EXHIBIT 10.207
FORBEARANCE AND AMENDATORY AGREEMENT
THIS FORBEARANCE AND AMENDATORY AGREEMENT ("Forbearance and Amendatory
Agreement") is made and entered into as of May 15, 2001, by and among CATALINA
LIGHTING, INC., a Florida corporation ("Domestic Borrower"), CATALINA
INTERNATIONAL PLC, a limited company organized under the laws of England and
Wales (Registered in England No. 03949382) ("Holdings Borrower"), and RING
LIMITED (formerly known as Ring PLC), a limited company organized under the laws
of England and Wales (Registered in England No. 29796) ("Sterling Borrower";
Domestic Borrower, Holdings Borrower and Sterling Borrower are collectively
referred to herein as the "Borrowers" and individually as a "Borrower"),
SUNTRUST BANK, a Georgia banking corporation ("SunTrust"), and the other banks
and lending institutions that are signatories to this Amendment (SunTrust and
such other banks and lending institutions, collectively, the "Lenders"),
SUNTRUST BANK, in its capacities as Administrative Agent for the Lenders (the
"Administrative Agent"), as Domestic Issuing Bank (the "Domestic Issuing Bank")
and as Domestic Swingline Lender (the "Domestic Swingline Lender"), and LASALLE
BANK NATIONAL ASSOCIATION, as successor in interest to SunTrust as the UK
Issuing Bank (the "UK Issuing Bank") and as successor in interest to SunTrust as
the UK Swingline Lender (the "UK Swingline Lender").
W I T N E S S E T H:
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WHEREAS, the Borrowers, the Lenders, the Administrative Agent, the
Domestic Swingline Lender, the Domestic Issuing Bank, SunTrust in its capacity
as UK Swingline Lender and SunTrust in its capacity as UK Issuing Bank entered
into that certain Amended and Restated Revolving Credit and Term Loan Agreement,
dated as of September 22, 2000, (as amended by that certain First Amendment to
Amended and Restated Revolving Credit and Term Loan Agreement, dated as of
December 22, 2000, as further amended by that certain Second Amendment to
Amended and Restated Revolving Credit and Term Loan Agreement, dated as of
February 9, 2001, as further amended by that certain Third Amendment to Amended
and Restated Revolving Credit and Term Loan Agreement, dated as of February 9,
2001, as further amended by that certain Fourth Amendment to Amended and
Restated Revolving Credit and Term Loan Agreement, dated as of March 30, 2001,
as further amended, restated, supplemented, or otherwise modified from time to
time, the "Credit Agreement");
WHEREAS, the Borrowers have acknowledged that an Event of Default has
occurred and is continuing under Section 10.02 of the Credit Agreement as a
result of the Borrowers' failure to maintain pursuant to Section 8.08(a) of the
Credit Agreement a Leverage Ratio of no greater than 6.75:1.00 for the Fiscal
Quarter ending as of March 31, 2001, (the "Existing Event of Default");
WHEREAS, the Borrowers have requested and the Administrative Agent and
the Required Lenders have agreed to extend the deadline to complete the
Whitewash Procedure until June 15, 2001;
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements and undertakings contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Credit Agreement shall have the
meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall from and after the date hereof refer to
the Credit Agreement as amended hereby.
