<PAGE>

FIRST AMENDED AND RESTATED
CREDIT AGREEMENT


     This FIRST AMENDED AND RESTATED CREDIT AGREEMENT dated
as of October 20, 1997 is entered into by and among THE TODD-AO
CORPORATION, a Delaware corporation ("Borrower"), each bank whose name is
set forth on the signature pages of this Agreement and each lender which may
hereafter become a party to this Agreement (collectively, the "Banks" and
individually, a "Bank") and Bank of America National Trust and Savings
Association, as Administrative Agent and Issuing Bank.


     In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:


DEFINITIONS AND ACCOUNTING TERMS


     1.1  Terms.  The following terms used in this Agreement and in any
exhibits annexed hereto shall have the following meanings unless the context
otherwise requires.

     "Acquisition" means any transaction or series of related transactions for
 the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person or any business or
division of a Person, (b) the acquisition of in excess of 50% of the
capital stock, partnership interests, membership interests or equity of any
Person, or otherwise causing any Person to become a Subsidiary, or (c) a
merger or consolidation or any other combination with another Person (other
than a Person that is a Subsidiary) provided that Borrower or one of its
Subsidiaries is the surviving entity.

     "Administrative Agent" means Bank of America National Trust and Savings
Association, when acting in its capacity as the Administrative Agent under
any of the Loan Documents, or any successor Administrative Agent.

     "Administrative Agent's Office" means the Administrative Agent's address
 and, as appropriate, account as set forth on Schedule 10.6, or such other
address or account as the Administrative Agent hereafter may designate
 by written notice to Borrower and the Banks.

     "Administrative Agent-Related Persons" means the Administrative Agent
(including any successor agent), together with their respective Affiliates,
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.

     "Affiliate" means, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person.  As used in this definition, "control" (and the
 correlative terms, "controlled by" and "under common control with") shall

<PAGE>

 mean possession, directly or indirectly, of power to direct or cause the
 direction of management or policies (whether through ownership of
 securities or partnership or other ownership interests, by contract or
 otherwise); provided that, in any event, any Person that owns, directly or
 indirectly, 10% or more of the securities having ordinary voting power for
 the election of directors or other governing body of a corporation that has
 more than 100 record holders of such securities, or 10% or more of the
 partnership or other ownership interests of any other Person that has more
 than 100 record holders of such interests, will be deemed to control such
 corporation, partnership or other Person.

     "Agreement" means this Agreement, either as originally executed
 or as it may from time to time be supplemented, modified, amended,
 restated or extended.

     "Applicable Amount" means, for any Pricing Period, the per annum
 amounts set forth below under Applicable Amount opposite the applicable
Leverage Ratio as calculated from the most recently delivered Compliance
Certificate delivered pursuant to Section 6.2(a); provided, however, that
until the Administrative Agent's receives the first such Compliance
 Certificate after the Closing Date, the Applicable Amount shall be based on
 the Leverage Ratio as set forth in the certificate delivered pursuant to
Section 4.1(i), which Leverage Ratio shall be based on Borrower's unaudited
financial statements for the Fiscal Year ended August 31, 1997; provided,
further, that if the Leverage Ratio calculated from the audited financial
statements dated for the Fiscal Year ended August 31, 1997, as set forth in
 the Compliance Certificate delivered in respect of such date pursuant to
 Section 6.2(a), results in a different Applicable Amount from that
 calculated from the Leverage Ratio set forth in the certificate delivered
 pursuant to Section 4.1(i), the Applicable Amount shall be adjusted
 retroactively to the Closing Date to be based upon such revised Leverage
 Ratio:

<TABLE>
<CAPTION>

Leverage Ratio Applicable Amount
on first day of
Pricing Period (1)


            Commitment   Letters of     CD          Alternate
            Fee          Credit               Rate +            Base
                                        Offshore    Rate +
                                        Rate +

<S>                      <C>                 <C>       <C>                 <C>

> = 2.50:1    0.500%            2.00%          2.125%             1.00%

> = 2.00:1    0.375%            1.50%          1.625%             0.500%
but < 2.50:1

> = 1.50:1
but < 2.00:1 0.300%            1.25%          1.375%             0.125%

> = 1.00:1    0.250%            1.00%          1.125%             0

<PAGE>

but < 1.50:1 < 1.00:1            0.200%         0.75%              0.875%     0

</TABLE>

     (1) For purposes of determining the Applicable Amount,
the Convertible Subordinated Notes shall not be included in calculating
the Leverage Ratio.

