CATALINA LIGHTING INC
<DOCUMENT>
<TYPE>EX-10.204
<SEQUENCE>3
<FILENAME>0003.txt
<TEXT>



                                                                  Exhibit 10.204

                               SECOND AMENDMENT TO
                      AMENDED AND RESTATED CREDIT AGREEMENT

            THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is entered into as of February 9, 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"), as UK
Swingline Lender (the "UK Swingline Lender") and as UK Issuing Bank (the "UK
Issuing Bank").

                              W I T N E S S E T H

         WHEREAS, the Borrowers, the Lenders, the Administrative Agent, the
Domestic Swingline Lender, the Domestic Issuing Bank, the UK Swingline Lender
and the UK Issuing Bank entered into that certain Amended and Restated Revolving
Credit and Term Loan Agreement, dated as of September 22, 2000, (as amended,
restated, supplemented, or otherwise modified from time to time, the "Credit
Agreement");

         WHEREAS, the Borrowers, the Lenders, the Administrative Agent, the
Domestic Swingline Lender, the Domestic Issuing Bank, the UK Swingline Lender
and the UK Issuing Bank entered into that certain First Amendment to Amended and
Restated Revolving Credit and Term Loan Agreement, dated as of December 22,
2000;

         WHEREAS, the Borrowers, the Lenders, the Administrative Agent, the
Domestic Swingline Lender, the Domestic Issuing Bank, the UK Swingline Lender
and the UK Issuing Bank are amending the Credit Agreement so as to make certain
changes in the terms and conditions of the Credit Agreement as are more fully
set forth herein.

         NOW THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency whereof are hereby acknowledged, the
Borrowers, the Lenders, the Administrative Agent, the Domestic Swingline Lender,
the Domestic Issuing Bank, the UK Swingline Lender and the UK Issuing Bank
hereby amend the Credit Agreement as follows:

<PAGE>

                                  A. AMENDMENT

         1.       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.       Exhibit G to the Credit Agreement is hereby replaced by the
attached Exhibit G.

         3.       Section 1.01 of the Credit Agreement is hereby amended so as
to add the following new definitions:

                  "Initial Additional Capital" shall mean a transaction or a
         series of transactions to generate funds whereby the Domestic Borrower
         (x) enters into documentation satisfactory to the Administrative Agent
         and the Lenders evidencing the Domestic Borrower's incurrence of
         Subordinated Debt, in addition to Required Subordinated Debt, which
         shall mature no earlier than the later of (i) six months after the
         Revolving Credit Termination Date, (ii) the Term A Loan Maturity Date,
         and (iii) the Term B Loan Maturity Date which shall have terms and
         conditions acceptable to Administrative Agent and the Required Lenders
         in their sole discretion, including but not limited to, matters
         involving payment blockage, scheduled payments on the Subordinated
         Debt, the definition of senior Indebtedness, and standstill provisions;
         (y) makes a sale of part of its fixed assets; or (z) accomplishes an
         equity infusion relating to the issuance of common or preferred stock,
         and whereby the net cash proceeds of such transaction or series of
         transactions shall be no less than $5,000,000.

                  "Required Subordinated Debt" shall have the meaning set forth
         in section 8.07.

                  "Secondary Additional Capital" shall mean a transaction or a
         series of transactions to generate funds whereby the Domestic Borrower
         (x) enters into documentation satisfactory to the Administrative Agent
         and the Lenders evidencing the Domestic Borrower's incurrence of
         Subordinated Debt, in addition to Required Subordinated Debt, which
         shall mature no earlier than the later of (i) six months after the
         Revolving Credit Termination Date, (ii) the Term A Loan Maturity Date,
         and (iii) the Term B Loan Maturity Date which shall have terms and
         conditions acceptable to Administrative Agent and the Required Lenders
         in their sole discretion, including but not limited to, matters
         involving payment blockage, scheduled payments on the Subordinated
         Debt, the definition of senior Indebtedness, and standstill provisions;
         (y) makes a sale of its assets; or (z)

<PAGE>

         accomplishes an equity infusion relating to the issuance of common or
         preferred stock, and whereby the net cash proceeds of such transaction
         or series of transactions shall be no less than $5,000,000; provided,
         however, any funds raised as Secondary Additional Capital shall be in
         addition to and shall not include any Initial Additional Capital.

         4.       Section 1.01 of the Credit Agreement is hereby amended so
that, from and after the date hereof, the definitions of "Applicable Base Rate
Margin," "Applicable LIBOR Margin," and "Consolidated Excess Cash Flow" set
forth therein shall read as follows:

                  "Applicable Base Rate Margin" shall mean, for the period
         commencing January 1, 2001 and continuing until such time that the
         Leverage Ratio reflected by the annual financial statements required
         under Section 8.07(a) or the quarterly financial statements for each
         Fiscal Quarter required under Section 8.07(b) is less than 3.50:1:00
         calculated as of the relevant determination date for the preceding four
         fiscal quarter period then ending, 2.00% per annum. If the Leverage
         Ratio reflected by the annual financial statements required under
         Section 8.07(a) or the quarterly financial statements for each Fiscal
         Quarter required under Section 8.07(b) becomes less than 3.50:1:00
         calculated as of the relevant determination date for the preceding four
         fiscal quarter period then ending, then, at such time, the Applicable
         Base Rate Margin shall mean the applicable percentage per annum
         determined from the chart set forth below:

                                                The Applicable Base Rate Margin
                If the Leverage Ratio is:              For the Loans is:
                -------------------------              -----------------
         Less than 1.50:1.00                                 0.75%
         Greater than or equal to                            1.00%
         1.50:1.00 but less than
         2.00:1.00
         Greater than or equal to                            1.25%
         2.00:1.00 but less than
         2.50:1.00
         Greater than or equal to                            1.50%
         2.50:1.00 but less than
         3.00:1.00
         Greater than or equal to                            1.75%
         3.00:1.00 but less than
         3.50:1.00
         Greater than or equal to                            2.00%
         3.50:1.00

                  Each change in the Applicable Base Rate Margin resulting from
         a change in the Leverage Ratio shall be effective on the second
         Business Day immediately following the date of delivery to the
         Administrative Agent of the annual financial

<PAGE>

         statements required under Section 8.07(a), or the quarterly financial
         statements for each Fiscal Quarter required under Section 8.07(b), as
         applicable, in each case together with the compliance certificate
         required by Section 8.07(c), indicating such change; provided, however,
         that for the period commencing on the Closing Date and ending on the
         six month anniversary of the Closing Date, the Applicable Base Rate
         Margin shall be 1.75% per annum. Notwithstanding the foregoing, at any
         time during which the Domestic Borrower has failed to deliver such
         financial statements and certificates when required by Section 8.07(a),
         (b), and (c), as applicable, the Applicable Base Rate Margin shall be
         2.00% per annum, which shall not include any increase in the Applicable
         Base Rate Margin contemplated in Section 8.10, until such time as the
         delinquent financial statements are delivered, at which time the
         Applicable Base Rate Margin shall be reset as provided above.
         Notwithstanding the foregoing, if the Domestic Borrower fails to obtain
         Initial Additional Capital by July 31, 2001, as specified in Section
         8.10 herein or fails to obtain Secondary Additional Capital by October
         31, 2001, as specified in Section 8.10 herein, then Applicable Base
         Rate Margin shall be increased as provided for in Section 8.10 herein.
         Provided, further, the Applicable Base Rate Margin shall remain at
         2.00% per annum, which shall not include any increase in the Applicable
         Base Rate Margin contemplated in Section 8.10, until such time that the
         Fixed Charge Coverage Ratio is greater than 1.20:1.00.

                  "Applicable LIBOR Margin" shall mean, for the period
         commencing January 1, 2001 and continuing until such time that the
         Leverage Ratio reflected by the annual financial statements required
         under Section 8.07(a) or the quarterly financial statements for each
         Fiscal Quarter required under Section 8.07(b) is less than 3.50:1:00
         calculated as of the relevant determination date for the preceding four
         fiscal quarter period then ending, 4.75% per annum. If the Leverage
         Ratio reflected by the annual financial statements required under
         Section 8.07(a) or the quarterly financial statements for each Fiscal
         Quarter required under Section 8.07(b) becomes less than 3.50:1:00
         calculated as of the relevant determination date for the preceding four
         fiscal quarter period then ending, then, at such time,

<PAGE>

         the Applicable LIBOR Margin shall mean the applicable percentage per
         annum determined from the chart set forth below:

                                                The Applicable LIBOR Margin For
                If the Leverage Ratio is:                the Loans is:
                ------------------------                 ------------
         Less than 1.50:1.00                                 1.75%

         Greater than or equal to                            2.00%
         1.50:1.00 but less than
         2.00:1.00
         Greater than or equal to                            2.25%
         2.00:1.00 but less than
         2.50:1.00
         Greater than or equal to                            2.50%
         2.50:1.00 but less than
         3.00:1.00
         Greater than or equal to                            2.75%
         3.00:1.00 but less than
         3.50:1.00
         Greater than or equal to                            3.00%
         3.50:1.00

                  Each change in the Applicable LIBOR Margin resulting from a
         change in the Leverage Ratio shall be effective on the second Business
         Day immediately following the date of delivery to the Administrative
         Agent of the annual financial statements required under Section
         8.07(a), or the quarterly financial statements for each Fiscal Quarter
         required under Section 8.07(b), as applicable, in each case together
         with the compliance certificate required by Section 8.07(c), indicating
         such change; provided, however, that for the period commencing on the
         Closing Date and ending on the six month anniversary of the Closing
         Date, the Applicable LIBOR Margin shall be 2.75% per annum.
         Notwithstanding the foregoing, at any time during which the Domestic
         Borrower has failed to deliver such financial statements and
         certificates when required by Section 8.07(a), (b), and (c), as
         applicable, the Applicable LIBOR Margin shall be 4.75% per annum, which
         shall not include any increase in the Applicable LIBOR Margin
         contemplated in Section 8.10, until such time as the delinquent
         financial statements are delivered, at which time the Applicable LIBOR
         Margin shall be reset as provided above. Notwithstanding the foregoing,
         if the Domestic Borrower fails to obtain Initial Additional Capital by
         July 31, 2001, as specified in Section 8.10 herein or fails to obtain
         Secondary Additional Capital by October 31, 2001, as specified in
         Section 8.10 herein, then Applicable LIBOR Margin shall be increased as
         provided for in Section 8.10 herein. Provided, further than in no event
         shall the Applicable LIBOR Margin for any UK Swingline Loan be less
         than 1.00%. Provided, further, the Applicable LIBOR Margin shall remain
         at 4.75% per annum, which

<PAGE>

         shall not include any increase in the Applicable Base Rate Margin
         contemplated in Section 8.10, until such time that the Fixed Charge
         Coverage Ratio is greater than 1.20:1.00.