2. Acknowledgments by Borrowers. Borrowers acknowledge and agree
as follows:
(a) Acknowledgment of Default. Prior to the date hereof:
(i) the Existing Event of Default existed under the Credit Agreement; (ii)
timely, adequate and proper notice of the occurrence of such Existing Event of
Default under the Credit Agreement has been received by Borrowers from Lenders
(and Borrowers waive any requirement that any such notice be in writing); (iii)
all grace periods, if any, applicable to the cure of such Existing Event of
Default after receipt of such notice have expired; (iv) said Existing Event of
Default was continuing without timely cure by Borrowers; and (v) Lenders had not
waived in any respect any or all of such Existing Event of Default or their
respective rights and remedies with respect thereto;
(b) Acknowledgment of Lenders' Right to Accelerate. That
(i) on and as of the date hereof, the Lenders have the right upon termination of
the Forbearance Period (as hereinafter defined) to accelerate and declare the
Obligations under the Credit Agreement to be immediately due and payable and to
make demand upon Borrowers for the payment in full of all such indebtedness;
(ii) such acceleration and demand for payment, if made, would be in all respects
adequate and proper; and (iii) Borrowers waive any and all further notice,
presentment, notice of dishonor or demand with respect to the Obligations under
the Credit Agreement;
(c) Acknowledgment of Indebtedness. That on and as of the
date hereof, (i) Borrowers are indebted to the Lenders in the principal amount
of $53,165,640.19; (ii) all such amounts remain outstanding and unpaid; (iii)
all such amounts are owing and payable in full, without offset, deduction or
counterclaim of any kind or character whatsoever, but are subject to increase,
decrease or other adjustment as a result of any and all interest, fees and other
charges including, without limitation, attorneys' fees and costs of collection,
which are payable to the Lenders under the Credit Documents; and
(d) Acknowledgment that Liabilities Continue in Full
Force and Effect. That the Obligations under the Credit Agreement and all other
respective liabilities and obligations of
Borrowers to the Lenders under the Credit Documents shall, except as expressly
modified herein, remain in full force and effect, and shall not be released,
impaired, diminished or in any other way modified or amended as a result of the
execution and delivery of this Agreement or by the agreements and undertakings
of the parties contained herein.
(e) Acknowledgment of Perfection of Security Interests.
That on and as of the date hereof, the security interests and liens granted to
SunTrust Bank, as Administrative Agent under the Credit Agreement and the Loan
Documents to secure the Obligations are in full force and effect, are properly
perfected and are enforceable in accordance with the terms of the Credit
Agreement.
3. Forbearance by Lenders.
(a) Forbearance Period. At the request of Borrowers,
Lenders agree to waive the Existing Event of Default, as of 12:00 noon,
prevailing Atlanta, Georgia time on May 15, 2001 until the earliest to occur of
the following times: (i) 12:00 noon, prevailing Atlanta, Georgia time on June
15, 2001; (ii) the time at which Borrowers fail to comply in any respect with
their respective covenants to Lenders set forth in Section 8 of the Credit
Agreement; or (iii) the occurrence of any Event of Default under any of the
Credit Documents (the period beginning at 12:00 noon, prevailing Atlanta,
Georgia time on May 15, 2001 and terminating on the earliest of such dates being
hereinafter referred to as the "Forbearance Period"); and
(b) Termination of Forbearance Period. Upon the
termination of the Forbearance Period pursuant to any of clauses (i) through
(iii) of paragraph (a) above, all waivers, deferrals and indulgences granted by
Lenders in paragraph (a) above shall automatically terminate, and Lenders shall
thereupon have, and shall be entitled to exercise, any and all rights and
remedies which either may have upon the occurrence of an Event of Default,
including, without limitation, the Existing Event of Default, and the
Obligations under the Credit Agreement shall become immediately due and payable,
without further notice of any kind.
4. Amendment to the Credit Agreement.
(a) Section 8.09(c) of the Credit Agreement is hereby
amended so as to read as follows:
(c) The Borrowers (other than the Sterling Borrower)
shall use all reasonable endeavors to procure that:
(i) the Sterling Borrower delists, converts to a
private limited company, completes the Whitewash Procedure,
executes the Sterling Borrower Guaranty and the UK Security
Amendment Agreement as soon as reasonably and legally
practicable and in any event no later than June 15, 2001; and
(ii) each member of the Sterling Borrower Group (other than
dormant companies) and any other member of the Sterling
Borrower Group which is or becomes a Material Foreign
Subsidiary after the date hereof, delists where necessary,
converts to a private company, completes the Whitewash
Procedures and executes a UK Subsidiary Guaranty Accession
Agreement and a UK Security Accession Agreement as soon as
reasonably and legally practicable and in any event no later
than June 15, 2001 (or in the case of any subsequent Material
Foreign Subsidiary within the later of June 15, 2001 or two
months of its becoming a Material Foreign Subsidiary).
