall be sold, at the sole option of Mortgagee, either (a) in one lot or unit and, as an entirety; or (b) in such lots or units and in such order and manner as may be required by law; or (c) in the absence of any such requirement, in such lots or units and in such order and manner as Mortgagee may determine in its sole discretion.

7.4. Upon the occurrence of an Event of Default, Mortgagee shall have the right, without further notice or demand and without the appointment of a receiver, to enter immediately upon and take possession of the Mortgaged Property, without further consent or assignment of Mortgagor or any subsequent owner of the Mortgaged Property, with the right to let the Mortgaged Property, or any part thereof, and to collect and receive all of the rents, issues, profits and other amounts due or to become due to Mortgagor or any such subsequent owner and to apply the same in such order of priority as Mortgagee shall determine at its sole option, after payment of all necessary charges and expenses in connection with the operation of the Mortgaged Property (including any managing agent’s commission), on account of interest, principal, taxes, water charges and assessments, insurance premiums and any advances for improvements, alterations or repairs or otherwise pursuant to the terms hereof for the account of Mortgagor, or on account of the Obligations. Mortgagee may institute legal proceedings against any tenant of the Mortgaged Property who fails to comply with the provisions of his lease. If Mortgagor or any such subsequent owner is occupying the Mortgaged Property or any part thereof, such Mortgagor or subsequent owner will either immediately vacate and surrender possession thereof to Mortgagee or pay to Mortgagee a reasonable rental for the use thereof, monthly in advance, and, in default of so doing, such Mortgagor or subsequent owner may be dispossessed by legal proceedings or otherwise.

7.5. All monies received by Mortgagee by virtue of the assignments made herein to Mortgagee, after payment therefrom of the costs and expenses incident to the enforcement or collection of the assigned rights or claims, shall be applied to the payment of the Obligations.

7.6. Upon the occurrence of an Event of Default, Mortgagee may proceed to protect and enforce its rights under this Mortgage by suit for specific performance of any covenant herein contained, or in aid of the execution of any power herein granted, or for the foreclosure of this Mortgage and the sale of the Mortgaged Property under the judgment or decree of a court of competent jurisdiction, or for the enforcement of any other right as Mortgagee shall deem most effectual for such purpose. The foregoing rights shall be in addition to, and not in lieu of, the rights of Mortgagee as a secured creditor under the UCC with respect to any portion of the Mortgaged Property which is subject to the UCC. Mortgagee may also proceed in any other manner permitted by law to enforce its rights hereunder and under the Loan Agreement of even date herewith.

7.7. No failure or delay on the part of Mortgagee in exercising any right, power or privilege under this Mortgage, and no course of dealings between Mortgagor and Mortgagee, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No notice to or demand on Mortgagor shall entitle Mortgagor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of Mortgagee to any other or further action in the same or other circumstances without notice or demand.

7.8. In any action to foreclose this Mortgage, Mortgagee, to the fullest extent permitted by law, shall be entitled as a matter of right to the appointment of a receiver of the Mortgaged Property and of the rents, revenues, issues, income and profits thereof, without notice or demand, and without regard to the adequacy of the security for the Obligations or the solvency of Mortgagor.

7.9. Upon the occurrence of any Event of Default, Mortgagor shall pay monthly in advance to Mortgagee, or to any receiver appointed at the request of Mortgagee to collect the rents, revenues, issues and profits of the Mortgaged Property, the fair and reasonable rental value for the use and occupancy of the Mortgaged Property or of such part thereof as may be possessed by Mortgagor. Upon default in payment thereof, Mortgagor shall vacate and surrender possession of the Mortgaged Property to Mortgagee or such receiver, and upon a failure so to do may be evicted by summary proceedings, in the manner hereinabove provided or otherwise.