          "Pricing Level Change Date" means with respect to any
 change in the Leverage Ratio which results in a change in the Applicable
 Amount, the earlier of (a) the date upon which Borrower delivers a
 Compliance Certificate to the Administrative Agent reflecting such changed
 Leverage Ratio and (b) the date upon which Borrower is required by
 Section 6.2(a) to deliver such Compliance Certificate; provided, however,
 that if the Compliance Certificate is not delivered by the date required by
 the above Section, then, subject to the other provisions of this Agreement,
 commencing on the date such Compliance Certificate was required until
 such Compliance Certificate is delivered, the Applicable Amount shall be
 based on highest level set forth above, and from and after the date such
 Compliance Certificate is thereafter received, the Applicable Amount shall
 be as determined from such Compliance Certificate.

          "Pricing Period" means (a) the period commencing on the
 Closing Date and ending on the first Pricing Level Change Date to occur
 thereafter and (b) each subsequent period commencing on each Pricing
 Level Change Date and ending the day prior to the next Pricing Level
 Change Date.

     "Attorney Costs" means and includes all fees and disbursements of
 any law firm or other external counsel and the allocated cost of internal
 legal services and all disbursements of internal counsel.

     "Bank" means each lender from time to time party hereto.

     "Base Rate" means, for any day, the higher of:  (a)  0.50% per
 annum above the latest Federal Funds Rate; and (b)  the rate of interest in
 effect for such day as publicly announced from time to time by BofA in San
 Francisco, California, as its "reference rate."  (The "reference rate" is a
 rate set by BofA based upon various factors including BofA's costs and
 desired  return, general economic conditions and other factors, and is used
 as a  reference point for pricing some loans, which may be priced at, above,
 or below such announced rate.)

     "Base Rate Loan" means a Dollar-denominated Loan made
hereunder and specified to be an Base Rate Loan in accordance with Section
 2.

     "BofA" means Bank of America National Trust and Savings
 Association, a national banking association.

     "BofA Tranche Loan" means the Offshore Rate Loan made by
 BofA to Borrower under the Existing Credit Agreement and continued
 hereunder under Section 2.1A.

     "BofA Tranche Termination Date" means the earlier of (a) March
 18, 1998 and (b) the date Borrower prepays the BofA Tranche Loan in full.

<PAGE>

     "Borrower" has the meaning given such term in the introduction
 hereof.

     "Borrowing" and "Borrow" each mean, a borrowing hereunder
 consisting of Loans of the same type made on the same day and, other than
 in the case of Base Rate Loans, having the same Interest Period.

     "Borrowing Date" means the date that a Loan is made by the
 Banks, which shall be a Business Day.

     "Business Day" means any day other than a Saturday, Sunday or
 other day on which commercial banks in New York City or San Francisco
 are authorized or required by law to close; if the applicable Business Day
 relates to any Offshore Rate Loan, means any such day on which dealings
 are carried on in the London offshore Dollar interbank market; and if the
 applicable Business Day relates to any Offshore Currency Loan, means any
 such day on  which dealings in such Offshore Currency deposits are carried
 on in the London offshore interbank market.

     "Capital Lease Obligations" means all monetary obligations of a
 Person under any leasing or similar arrangement which, in accordance with
 Generally Accepted Accounting Principles, is classified as a capital lease.


     "CD Rate" means, for any Interest Period with respect to CD Rate
 Loans comprising part of the same Borrowing, the per annum rate of
 interest (rounded upward to the next 1/100th of 1%) determined by the
 Administrative Agent (whose determination shall be conclusive in the
 absence of manifest error) as follows:

     CD Rate = Certificate of Deposit Rate + Assessment Rate
                  1 - Reserve Percentage

     Where

          "Assessment Rate" means, for any day of such Interest
 Period, the rate determined by the Administrative Agent as equal to the
 annual assessment rate in effect on such day payable to the FDIC by a
 member of the Bank Insurance Fund that is classified as adequately
 capitalized and within supervisory subgroup "A" (or a comparable
 successor assessment risk classification within the meaning of 12 C.F.R.
 327.3) for insuring time deposits at offices of such member in the United
 States; or, in the event that the FDIC shall at any time hereafter cease to
 assess time deposits based upon such classifications or successor
 classifications, equal to the maximum annual assessment rate in effect on
 such day that is payable to the FDIC by commercial banks (whether or not
 applicable to any particular Bank) for insuring time deposits at offices of
 such banks in the United States.