                  "Consolidated Excess Cash Flow" shall mean, for any Fiscal
         Year, Consolidated Adjusted EBITDA (A) minus the sum of (i)
         Consolidated Interest Expense for such Fiscal Year, (ii) principal
         payments made on Consolidated Total Debt (including voluntary and
         mandatory prepayments of Consolidated Total Debt made during such
         Fiscal Year), (iii) Consolidated Tax Expense paid during such Fiscal
         Year, and (iv) Consolidated Capital Expenditures made during such
         Fiscal Year up to $2,250,000, (B) plus or minus (i) extraordinary gains
         and/or losses and (ii) changes in Consolidated Working Capital from the
         last day of the prior Fiscal Year to the last day of such Fiscal Year.

         5.       Section 5.08 (b) of the Credit Agreement is hereby amended so
as to read as follows:

                  (b) The Borrowers shall prepay the Loans in accordance with
         Section 5.08(e) below in an amount equal to one hundred percent (100%)
         of the Net Cash Proceeds from (i) the issuance of Required Subordinated
         Debt, (ii) Initial Additional Capital or (iii) Secondary Additional
         Capital, when incurred, pursuant to Section 8.10 hereof, provided that,
         so long as no Default or Event of Default has occurred and is
         continuing, and the Borrowers shall have prepaid the Loans from the Net
         Cash Proceeds of the issuance of Required Subordinated Debt pursuant to
         Section 8.10 in an amount equal to at least $7,500,000 and prepaid the
         Net Cash Proceeds of Initial Additional Capital and Secondary
         Additional Capital, the Borrowers shall be required to prepay the Loans
         in accordance with Section 5.08(e) below in an amount equal to fifty
         percent (50%) of the Net Cash Proceeds from the issuance of any other
         Subordinated Debt. Such prepayment shall be made on the day such
         Subordinated Debt transaction is consummated.

         6.       Section 8.05 of the Credit Agreement is hereby amended so as
to add the following new subsection (c):

                  (c) Deliver to the Lenders (x) such appraisals or updated
         appraisals of the fixed assets of the Credit Parties (including,
         without limitation all Equipment and real property) at the Tupelo
         Warehouse and (y) appraisals of the fixed assets of the Credit Parties
         (including, without limitation, Equipment and real property) of the
         properties located at (i) Van-Line Ltd., Britannia House, Beza Road,
         Hunsiet Leeds, LS10 2BR, England and (ii) BMAC Ltd., Broadway, Hyde
         Cheshire, SK14 4QF, England, such appraisals to be conducted by an
         appraiser, and in form and substance, reasonably satisfactory to the
         Required Lenders, in each case conducted at the expense of the Domestic
         Borrower.

<PAGE>

         7.       Section 8.07(b) and 8.07(c) of the Credit Agreement are hereby
amended so as to read as follows:

                  (b) Quarterly Financial Statements, Monthly Financial
         Statements. As soon as available and in any event within 45 days after
         the end of each Fiscal Quarter that is not the end of a Fiscal Year,
         balance sheets of the Consolidated Companies and the Sterling Borrower
         as at the end of such Fiscal Quarter presented on a consolidated basis
         and the related statements of income, retained earnings and cash flows
         of the Consolidated Companies and the Sterling Borrower for such Fiscal
         Quarter and for the portion of the Fiscal Year ended at the end of such
         Fiscal Quarter, presented on a consolidated basis setting forth in each
         case in comparative form the figures for the corresponding quarter and
         the corresponding portion of the Domestic Borrower's and the Sterling
         Borrower's previous Fiscal Year, all in reasonable detail, and
         certified by the chief financial officer of the Domestic Borrower that
         such financial statements fairly present in all material respects the
         financial condition of the Consolidated Companies and the Sterling
         Borrower as at the end of such Fiscal Quarter on a consolidated basis,
         and the results of operations and statements of cash flows of the
         Consolidated Companies and the Sterling Borrower for such Fiscal
         Quarter and such portion of the Fiscal Year, in accordance with GAAP
         consistently applied (subject to normal year-end audit adjustments and
         the absence of certain footnotes). In addition, as soon as available
         and in any event within 35 days after the end of each month that is not
         the end of a Fiscal Quarter and within 45 days after the end of each
         month that is also the end of a Fiscal Quarter, balance sheets of the
         Consolidated Companies and the Sterling Borrower as at the end of such
         month presented on a consolidated basis and the related statements of
         income, retained earnings and cash flows of the Consolidated Companies
         and the Sterling Borrower for such month, all in reasonable detail, and
         certified by the chief financial officer of the Domestic Borrower that
         such financial statements fairly present in all material respects the
         financial condition of the Consolidated Companies and the Sterling
         Borrower as at the end of such month on a consolidated basis, and the
         results of operations and statements of cash flows of the Consolidated
         Companies and the Sterling Borrower for such month, in accordance with
         GAAP consistently applied (subject to normal year-end audit adjustments
         and the absence of certain footnotes);