7.10. The rights and remedies of Mortgagee expressed or contained in this Mortgage are cumulative and no one of them shall be deemed to be exclusive of the others or of any right or remedy Mortgagee may now or hereafter have at law or in equity. The covenants of this Mortgage shall run with the land and bind Mortgagor and, unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, its successors and assigns and all subsequent owners, encumbrancers, tenants and subtenants of the Mortgaged Property and shall inure to the benefit of Mortgagee and its successors and assigns and all subsequent holders of this Mortgage and the Obligations.

7.11. Mortgagee may in its discretion from time to time grant to Mortgagor indulgences, forbearances and extensions of the Obligations, may release, with or without consideration, any portion of the Mortgaged Property from the lien hereof, and may accept other and further collateral security for the payment of and strict and faithful performance of the Obligations, all without otherwise affecting the lien or priority of this Mortgage, and the release of any portion of the Mortgaged Property from the lien hereof shall not affect the lien of this Mortgage with respect to the remainder of the Mortgaged Property.

7.12. Mortgagor hereby waives and relinquishes the benefits of all present and future laws (i) exempting the Mortgaged Property or any other property or any part of the proceeds of sale thereof from attachment, levy or sale on execution; (ii) staying execution or other process; and (iii) requiring valuation or appraisement of the Mortgaged Property or any other property levied or sold upon execution under any judgment recovered for the Obligations. Notwithstanding the foregoing, Mortgagor hereby agrees to pay all fees and costs incurred by Mortgagee in connection with exercising its rights under this Mortgage (including, without limitation, attorneys’ fees), and Mortgagor shall be so obligated before or after a judgment has been rendered against Mortgagor by Mortgagee hereunder.

7.13. The Mortgagor acknowledges and agrees that the occurrence of an Event of Default under the terms of this Mortgage shall constitute a default under each of the other Loan Documents and under any documents, instruments or agreements (the “Other Agreements” ), whether evidencing any other loan now existing or hereafter made by the Mortgagee to the Mortgagor, or otherwise, and a default under the other Loan Documents or any of them or any of the Other Agreements shall constitute an Event of Default under this Mortgage. The security interests, liens and other rights and interests in and relative to any of the collateral now or hereafter granted to the Mortgagee by the Mortgagor by or in any instrument or agreement, including but not limited to this Mortgage and the other Loan Documents, shall serve as security for any and all liabilities of the Mortgagor to the Mortgagee, including but not limited to the liabilities described in this Mortgage and the other Loan Documents, and, for the repayment thereof, the Mortgagee may resort to any security held by it in such order and manner as it may elect.

ARTICLE VIII

Indemnity

8.1. Each Indemnifying Party agrees to indemnify and to hold harmless and upon request defend the Indemnified Parties of and from any and all liability, loss and damage (including without limitation those involving death, personal injury or property damage), and all costs and expenses (including without limitation attorneys’ fees and litigation costs) which any one or more Indemnified Parties may or might incur by reason of any event or circumstance occurring on the Mortgaged Property, and any action or omission of Mortgagor or its agents or invitees, and the failure of Mortgagor to comply with, or the failure of the Mortgaged Property to be kept in compliance with, any applicable law, rule or regulation (including the Environmental Laws, as to which Article III also applies), and the breach of any other agreement, contract or obligation under which the Indemnifying Parties are obligated, except solely to the extent that such liability, loss or damage is proximately and primarily caused by the willful misconduct of any Indemnified Party, or to the extent of the negligence of any Indemnified Party, or by any action or omission of any Indemnified Party that either violates applicable law or breaches an express contractual obligation of Mortgagee to Indemnifying Party. No Indemnifying Party shall have the right to settle any claim without the consent of the Indemnified Parties, which consent shall not be unreasonably withheld so long as such settlement will not (a) result in any material loss to any Indemnified Party which is not so indemnified by Indemnifying Party, or (b) have any other materially adverse effect on the Indemnified Party. Mortgagee agrees to act reasonably in giving the Indemnifying Parties notice of any claim that is subject to indemnification under this Agreement. The indemnities contained in this provision are specifically excepted from any limitation of liability provision contained in this or any of the Other Agreements. The Indemnifying Parties’ obligations under this Article VIII shall survive foreclosure, the satisfaction, release or cancellation of this Mortgage, or any other termination or release of the lien created hereby.

