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EXHIBIT 10.19
SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Amendment") is
executed as of this 30th day of May, 1997, by and between RADIO SYSTEMS
CORPORATION, a Tennessee corporation with principal offices in Knoxville,
Tennessee ("Borrower") and FIRST AMERICAN NATIONAL BANK, a national banking
association with principal offices in Nashville, Tennessee ("Lender");
W I T N E S S E T H
WHEREAS, Borrower and Lender entered into that certain Loan and
Security Agreement dated April 3, 1995, as amended by that certain First
Amendment to Loan and Security Agreement dated October 25, 1995, that certain
Second Amendment to Loan and Security Agreement dated May 17, 1996, that certain
Third Amendment to Loan and Security Agreement dated December 13, 1996, that
certain Fourth Amendment to Loan and Security Agreement dated January 22, 1997,
and that certain Fifth Amendment to Loan and Security Agreement dated April 30,
1997 (as amended, the "Agreement"), pursuant to which Lender has made available
to Borrower a line of credit currently in the maximum principal amount of
$5,000,000, and an Acquisition Line in the maximum principal amount of
$1,500,000, all as more fully described and defined therein; and
WHEREAS, Borrower has requested that Lender make a term loan to
Borrower in the original principal amount of $1,000,000 (the "Term Loan"; the
Line of Credit, the Acquisition Line and the Term Loan are sometimes hereinafter
referred to as the "Loans") on the terms and conditions hereinafter set forth,
and for the purpose(s) hereinafter set forth; and
WHEREAS, Borrower and Lender desire to further amend the Agreement in
certain respects;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Article I of the Agreement is hereby amended by
substituting the following definitions for the existing definitions of the
following terms and, as applicable, adding the following definitions:
"Borrowing Base" shall mean an aggregate amount equal to the
sum of (a) seventy-five percent (75%) of Eligible Receivables, plus (b)
the lesser of fifty percent (50%) of Eligible Inventory or the
Inventory Borrowing Limit, plus (c) the lesser of fifty percent (50%)
of the face amount of trade letters of credit issued by Lender for the
amount of Borrower securing the purchase of Inventory by Borrower or
$150,000, minus (d) the amount of $500,000, which amount shall be
reduced by the amount each principal reduction in the Term Loan at the
time of each such reduction.
"Guarantor" shall mean, collectively, jointly and severally,
Xxxxxx Xxxx and, so long as and to the extent that the Xxxxxx Guaranty
is in effect, Xxxxx Xxxxxx.
"Guaranty" shall mean, collectively, one or more Continuing
Guaranties executed in favor of Lender by Guarantor.
"Xxxxxx Guaranty" shall mean the Guaranty executed by Xxxxx
Xxxxxx pursuant to this Sixth Amendment.
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"Notes" shall mean, collectively, the Line of Credit Note, the
Acquisition Notes and the Term Note.
"Term Loan" shall have the meaning assigned to such term in
the preamble of this Agreement.
"Term Note" shall mean that certain Secured Term Promissory
Note of even date with this Sixth Amendment, in the original principal
amount of $1,000,000, made and executed by Borrower, payable to the
order of Lender, evidencing the indebtedness of Borrower to Lender in
connection with the Term Loan, together with any and all extensions,
modifications, renewals, restatements and/or replacements thereof.
2. Term Loan. The following Section 2.6 is hereby added to the
Agreement immediately following Section 2.5:
2.6 Term Loan.
(a) The Term Loan shall be evidenced by, and payable in
accordance with the terms of, the Term Note.
(b) The purpose of the Term Loan shall provide funds for the
repurchase of stock warrants issued by Borrower and currently held by
Sirrom Capital. The proceeds of the Term Loan shall be used for no
other purpose.
(c) Upon execution this Sixth Amendment, Borrower shall pay to
Lender a Term Loan fee in the amount of $7,500.
3. Xxxxxx Guaranty Limitations and Conditions. Execution of the
Xxxxxx Guaranty and delivery thereof to Lender is a condition precedent to the
funding of the Term Loan. The Xxxxxx Guaranty shall be limited to Borrower's
obligations to Lender in connection with the Term Loan and shall be released
when such obligations are paid in full and no payment in respect of such
obligations remains subject to recoupment for any reason, including but not
limited to recoupment as a preferential payment pursuant to bankruptcy or other
insolvency laws. Lender shall apply regularly scheduled payments designated by
Borrower as Term Loan payments to the Term Loan in the absence of default or an
Event of Default. Otherwise Lender may apply any and all payments and proceeds
of collateral to any obligations of Borrower to Lender as Lender shall determine
at its sole discretion. Any payments made by any Guarantor other than Xxxxx
Xxxxxx may be applied in Lender's sole discretion first to Borrower's
obligations secured by such other Guarantor other than the Term Loan until all
such other obligations of Borrower to Lender are paid in full before any such
payments are applied to the Term Loan.
4. Representations and Warranties. Borrower represents and
warrants that the representations and warranties set forth in Article IV of the
Agreement are true and correct on and as of the date of this Amendment, and that
no default or Event of Default exists under the Agreement or any other documents
executed in connection therewith.
5. Miscellaneous. Except as amended hereby, the Agreement shall
remain in full force and effect. This Amendment does not constitute a waiver of
any default or Event of Default under the Agreement, whether or not Lender is
aware of any such default or Event of Default.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
LENDER:
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxx
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Title: Assistant Vice-President
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BORROWER:
RADIO SYSTEMS CORPORATION
By: /s/ Xxxxx Xxxx
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Title: President
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