                  (c) No Default/Compliance Certificate. Together with the
         financial statements required pursuant to subsection (a) and with the
         financial statements required pursuant to subsection (b) above for the
         Fiscal Quarter or month as applicable, a certificate of a Senior
         Officer substantially in the form of Exhibit G, to the effect that,
         based upon a review of the activities of the Consolidated Companies and
         such financial statements during the period covered thereby, to his
         knowledge, (i) there exists no Event of Default and no Default under
         this

<PAGE>

         Agreement, or if there exists an Event of Default or a Default
         hereunder, specifying the nature thereof and the proposed response
         thereto, (ii) demonstrating in reasonable detail calculations
         demonstrating compliance with Section 8.08 and Section 9.12 as at the
         end of such Fiscal Year or such Fiscal Quarter, (iii) stating whether
         any change in GAAP or the application thereof has occurred since the
         date of the Domestic Borrower's most recently delivered audited
         financial statements, (iv) listing the outstanding balance of all
         Intercompany Notes as of the end of such period, (v) listing the
         proposed asset sales of the Consolidated Companies, including the
         projected time table for sales and contracts pending, and (vi)
         detailing and comparing the current monthly financial statements in
         narrative form as to the projected financial statements of the
         Consolidated Companies.

         8.       Section 8.10 of the Credit Agreement is hereby amended so as
to read as follows:

                  Section 8.10 Subordinated Debt Placement and Sale of Assets.
         (a) On or prior to March 31, 2002, the Administrative Agent shall have
         received documentation satisfactory to the Administrative Agent and the
         Lenders evidencing the Domestic Borrower's incurrence of not less than
         $7,500,000 in new Subordinated Debt (the "Required Subordinated Debt")
         , plus documentation satisfactory to the Administrative Agent and the
         Lenders evidencing additional capital equal to the sum of (a) such
         portion of the Initial Additional Capital that was not generated by the
         Domestic Borrower on or before July 31, 2001, or thereafter, and (b)
         such portion of the Secondary Additional Capital that was not generated
         by Domestic Borrower on or before October 31, 2001, or thereafter, and
         in the event any Subordinated Debt is included in such generation of
         capital, it shall mature no earlier than the later of (i) six months
         after the Revolving Credit Termination Date, (ii) the Term A Loan
         Maturity Date, and (iii) the Term B Loan Maturity Date which shall have
         such terms and conditions acceptable to Administrative Agent and the
         Required Lenders in their sole discretion, including but not limited
         to, matters involving payment blockage, scheduled payments on the
         Subordinated Debt, the definition of senior Indebtedness, and
         standstill provisions. Without limiting the foregoing, all Obligations,
         including the Obligations to pay principal of and interest on the Loans
         and L/C Obligations shall constitute senior Indebtedness as that or any
         similar term is defined in any instrument evidencing or applicable to
         any Subordinated Debt incurred under this Section 8.10 which shall be
         entitled to the benefits of the subordination provisions contained in a
         Subordination Agreement.

                  (b)      The Domestic Borrower shall use its best efforts to
         deliver to Administrative Agent prior to July 31, 2001, documentation
         satisfactory to the Administrative Agent and the Lenders evidencing the
         Initial Additional Capital; provided, however, if the Domestic Borrower
         fails to deliver to Administrative

<PAGE>

         Agent prior to July 31, 2001, documentation satisfactory to the
         Administrative Agent and the Lenders evidencing the Initial Additional
         Capital, the Applicable Base Rate Margin and the Applicable LIBOR
         Margin shall be increased by an additional 1.00% per annum; provided,
         further, the Domestic Borrower shall use its best efforts to deliver to
         Administrative Agent prior to October 31, 2001, documentation
         satisfactory to the Administrative Agent and the Lenders evidencing the
         Secondary Additional Capital; provided, however, if the Domestic
         Borrower fails to deliver to Administrative Agent prior to October 31,
         2001, documentation satisfactory to the Administrative Agent and the
         Lenders evidencing the Secondary Additional Capital the Applicable Base
         Rate Margin and the Applicable LIBOR Margin shall be increased by an
         additional 1.00% per annum.

                  (c)      If the Domestic Borrower fails to deliver to
         Administrative Agent prior to July 31, 2001, documentation satisfactory
         to the Administrative Agent and the Lenders evidencing the Initial
         Additional Capital but later delivers satisfactory documentation
         evidencing the Initial Additional Capital, then the Applicable Base
         Rate Margin and the Applicable LIBOR Margin shall be decreased by 1.00%
         per annum. If the Domestic Borrower fails to deliver to Administrative
         Agent prior to October 31, 2001, documentation satisfactory to the
         Administrative Agent and the Lenders evidencing the Secondary
         Additional Capital but later delivers satisfactory documentation
         evidencing the Secondary Additional Capital, then the Applicable Base
         Rate Margin and the Applicable LIBOR Margin shall be decreased by 1.00%
         per annum.

                  (d)      Each payment made pursuant to this Section 8.10(b)
         shall be applied to the Term A Notes or Term B Notes in accordance with
         Section 5.08(e).

