EIGHTH AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT,
THIRD AMENDMENT TO SECOND AMENDED
AND RESTATED SECURITY AGREEMENT,
AND FOURTH AMENDMENT TO THIRD AMENDED
AND RESTATED STOCK AND NOTES PLEDGE
THIS EIGHTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT,
THIRD AMENDMENT TO SECOND AMENDED AND RESTATED SECURITY AGREEMENT, AND FOURTH
AMENDMENT TO THIRD AMENDED AND RESTATED STOCK AND NOTES PLEDGE (the "Eighth
Amendment") dated as of October 4, 1996, by and among CATALINA LIGHTING, INC., a
Florida corporation (the "Borrower"), the corporations listed on ANNEX I thereto
(the "Guarantors"), the Banks signatories to the Credit Agreement (as
hereinafter defined) (the "Banks") and SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL
ASSOCIATION, a national banking association, as Agent (the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent have
entered into that certain Third Amended and Restated Credit Agreement dated as
of May 12, 1994, as amended by that certain First Amendment to Third Amended and
Restated Credit Agreement, Second Amended and Restated Security Agreement, Third
Amended and Restated Stock and Notes Pledge, Third Amended and Restated
Agreement Regarding Factoring Proceeds, Consent and Waiver dated as of August
12, 1994, as further amended by that Second Amendment to Third Amended and
Restated Credit Agreement, and Third Amended and Restated Stock and Notes
Pledge, dated as of February 23, 1995, as further amended by that Third
Amendment to Third Amended and Restated Credit Agreement and Consent, dated as
of May l, 1995, as further amended by that Fourth Amendment to the Third Amended
and Restated Credit Agreement dated as of June 30, 1995, as further amended by
that Fifth Amendment to Third Amended and Restated Credit Agreement, dated as of
December 4, 1995, as further amended by that Sixth Amendment to Third Amended
and Restated Credit Agreement, Second Amendment to Second Amended and Restated
Security Agreement and Second Amendment to Third Amended and Restated Stock and
Notes Pledge, dated as of December 28, 1995, and as further amended by that
Seventh Amendment to Third Amended and Restated Credit Agreement, dated as of
March 18, 1996 (as so amended, the "Credit Agreement"); and
WHEREAS, the Borrower and the Guarantors have requested that the Credit
Agreement be amended to permit the guaranty of additional indebtedness of Go-Gro
Industries Limited in conjunction with its financing the purchase of equipment,
to reflect the additional pledge of stock of Catalina Lighting
Canada, (1992) Inc. and to clarify the effective date of the change in certain
interest rates; and
WHEREAS, the Borrower has formed an additional domestic subsidiary,
Catalina Merchandising, Inc., a Florida corporation ("Catalina Merchandising");
and
WHEREAS, Catalina Merchandising, which became a domestic Subsidiary
after the date of the Credit Agreement, is required, pursuant to Section 5.19 of
the Credit Agreement, to become a Guarantor under the Credit Agreement and to
become a party to the Second Amended and Restated Security Agreement by and
between Catalina Lighting, Inc., the Guarantors, and the Agent dated as of May
12, 1994, as amended by the First Amendment thereto dated as of August 12, 1994
and as amended by the Second Amendment thereto dated as of December 28, 1995
(the "Security Agreement"), and to the Third Amended and Restated Stock and
Notes Pledge by and between the Borrower, the Guarantors, and the Agent dated as
of May 12, 1994, as amended by that First Amendment thereto dated as of August
12, 1994 and as amended by the Second Amendment thereto dated as of February 23,
1995 and as amended by the Third Amendment thereto dated as of December 28, 1995
(the "Stock and Notes Pledge") and the Borrower is required to pledge one
hundred percent (100%) of the capital stock of Catalina Merchandising owned by
it and to pledge, or cause Catalina Merchandising, to pledge, all Notes from
Catalina Merchandising to the Borrower and all Notes from the Borrower to
Catalina Merchandising, to the Agent to secure the Obligations; and
WHEREAS, the Banks and the Agent have agreed to amend the Credit
Agreement to provide for the foregoing, subject to the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged; the parties hereto agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended as
follows:
a. Section 2.3(a) of the Credit Agreement is hereby amended as follows:
Section 2.3 INTEREST AND FEES ON LOANS.
a. Rates on Loans Except for the Non-Revolving Advance, each Loan shall
bear interest on the unpaid principal amount thereof until due whether by
acceleration or otherwise at a rate determined by reference to Prime Rate Loan
or LIBOR Loan.