ARTICLE IX

Miscellaneous Provisions

9.1. All notices, demands, requests and consents required under this Mortgage shall be in writing. All such notices, demands, requests and consents shall be deemed to have been properly given if sent or given in accordance with the notice provisions set forth in Section 11.1 of the Loan Agreement.

9.2. If Mortgagor complies with the provisions of this Mortgage and pays to Mortgagee all sums secured hereby in accordance with the terms of and at the times provided in the Loan Agreement and this Mortgage, without deduction, fraud or delay, then this Mortgage and the estate and security interest hereby granted and created shall then cease, terminate and become void, and Mortgagee shall execute and deliver such mortgage satisfactions and other documents as Mortgagor may reasonably request to evidence the same.

9.3. Mortgagor shall promptly cause this Mortgage to be duly recorded in the Office for the Recording of Deeds and Mortgages in and for Middlesex County, New Jersey and shall pay all recording fees and other costs incurred in connection therewith.

9.4. All amendments and modifications of this Mortgage must be in writing.

9.5. If any term or provision of this Mortgage or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Mortgage, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Mortgage shall be valid and be enforced to the fullest extent permitted by law.

9.6. This Mortgage is intended to secure present and future advances and the lien of future advances shall relate back to the date of this Mortgage, even if such advances are made under a renewal, extension, modification or refinancing of the Obligations, and even if the Obligations are assumed by a third party. Mortgagor agrees that full repayment of the Obligations secured hereby at any time shall not extinguish the security of this Mortgage for obligations which Mortgagor may incur to Mortgagee at anytime while the Obligations remain outstanding. Mortgagee may (but is not obligated to) make an advance or advances to pay interest, penalties, fees, charges or other obligations which Mortgagor may owe Mortgagee, and all such advances shall be secured by this Mortgage with lien priority from the time this Mortgage was left for record. If Mortgagee makes such an advance after having notified Mortgagor of a default under this Mortgage or the Obligations, any such advances shall be treated as expenses incurred by Mortgagee by reason of Mortgagor’s default under this Mortgage.

9.7. This Mortgage is granted in connection with a commercial loan transaction and is not a residential mortgage; it shall not be construed to be pursuant to a consumer transaction or eligible for the protections granted to a mortgage pursuant to any such consumer or residential transaction.

9.8. This Mortgage and all terms, covenants and conditions hereof shall inure to the benefit of and bind the parties hereto, their successors and assigns, to the extent assignments are permitted herein.

9.9. MORTGAGOR HAS RECEIVED A FULLY EXECUTED COPY OF THIS MORTGAGE WITHOUT CHARGE.

9.10. Waiver of Jury Trial. MORTGAGOR AND MORTGAGEE IRREVOCABLY, AS AN INDEPENDENT COVENANT, WAIVE JURY TRIAL AND THE RIGHT THERETO IN ANY ACTION OR PROCEEDING BETWEEN MORTGAGOR AND MORTGAGEE, WHETHER HEREUNDER OR OTHERWISE.

IN WITNESS WHEREOF, Mortgagor has executed and delivered this Mortgage on the day and year above written.

BLONDER TONGUE LABORATORIES, INC., a

Delaware corporation

By:

Name/Title:

(CORPORATE SEAL)

Attest:

Name/Title:

The address of Mortgagee is:

21 Desai Court

Freehold, New Jersey 07728

On behalf of Mortgagee

STATE OF NEW JERSEY:

: ss.

COUNTY OF MIDDLESEX: :

On this the _______ day of February, 2016, before me, the undersigned officer, personally appeared ______________________, who known to me (or satisfactorily proven) to be the persons subscribed to the within instrument, and acknowledged that they executed the foregoing instrument for the purposes therein contained by signing their name(s) as their own free act and deed.