         9.       Section 8.08 (a) and 8.08 (b) of the Credit Agreement is
hereby amended so as to read as follows:

                 Section 8.08  Financial Covenants.

                  (a)      Maximum Leverage Ratio. Maintain at all times,
         calculated as of the last day of each Fiscal Quarter (i) commencing
         with the Fiscal Quarter beginning on October 1, 2000 through the Fiscal
         Quarter ending on December 31, 2000, a Leverage Ratio of no greater
         than 5.5:1.00, (ii) commencing with the Fiscal Quarter beginning on
         January 1, 2001 through the Fiscal Quarter ending on March 31, 2001, a
         Leverage Ratio of no greater than 6.75:1.00, (iii) commencing with the
         Fiscal Quarter beginning on April 1, 2001 through the Fiscal Quarter
         ending on June 30, 2001, a Leverage Ratio of no greater than 5.5:1.00,
         (iv) commencing with the Fiscal Quarter beginning on July 1, 2001
         through the Fiscal Quarter ending on September 30, 2001, a Leverage
         Ratio of no greater than 4.5:1.00, (iv) commencing with the Fiscal
         Quarter October 1, 2001 through the Fiscal Quarter ending on December
         31, 2001, a Leverage Ratio of no greater than

<PAGE>

         3.25:1.00 and (v) commencing with the Fiscal Quarter beginning January
         1, 2002, and thereafter, a Leverage Ratio of no greater than 3.25:1.00.

                  (b)      Minimum Fixed Charge Coverage Ratio. Maintain at all
         times, calculated as of the last day of each Fiscal Quarter (i)
         commencing with the Fiscal Quarter beginning on October 1, 2000 through
         the Fiscal Quarter ending on December 31, 2000, a Fixed Charge Coverage
         Ratio of not less than 0.50:1.00, (ii) commencing with the Fiscal
         Quarter beginning on January 1, 2001 through the Fiscal Quarter ending
         on March 31, 2001, a Fixed Charge Coverage Ratio of not less than
         0.25:1.00, (iii) commencing with the Fiscal Quarter beginning on April
         1, 2001 through the Fiscal Quarter ending on June 30, 2001, a Fixed
         Charge Coverage Ratio of not less than 0.50:1.00, (iv) commencing with
         the Fiscal Quarter beginning on July 1, 2001 through the Fiscal Quarter
         ending on September 30, 2001, a Fixed Charge Coverage Ratio of not less
         than 0.50:1.00, (v) commencing with the Fiscal Quarter beginning on
         October 1, 2001 through the Fiscal Quarter ending on December 31, 2001,
         a Fixed Charge Coverage Ratio of not less than .75:1.00, (vi)
         commencing with the Fiscal Quarter beginning January 1, 2002 through
         the Fiscal Quarter ending on March 31, 2002, a Fixed Charge Coverage
         Ratio of not less than 1.00:1.00, (vii) commencing with the Fiscal
         Quarter beginning on April 1, 2002 through the Fiscal Quarter ending on
         September 30, 2002, a Fixed Charge Coverage Ratio of not less than
         1.20:1.00, and (viii) commencing with the Fiscal Quarter beginning on
         October 1, 2002 and thereafter, a Fixed Charge Coverage Ratio of not
         less than 1.30:1.00.

         10.      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 March 31, 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 March 31, 2001 (or in the case of any subsequent Material Foreign
         Subsidiary within the later of March 31, 2001 or two months of its
         becoming a Material Foreign Subsidiary).

<PAGE>

         11.      Section 9.03(b) of the Credit Agreement is hereby amended so
as to read as follows:

                  (b) Sell, lease, or otherwise dispose of its accounts,
         property or other assets (including capital stock of Subsidiaries),
         other than (i) sales, leases or other dispositions of assets by a
         Borrower to another Credit Party or a Credit Party to a Borrower, (ii)
         sales, leases or other dispositions of assets by a Subsidiary to a
         Credit Party or to the Borrower, (iii) sales of inventory in the
         ordinary course of business, (iv) sales of obsolete, worn out,
         excessively damaged or unusable equipment, fixtures or inventory and
         (v) sales made in accordance with 8.10(b), the net proceeds of which
         are paid to the Administrative Agent for the benefit of the Lenders as
         applied and prescribed in Section 5.08(b);

         12.      Section 9.12 of the Credit Agreement is hereby amended so as
to read as follows:

                  Section 9.12 Consolidated Capital Expenditures. Without
         consent of the Required Lenders, make Capital Expenditures during any
         Fiscal Year in excess of the sum of, (i) $2,250,000, and (ii) Permitted
         Hong Kong Capital Expenditures.


                                B. MISCELLANEOUS

         1.       Except as expressly set forth herein, this Amendment shall be
deemed not to waive or modify any provision of the Credit or the other Credit
Documents, and all terms of the Credit Agreement, as amended hereby, shall be
and shall remain in full force and effect and shall constitute a legal, valid,
binding and enforceable obligations of the Borrowers, the Lenders, the
Administrative Agent, the Domestic Swingline Lender, the Domestic Issuing Bank,
the UK Issuing Bank and the UK Swingline Lender. For the avoidance of doubt, all
amendments to the Applicable Base Rate Margin and the Applicable LIBOR Margin
contained herein shall apply to all existing Loans and all future Loans. All
references to the Credit Agreement shall hereinafter be references to the Credit
Agreement as amended by this Amendment.