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The applicable basis for determining the rate of interest shall be selected by
Borrower, at the time that the Notice of Borrowing is given pursuant to Section
2.2 or at the time a Notice of Conversion/Continuation is given pursuant to
Section 2.2. If on any Day any Loan is outstanding with respect to which such a
notice has not been delivered to Agent in accordance with the terms of this
Agreement specifying the basis for determining the rate of interest then for
that Day the Loan shall bear interest as set forth herein for a Prime Rate Loan.
The Loan shall bear interest as follows:
(i) A Prime Rate Loan at a fluctuating rate per annum equal to the
Prime Rate; or
(ii) Through June 30, 1996, a LIBOR Loan at a rate per annum equal
to the sum of the LIBOR plus 220 basis points (2.2%); or
(iii) After June 30, 1996, a LIBOR Loan at a rate per annum equal
to the sum of the LIBOR plus the LIBOR Spread (basis points) determined in
accordance with the Senior Funded Debt to Earnings Before Interest, Taxes,
Depreciation and Amortization (Sr. FD/EBITDA) ratio and the Earnings Before
Interest and Taxes to Interest (EBIT/I) ratio indicated below determined as of
the end of the preceding calendar quarter and calculated on an annualized basis
for the quarter ending June 30, 1996 and calculated on a rolling four (4)
quarter basis for the end of each quarter thereafter, any such change in the
rate per annum to be effective on the first day of the fiscal quarter after the
fiscal quarter in which financial statements are required to be furnished to the
Agent as provided herein:
SR. FD/EBITDA EBIT/I LIBOR Spread
(basis points)
/greater than/2.0:1/less than equal to/3.0:1 /more than/3.0:1 160
/greater than/2.0:1/less than equal to/3.0:1 /less than equal to/3.0:1 180
/greater than/3.0:1/less than equal to/4.0:1 --- 200
/greater than/4.0:1/less than equal to/5.0:1 --- 220
/greater than/5.0:1 --- 250
The Non-Revolving Advance at a fluctuating rate per annum equal to the Prime
Rate plus one hundred (100) basis points (1.0%), effective October 31, 1995.
3
b. Section 2.13(b) of the Credit Agreement is hereby deleted, and in
lieu thereof, there is substituted the following:
"(b) STANDBY LETTERS OF CREDIT. Each Standby Letter of Credit shall
(i) have an expiration date not later than the earlier of (A) 365
days after the date of issuance of such Letter of Credit (not
including any provision, consented to by the Banks, providing for
the automatic extension of the term of such Letter of Credit for an
additional period of time unless the Agent gives notice to the
beneficiary and the Borrower of its election not to extend the term
of such Letter of Credit), or (B) the Termination Date, and (ii) be
used only to secure (A) bid, tender, customs, surety, payment,
performance or similar bonds required by the Borrower or its
Subsidiaries in the ordinary course of business, (B) to partially
secure the obligations of Catalina Canada in an amount not to exceed
One Million One Hundred Thousand Dollars ($1,100,000.00) in
connection with the financing of the operating requirements and
currency conversion risks for Catalina Canada, (C) to partially
secure the guaranty of the Borrower to the Agent of the obligation
of Meridian to the Agent in an amount not to exceed Six Hundred
Thousand Dollars ($600,000.00) in connection with a direct-pay
letter of credit issued by the Agent to secure tax exempt bonds
issued by the State of Mississippi for the purpose of financing the
construction of a manufacturing facility for Meridian in Meridian,
Mississippi, (D) partially secure the obligations of Catalina
Industries, Inc. d/b/a Dana Lighting to the Agent in an amount not
to exceed One Million Two Hundred Thousand Dollars ($1,200,000.00)
in connection with a direct-pay letter of credit issued by the Agent
to secure taxable variable rate industrial development revenue bonds
issued by the Mississippi Business Finance Corporation for the
purpose of financing the acquisition, construction and equipping of
a distribution facility for Catalina Industries, Inc. d/b/a Dana
Lighting in Tupelo, Mississippi (the "Tupelo Project") and (E) with
the consent of all the Banks, for other general corporate purposes."
c. Section 5.7 of the Credit Agreement is hereby deleted, and in lieu
thereof, there is substituted the following:
"Section 5.7 TRANSACTIONS WITH AFFILIATES.
