CATALINA LIGHTING INC
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<TYPE>EX-10.196
<SEQUENCE>2
<FILENAME>0002.txt
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                                                                  EXHIBIT 10.196

                          Asset Based Lending Division

[GRAPHIC OMITTED] NATIONAL
                  BANK
                  OF CANADA

May 15, 2000

CATALINA LIGHTING CANADA, (1992) INC.
LUMIERES CATALINA CANADA, (1992) INC.
c/o Catalina Lighting Inc.
18191 N.W. 68th Avenue
Miami, Florida 33015
United States of America

Attention: Mr. Thomas M. Bluth, Tax Director

Dear Sir:


         RE:   Third Amendment to Offer of financing and banking services

Reference is hereby made to the Offer of financing and banking services dated
April 17, 1996 and amended October 17, 1997 (First Amendment) and December 19,
1997 (Second Amendment), between Catalina Lighting Canada, (1992) Inc. (the
"Borrower") and National Bank of Canada (the "Bank"). Capitalized terms used
herein and not otherwise defined shall have the meanings specified in the Offer
of financing and banking services.

In consideration of the mutual covenants and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Bank and the Borrower have agreed as follows:

1)   The Offer of financing and banking services shall be further amended as
     follows:

     A) The credit referenced in section 1.1 shall be replaced by the following:

           1.1.   The credit

                  The Bank, subject to the terms and conditions hereof, agrees
                  to make available to the Borrower an operating credit line of
                  $5,500,000, in Canadian Dollars or U.S. equivalent, to finance
                  the Borrower's operating requirements.

     B) The Financing conditions referenced in section 1.5 and subsections 1.5.1
        and 1.5.2 shall be replaced by the following:

           1.5.   Financing conditions

                  The aggregate total amount of the Floating Rate advances under
                  this operating credit shall not exceed the total of:

                  1.5.1    85% of the Borrower's accounts receivable (excluding
                           contra or intercompany accounts, accounts of doubtful
                           quality and those aged 90 days or more), and

                           350 Burnhamthorpe Road West
                           Suite 216
                           Mississauga, Ontario L5B 3J1
                           Telephone: (905) 272-1515
                           Fax:       (905) 272-2500

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Amendment to Offer of financing
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                  1.5.2    50% of the Borrower's inventory of finished products
                           for a maximum of $3,000,000.

                  The value of the Borrower's accounts receivable and inventory
                  of finished products shall be established, from time to time
                  by the Bank, taking into account claims ranking, prior to the
                  security of the Bank. The Borrower shall furnish to the Bank,
                  on the 20th day of each month, a list of its inventory, of its
                  accounts receivable according to age and of its accounts
                  payable for the month ending on the last day of the proceeding
                  month.

2.   A $5,000 amendment fee will be charged to the Borrower in connection with
     the amendments and waivers set forth herein.

3.   The amendments and waivers set forth herein are strictly limited to the
     terms, covenants, matters, occassions, and times specifically described
     above and shall not be deemed to constitute and amendment, consent or
     waiver with respect to any other term, covenant, matter, time or occasion.

4.   This letter agreement supersedes and replaces any prior agreements of
     understandings with respect to any of the matters provided for herein.

5.   This letter agreement shall be deemed to have been made in the Province of
     Ontario and governed by the interpreted in accordance with the laws of such
     province, and the laws of Canada applicable therein, except that no
     doctrine or choice of law shall be used to apply the laws of any other
     jurisdiction.


Except to the extent waived or modified herein, the Offer of financing and
banking services remains in full force and effect nad is hereby ratified and
confirmed. Please evidence your agreement with the terms of this letter and
agreement by signing in the space below. This letter agreement shall become
effective in accordance with the terms upon execution by the the Bank and the
Borrower whereupon all references to the Agreement in the Offer of financing and
banking services and in the other credit Documents shall, except where the
context otherwise requires, be deemed to be a reference to the Offer of
financing and banking services as amended by this letter agreement.


Sincerely

[GRAPHIC OMITTED] NATIONAL BANK OF CANADA



Per:  /s/ Timothy Lohn                      Per:  /s/ Ellis Gaston
    ---------------------------                 ---------------------------
    Timothy Lohn                                Ellis Gaston
    Regional Manager                            Senior Manager




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Catalina Lighting Canada. (1992) Inc./ Lumieres Catalina Canada, (1992) Inc.

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Amendment to Offer of financing
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ACCEPTANCE

The undersigned hereby accepts the terms and conditions of this Offer dated May
15, 2000, at the City of Miami, Province of Ontario, this 20 day of June, 2000.

CATALINA LIGHTING CANADA, (1992) INC./
LUMIERES CATALINA CANADA, (1992) INC.


Per: /s/ Dean Rappaport
    ---------------------------
    Name: Dean Rappaport
    Title: P




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Catalina Lighting Canada. (1992) Inc./ Lumieres Catalina Canada, (1992) Inc.
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