from 10-Q
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April 16, 1998 Unitel Video, Inc. 555 West 57th Street New York, Ny 10019 Attn: George Horowitz Re: Financial Covenants Dear Mr. Horowitz: Reference Is Made to That Certain Amended and Restated Loan and Security Agreement Dated as of December 12, 1995 (As Amended, the "Agreement") Among Unitel Video, Inc., as Borrower, R Squared, Inc., as Corporate Guarantor, and Heller Financial, Inc., as Agent and Lender ("Heller"). Capitalized Terms Used Herein and Not Otherwise Defined, Shall Have the Meanings Ascribed to Them in the Agreement. This Letter Will Confirm That Borrower and Heller Have Agreed to Amend the Financial Covenants Contained in Section 6 of the Agreement to the Amounts Set Forth Below for the Periods Set Forth Below: Quarter Covenant Ended Amount Tangible Net Worth 11/30/97 $12,500,000 (Section 6.1) 02/28/98 $12,500,000 05/31/98 $13,000,000 08/31/98 $13,000,000 Capital Expenditure Limits 11/30/97 $ 3,322,000 (Section 6.2) 02/28/98 $ 799,000 05/31/98 $ 658,000 08/31/98 $ 985,000 Fixed Charge Coverage* 11/30/97 <0.50 : 1.0> (Section 6.3) 02/28/98 0.25 : 1.0 05/31/98 0.75 : 1.0 08/31/98 1.00 : 1.0 * Calculated on a Cumulative Quarter Basis Until 8/31/98, Then Calculated on a Rolling Four-Quarter Basis Leverage Ratio 11/30/97 5.00 : 1.0 (Section 6.4) 02/28/98 5.00 : 1.0 05/31/98 3.75 : 1.0 08/31/98 3.75 : 1.0 Interest Coverage Ratio 11/30/97 <0.72 : 1.0> (Section 6.5) 02/28/97 1.00 : 1.0 05/31/98 1.50 : 1.0 08/31/98 1.80 : 1.0 <page> the Agreement Will Be Amended to Reflect the Foregoing Covenant Levels. Very Truly Yours, Heller Financial, Inc. /S/ Shyam Amladi - Shyam Amladi Senior Vice President