Effect any transaction with any Affiliate [except for transactions
among the Borrower and Guarantors (a) involving Inventory at not
less than cost or (b)
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involving Accounts at not less than the face value thereof) on a
basis less favorable to such Borrower, Guarantor or Subsidiary, as
the case may be, than would at the time be obtainable for a
comparable transaction in arms-length dealing with an unrelated
third party, except this Section 5.7 shall not prohibit any
transaction permitted pursuant to Section 5.18(a) or (g) . "
d. The definition of "Permitted Guaranty" as defined in Section 11.1(a)
of the Credit Agreement is hereby deleted and, in lieu thereof, there is
substituted the following:
"PERMITTED GUARANTY" means a Guaranty that is (i) an endorsement of
a negotiable instrument for collection in the ordinary course of
business, (ii) subject to the limitations contained in Section
5.11, a Guaranty of any Debt of any Guarantor, (iii) a Guaranty by
the Borrower of Operating Leases of any Guarantor reasonably
required in its ordinary operations, (iv) a Guaranty of the Debt of
Go-Gro Industries Limited, a Hong Kong corporation, for loans not in
excess of Four Million Four Hundred Thousand Dollars
($4,400,000.00), to fund its working capital needs, (v) a Guaranty
of the Debt of Go-Gro Industries Limited, or the debt of a Chinese
cooperative joint venture controlled by Go-Gro Industries Limited,
for loans not in excess of $1,200,000.00 to fund equipment
purchases, or (vi) a Guaranty of the Debt of Foreign Subsidiaries
(other than Catalina Canada and Go-Gro Industries Limited) provided
that such Debt of said Foreign Subsidiaries shall not exceed at any
time the total amount of $1,000,000 and further provided that
Borrower shall notify the Agent in writing prior to guaranteeing any
Debt of said Foreign Subsidiaries."
e. Annex I to the Credit Agreement is hereby deleted, and in lieu
thereof, there is substituted Annex I attached hereto as Exhibit "A."
2. AMENDMENTS TO SECURITY AGREEMENT. The Security Agreement is hereby amended as
follows;
a. The Security Agreement, a copy of which is attached as Exhibit "B,"
is hereby amended to add as a signatory thereto and as a Pledgor, as defined in
said Security Agreement, Catalina Merchandising, Inc., a Florida corporation,
and by executing this Eighth Amendment, said Catalina Merchandising, Inc. hereby
mortgages, pledges and collaterally assigns to the Agent, and grants to the
Agent, for the benefit of the Banks, a continuing
5
security interest in, and a continuing lien upon, all of the Collateral and
agrees to all of the terms and conditions of said Security Agreement and hereby
acknowledges and represents that it is a Pledgor under said Security Agreement
and that all covenants and representations and warranties of the Pledgor
contained in said Security Agreement are true and correct as of the date hereof.
b. Annex I to said Security Agreement is hereby deleted and, in lieu
thereof, there is substituted Annex I attached hereto as Exhibit "C."
3. AMENDMENTS TO STOCK AND NOTES PLEDGE. The Stock and Notes Pledge is hereby
amended as follows:
a. The Stock and Notes Pledge, a copy of which is attached as Exhibit
"D," is hereby amended to add as a signatory thereto and as a Pledgor, as
defined in said Stock and Notes Pledge, Catalina Merchandising, Inc., a Florida
corporation, and by executing this Eighth Amendment, said Catalina
Merchandising, Inc. hereby pledges and deposits with the Agent all of such
Pledgor's right, title and interest in and to the Securities (as defined in said
Stock and Notes Pledge) and agrees to all of the terms and conditions of said
Stock and Notes Pledge and hereby acknowledges and represents that it is a
Pledgor under said Stock and Notes Pledge and that all covenants and
representations and warranties of the Pledgor contained in said Stock and Notes
Pledge are true and correct as of the date hereof.
b. Annex I to the Stock and Notes Pledge is hereby deleted and, in lieu
thereof, there is substituted Annex I attached hereto as Exhibit "E."
c. Annex II to the Stock and Notes Pledge is hereby deleted and, in
lieu thereof, there is substituted Annex II attached hereto as Exhibit "F."
d. Annex III to the Stock and Notes Pledge is hereby deleted and, in
lieu thereof, there is substituted Annex III attached hereto as Exhibit "G."