         3.       THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA AND ALL APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.

         4.       This Amendment may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

         5.       This Amendment shall be binding on, and shall inure to the
benefit of, the successors and assigns of the parties hereto.

<PAGE>

         6.       In the event that any part of this Agreement shall be found to
be illegal or in violation of public policy, or for any reason unenforceable at
law, such finding shall not invalidate any other part thereof.

         7.       TIME IS OF THE ESSENCE UNDER THIS AGREEMENT.

         8.       The parties agree that their signatures by telecopy or
facsimile shall be effective and binding upon them as though executed in ink on
paper but that the parties shall exchange original ink signatures promptly
following any such delivery by telecopy or facsimile.

         9.       The Borrowers agree to pay all costs and expenses of the
Administrative Agent and the Lenders incurred in connection with the
preparation, execution, delivery and enforcement of this Amendment, including
the reasonable fees and out-of-pocket expenses of Administrative Agent's
counsel.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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: /s/  Robert Hersh
                                             ------------------
                                             Name: Robert Hersh
                                             Title: Chief Executive Officer

                                         CATALINA INTERNATIONAL PLC,
                                                as a Borrower


                                         By: /s/ Robert Hersh
                                             ----------------
                                             Name: Robert Hersh
                                             Title: Director

                                         RING LIMITED (formerly known as
                                         Ring PLC), as a Borrower


                                         By: /s/ Robert Hersh
                                             ----------------
                                             Name: Robert Hersh
                                             Title: Director


<PAGE>


                                         SUNTRUST BANK,
                                         as Administrative Agent, as Domestic
                                         Issuing Bank, as Domestic Swingline
                                         Lender, UK Swingline Lender, UK Issuing
                                         Bank and as a Lender


                                         By: /s/ W. David Wisdom
                                             -------------------
                                             Name: W. David Wisdom
                                             Title: Vice President


<PAGE>


                                         REPUBLIC BANK, as a Lender



                                          /s/ Brigitta Lawton
                                         -------------------
                                         By: Brigitta Lawton  S.V.P.
                                             -----------------------
                                         Name:

                                         BANK UNITED FSB, as a Lender



                                         ------------------------------
                                         By:
                                         Name:

                                         DRESDNER BANK
                                         LATEINAMERIKA, AG, MIAMI
                                         AGENCY, as a Lender



                                         ------------------------------
                                         By:
                                         Name:

                                         HAMILTON BANK, as a Lender



                                          /s/ Hector F. Ramirez
                                         By: Hector F. Ramirez
                                         Name: Senior Vice President

                                         LASALLE BANK NATIONAL
                                         ASSOCIATION, as a Lender



                                          /s/ Richard Lavina
                                          ------------------
                                         By:
                                         Name:


<PAGE>

                                         UNION PLANTERS BANK, N.A.,
                                         as a Lender


                                          /s/ Gus A. Varona
                                          -----------------
                                         By:
                                         Name:

<PAGE>

                                    EXHIBIT G

                         FORM OF COMPLIANCE CERTIFICATE

To:  SunTrust Bank, as Agent
     501 East Las Olas Blvd.
     5th Floor
     Ft. Lauderdale, FL  33301
     Attention: Mr. Stephen Derby

Ladies and Gentlemen:

            The undersigned ________________, being the ______________ of
CATALINA LIGHTING, INC., a Florida corporation (referred to herein as the
"Domestic Borrower") hereby delivers this Compliance Certificate pursuant to
Section 8.07(c) of that Amended and Restated Revolving Credit and Term Loan
Agreement, dated as of September 22, 2000 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by and among the
Domestic Borrower, CATALINA INTERNATIONAL PLC, a corporation organized under the
laws of England and Wales (Registered in England No. _____) ("Holdings
Borrower"), and RING LTD, a corporation organized under the laws of England and
Wales (Registered in England No. _______) ("Sterling Borrower"), SUNTRUST BANK,
a Georgia banking corporation ("SunTrust"), and the other banks and lending
institutions that are signatories to the Credit Agreement (SunTrust and such
other banks, lending institutions and insurance companies, collectively, the
"Lenders"), SUNTRUST BANK, in its capacity as Administrative Agent for the
Lenders (the "Administrative Agent"), as Domestic Issuing Bank (the "Domestic
Issuing Bank") and as the Domestic Swingline Lender (the "Domestic Swingline
Lender"), and SunTrust Bank, as UK Issuing Bank (the "UK Issuing Bank"), and as
UK Swingline Lender (the "UK Swingline Lender"). Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.

         1.       The officer executing this certificate is the
___________________ of the Domestic Borrower and as such is duly authorized to
execute and deliver this Certificate on behalf of the Consolidated Companies.

         2.       The calculations set forth on the Attachment hereto are true
and accurate computations of the financial covenants and tests as set forth in
the Credit Agreement.

         3.       As of the date hereof no Default or Event of Default exists.

<PAGE>


         Dated this ___ day of ____________, ____.