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

Notary Public

My Commission Expires:

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.

EXHIBIT 10.3

SUBORDINATION AGREEMENT

Borrower:	Blonder Tongue Laboratories, Inc. One Jake Brown Road Old Bridge, NJ 08857 and R. L. Drake Holdings, L.L.C. One Jake Brown Road Old Bridge, NJ 08857
Lender:	Santander Bank, N.A. (f/k/a Sovereign Bank, N.A.) MAIL CODE PA1-106-RM1 3 Terry Drive Newtown, PA 18940
Creditor:	Robert J. Pallé and Carol Pallé, jointly 21 Desai Court Freehold, NJ 07728

THIS SUBORDINATION AGREEMENT dated February 11th, 2016, is made and executed among Blonder Tongue Laboratories, Inc., One Jake Brown Road, Old Bridge, NJ 08857 (the “ Company ”) and R. L. Drake Holdings, L.L.C., One Jake Brown Road, Old Bridge, NJ 08857 (“ Drake ”; and together with the Company, collectively, jointly and severally, “ Borrower ”); Robert J. Pallé, and Carol Pallé, jointly, 21 Desai Court, Freehold NJ 07728 (“ Creditor ”); and Santander Bank, N.A. (f/k/a Sovereign Bank, N.A.), MAIL CODE PA1-106-RM1, 3 Terry Drive, Newtown, PA 18940 (“ Lender ”).

1. REQUESTED FINANCIAL ACCOMMODATIONS. Creditor and Borrower each want Lender to provide financial accommodations to Borrower in the form of (A) new credit or loan advances, (B) an extension of time to pay or other compromises regarding all or part of Borrower’s present indebtedness to Lender, or (C) other benefits to Borrower. Borrower and Creditor each represent and acknowledge to Lender that Creditor will benefit as a result of these financial accommodations from Lender to Borrower, and Creditor acknowledges receipt of valuable consideration for entering into this Agreement. Based on the representations and acknowledgments contained in this Agreement, Borrower and Creditor agree with Lender as follows:

2. SUBORDINATED INDEBTEDNESS. The words “ Subordinated Indebtedness ” as used in this Agreement mean all present and future indebtedness, obligations, liabilities, claims, rights, and demands of any kind for borrowed money, which may be now or hereafter owing from Borrower to Creditor, including, without limitation, under and pursuant to that certain Senior Subordinated Convertible Loan and Security Agreement, dated on or about the date hereof (the “ Creditor Loan Agreement ”), pursuant to which Creditor may make loans and advances to Borrower, all as more fully contemplated thereby. The term “Subordinated Indebtedness” is used in its broadest sense and includes without limitation all principal, all interest, all costs, reasonable attorneys’ fees, all sums paid for the purpose of protecting the rights of a holder of security, all contingent obligations of Borrower (such as a guaranty), and all other obligations, secured or unsecured, of any nature whatsoever; provided, however that “Subordinated Indebtedness” does not and is not intended to include any amount owing from time to time to Creditor in Creditor’s capacity as an employee officer, director or stockholder of Borrower.

3. SUPERIOR INDEBTEDNESS. The words “ Superior Indebtedness ” as used in this Agreement mean and include all present and future indebtedness, obligations, liabilities, claims, rights, and demands of any kind which may be now or hereafter owing from Borrower to Lender. The term “Superior Indebtedness” is used in its broadest sense and includes without limitation all principal, all interest, all costs, reasonable attorneys’ fees, all sums paid for the purpose of protecting Lender’s rights in security (such as paying for insurance on collateral if the owner fails to do so), all contingent obligations of Borrower (such as a guaranty), all obligations arising by reason of Borrower’s accounts with Lender (such as an overdraft on a checking account), and all other obligations of Borrower to Lender, secured or unsecured, of any nature whatsoever.

