THIRD AMENDMENT TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
(this "Third Amendment") is made and dated as of September 21, 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 and a Second
Amendment to First Amended and Restated Credit Agreement dated as of July 21,
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 The definition of "Fixed Charge Coverage Ratio" in Section 1.1 of the
Agreement (Terms) is amended by inserting the following at the end thereof:
"For purposes of determining the Fixed Charge Coverage Ratio, repurchases
of the Borrower's capital stock in an aggregate amount not exceeding
$8,000,000 during the period from September 1, 1998 through and including
August 31, 1999 shall be excluded from the calculation of 'Distributions.'"
2.2 Section 7.5 of the Agreement (Limitation on Investments) is amended by
deleting "and" at the end of subsection (d); inserting "and" at the end of
subsection (e), and inserting a new subsection (f) immediately following
subsection (e) as follows:
"(f) repurchases of the Borrower's capital stock in an aggregate
amount not exceeding $8,000,000 during the period from September 1, 1998
through and including August 31, 1999;"
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2.3 Section 7.10 of the Agreement (Minimum Net Worth) is amended by
inserting the following at the end thereof:
"This covenant shall be calculated excluding the effect on shareholders'
equity of repurchases of the Borrower's capital stock in an aggregate
amount not exceeding $8,000,000 during the period from September 1, 1998
through and including August 31, 1999."
2.4 Section 7.12 of the Agreement (Leverage Ratio) is amended and restated
in its entirety as follows:
"7.12 LEVERAGE RATIO. Permit at any time the Leverage Ratio to
exceed (a) until February 28, 2000, 3.50 to 1.00 and (b) thereafter, 3.00
to 1.00."
2.5 Exhibit B (Compliance Certificate) is amended to reflect the foregoing
amendments.
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 Third Amendment:
3.1 AUTHORIZATION. The execution, delivery and performance of this Third
Amendment have been duly authorized by all necessary corporate action and this
Third Amendment has been duly executed and delivered by the Borrower.
3.2 BINDING OBLIGATION. This Third 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 Third
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 Third 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.
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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 Third 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
Third 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 Third 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 Third 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
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS ADMINISTRATIVE
AGENT
By:
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Janice Hammond
Vice President
(Signatures continue)
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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:
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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 Third 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 September ___, 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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