EXHIBIT 4.18
AMENDMENT NUMBER TEN TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Amendment Number Ten to Amended and Restated Loan and Security
Agreement ("Amendment") is entered into as of March 1, 2001 by and between
FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), and PORTA
SYSTEMS CORP., a Delaware corporation ("Borrower"), in light of the following:
A. Borrower and Foothill have previously entered into that certain Amended
and Restated Loan and Security Agreement, dated as of November 28, 1994, as
amended as of February 13, 1995, March 30, 1995, March 12, 1996, August 26,
1997, November 30, 1997, August 1, 1998, December 1, 1998, March 24, 2000 and
June 9, 2000 (collectively, the "Agreement").
B. Borrower and Foothill desire to further amend the Agreement as provided
for and on the conditions herein.
NOW, THEREFORE, Borrower and Foothill hereby amend the Agreement as
follows:
1. DEFINITIONS. All initially capitalized terms used in this Amendment
shall have the meanings given to them in the Agreement unless specifically
defined herein.
2. AMENDMENTS. The following amendments to the Agreement shall be
effective from the date hereof through and including July 2, 2001.
A. Section 2.5 of the Agreement is amended to provide that interest at the
rate of 12% per annum shall be paid monthly with one-half of such payment made
on the first of each month and the remaining one-half being paid on the 15th day
of each month.
B. The facility fee in Section 2.8 of the Agreement shall be deferred
until the earlier of the termination of the Agreement or until Borrower has
consummated a sale of stock or some or all of its assets other than ordinary
course of sales of Inventory, at which time the net proceeds shall be used to
pay the deferred facility fee.
C. The $400,000 principal payment on the Indebtedness that is due on April
1, 2001 pursuant to Section 2.9 of the Agreement, shall be deferred until the
earlier of the termination of the Agreement or until Borrower has consummated a
sale of stock or some or all of its assets other than ordinary course of sales
of Inventory, at which time the net proceeds shall be used to pay the April 1,
2001 principal payment.
D. During the period from the date of this Amendment through July 2, 2001,
Borrower shall not make any payments on Indebtedness to any subordinated
1
creditors, but Borrower shall not be prohibited from paying accounts payable in
the ordinary course of business.
E. Upon the consummation of any sale of assets or sale of stock by
Borrower or any of its subsidiaries, 100% of the net proceeds from such sale
shall be delivered to Foothill to be applied first to accrued and unpaid
interest, second to the deferred facility fee, third to the principal payment
due April 1, 2001, and fourth to the Obligations.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Foothill
that all of Borrower's representations and warranties set forth in the Agreement
are true, complete and accurate in all respects as of the date hereof
4. NO DEFAULTS. Borrower hereby affirms to Foothill that no Event of
Default has occurred and is continuing as of the date hereof, except for
defaults related Section 6.13(a) (interest coverage covenant) and section 2.4
(borrowings in excess of borrowing base formula), both of which are expressly
waived through the term of this Amendment. (July 2, 2001)
5. CONDITION PRECEDENT. The effectiveness of this Amendment is expressly
conditioned upon receipt by Foothill of an executed copy of this Amendment
6. COSTS AND EXPENSES. Borrower shall pay to Foothill all of Foothill's
out-of-pocket costs and expenses (including, without limitation, the fees and
expenses of its counsel, which counsel may include any local counsel deemed
necessary, search fees, filing and recording fees, documentation fees, appraisal
fees, travel expenses, and other fees) arising in connection with the
preparation, execution, and delivery of this Amendment and all related
documents.
7. LIMITED EFFECT. In the event of a conflict between the terms and
provisions of this Amendment and the terms and provisions of the Agreement, the
terms and provisions of this Amendment shall govern. In all other respects, the
Agreement, as amended and supplemented hereby, shall remain in full force and
effect.
8. COUNTERPARTS: EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which when so executed and delivered shall be deemed to be an original. All
such counterparts, taken together, shall constitute one and the same Amendment.
This Amendment shall become effective upon the execution of a counterpart of
this Amendment by each of the parties hereto.
2
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first set forth above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By ______________________________
Title: __________________________
PORTA SYSTEMS CORP.,
a Delaware corporation
By ______________________________
Title: __________________________