4. SUBORDINATION. All Subordinated Indebtedness of Borrower to Creditor is and shall be subordinated in all respects to all Superior Indebtedness of Borrower to Lender. Creditor holds or will hold one or more Security Interests, whether now existing or hereafter acquired, in Borrower’s real property and/or personal property, as contemplated by the Creditor Loan Agreement; provided , however, that Creditor also subordinates all such Creditor’s Security Interests to all Security Interests held by Lender, whether now existing or hereafter acquired; provided , however , that notwithstanding the foregoing, Lender acknowledges and agrees that Creditor’s Security Interests in equipment hereafter acquired by Borrower in connection with a permitted acquisition, which will be identified with specificity (‘ Specified Equipment ”), the purchase of which is financed with advances by Creditor to Borrower of Subordinated Indebtedness, will be senior to the Security Interests in favor of Lender, in such Specified Equipment and the proceeds thereof.

5. PAYMENTS TO CREDITOR. Borrower will not make and Creditor will not accept, at any time while any Superior Indebtedness is owing to Lender, (A) any payment upon any Subordinated Indebtedness, (B) any advance, transfer, or assignment of assets to Creditor in any form whatsoever that would reduce at any time or in any way the amount of Subordinated Indebtedness (except with respect to the Specified Equipment, as contemplated by section 4 above), or (C) any transfer of any assets as security for the Subordinated Indebtedness (other than as contemplated by the Creditor Loan Agreement and consented to herein), except upon Lender’s prior written consent.

In the event of any distribution, division, or application, whether partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of Borrower’s assets, or the proceeds of Borrower’s assets, in whatever form, to creditors of Borrower or upon any indebtedness of Borrower, whether by reason of the liquidation, dissolution or other winding-up of Borrower, or by reason of any execution sale, receivership, insolvency, or bankruptcy proceeding, assignment for the benefit of creditors, proceedings for reorganization, or readjustment of Borrower or Borrower’s properties, then and in such event other than with respect to the proceeds derived from the sale or other disposition of the Specified Equipment, (A) the Superior Indebtedness shall be paid in full before any payment is made upon the Subordinated Indebtedness, and (B) all payments and distributions, of any kind or character and whether in cash, property, or securities, which shall be payable or deliverable upon or in respect of the Subordinated Indebtedness shall be paid or delivered directly to Lender for application in payment of the amounts then due on the Superior Indebtedness until the Superior Indebtedness shall have been paid in full. Nothing contained in this Agreement will limit or impair Creditor’s exercise of its rights under the Creditor Loan Agreement to convert all or any portion of the Subordinated Indebtedness into capital stock of the Company, as contemplated by the Creditor Loan Agreement.

In order that Lender may establish its right to prove claims and recover for its own account dividends based on the Subordinated Indebtedness, Creditor does hereby assign all its right, title, and interest in such claims to Lender, subject to Creditor’s rights in the proceeds of the Specified Equipment. Creditor further agrees to supply such information and evidence, provide access to and copies of such of Creditor’s records as may pertain to the Subordinated Indebtedness, and execute such instruments as may be required by Lender to enable Lender to enforce all such claims and collect all dividends, payments, or other disbursements which may be made on account of the Subordinated Indebtedness. For such purposes, Creditor hereby irrevocably authorizes Lender in its discretion to make and present for or on behalf of Creditor such proofs of claims on account of the Subordinated Indebtedness as Lender may deem expedient and proper and to vote such claims in any such proceeding and to receive and collect any and all dividends, payments, or other disbursements made thereon in whatever form the same may be paid or issued and to apply the same on account of the Superior Indebtedness, other than the proceeds of the Specified Equipment.

