Exhibit 10.1(b)

 

CONSENT AND AMENDMENT NO. 1

TO LOAN AND SECURITY AGREEMENT

 

CONSENT AND AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (“Amendment No. 1”),
dated as of December 29, 2004, by and among Congress Financial Corporation, in
its capacity as agent pursuant to the Loan Agreement (as hereinafter defined)
acting for and on behalf of the financial institutions which are parties thereto
as lenders (in such capacity, “Agent”), the financial institutions which are
parties to the Loan Agreement as lenders (individually, each a “Lender” and
collectively, “Lenders”), Catalina Industries, Inc., Catalina Merchandising,
Inc., Ring Lamp Company Limited, BMAC Limited, Lancer Products Limited, Grove
Products (Caravan Accessories) Limited, Lighten Point Corporation Europe
Limited, Arctic Products Limited, Van-Line Limited and Catalina International
Limited (individually, each a “Borrower” and collectively, “Borrowers”), British
Syphon Industries Limited, Graystone Ring Limited, Ring Group Limited, Ring
Parts Limited, Marshall’s Universal Limited, Hovekey Limited, Newton Mill
Limited, Ring Limited, Catalina Lighting, Inc. and Meridian Lamps, Inc.
(individually, each a “Guarantor” and collectively, “Guarantors”).

 

W I T N E S S E T H :

 

WHEREAS, Agent, Lenders, Borrowers and Guarantors have entered into financing
arrangements pursuant to which Lenders (or Agent on behalf of Lenders) have made
and may make loans and advances and provide other financial accommodations to
Borrowers as set forth in the Loan and Security Agreement, dated December 23,
2003, by and among Agent, Lenders, Borrowers and Guarantors (as the same may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced the “Loan Agreement”) and the other agreements, documents and
instruments referred to therein or at any time executed and/or delivered in
connection therewith or related thereto, including, but not limited to, this
Amendment No. 1 (all of the foregoing, together with the Loan Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, being collectively referred to herein as the
“Financing Agreements”);

 

WHEREAS, Borrowers have requested that Agent, Required Lenders and UK Term B
Loan Lenders consent to the amendment and restatement of the Restated Holding
Note for the purpose of permitting additional advances in the aggregate
principal amount of up to $3,500,000 to be advanced by International to Holding
and agree to amend the Loan Agreement as hereinafter provided and Agent,
Required Lenders and UK Term B Loan Lenders are agreeable to such request, but
only on the terms and subject to the conditions contained herein; and

 

WHEREAS, by this Amendment No. 1, Agent, Required Lenders, UK Term B Loan
Lenders, Borrowers and Guarantors wish and intend to evidence such consent and
amendments.

 

NOW, THEREFORE, in consideration of the foregoing, the mutual agreements and

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covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1. Definitions.

 

1.1 Additional Definitions. As used herein, the following terms shall have the
respective meanings given to them below and the Loan Agreement and the other
Financing Agreements are hereby amended to include, in addition and not in
limitation, the following definitions:

 

(a) “Amendment No. 1” shall mean Consent and Amendment No. 1 to Loan and
Security Agreement by and among Borrower, Guarantors, Agent and Lenders, as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.

 

(b) “Second Restated Holding Note” shall mean the Restated Holding Note as
restated to permit additional advances (in excess of the amount permitted as of
the date hereof) of up to $3,500,000 to be advanced by International to Holding,
as the same now exists and may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.

 

1.2 Interpretation. Capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed to them in the Loan
Agreement.

 

2. Consent. Agent, Required Lenders and UK Term B Loan Lenders hereby consent,
subject to the terms and conditions set forth in this Amendment No. 1, to the
making by International of additional loan(s) to Holding in an aggregate amount
of up to $3,500,000 as evidenced by the Second Restated Holding Note; provided,
that, (i) each of the conditions set forth in Section 9.10(g) of the Loan
Agreement shall have been satisfied with respect to such loan and the Second
Restated Holding Note, in each case as determined by Agent, (ii) on and after
the date hereof, each reference in the Loan Agreement and the other Financing
Agreements to the “Restated Holding Note” shall refer, and shall be deemed to
refer, to the Second Restated Holding Note and (iii) as of the date of the
making by International of such loan to Holding and after giving effect thereto,
no Default or Event of Default shall exist or have occurred and be continuing.

 

3. Indebtedness. Section 9.9(l) is hereby amended by adding the following at the
end thereof:

 

“(b) of Catalina Asia Ltd. under the “Banking Facilities: Catalina Asia Ltd.”
with Standard Chartered Bank, dated December 2, 2003, in the maximum principal
amount of HK $41,600,000 and in respect of which the outstanding principal
balance as of December 29, 2004 is HK $24,845,658.”

