FIRST AMENDMENT TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this
"First Amendment") is made and dated as of April 16, 1998 among THE TODD-AO
CORPORATION, a Delaware corporation (the "Borrower"), the banks party hereto
(the "Banks"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
administrative agent for such Banks (in such capacity, the "Administrative
Agent") and as Issuing Bank (in such capacity, the "Issuing Bank"), and
amends that certain First Amended and Restated Credit Agreement dated as of
October 20, 1997 among Borrower, the Banks, the Administrative Agent and the
Issuing Bank (the "Agreement").
RECITAL
A. The Borrower has requested the Banks, the Administrative Agent and
the Issuing Bank to: (i) ratably increase, at the sole discretion of the
Borrower, the combined Commitments to $60,000,000 not later than May 29,
1998; (ii) permit the issuance of TeleCine Cell Loan Notes in connection with
the acquisition of TeleCine Cell Group plc; (iii) increase the Letter of
Credit sublimit to $18,500,000 to permit the issuance of TeleCine Cell
Letters of Credit to support directly or indirectly payments on the TeleCine
Cell Loan Notes; (iv) exclude from the Leverage Ratio for pricing purposes up
to $10,000,000 of the TeleCine Cell Letters of Credit; (v) clarify that the
TeleCine Cell Loan Notes and the TeleCine Cell Letters of Credit shall not be
double-counted for purposes of the Agreement; and (vi) fix pricing on up to
$10,000,000 of such Letters of Credit.
B. The Banks, the Administrative Agent and the Issuing Bank are willing
to agree to the foregoing on the terms and conditions specified herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. TERMS. All terms used herein shall have the same meanings as in the
Agreement unless otherwise defined herein. All references to the Agreement
shall mean the Agreement as hereby amended.
2. AMENDMENTS. The Borrower, the Banks, the Administrative Agent and the
Issuing Bank hereby agree to amend the Agreement as follows:
2.1 The definition of "Applicable Amount" in Section 1.1 of the Agreement
is amended by inserting the following proviso at the end of the first paragraph
before the table:
"PROVIDED, FURTHER, that, so long as the Default Rate is not otherwise
applicable, the Applicable Margin on up to $10,000,000 aggregate face
amount of TeleCine Cell Letters of Credit shall be 1% per annum, instead of
the percentage indicated in the table below, regardless of the Leverage
Ratio then in effect."
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2.2 The definition of "Funded Indebtedness" in Section 1.1 of the
Agreement is amended by inserting the following proviso at the end thereof
"It is understood that the TeleCine Cell Loan Notes and the TeleCine Cell
Letters of Credit shall not be double-counted for purposes of calculating
Funded Indebtedness to the extent that any payment on the TeleCine Cell
Loan Notes concurrently reduces the face amount of the TeleCine Cell
Letters of Credit by an equivalent amount, and drawings under the TeleCine
Cell Letters of Credit concurrently reduce the TeleCine Cell Loan Notes by
an equivalent amount."
2.3 The definition of "Leverage Ratio" in Section 1.1 of the Agreement is
amended by inserting the following at the end thereof before the period:
"PROVIDED, HOWEVER, that for purposes of determining the Applicable Amount
only, up to $10,000,000 in aggregate face amount of TeleCine Cell Letters
of Credit shall not be included in Funded Indebtedness."
2.4 Section 1.1 of the Agreement is amended by inserting the following new
definitions in proper alphabetical order as follows:
"'TeleCine Cell Letters of Credit' means one or more Letters of Credit
not exceeding $18,500,000 in aggregate face amount issued substantially
concurrently with the closing of the acquisition of TeleCine Cell Group plc
by Todd-AO Europe Holding Company Limited to support, directly or
indirectly, payments under the TeleCine Cell Loan Notes."
"'TeleCine Cell Loan Notes' means one or more promissory notes not
exceeding $18,500,000 in aggregate principal amount issued by Todd-AO
Europe Holding Company Limited, a wholly-owned Subsidiary of Borrower, to
one or more shareholders of TeleCine Cell Group plc in connection with
Todd-AO Europe Holding Company Limited's acquisition of TeleCine Cell Group
plc, which notes shall be substantially in the form previously furnished to
the Banks and the Administrative Agent."
2.5 The first proviso to Section 2.3(a) of the Agreement is amended by
deleting "$2,500,000 at any time" and inserting the following in lieu thereof:
"$18,500,000 at any time; PROVIDED, HOWEVER, that Letter of Credit Usage
not relating to the TeleCine Cell Letters of Credit shall not exceed
$2,500,000 in the aggregate; PROVIDED, FURTHER, that such limit shall be
permanently reduced from time to time to an amount equal to the aggregate
remaining outstanding balance of the TeleCine Cell Loan Notes but not less
than an amount equal to $2,500,000."
2.6 Section 7.1 of the Agreement is amended by deleting "and" at the end
of subsection (f), deleting the period at the end of subsection (g) and
inserting "; and" in lieu thereof, and inserting a new subsection (h)
immediately after subsection (g) as follows:
"(h) the TeleCine Cell Loan Notes."
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2.7 Upon written notice to the Administrative Agent (who shall promptly
notify each Bank and the Issuing Bank), given by Borrower in its sole
discretion, each Bank agrees to ratably increase its Commitment as set forth
on Schedule 2.1 hereto no later than May 29, 1998 pursuant to Section 2.13 of
the Agreement. All time periods set forth in Section 2.13 of the Agreement
are hereby waived. If the Commitments are so increased, Schedule 2.1 to the
Agreement shall be amended as set forth in Schedule 2.1 hereto. Such
increase shall not become effective (a) unless Borrower could satisfy the
conditions precedent to a Borrowing under Section 4.2 of the Agreement on the
effective date of such increase and (b) until Borrower has obtained requisite
corporate approval for such increase and delivered evidence of same to the
Administrative Agent.
2.8 Section IV of Schedule 2 to Exhibit B to the Agreement (Compliance
Certificate) is amended as set forth on Exhibit A hereto and a new Section V
is added to Schedule 2 to Exhibit B to the Agreement as set forth on Exhibit
A hereto.
3. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to Banks, Administrative Agent and the Issuing Bank that, on and as
of the date hereof, and after giving effect to this First Amendment:
3.1 AUTHORIZATION. The execution, delivery and performance of this First
Amendment have been duly authorized by all necessary corporate action and this
First Amendment has been duly executed and delivered by the Borrower.
3.2 BINDING OBLIGATION. This First Amendment is the legally valid and
binding obligation of the Borrower, enforceable in accordance with its terms
against the Borrower, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors rights generally or by equitable principles relating
to enforceability.
3.3 NO LEGAL OBSTACLE TO AGREEMENT. Neither the execution of this
First Amendment, the making by the Borrower of any borrowing under the
Agreement, nor the performance of the Agreement has constituted or resulted
in or will constitute or result in a breach of the provisions of any material
contract to which the Borrower is a party, or the violation of any law,
judgment, decree or governmental order, rule or regulation applicable to the
Borrower, or result in the creation under any agreement or instrument of any
security interest, lien, charge, or encumbrance upon any of the assets of the
Borrower. No approval or authorization of any governmental authority is
required to permit the execution, delivery or performance by the Borrower of
this First Amendment, the Agreement, or the transactions contemplated hereby
or thereby, or the making of any borrowing under the Agreement.
3.4 INCORPORATION OF CERTAIN REPRESENTATIONS. The representations and
warranties set forth in Section 5 of the Agreement are true and correct in all
respects on and as of the date hereof as though made on and as of the date
hereof.
3.5 DEFAULT. No Default or Event of Default under the Agreement has
occurred and is continuing.
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4. MISCELLANEOUS.
4.1 TELECINE CELL GROUP PLC AND TODD-AO EUROPE HOLDING COMPANY LIMITED
AS GUARANTORS. Promptly following the closing of the acquisition of TeleCine
Cell Group plc by Todd-AO Europe Holding Company Limited, Borrower shall
cause TeleCine Cell Group plc and Todd-Europe, as Significant Subsidiaries,
to comply with Section 6.9(a) of the Agreement, including executing and
delivering an Additional Guarantor Supplement in the form of Exhibit B to
this Second Amendment, pursuant to which TeleCine Cell Group plc and Todd-AO
Europe Holding Company Limited shall become Guarantors.
4.2 EFFECTIVENESS OF THE AGREEMENT; COUNTERPARTS. Except as hereby
expressly amended, the Agreement shall remain in full force and effect, and
is hereby ratified and confirmed in all respects. This First Amendment may
be executed in any number of counterparts and all of such counterparts taken
together shall be deemed to constitute one and the same instrument. This
First Amendment shall not become effective until each of the Borrower, the
Banks, the Administrative Agent and the Issuing Bank shall have signed a copy
hereof, whether the same or counterparts, and the same shall have been
delivered to the Administrative Agent.
4.3 WAIVERS. This First Amendment is specific in time and in intent
and does not constitute, nor should it be construed as, a waiver of any other
right, power or privilege under the Agreement, or under any agreement,
contract, indenture, document or instrument mentioned in the Agreement; nor
does it preclude any exercise thereof, nor shall any future waiver of any
right, power, privilege or default hereunder, or under any agreement,
contract, indenture, document or instrument mentioned in the Agreement,
constitute a waiver of any other default of the same or of any other term or
provision.
4.4 JURISDICTION. This First Amendment, and any instrument or
agreement required hereunder, shall be governed by and construed under the
laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first written above.
THE TODD-AO CORPORATION,
A DELAWARE CORPORATION
By
----------------------------------------
W. R. Strickley
Senior Vice President
(Signatures Continue) Chief Financial Officer
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS ADMINISTRATIVE AGENT
By:
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Janice Hammond
Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS ISSUING BANK AND A
BANK
By:
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Matthew Koenig
Vice President
UNION BANK OF CALIFORNIA, N.A.
By:
--------------------------------------
Name:
------------------------------------
Title:
--------------------------------------
SOCIETE GENERALE
By:
--------------------------------------
Name:
------------------------------------
Title:
--------------------------------------
SANWA BANK CALIFORNIA
By:
--------------------------------------
Name:
------------------------------------
Title:
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CONSENT OF GUARANTORS
The undersigned Guarantors, as party to the Subsidiary Guaranty dated as
of October 20,1997, hereby consent to the foregoing First Amendment to First
Amended and Restated Credit Agreement dated as of even date herewith and
confirm that the Subsidiary Guaranty remains in full force and effect to each
of them after giving effect thereto and represent and warrant that there is
no defense, counterclaim or offset of any type or nature under the Subsidiary
Guaranty.
Dated as of April 16, 1998
TODD-AO STUDIOS EAST INC.
TODD-AO VIDEO SERVICES
TODD-AO STUDIOS
TODD-AO STUDIOS WEST
TODD-AO HD, INC.
By
--------------------------------------
J.R. DeLang
Vice President
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SCHEDULE 2.1
COMMITMENTS
(EFFECTIVE AS SET FORTH IN SECTION 2.7 OF SECOND AMENDMENT)
BANK COMMITMENT PRO RATA SHARE
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Bank of America National Trust $30,000,000 $50%
and Savings Association
Union Bank of California, N.A 12,000,000 20%
Sanwa Bank California 12,000,000 20%
Societe Generale 6,000,000 10%
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Combined Commitments $60,000,000 100%
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EXHIBIT A TO FIRST AMENDMENT
AMENDMENTS TO COMPLIANCE CERTIFICATE
IV. SECTION 7.12 - LEVERAGE RATIO.
A. Funded Indebtedness (without duplication):
1. Indebtedness for borrowed money: $_____________
a. Non Recourse Joint Venture Indebtedness $_____________
b. Includable Funded Indebtedness (Line 1 LESS Line 1a) $_____________
_____________
2. Principal portion of Capital Leases: $_____________
3. Synthetic Leases: $_____________
4. Acceptances and letters of credit: $_____________
5. Guaranty Obligations: $_____________
6 Total (Lines 1b + 2 + 3 + 4 + 5): $_____________
7. Cash, cash equivalents and marketable securities: $_____________
a. Line 7 less $3,500,000 (>$0): $_____________
8. Includable Funded Indebtedness (Line A.6 less Line A.7.a): $_____________
_____________
B. EBITDA (Line III.A.1.g): (1) $_____________
C. Leverage Ratio (Line A.8 DIVIDED BY Line B): ________ to 1
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(1) For purposes of determining the Leverage Ratio when determining
compliance with Section 7.6 of the Agreement in connection with any Acquisition,
not more than 80% of the EBITDA of (a) any Person being so acquired (provided
such EBITDA may be included only if such Person will be a Significant Subsidiary
immediately following such Acquisition) and (b) any Significant Subsidiary
acquired by Borrower less than two fiscal quarters prior to the date of such
Acquisition, may be included for purposes of calculating the Leverage Ratio.
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MAXIMUM PERMITTED RATIO: 3.00 TO 1
V. SECTION 7.12 - LEVERAGE RATIO FOR DETERMINING APPLICABLE RATIO.
A. Funded Indebtedness (without duplication):
1. Indebtedness for borrowed money: $_____________
a. Non Recourse Joint Venture Indebtedness $_____________
b. Convertible Subordinated Notes $_____________
c. Up to $10,000,000 in aggregate face
amount of TeleCine Cell Letters of Credit $_____________
d. Includable Funded Indebtedness (Line
1 LESS Line 1a LESS Line 1b LESS Line 1c) $_____________
_____________
2. Principal portion of Capital Leases: $_____________
3. Synthetic Leases: $_____________
4. Acceptances and letters of credit: $_____________
5. Guaranty Obligations: $_____________
6 Total (Lines 1d + 2 + 3 + 4 + 5): $_____________
7. Cash, cash equivalents and marketable securities: $_____________
a. Line 7 less $3,500,000 (>$0): $_____________
8. For Pricing purposes: includable Funded
Indebtedness (Line A.6 less Line A.7.a): $_____________
_____________
B. EBITDA (Line III.A.1.g):(2) $_____________
C.. Leverage Ratio for Pricing Purposes (Line A.8 DIVIDED BY Line B):
________ to 1
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(2) For purposes of determining the Leverage Ratio when determining
compliance with Section 7.6 of the Agreement in connection with any
Acquisition, not more than 80% of the EBITDA of (a) any Person being so
acquired (provided such EBITDA may be included only if such Person will be a
Significant Subsidiary immediately following such Acquisition) and (b) any
Significant Subsidiary acquired by Borrower less than two fiscal quarters
prior to the date of such Acquisition, may be included for purposes of
calculating the Leverage Ratio.
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EXHIBIT B TO FIRST AMENDMENT
ADDITIONAL GUARANTOR SUPPLEMENT
Dated: _______________, 199_
Reference is made to that certain Guaranty dated as of October 20, 1997,
as amended (the "Guaranty"), by and among the Guarantors from time to time
party thereto in favor of Bank of America National Trust and Savings
Association, as Administrative Agent for the Guarantied Parties. Unless
otherwise defined herein, capitalized terms used herein have the respective
meanings assigned to them in the Guaranty and the Credit Agreement referred
to therein.
TeleCine Cell Group plc, a subsidiary of Todd-AO Europe Holding Company
Limited, and Todd-AO Europe Holding Company Limited, a subsidiary of The
Todd-AO Corporation, (the "Subsidiaries") hereby elect to become Guarantors
under the Guaranty, and agree to be bound by all the terms and conditions
applicable to a Guarantor thereunder as of the date hereof.
The undersigned Subsidiaries hereby represent and warrant that the
execution, delivery and performance of any Loan Documents to which each is to
be a party will not violate any law, decree or judgment applicable to the
undersigned, except as will not have a Material Adverse Effect.
The undersigned existing Guarantors hereby consent to Subsidiary becoming a
party to the Guaranty.
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This Certificate of Additional Guarantors is executed by the parties hereto
as of the date first written above.
"Subsidiary"
TODD-AO EUROPE HOLDING COMPANY
LIMITED
TELE CINE CELL GROUP PLC
By:
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J.R. DeLang
Vice President
THE GUARANTORS LISTED ON THE SIGNATURE PAGE TO
GUARANTY AND ON ANY PRIOR ADDITIONAL GUARANTORS
SUPPLEMENTS
By:
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J.R. DeLang
Vice President
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
By:
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Janice Hammond
Vice President
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