Should any payment, distribution, security, or proceeds thereof be received by Creditor at any time on the Subordinated Indebtedness contrary to the terms of this Agreement, Creditor promptly will deliver the same to Lender in precisely the form received (except for the endorsement or assignment of Creditor if necessary), for application on or to secure the Superior Indebtedness, whether it is due or not due, and until so delivered the same shall be held in trust by Creditor as property of Lender. In the event Creditor fails to make any such endorsement or assignment, Lender, or any of its officers on behalf of Lender, is hereby irrevocably authorized by Creditor to make the same.

6. CREDITOR’S NOTES. Creditor agrees to deliver to Lender, at Lender’s request, all notes of Borrower to Creditor or other evidence of the Subordinated Indebtedness, now held or hereafter acquired by Creditor, while this Agreement remains in effect. At Lender’s request, Borrower will also execute and deliver to Creditor a promissory note evidencing any book amount or claim now or hereafter owed by Borrower to Creditor, which note also shall be delivered by Creditor to Lender. Creditor agrees not to sell, assign, pledge or otherwise transfer any of such notes except subject to all of the terms and conditions of this Agreement. N otwithstanding the foregoing, in the event that, pursuant to a request by Lender, Creditor supplies to Lender original loan documents memorializing Creditor’s loan to Borrower, the provision of such original loan documents to Lender shall not impair any of Creditor’s rights to enforce any of the provisions in the loan documents or any of the Creditor’s rights generally.

7. CREDITOR’S REPRESENTATIONS AND WARRANTIES. Creditor represents and warrants to Lender that: (A) no representations or agreements of any kind have been made to Creditor which would limit or qualify in any way the terms of this Agreement; (B) this Agreement is executed at Borrower’s request and not at the request of Lender; (C) Lender has made no representation to Creditor as to the creditworthiness of Borrower; and (D) Creditor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower’s financial condition. Creditor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Creditor’s risks under this Agreement, and Creditor further agrees that Lender shall have no obligation to disclose to Creditor information or material acquired by Lender in the course of its relationship with Borrower.

8. CREDITOR’S WAIVERS. Creditor waives any right to require Lender: (A) to make, extend, renew, or modify any loan to Borrower or to grant any other financial accommodations to Borrower whatsoever; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Superior Indebtedness or of any nonpayment related to any Security Interests, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Superior Indebtedness, or in connection with the creation of new or additional Superior Indebtedness; (C) to resort for payment or to proceed directly or at once against any person, including Borrower; (D) to proceed directly against or exhaust any Security Interests held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender’s power; or (G) to commit any act or omission of any kind, at any time, with respect to any matter whatsoever.

9. LENDER’S RIGHTS. Lender may take or omit any and all actions with respect to the Superior Indebtedness or any Security Interests for the Superior Indebtedness without affecting whatsoever any of Lender’s rights under this Agreement. In particular, without limitation, Lender may, without notice of any kind to Creditor, (A) make one or more additional secured or unsecured loans to Borrower; (B) repeatedly alter, compromise, renew, extend, accelerate, or otherwise change the time for payment or other terms of the Superior Indebtedness or any part thereof, including increases and decreases of the rate of interest on the Superior Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) take and hold Security Interests for the payment of the Superior Indebtedness, and exchange, enforce, waive, and release any such Security Interests, with or without the substitution of new collateral; (D) release, substitute, agree not to sue, or deal with any one or more of Borrower’s sureties, endorsers, or guarantors on any terms or manner Lender chooses; (E) determine how, when and what application of payments and credits, shall be made on the Superior Indebtedness; (F) apply such security and direct the order or manner of sale thereof, as Lender in its discretion may determine; and (G) assign this Agreement in whole or in part.

10. DEFAULT BY BORROWER. If Borrower becomes insolvent or bankrupt, this Agreement shall remain in full force and effect. Any default by Borrower under the terms of the Subordinated Indebtedness also shall constitute an event of default under the terms of the Superior Indebtedness in favor of Lender.