4. COUNTERPARTS. The Eighth Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be
binding upon all parties, their successors and permitted assigns.
5. CAPITALIZED TERMS. All capitalized terms contained herein shall have the
meanings assigned to them in the Credit Agreement unless the context herein
otherwise dictates or unless different meanings are specifically assigned to
such terms herein.
6
6. RATIFICATION OF LOAN DOCUMENTS: MISCELLANEOUS. The Credit Agreement as
amended hereby, and all other Loan Documents shall remain in full force and
effect in this Eighth Amendment to Credit Agreement shall not be deemed a
novation. Each and every reference to the Credit Agreement and any other Loan
Documents shall be deemed to refer to the Credit Agreement as amended by the
Eighth Amendment. The Borrower and the Guarantors hereby acknowledge and
represent that the Loan Documents, as amended, are, as of the date hereof, valid
and enforceable in accordance with their respective terms and are not subject to
any defenses, counterclaims or right of set-offs whatsoever.
7. GOVERNING LAW. THIS EIGHTH AMENDMENT SHALL BE EFFECTIVE UPON ACCEPTANCE BY
THE BANKS IN FLORIDA AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
7
IN WITNESS WHEREOF, the parties have executed this Eighth Amendment as
of the day and year first above written.
BORROWER:
CATALINA LIGHTING, INC.
By: /s/ DEAN RAPPAPORT
---------------------------------
Dean Rappaport,
Executive Vice President
(CORPORATE SEAL)
GUARANTORS:
EACH OF THE CORPORATIONS LISTED
ON ANNEX I HERETO
CATALINA INDUSTRIES, INC., d/b/a Dana
Lighting
By: /s/ DEAN RAPPAPORT
---------------------------------
Dean Rappaport,
Vice President
CATALINA REAL ESTATE TRUST, INC.
By: /s/ DEAN RAPPAPORT
---------------------------------
Dean Rappaport,
Vice President
ANGEL STATION, INC.
By: /s/ DEAN RAPPAPORT
---------------------------------
Dean Rappaport,
Vice President
8
MERIDIAN LAMPS, INC.
By: /s/ DEAN RAPPAPORT
---------------------------------
Dean Rappaport,
Vice President
MERIDIAN LAMPS DEVELOPMENT, INC.
By: /s/ DEAN RAPPAPORT
---------------------------------
Dean Rappaport,
Vice President
CATALINA ADMINISTRATIVE CORPORATION
By: /s/ DEAN RAPPAPORT
---------------------------------
Dean Rappaport,
Vice President
CATALINA MERCHANDISING, INC.
By: /s/ DEAN RAPPAPORT
---------------------------------
Dean Rappaport,
Vice President
9
ACKNOWLEDGEMENT
DISTRICT OF COLUMBIA, ss.:
WASHINGTON, D.C.
On this the 4th day of October, 1996, personally appeared Dean
Rappaport, as the Executive Vice President of CATALINA LIGHTING, INC., a Florida
corporation, and before me executed the attached Eighth Amendment to Third
Amended and Restated Credit Agreement, Third Amendment to Second Amended and
Restated Security Agreement and Fourth Amendment to Third Amended and Restated
Stock and Notes Pledge dated as of October 4, 1996, by and among Catalina
Lighting, Inc. (the "Borrower"), the corporations listed on ANNEX I thereto (the
"Guarantors"), the Banks signatories to the Credit Agreement (the "Banks") and
SunTrust Bank, Central Florida, National Association, a national banking
association, as Agent, acting in his corporate capacity on behalf of the
Borrower and he was so authorized to do.
IN WITNESS WEEREOF, I have hereunto set my hand and official seal, in
the state and county aforesaid.
