EXHIBIT 10.163
NINTH AMENDMENT TO
LETTER OF CREDIT AGREEMENT
THIS NINTH AMENDMENT TO LETTER OF CREDIT AGREEMENT (the "Ninth
Amendment") dated as of September 30, 1998 by and among CATALINA INDUSTRIES,
INC. D/B/A DANA LIGHTING, a Florida corporation (the "Company"), the
corporations designated as guarantors (collectively, the "Guarantors") and
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION F/K/A SUN BANK, NATIONAL
ASSOCIATION, a national banking association (the "Bank").
WITNESSETH:
WHEREAS, the Company, Guarantors and the Bank have entered into that
certain Letter of Credit Agreement dateD as of May 1, 1995, as amended by that
certain First Amendment to Letter of Credit Agreement dated as of June 30, 1995,
as further amended by that certain Second Amendment to Letter of Credit
Agreement and First Amendment to Security Agreement dated as of December 28,
1995, as further amended by that certain Third Amendment to Letter of Credit
Agreement dated as of March 27, 1996, as further amended by that certain Fourth
Amendment to Letter of Credit Agreement dated as of December 30, 1996, as
further amended bY that certain Fifth Amendment to Letter of Credit Agreement
dated as of March 31, 1997, as further amended by that certain Sixth Amendment
to Letter of Credit Agreement dated as of September 30, 1997, as further amended
by that certain Seventh Amendment to Letter of Credit Agreement dated as of
December 31, 1997, and as further amended by that certain Eighth Amendment to
Letter of Credit Agreement dated as of March 31, 1998 (as amended, the "Letter
of Credit Agreement"); and
WHEREAS, the Company and the Guarantors have requested that the Letter
of Credit Agreement be amended to revise certain financial covenants contained
in Annex VI attached to said Letter of Credit Agreement and incorporated therein
by reference; and
WHEREAS, the Bank has agreed to amend the Letter of 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 LETTER OF CREDIT AGREEMENT. The Letter of Credit
Agreement is amended as follows:
a. Section 5.12, contained in Annex VI attached to the Letter of
Credit Agreement, is hereby deleted and, in lieu thereof, there is substituted
the following:
"Section 5.12. MINIMUM CONSOLIDATED TANGIBLE NET WORTH PLUS
SUBORDINATED DEBT. Permit its Minimum Consolidated tangible net worth
plus Subordinated Debt to be less than $36,000,000.00 from the date
hereof until September 29, 1996; $39,000,000.00 from September 30, 1996
until March 30, 1997; $34,500,000.00 from March 31, 1997 until June 29,
1997; $35,000,000.00 from June 30, 1997 until September 29, 1997;
$35,500,000.00 from September 30, 1997 until December 30, 1997;
$35,750,000.00 from December 31, 1997 until March 30, 1997;
$36,250,000.00 from March 31, 1998 until June 29, 1998; $37,250,000.00
from June 30, 1998 until September 29, 1998; $38,250,000 from September
30, 1998 until December 30, 1998; $38,750,000.00 from December 31, 1998
until March 30, 1999; $39,250,000.00 from March 31, 1999 until June 29,
1999; $40,250,000.00 from June 30, 1999 until September 29,1999;
$41,250,000.00 from September 30, 1999 until December 30, 1999;
$41,750,000.00 from December 31, 1999 until March 30, 2000; and
$42,250,000.00 as at March 31, 2000 and at all times thereafter
provided, however, in the event Catalina Lighting, Inc. purchases up to
$2,000,000.00 worth of its issued and outstanding publicly traded
common stock and at the time of said purchase there is no default under
any other provision of the Credit Agreement, then the Minimum
Consolidated Tangible Net Worth Plus Subordinated Debt covenant amounts
provided above shall be reduced by the amount of said stock purchases
up to, but not to exceed, $2,000,000.00.