5. Expenses. The Borrowers shall pay, at the time all other
indebtedness owing to Administrative Agent and the Lenders, the legal fees and
other expenses of the Administrative Agent, including, without limitation, legal
fees and other expenses paid or owed to King & Spalding and incurred with
respect to the creation and implementation of this Forbearance and Amendatory
Agreement and the other documents contemplated hereby. Nothing herein shall
limit the provisions relating to expenses of the Credit Agreement or other
Credit Documents.
6. Estoppel. Borrowers hereby represent and warrant that there
are no claims, causes of action, suits, debts, liens, obligations, liabilities,
demands, losses, costs and expenses (including attorneys' fees) of any kind,
character or nature whatsoever, known or unknown, fixed or contingent, which
Borrowers may have or claim to have against the Administrative Agent or the
Lenders, which might arise out of or be connected with any act of commission or
omission of the Administrative Agent or the Lenders existing or occurring on or
prior to the date of this Forbearance and Amendatory Agreement, including,
without limitation, any claims, liabilities or obligations arising with respect
to the Credit Agreement and the other Credit Documents.
7. Reservation of Rights. The Borrowers acknowledge and agree
that the Administrative Agent and the Lenders (i) have not acquiesced to any
noncompliance by the Borrowers with the exact terms of the Credit Agreement
relating to any Event of Default (other than the temporary waiver of the
Existing Event of Default granted herein), (ii) intend to strictly enforce the
terms of the Credit Agreement and the Credit Documents, in the exercise of their
sole and absolute discretion, and (iii) hereby reserve all rights, powers and
remedies under the Credit Agreement and the other Credit Documents with respect
to the Existing Event of Default (upon termination of the Forbearance Period)
and any other noncompliance with the terms of the Credit Agreement or any of the
other Credit Documents. In no event shall the Lenders' honoring of any requests
or making of any Revolving Loans, be deemed a permanent waiver of any Existing
Event of Default or any other noncompliance with the terms of the Credit
Agreement or any of the other Credit Documents that hereafter may occur.
8. Restatement of Representations and Warranties. The Borrowers
hereby restate and renew each and every representation and warranty heretofore
made by it in the Credit Agreement and the other Credit Documents as fully as if
made on the date hereof and with specific reference to this Agreement and all
other loan documents executed and/or delivered in connection herewith, but
excluding therefrom the effect of the Existing Event of Default.
9. Ratification. The Borrowers hereby restate, ratify and
reaffirm each and every term, covenant and condition set forth in the Credit
Agreement and the other Credit Documents effective as of the date hereof.
10. Release. Borrowers hereby release, acquit, and forever
discharge each of the Lenders, and each and every past and present subsidiary,
affiliate, stockholder, officer, director, agent, servant, employee,
representative, and attorney of the Lenders, from any and all claims, causes of
action, suits, debts, liens, obligations, liabilities, demands, losses, costs
and expenses (including attorneys' fees) of any kind, character, or nature
whatsoever, known or unknown, fixed or contingent, which the Borrowers may have
or claim to have now or which may hereafter arise out of or connected with any
act of commission or omission of the Lenders existing or occurring prior to the
date of this Agreement or any instrument executed prior to the date of this
Agreement including, without limitation, any claims, liabilities or obligations
arising with respect to the Credit Agreement or the other of the Credit
Documents. The provisions of this Section 11 shall be binding upon the Borrowers
and shall inure to the benefit of the Lenders, and their respective heirs,
executors, administrators, successors and assigns.
11. Receipt and Application of Payments. Borrowers acknowledge and
agree that the Administrative Agent shall be entitled during the term of this
Agreement to accept such payments and proceeds as are remitted to it pursuant to
any provision of the Credit Documents or this Agreement, that Administrative
Agent shall be entitled to apply any and all such proceeds and payments against
the liabilities and obligations owned by Borrowers to Lenders in such order of
application as Administrative Agent in its sole and absolute discretion shall
determine proper, and that the acceptance by Administrative Agent of any such
proceeds and payments as are remitted to it pursuant to the Credit Documents or
this Agreement or otherwise shall in no way affect or impair the status of the
indebtedness owed to the Lenders by the Borrowers or be deemed to be a waiver of
any Events of Default or any acquiescence therein.