                                          -----------------------------------
                                          Name:
                                          Title:


<PAGE>

                      ATTACHMENT TO COMPLIANCE CERTIFICATE
                  ALL TERMS USED HEREIN SHALL HAVE THE MEANING
                 ASCRIBED TO SUCH TERMS IN THE CREDIT AGREEMENT

A.       LEVERAGE RATIO
<TABLE>
<CAPTION>
<S>      <C>                                                                               <C>
1.       Indebtedness of the Consolidated Companies (Sum of paragraphs (a) - (i) below):   $_________

         (a)       All obligations of the Consolidated Companies for borrowed money:       $_________

         (b)       All obligations of the Consolidated Companies evidenced by
                   bonds debentures notes, drafts, bankers' acceptances or other
                   similar instruments:                                                    $_________

         (c)       All obligations of the Consolidated Companies to pay the
                   deferred purchase price of property or services (other than
                   trade accounts payable that are not past due by more than
                   ninety (90) days and other obligations accrued in the
                   ordinary course of business and earn-outs or similar
                   arrangements):                                                          $_________

         (d)       All  obligations of the  Consolidated  Companies under leases required
                   to be capitalized under GAAP:                                           $_________

         (e)       All obligations or liabilities of others secured by any Lien
                   upon property of the Consolidated Companies whether or not
                   such obligation $_________ or liability is assumed:

         (f)       All  obligations  of the  Consolidated  Companies  under Interest Rate
                   Contracts or Currency Contracts:                                        $_________

         (g)       All obligations of the Consolidated Companies in respect of
                   letters of credit (including all contingent reimbursement
                   obligations, whether or not any draws under such letters of
                   credit have been presented for payment) and all drafts,
                   bankers acceptances or similar instruments issued in
                   connection therewith:                                                   $_________

         (h)       The aggregate development, construction and acquisition cost
                   of property leased to the Consolidated Companies pursuant to
                   a Synthetic Lease and all obligations of such person with
                   respect to asset securitization programs:                               $_________
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
<S>        <C>                                                                             <C>
2.       50% of aggregate L/C Obligations of Eligible Trade L/Cs for the
         Consolidated Companies:                                                           $_________

3.       Consolidated Total Debt
         Line 1 minus Line 2                                                               $_________

4.       Consolidated EBITDA (sum of paragraphs (a) - (b) plus (c), (d), or (e) as
         applicable below):                                                                $_________
         (a)         Consolidated Net Income for such period,                              $_________

         (b)         (To the extent deducted in determining Consolidated Net Income)

                              (i)      Consolidated Tax Expense for such period,           $_________

                              (ii)     Consolidated Interest Expense for such period,      $_________

                              (iii)    Consolidated Depreciation for such period,          $_________

                              (iv)     Consolidated Amortization for such period, and      $_________

                              (v)      Other non-cash charges determined on a              $_________
                                       consolidated basis in accordance with GAAP

         (c)         For the period ending on the last day of the fourth Fiscal Quarter
                     of Fiscal Year 2000, $976,000 for a severance payment to William C.
                     Stewart                                                               $_________
         (d)         For the periods ending on the last day of each of the
                     _____, _____ and ____ Fiscal Quarters of the Fiscal Year
                     _____, $583,000 for losses incurred in connection with the
                     sale of M&F Components; and                                           $_________
         (e)         For the periods ending on the last day of Fiscal Quarter during
                     Fiscal Year 2001 and Fiscal Year 2002, $250,000 for payments under
                     the non compete agreement with  William C. Stewart.                   $_________
                     For the period beginning on September 30, 2000 through June 20,
         (f)         2001, the Sterling Borrower public company expenses up to an
                     aggregate annual amount of $500,000.                                  $_________
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
<S>                  <C>                                                                   <C>
         (g)         For the period beginning on September 30, 2000 through March 31,      $_________
                     2001, legal and investment advisory fees incurred by Ring PLC with
                     respect to its sale to Domestic Borrower up to an aggregate annual
                     amount of $739,257.
         (h)         For the period beginning on September 30, 2000, through March 31,
                     2001, any Pension Expense associated with the sale of the
                     Engineering Division up to an aggregate annual amount of $578,687.    $_________
</TABLE>

5.       Leverage Ratio (ratio of Line 3 to Line 4):                  __________

6.       Maximum Leverage Ratio:

                  (i) Commencing with the Fiscal Quarter beginning on October 1,
                  2000 through the Fiscal Quarter ending on December 31, 2000, a
                  Leverage Ratio of no greater than 5.5:1.00,

                  (ii) Commencing with the Fiscal Quarter beginning on January
                  1, 2001 through the Fiscal Quarter ending on March 31, 2001, a
                  Leverage Ratio of no greater than 6.75:1.00,

                  (iii) Commencing with the Fiscal Quarter beginning on April 1,
                  2001 through the Fiscal Quarter ending on June 30, 2001, a
                  Leverage Ratio of no greater than 5.5:1.00,

                  (iii) Commencing with the Fiscal Quarter beginning on July 1,
                  2001 through the Fiscal Quarter ending on September 30, 2001,
                  a Leverage Ratio of no greater than 4.5:1.00,

                  (iv) Commencing with the Fiscal Quarter beginning on July 1,
                  2001 through the Fiscal Quarter ending on September 30, 2001,
                  a Leverage Ratio of no greater than 4.5:1.00,

                  (v) Commencing with the Fiscal Quarter October 1, 2001 through
                  the Fiscal Quarter ending on December 31, 2001, a Leverage
                  Ratio of no greater than 3.25:1.00, and

<PAGE>

                  (vi) Commencing with the Fiscal Quarter beginning January 1,
                  2002, and thereafter, a Leverage Ratio of no greater than
                  3.25:1.00.