b. Section 5.14, contained in Annex VI attached to the Letter of Credit
Agreement, is hereby deleted and, in lieu thereof, there is substituted the
following:
"Section 5.14. INTEREST COVERAGE RATIO. Permit the ratio of (a) the sum
of (i) Consolidated Pre-tax Income PLUS
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(ii) Consolidated Interest Charges to (b) Consolidated Interest
Charges, to be less than 1.0:1 for the one (1) calendar quarterly
period ending December 31, 1995; less than 0.60:1 for the immediately
preceding two (2) calendar quarterly periods ending March 31, 1996;
less than 1.25:1 for the immediately preceding three ( 3) calendar
quarterly periods ending June 30, 1996; less than 1.75:1 for the
immediately preceding four (4) calendar quarterly period ending
September 30, 1996; less than 1.25:1 for the immediately preceding four
(4) calendar quarterly periods ending December 31, 1996; excluding the
effect of the actual pretax charge to earnings previously disclosed to
the Agent and the Banks not to exceed $9,859,826.00 incurred during the
quarterly period ending March 31, 1997, less than 1.00:1 for the
immediately preceding four (4) calendar quarterly periods ending March
31, 1997; excluding the effect of the actual pretax charge to earnings
not to exceed $432,000.00 incurred during the quarterly period ending
June 30, 1997 for all calculations for which said quarterly period is
included, less than 1.50:1 for the one (1) calendar quarterly period
ending June 30, 1997; less than 1.75:1 for the immediately preceding
two (2) calendar quarterly periods ending September 30, 1997; less than
1.40:1 for the immediately preceding three (3) calendar quarterly
periods ending December 31, 1997; less than 1.30:1 for the immediately
preceding four (4) calendar quarterly periods ending March 31, 1998;
less than 1.35:1 for the immediately preceding four (4) calendar
quarterly periods ending June 30, 1998; less tha 1.35:1 for the
immediately proceeding four (4) calander quarterly periods ending
September 30, 1998; less than 1.35:1 for the immediately preceeding
four (4) calander quarterly periods ending December 31, 1998; and less
than 2.00:1 for the immediately preceeding four (4) calander quarterly
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periods ending on the last day of each calendar quarter thereafter."
c. Section 5.18(g), contained in Annex VI attached to the Letter of
Credit Agreement, is hereby deleted and, in lieu thereof, there is substituted
the following:
the Borrower and any of its Subsidiaries may make other investments,
loans and advances in addition to those permitted by the foregoing
provisions of this Section 5.18 from time to time, provided that the
aggregate amount of such investments, loans and advances shall not
exceed $21,000,000.00 without the prior written consent of all Banks
and, further provided that not more than $3,250,000.00 of said
aggregate amount shall represent the aggregate amount of investments,
loans and advances made to Catalina Lighting Mexico, S.A. DE C.V. For
the purpose of this subsection, the $21,000,000.00 limitation referred
to above shall not include the net note receivable from Catalina Asia
in the amount not to exceed $1,000,000.00.
2. COUNTERPARTS. The Ninth 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.
3. CAPITALIZED TERMS. All capitalized terms contained herein shall have the
meanings assigned to them in the Letter of Credit Agreement unless the context
herein otherwise dictates or unless different meanings are specifically assigned
to such terms herein.
4. RATIFICATION OF LOAN DOCUMENTS: MISCELLANEOUS. The Letter of Credit Agreement
as amended hereby shall remain in full force and effect and this Ninth Amendment
to Letter of Credit Agreement shall not be deemed a novation. Each and every
reference to the Letter of Credit Agreement and any other Operative Documents
shall be deemed to refer to the Letter of Credit Agreement as amended by the
Ninth Amendment. The Company and the Guarantors hereby acknowledge and represent
that the Operative 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.
5. GOVERNING LAW. THIS NINTH AMENDMENT SHALL BE EFFECTIVE UPON ACCEPTANCE BY THE
BANK IN FLORIDA AND SHALL BE CONSTRUED IN
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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)
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IN WITNESS WHEREOF, the parties have executed this Ninth Amendment as
of the day and year first above written.
COMPANY:
CATALINA INDUSTRIES, INC.
d/b/a Dana Lighting
By: /s/ THOMAS M. BLUTH
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Thomas M. Bluth
Secretary/Treasurer
GUARANTORS:
CATALINA LIGHTING, INC.
By: /s/ THOMAS M. BLUTH
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Thomas M. Bluth
Vice President,
Secretary/Treasurer
CATALINA REAL ESTATE TRUST, INC.
By: /s/ THOMAS M. BLUTH
----------------------------------
Thomas M. Bluth
Secretary/Treasurer
ANGEL STATION, INC.
By: /s/ THOMAS M. BLUTH
----------------------------------
Thomas M. Bluth
Secretary/Treasurer
MERIDIAN LAMPS, INC.
By: /s/ THOMAS M. BLUTH
----------------------------------
Thomas M. Bluth
Secretary/Treasurer
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MERIDIAN LAMPS DEVELOPMENT, INC.
By: /s/ THOMAS M. BLUTH
----------------------------------
Thomas M. Bluth
Secretary/Treasurer
CATALINA ADMINISTRATIVE CORPORATION
By: /s/ THOMAS M. BLUTH
----------------------------------
Thomas M. Bluth
Assistant Secretary
BANK:
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION F/K/A SUN BANK,
NATIONAL ASSOCIATION
By: /s/ DAVID E. CROW
----------------------------------
David E. Crow,
Senior Vice President
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