11. DURATION AND TERMINATION. This Agreement will take effect when received by Lender, without the necessity of any acceptance by Lender, in writing or otherwise, and will remain in full force and effect until Creditor shall notify Lender in writing at the address shown above to the contrary. Any such notice shall not affect the Superior Indebtedness owed Lender by Borrower at the time of such notice, nor shall such notice affect Superior Indebtedness thereafter granted in compliance with a commitment made by Lender to Borrower prior to receipt of such notice, nor shall such notice affect any renewals of or substitutions for any of the foregoing. Such notice shall affect only indebtedness of Borrower to Lender arising after receipt of such notice and not arising from financial assistance granted by Lender to Borrower in compliance with Lender’s obligations under a commitment. Any notes lodged with Lender pursuant to the section titled “Creditor’s Notes” above need not be returned until this Agreement has no further force or effect.

12. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

Attorneys’ Fees; Expenses. Creditor agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s reasonable attorneys’ fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Creditor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s reasonable attorneys’ fees and legal expenses whether or not there is a lawsuit, including reasonable attorneys’ fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Creditor also shall pay all court costs and such additional fees as may be directed by the court.

Authority. The person who signs this Agreement as or on behalf of Creditor represents and warrants that he or she has authority to execute this Agreement and to subordinate the Subordinated Indebtedness and the Creditor’s security interests in Creditor’s property, if any.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of New Jersey without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of New Jersey.

Interpretation. In all cases where there is more than one Creditor, then all words used in this Agreement in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Creditor named in this Agreement or when this Agreement is executed by more than one , the words “Creditor” shall mean all and any one or more of them. Reference to the phrase “Creditor” includes the heirs, successors, assigns, and transferees of each of them.

Successors and Assigns. This Agreement shall be understood to be for the benefit of Lender and Creditor and for such other person or persons as may from time to time become or be the holder or owner of any of the Superior Indebtedness or any interest therein, and this Agreement shall be transferable to the same extent and with the same force and effect as any such Superior Indebtedness may be transferable.

No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Creditor, shall constitute a waiver of any of Lender’s rights or of any of Creditor’s obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

13. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code:

Agreement. The word “Agreement” means this Subordination Agreement, as this Subordination Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Subordination Agreement from time to time.

Borrower. The word “Borrower” collectively means Blonder Tongue Laboratories, Inc. and R. L. Drake Holdings, L.L.C. and includes all co-signers and co-makers signing the Note and all their successors and assigns.

Creditor. The word “Creditor” means Robert J. Pallé and/or Carol Pallé, jointly and their successors and assigns..

Lender. The word “Lender” means Santander Bank, N.A. (f/k/a Sovereign Bank, N.A.), its successors and assigns.

Note. The word “Note” collectively means (a) the Term Note dated August 6, 2008 and executed by Blonder Tongue Laboratories, Inc. in the principal amount of $4,000,000.00, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement and (b) the Revolving Credit Note dated August 6, 2008 and executed by Blonder Tongue Laboratories, Inc. in the principal amount of $4,000,000.00, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement.

Related Documents. The words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Superior Indebtedness.

Security Interest. The words “Security Interest” mean, without limitation, any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise.

Subordinated Indebtedness. The words “Subordinated Indebtedness” mean the indebtedness described in the section of this Agreement titled “Subordinated Indebtedness”.

Superior Indebtedness. The words “Superior Indebtedness” mean the indebtedness described in the section of this Agreement titled “Superior Indebtedness”.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF THE PARTIES, INTENDING TO BE LEGALLY BOUND, HAVE EXECUTED THIS SUBORDINAITON AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN.

BORROWER:

BLONDER TONGUE LABORATORIES, INC.

By:

Eric Skolnik, Chief Financial Officer

R. L. DRAKE HOLDINGS, L.L.C.

By:

Eric Skolnik, Chief Financial Officer

CREDITOR:

Robert J. Pallé, Individually

Carol Pallé, Individually

LENDER:

SANTANDER BANK, N.A. f/k/a/ Sovereign Bank, N.A.

By:

John Giangrossi, Vice President