7.       Default Indicated?         __________



B.       FIXED CHARGE COVERAGE RATIO

1.       Consolidated EBITDA:                                          $________

2.       Consolidated Capital Expenditures (excluding Permitted
         Go-Gro Capital Expenditures):                                 $________

3.       Consolidated Cash Tax Expense paid:                           $________

4.       Item 1 minus Item 2 minus Item 3:                             $________

5.       The greater of Item 4 or $0:                                  $________

6.       Consolidated Interest Expense:                                $________

7.       Current maturities of Consolidated Total Debt:                $________

8.       Current maturities of Capital Leases:                         $________

9.       Ring Preferred Dividends:                                     $________

10.      Item 6 plus Item 7 plus Item 8 plus Item 9:                   $________

11.      Fixed Charge Coverage Ratio- ratio of Item 5 to 10:           ________

12.      Minimum Fixed Charge Coverage Ratio

                  (i) Commencing with the Fiscal Quarter beginning on October 1,
                  2000 through the Fiscal Quarter ending on December 31, 2000, a
                  Fixed Charge Coverage Ratio of not less than 0.50:1.00,

                  (ii) Commencing with the Fiscal Quarter beginning on January
                  1, 2001 through the Fiscal Quarter ending on March 31, 2001, a
                  Fixed Charge Coverage Ratio of not less than 0.25:1.00,

<PAGE>

                  (iii) Commencing with the Fiscal Quarter beginning on April 1,
                  2001 through the Fiscal Quarter ending on June 30, 2001, a
                  Fixed Charge Coverage Ratio of not less than 0.50:1.00,

                  (iv) Commencing with the Fiscal Quarter beginning on July 1,
                  2001 through the Fiscal Quarter ending on September 30, 2001,
                  a Fixed Charge Coverage Ratio of not less than 0.50:1.00,

                  (v) Commencing with the Fiscal Quarter beginning on October 1,
                  2001 through the Fiscal Quarter ending on December 31, 2001, a
                  Fixed Charge Coverage Ratio of not less than .75:1.00,

                  (vi) Commencing with the Fiscal Quarter beginning January 1,
                  2002 through the Fiscal Quarter ending on March 31, 2002, a
                  Fixed Charge Coverage Ratio of not less than 1.00:1.00,

                  (vii) Commencing with the Fiscal Quarter beginning on April 1,
                  2002 through the Fiscal Quarter ending on September 30, 2002,
                  a Fixed Charge Coverage Ratio of not less than 1.20:1.00, and

                  (viii) Commencing with the Fiscal Quarter beginning on October
                  1, 2002 and thereafter, a Fixed Charge Coverage Ratio of not
                  less than 1.30:1.00.

13.      Default Indicated?  __________


C.       CONSOLIDATED NET WORTH

1.       Initial Minimum Compliance Level                           $43,000,000

2.       After September 30, 2000, 50% of Consolidated Net          $_________
         Income (if positive)

3.       Required Consolidated Net Worth (Item 1 plus Item 2)       $_________
                                                 ----

4.       Total stockholders equity of consolidated companies        $_________

5.       Default Indicated?         __________

<PAGE>


D.       CONSOLIDATED CAPITAL EXPENDITURES (Calendar Year End Only)

1.       Permitted Go-Gro Capital Expenditures                        $_________

                   Calendar Year                       Amount Allowed
                   -------------                       --------------

                   Calendar Year ending
                   December 31, 2000                   $5,000,000

                   Calendar Year ending
                   December 31, 2001                   $5,000,000

2.       $2,250,000

3.       Permitted Consolidated Capital Expenditures- Item 1 plus
         Item 2                                                       $_________

4.       Actual Consolidated Capital Expenditures                     $_________

5.       Default Indicated?         __________



E.       EXCESS CASH FLOW (Fiscal Year end only)

1.       Consolidated EBITDA                                          $_________

2.       Consolidated Interest Expense                                $_________

3.       Principal Payments made on Consolidated Total Debt           $_________

4.       Consolidated Cash Tax Expense                                $_________

5.       Consolidated Capital Expenditures                            $_________
         (not to exceed $2,250,000 plus Permitted Hong Kong Capital
         Expenditures)

6.       Sum of Item 2 plus Item 3 plus Item 4 plus Item 5            $_________

7.       Extraordinary gains and/or losses                            $_________

8.       Changes in consolidated working capital                      $_________

9.       Excess Cash Flow- Item 1 minus Item 6 plus or minus
         Item 7 plus or minus Item 8                                  $_________

10.      Default Indicated?             __________

<PAGE>

F.       LISTING OF PROPOSED ASSETS SALES (MONTH END):

                  [LIST]

G.       NARRATIVE OF MONTHLY FINANCIALS COMPARED TO
         PROJECTIONS (MONTH END)

</TEXT>
</DOCUMENT>
