Exhibit 4(E)
November 27, 1996
Unitel Video, Inc.
515 West 57th Street
New York, New York 10019
Attention: Barry Knepper - Chief Executive Officer
Re: Waiver and Agreement to Amend Financial Covenants
-------------------------------------------------
Dear Mr. Knepper:
Reference is made to the Second Amended and Restated Credit Agreement
dated as of December 12, 1995, as waived by a Letter Agreement dated April
12, 1996, and as further waived by a Letter Agreement dated July 29, 1996 (as
so waived, the "Credit Agreement") between Unitel Video, Inc. (the
"Borrower") and The Chase Manhattan Bank (successor by merger to The Chase
Manhattan Bank, N.A.; the "Bank"). Any term used herein and not otherwise
defined herein shall have the meaning assigned to such term in the Credit
Agreement.
The Borrower and Bank have agreed to amend and waive certain provisions
of the Credit Agreement as hereinafter set forth.
The Borrower has advised the Bank that because the Borrower and its
Consolidated Subsidiaries had (1) for the Quarterly Date ended August 31,
1996 a Consolidated Tangible Net Worth of Fifteen Million Three Hundred
Eighty-One Dollars (($15,381,000), and (2) for the prior four quarters (taken
as a whole) ending on August 31, 1996 a ratio of (1) the sum of (a)
Consolidated Earnings Before Interest, Taxes and Depreciation for such
period, less (b) Five Million Dollars ($5,000,000) to (2) the sum of (a)
Consolidated Interest Expense for such period, due (b) Consolidated Current
Portion of Long Term Debt as of the first day of such period, plus (c) Cash
Dividends paid during such period, plus (d) Consolidated Taxes payable for
such period, of .31 to 1.00, there are Events of Default due to a violation
of each of Section 7.01, MINIMUM CONSOLIDATED TANGIBLE NET WORTH, and Section
7.03, CASH FLOW RATIO, of the Credit Agreement.
The Borrower has requested that the Bank waive such Events of Default.
Subject to the conditions of effectiveness set forth below, the Bank hereby
waives the Borrower's and its Consolidated Subsidiaries' compliance with
Section 7.01, MINIMUM CONSOLIDATED TANGIBLE NET WORTH for the Quarterly Date
ended August 31, 1996 and Section 7.03, CASH FLOW RATIO, for the prior four
quarters (taken as a whole) ending on August 31, 1996. The Bank does not waive
any future noncompliance by the Borrower and its Consolidated Subsidiaries
with either such Section.
This is to advise the Borrower that the Bank has agreed to amend the
Credit Agreement by deleting each of the financial convenants set forth in
Article VII, FINANCIAL COVENANTS and by substituting in their place (1)
financial covenants identical to each of the financial covenants set forth in
the First Amendment to Heller Loan Agreement dated November 26, 1996 attached
hereto as Exhibit A, and (2) a Maximum Consolidated Capital Expenditure
covenant identical to Section 6.2 of the Heller Loan Agreement. The Bank's
agreement to amend the financial covenants is subject to the execution of
documentation satisfactory to the Bank to reflect such amendment.
The Waiver and Agreement to Amend shall become effective on the date
when the Borrower shall have paid to the Bank an amendment fee of Five
Thousand Dollars ($5,000).
The execution and delivery of this Waiver and Agreement to Amend shall
not, except as specifically provided above, constitute a waiver of any
right, power or remedy of the Bank under the Credit Agreement or any Loan
Documents or any other document related thereto, and, except as specifically
provided above, the Credit Agreement, each Loan Document and each other
document related thereto shall remain in full force and effect and are hereby
ratified and confirmed.
The Borrower agrees to reimburse the Bank on demand for all
out-of-pocket costs, expenses and charges (including, without limitation, all
fees and charges of external legal counsel for the Bank) incurred by the Bank
in connection with the preparation, reproduction, execution and delivery of
this Waiver and Agreement to Amend, the amendment to financial covenants
contemplated herein and any other instruments and documents to be delivered
hereunder. In addition, the Borrower shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution and delivery, filing or recording of this Waiver and Agreement to
Amend and the other instruments and documents to be delivered hereunder, and
agrees to save the Bank harmless from and against any
2
and all liabilities with respect to or resulting from any delay in payling or
omission to pay such taxes or fees.
If the Borrower agrees to the foregoing, please evidence such agreement
by executing at least three (3) counterparts of this Waiver and Agreement to
Amend in the space provided below and by returning said executed
counterparts to the Bank at 1411 Broadway, 5th Floor, New York, New York
10018, Attention: Randall J. Berini, whereupon this Waiver and Agreement to
Amend shall be a binding agreement between the Borrower and the Bank.
This Waiver and Agreement to Amend may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Waiver and Agreement to
Amend by signing any such counterpart.
Very truly yours,
THE CHASE MANHATTAN BANK
(successor by merger to
The Chase Manhattan Bank, N.A.)
By /s/ Randall J. Berini
----------------------------
Name:
Title: Vice President
AGFREED AND ACCEPTED TO:
UNITEL VIDEO, INC.
By /s/ Barry Knepper
------------------------
Name:
Title: CEO