 

4. Adjusted Tangible Net Worth. Schedule 9.18(a) of the Loan Agreement is hereby
deleted in its entirety and Schedule 9.18(a) to the Loan Agreement as appended
hereto is substituted therefor.

 

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5. Leverage Ratio. Schedule 9.19(a) of the Loan Agreement is hereby deleted in
its entirety and Schedule 9.19(a) to the Loan Agreement as appended hereto is
substituted therefor.

 

6. Additional Representations, Warranties and Covenants. Borrowers and
Guarantors represent, warrant and covenant with and to Agent and Lenders as
follows, which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof, the truth and accuracy of, or
compliance with each, together with the representations, warranties and
covenants in the other Financing Agreements, being a continuing condition of the
making of Loans by Lenders (or Agent on behalf of Lenders) to Borrowers:

 

6.1 neither the execution, delivery and performance of this Amendment No. 1, or
any other Financing Agreements in connection herewith, nor the consummation of
the transactions herein or therein contemplated, are in contravention of law or
any indenture, agreement or undertaking to which any Borrower or Guarantor is a
party or by which any Borrower or Guarantor or its property are bound, or
violates any provision of the Certificate of Incorporation or By-Laws (or
similar governing documents) of any Borrower or Guarantor;

 

6.2 no consent, approval or other action of, or filing with, or notice to any
Governmental Authority is required in connection with the execution, delivery
and performance of this Amendment No. 1;

 

6.3 this Amendment No. 1 has been duly executed and delivered by each Borrower
and Guarantor and the agreements and obligations of each Borrower and Guarantor
contained herein constitute legal, valid and binding obligations of each
Borrower and Guarantor enforceable against each Borrower and Guarantor in
accordance with the terms hereof;

 

6.4 all of the representations and warranties set forth in the Loan Agreement
and the other Financing Agreements, each as amended hereby, are true and correct
in all material respects on and as of the date hereof as if made on the date
hereof, except to the extent any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall have been
true and correct in all material respects as of such date; and

 

6.5 After giving effect to the terms of this Amendment No. 1, no Default or
Event of Default exists or has occurred and is continuing.

 

7. Conditions. The amendments contained herein shall only be effective upon the
satisfaction of each of the following conditions in a manner satisfactory to
Agent:

 

7.1 Agent shall have received an executed original or executed counterparts of
this Amendment No. 1, duly authorized, executed and delivered by each of the
respective parties hereto; and

 

7.2 After giving effect to the terms of this Amendment No. 1, no Default or
Event of Default shall exist or have occurred and be continuing.

 

8. Fees. In consideration of the consent and amendments set forth herein,
Borrowers shall on the date hereof pay to Agent: (a) for its individual benefit,
a fee in the amount of

 

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$25,000 and (b) for the benefit of Burdale Financial Limited, a fee in the
amount of £25,000, or Agent, at its option, may charge the account(s) of
Borrowers maintained by Agent the amount of such fees, all of which fees are
earned as of the date hereof and shall constitute part of the Obligations.

 

9. Effect of this Amendment. This Amendment No. 1 constitutes the entire
agreement of the parties with respect to the subject matter hereof and thereof,
and supersedes all prior oral or written communications, memoranda, proposals,
negotiations, discussions, term sheets and commitments with respect to the
subject matter hereof and thereof. Except as expressly amended pursuant hereto,
no other changes or modifications or waivers to the Financing Agreements are
intended or implied, and in all other respects the Financing Agreements are
hereby specifically ratified, restated and confirmed by all parties hereto as of
the effective date hereof. To the extent that any provision of the Loan
Agreement or any of the other Financing Agreements are inconsistent with the
provisions of this Amendment, the provisions of this Amendment shall control.

 

10. Further Assurances. Borrowers and Guarantors shall execute and deliver such
additional documents and take such additional action as may be requested by
Agent to effectuate the provisions and purposes of this Amendment No. 1.

 

11. Governing Law. The rights and obligations hereunder of each of the parties
hereto shall be governed by and interpreted and determined in accordance with
the internal laws of the State of New York but excluding any principles of
conflicts of law or other rule of law that would cause the application of the
law of any jurisdiction other than the laws of the State of New York.

 

12. Binding Effect. This Amendment No. 1 shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.

 

13. Counterparts. This Amendment No. 1 may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment No. 1, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto. Delivery of an executed counterpart of this
Amendment No. 1 by telecopier shall have the same force and effect as delivery
of an original executed counterpart of this Amendment No. 1. Any party
delivering an executed counterpart of this Amendment No. 1 by telecopier also
shall deliver an original executed counterpart of this Amendment No. 1, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment No. 1 as to such
party or any other party.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
duly executed and delivered by their authorized officers as of the day and year
first above written.