12. Conditions Precedent. This Agreement shall become effective
when and only when the Administrative Agent shall have received executed
originals of this Agreement and upon receipt of all outstanding fees and
expenses owed by the Borrowers.
13. Miscellaneous.
(a) Entire Agreement. This Agreement reflects the entire
understanding of the parties with respect to the subject matter herein contained
and supersedes any prior agreements, whether written or oral, in regard thereto.
(b) Full Force and Effect. Except as expressly modified
herein during the Forbearance Period, all terms of the Credit Agreement and the
Credit Documents shall be and shall remain in full force and effect and shall
constitute the legal, valid, binding and enforceable obligations of Borrowers.
(c) No Waiver. This Agreement is not intended to operate
as, and shall not be construed as, a waiver of any Event of Default, whether
known to the Lenders or unknown, as to which all rights of Lenders shall remain
reserved.
(d) Governing Law. This Agreement shall be governed by,
and shall be construed in accordance with, the laws of the State of Georgia and
all applicable laws of the United States of America.
(e) WAIVER OF RIGHT TO JURY TRIAL. EACH BORROWER WAIVES
TRIAL BY JURY AND CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS
IS DEEMED APPROPRIATE A JUDGE OF A THE COURT OF COMPETENT JURISDICTION.
(f) Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be an original and all of which,
taken together, shall constitute but one and the same agreement among the
parties.
(g) Binding Nature. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
(h) Captions. The captions to the Sections and paragraphs
of the Agreement are for the convenience of the parties only, and are not a part
of this Forbearance and Amendatory Agreement.
(i) Time of the Essence. Time is of the essence under
this Forbearance and Amendatory Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Forbearance and
Amendatory Agreement to be executed and delivered by their respective officers
thereunto duly authorized, all as of the date first above written.
CATALINA LIGHTING, INC.,
as a Borrower
By:
------------------------------------
Name:
Title:
CATALINA INTERNATIONAL PLC,
as a Borrower
By:
------------------------------------
Name:
Title:
RING LIMITED (formerly known as
Ring PLC), as a Borrower
By:
------------------------------------
Name:
Title:
SUNTRUST BANK,
as Administrative Agent, as Domestic
Issuing Bank, as Domestic Swingline
Lender, UK Swingline Lender, UK Issuing
Bank and as a Lender
By:
------------------------------------
Name:
-------------------------------
Title:
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REPUBLIC BANK, as a Lender
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By:
Name:
BANK UNITED FSB, as a Lender
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By:
Name:
DRESDNER BANK
LATEINAMERIKA, AG, MIAMI
AGENCY, as a Lender
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By:
Name:
XXXXXXXX BANK, N.A. as a
Lender
------------------------------
By:
Name:
LASALLE BANK NATIONAL
ASSOCIATION, as a Lender
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By:
Name:
UNION PLANTERS BANK, N.A.,
as a Lender
------------------------------
By:
Name:
ACKNOWLEDGMENT AND CONSENT
PARENT GUARANTOR
The undersigned hereby acknowledges receipt of a copy of the foregoing
Forbearance and Amendatory Agreement (the "Amendment"; capitalized terms used
herein and not defined herein shall have the meanings given to them in the
Amendment), consents to the terms and provisions set forth therein, and agrees
that the Parent Guaranty, dated as of July 18, 2000, as amended and supplemented
through the date hereof (the "Parent Guaranty") made by the undersigned, in
favor of the Lenders, the Administrative Agent, the Domestic Issuing Bank, the
Domestic Swingline Lender, the U.K. Issuing Bank and the U.K. Swingline Lender,
will continue in full force and effect without diminution or impairment
notwithstanding the execution and delivery of the foregoing Amendment. The
undersigned further acknowledges and agrees that, upon effectiveness of the
foregoing Amendment and from and after the date thereof, each reference in the
Credit Agreement and all of the Credit Documents shall mean and be a reference
to the Credit Agreement and all other Credit Documents as amended by the
Amendment.
CATALINA LIGHTING, INC., as
Parent Guarantor
By:
---------------------------------
Name:
Title:
