SECOND AMENDMENT TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
(this "Second Amendment") is made and dated as of July 21, 1998, to be
effective as of May 30, 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, as amended by a
First Amendment to First Amended and Restated Credit Agreement dated as of
April 16, 1998 (as so amended, the "Agreement").
RECITAL
The Borrower the Banks, the Administrative Agent and the Issuing Bank
desire to amend the Agreement 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 Section 1.1 of the Agreement (Terms) is amended by deleting the
definition of "Tangible Net Worth."
2.2 Section 2.3(k) of the Agreement (Letter of Credit fee) is amended by
deleting "the average daily maximum" wherever it appears and inserting "the
actual daily maximum" in lieu thereof.
2.3 Section 2.8(a) of the Agreement (Commitment fee) is amended by
deleting "the average daily amount" wherever it appears and inserting "the
actual daily amount" in lieu thereof.
2.4 Section 7.10 of the Agreement is amended and restated in its entirety
as follows:
"7.10 MINIMUM NET WORTH. Permit the net worth of Borrower and its
Subsidiaries on a consolidated basis at any time to be less than the sum of
(a) $54,000,000 plus (b) 50% of Borrower's consolidated net income for each
fiscal quarter (without deduction for any net loss) commencing with the
Fiscal Quarter ending
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subsequent to May 31, 1998, plus (c) 100% of the net proceeds received by
Borrower or any of its Subsidiaries from the issuance of equity by
Borrower or any Subsidiary. For purposes of this covenant net worth
shall be equal to shareholders' equity of Borrower and its Subsidiaries
on a consolidated basis, determined in accordance with Generally Accepted
Accounting Principles."
2.5 Paragraph II of Schedule 2 to Exhibit B to the Agreement (Compliance
Certificate) is amended and restated in its entirety as follows:
"II. SECTION 7.10 - MINIMUM NET WORTH.
A. Net Worth (shareholder's equity on a consolidated
basis): $____________
B. 50% of consolidated net income computed on a
cumulative basis for each of the elapsed fiscal
quarters ending after May 31, 1998 (no deduction
for quarterly losses): $____________
C. 100% of net proceeds of any equity issued after the
Closing Date: $____________
D. Total (Lines II.B + C + $54,000,000): $____________
MINIMUM REQUIREMENT: LINE II.A TO BE GREATER THAN LINE II.D"
3. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Banks, the Administrative Agent and the Issuing Bank that, on and as of
the date hereof, and after giving effect to this Second Amendment:
3.1 AUTHORIZATION. The execution, delivery and performance of this Second
Amendment have been duly authorized by all necessary corporate action and this
Second Amendment has been duly executed and delivered by the Borrower.
3.2 BINDING OBLIGATION. This Second 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 Second
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 Second Amendment, the Agreement,
or the transactions contemplated hereby or thereby, or the making of any
borrowing under the Agreement.
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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.
4. MISCELLANEOUS.
4.1 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 Second 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
Second Amendment shall become effective as of May 30, 1998 upon each of the
Borrower, the Majority Banks, the Administrative Agent and the Issuing Bank
signing a copy hereof, whether the same or counterparts, and delivering the
same to the Administrative Agent.
4.2 WAIVERS. This Second 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.
4.3 JURISDICTION. This Second 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:
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W. R. Strickley
Senior Vice President and
Chief Financial Officer
(Signatures continue)
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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:
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Name:
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Title:
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SOCIETE GENERALE
By:
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Name:
---------------------------------
Title:
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SANWA BANK CALIFORNIA
By:
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Name:
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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 Second Amendment to Second
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 July 21, 1998
TODD-AO STUDIOS EAST INC.
TODD-AO VIDEO SERVICES
TODD-AO STUDIOS
TODD-AO STUDIOS WEST
TODD-AO HD, INC.
TODD-AO EUROPE HOLDING COMPANY
LIMITED
TELE CINE CELL GROUP PLC
By
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J.R. DeLang
Vice President
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