/s/ EVELYN W. WRIGHT
------------------------------------------
Signature of Notary Public, District of
Columbia
/s/ EVELYN W. WRIGHT
------------------------------------------
(Print, Type or Stamp Commissioned Name of
Notary Public)
Personally known _____ ; OR Produced
identification __X__
Type of identification produced: Drivers
License from State of Florida
(Notarial Seal)
AGENT:
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATI0N
By: /s/ DAVID E. CROW
----------------------------------
David E. Crow
First Vice President
THE BANKS:
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By: /s/ DAVID E. CROW
----------------------------------
David E. Crow
First Vice President
FIRST UNION NATIONAL BANK OF FLORIDA
By:
---------------------------------
Name:
---------------------------
Title:
---------------------------
NATIONAL CANADA FINANCE CORP.
By:
-----------------------------------
Michael S. Bloomenfeld
Vice President
10
ACKNOWLEDGMENT
STATE OF GEORGIA
COUNTY OF FULTON
On this the 10th day of October, 1996, personally appeared David E.
Crow, as a First Vice President of SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL
ASSOCIATION, a national banking association (the "Bank"), and before me executed
the attached Eighth Amendment to Third Amended and Restated Credit Agreement,
Third Amendment to Second Amended and Restated Security Agreement and Fourth
Amendment to Third Amended and Restated Stock and Notes Pledge dated as of
October 4, 1996, by and among Catalina Lighting, Inc. (the "Borrower"), the
corporations listed on ANNEX I thereto (the "Guarantors"), the Banks signatories
to the Credit Agreement (the "Banks") and SunTrust Bank, Central Florida,
National Association, a national banking association, as Agent (the "Agent"),
acting in his corporate capacity on behalf of the Bank and the Agent and he was
so authorized to do.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal, in
the state and county aforesaid.
/s/ Susan C. Pilcher
--------------------------------------------
Signature of Notary Public, State of Georgia
/s/ Susan C. Pilcher
---------------------------------------------
(Print, Type or Stamp Commissioned Name of
Notary Public)
Personally known X; OR Produced
identification _____
Type of identification produced:____________
____________________________________________
(Notarial Seal)
AGENT:
SUNTRUST BANK CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By:
-------------------------------------
David E. Crow
First Vice President
THE BANKS:
SUNTRUST BANK CENTRAL FLORIDA
NATIONAL ASSOCIATION
By:
-------------------------------------
David E. Crow
First Vice President
FIRST UNION NATIONAL BANK OF FLORIDA
By: /s/ MARGARITA M. ALFONSO
-------------------------------------
Name: Margarita M. Alfonso
Title: Vice President
NATIONAL CANADA FINANCE CORP.
By:
-------------------------------------
Michael S. Bloomenfeld
Vice President
10
AGENT:
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By:
-------------------------------------
David E. Crow
First Vice President
THE BANKS:
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By:
-------------------------------------
David E. Crow
First Vice President
FIRST UNION NATIONAL BANK OF FLORIDA
By:
---------------------------------
Name:
---------------------------
Title:
---------------------------
NATIONAL CANADA FINANCE CORP.
By: /s/ MICHAEL S. BLOOMENFELD
-------------------------------------
Michael S. Bloomenfeld
Vice President
10
EXHIBIT "A"
ANNEX I TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
GUARANTORS
CAPITAL STOCK
AUTHORIZED ISSUED AND
NAME CAPITAL STOCK OUTSTANDING*
- ---- ------------- ------------
Catalina Industries, Inc.
f/k/a Dana Lighting, Inc., 10,000 shares 100 shares
d/b/a Dana Lighting Common Stock
$1 par value
Catalina Real Estate
Trust, Inc. 10,000 shares 100 shares
Common Stock
$1 par value
Angel Station, Inc. 1000 shares 1000 shares
Common Stock
$0.01 par value
Meridian Lamps, Inc. 1000 shares 1000 shares
Common Stock
$0.01 par value
Meridian Lamps 1000 shares 1000 shares
Development, Inc. Common Stock
$0.01 par value
Catalina Administrative 1000 shares 1000 shares
Corporation Common Stock
$0.01 par value
Catalina Merchandising, 1000 shares 1000 shares
Inc. Common Stock
$0.01 par value
* All issued and outstanding Capital Stock is owned by the Borrower.