 

BORROWERS CATALINA INDUSTRIES, INC. By:  

/s/ Gary Rodney

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Title:   CFO CATALINA MERCHANDISING, INC. By:  

/s/ Gary Rodney

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Title:   CFO RING LAMP COMPANY LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director BMAC LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director

 

[SIGNATURES CONTINUE ON NEXT PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

LANCER PRODUCTS LIMITED

By:

 

/s/ John Hall

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Title:

 

Director

By:

 

/s/ Anthony Welham

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Title:

 

Director

GROVE PRODUCTS (CARAVAN ACCESSORIES) LIMITED

By:

 

/s/ John Hall

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Title:

 

Director

By:

 

/s/ Anthony Welham

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Title:

 

Director

LIGHTEN POINT CORPORATION EUROPE LIMITED

By:

 

/s/ John Hall

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Title:

 

Director

By:

 

/s/ Anthony Welham

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Title:

 

Director

CATALINA INTERNATIONAL LIMITED

By:

 

/s/ Gary Rodney

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Title:

 

Director

By:

 

/s/ Robert Varakian

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Title:

 

Director

 

[SIGNATURES CONTINUE ON NEXT PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

ARCTIC PRODUCTS LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director VAN-LINE LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director GUARANTORS CATALINA LIGHTING, INC. By:  

/s/ Gary Rodney

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Title:   CFO MERIDIAN LAMPS, INC. By:  

/s/ Gary Rodney

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Title:   CFO

 

[SIGNATURES CONTINUED ON NEXT PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

BRITISH SYPHON INDUSTRIES LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director GRAYSTONE RING LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director RING GROUP LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director RING PARTS LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director

 

[SIGNATURES CONTINUE ON NEXT PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

MARSHALL’S UNIVERSAL LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director HOVEKEY LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director NEWTON MILL LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director RING LIMITED By:  

/s/ John Hall

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Title:   Director By:  

/s/ Anthony Welham

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Title:   Director

 

[SIGNATURES CONTINUE ON NEXT PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

AGREED AND ACCEPTED: AGENT

CONGRESS FINANCIAL CORPORATION (FLORIDA), as Agent

By:  

/s/ Josephine Norris

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Title:   SVP LENDERS

CONGRESS FINANCIAL CORPORATION (FLORIDA)

By:  

/s/ Josephine Norris

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Title:   SVP BURDALE FINANCIAL LIMITED By:  

/s/ Ian Conway

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Title:   Vice President SABERASU JAPAN INVESTMENTS II B.V. By:  

/s/ B. S. Hummel

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Title:   Man. Director By:  

/s/ Daj Hoogenkamp

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Title:   Managing Director

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Schedule 9.18(a)

to Loan and Security Agreement

 

Period

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   Adjusted Tangible
Net Worth

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from the date hereof through and including March 31, 2004

   US$ 19,000,000

April 1, 2004 through and including June 30, 2004

   US$ 20,000,000

July 1, 2004 through and including September 30, 2004

   US$ 21,000,000

October 1, 2004 through and including December 31, 2004

   US$ 21,000,000

January 1, 2005 through and including March 31, 2005

   US$ 22,000,000

April 1, 2005 through and including June 30, 2005

   US$ 23,000,000

July 1, 2005 through and including September 30, 2005

   US$ 24,000,000

October 1, 2005 through and including December 31, 2005

   US$ 26,000,000

January 1, 2006 through and including March 31, 2006

   US$ 27,000,000

April 1, 2006 through and including June 30, 2006

   US$ 28,000,000

July 1, 2006 through and including September 30, 2006

   US$ 29,000,000

October 1, 2006 and at all times thereafter

   US$ 30,000,000

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Schedule 9.19(a)

to Loan and Security Agreement

 

Period

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   Leverage
Ratio

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from the date hereof through and including December 31, 2003

   2.75:1.0

from January 1, 2004 through and including March 31, 2004

   2.9:1.0

from April 1, 2004 through and including June 30, 2004

   2.75:1.0

from July 1, 2004 through and including December 31, 2004

   3.75:1.0

from January 1, 2005 through and including March 31, 2005

   3.50:1.0

from April 1, 2005 through and including June 30, 2005

   3.0:1.0

from July 1, 2005 through and including September 30, 2005

   2.5:1.0

from October 1, 2005 and at all times thereafter

   2.5:1.0