          "Certificate of Deposit Rate" means the rate of interest per
 annum determined by the Administrative Agent to be the arithmetic average
 (rounded upward to the next 1/100th of 1%) of the rates notified to BofA as
 the rates of interest bid by two or more certificate of deposit dealers of
 recognized standing selected by the Administrative Agent for the purchase
 at face value of dollar certificates of deposit issued by major United
 States banks, for a maturity comparable to such Interest Period and in the
 approximate amount of the CD Rate Loans to be made, at the time selected
 by the Administrative Agent on the first day of such Interest Period.

<PAGE>

          "Reserve Percentage" means, for any day of such Interest
 Period, the maximum reserve percentage (expressed as a decimal, rounded
 upward to the next 1/100th of 1%), as determined by the Administrative
 Agent, in effect on such day (including any ordinary, marginal, emergency,
 supplemental, special and other reserve percentages), prescribed by the
 FRB for determining the maximum reserves to be maintained by member
 banks of the Federal Reserve System with deposits exceeding
 $1,000,000,000 for new non-personal time deposits for a period comparable
 to such Interest Period and in an amount of $100,000 or more.

     The CD Rate shall be adjusted, as to all CD Rate Loans then
 outstanding, automatically as of the effective date of any change in the
 Assessment Rate or the Reserve Percentage.

     "CD Rate Loan" means a Dollar-denominated Loan which bears
interest at a rate based upon the CD Rate.

     "Closing Date" means the date all conditions set forth in Section
 4.1 are satisfied or waived by the Administrative Agent and the Banks.

     "Code" means the Internal Revenue Code of 1986, as amended, as
 time to time in effect.

     "Collateral" means all of the collateral covered by the Collateral
 Documents.

     "Collateral Documents" means, collectively, the Pledge Agreement
 and any other security agreement, or supplement thereto, from time to time
 executed and delivered by Borrower or the Subsidiaries to secure the
 Obligations.

     "Commitment" means, for each Bank, the amount set forth as such
 opposite such Bank's name on Schedule 2.1, as such amount may be
 reduced, adjusted or increased pursuant to the terms of this Agreement
 (collectively, the combined Commitments).  The respective Pro Rata Shares
 of the Banks are set forth in Schedule 2.1.

     "Compliance Certificate" means a certificate in the form of Exhibit
 B, properly completed and signed by a Responsible Officer.

     "Continuation" and "Continue" each mean, with respect to any
 Loan other than a Base Rate Loan, the continuation of such Loan as the
 same type of Loan in the same principal amount, but with a new Interest
 Period and an interest rate determined as of the first day of such new
 Interest Period.  Continuations must occur on the last day of the Interest
 Period for such Loan.

     "Conversion" and "Convert" each mean, with respect to any Loan,
 the conversion of one type of Loan into another type of Loan.  With respect
 to Loans other than Base Rate Loans, Conversions must occur on the last
 day of the Interest Period for such Loan.

     "Convertible Subordinated Notes" means convertible subordinated
 notes issued by Borrower in connection with the Hollywood Digital
 Acquisition and having terms and conditions and otherwise in form and
 substance satisfactory to the Requisite Bank, and any extension, renewal,

<PAGE>

 refunding and refinancing thereof in form and substance satisfactory to the
 Requisite Banks; provided that after giving effect to such extension,
 renewal, refunding or refinancing the principal amount thereof is not
 increased.  Prior to the exchange of such notes as contemplated by Section
 6.11, the aggregate principal amount of such notes shall not exceed
 $9,239,071.  From and after the exchange of such notes as contemplated by
 Section 6.11, the aggregate principal amount of such notes shall not exceed
 $8,400,000.

     "Commonly Controlled Entity" means an entity, whether or not
 incorporated, which is under common control with Borrower within the
 meaning of Section 414(c) of the Code.

     "Debtor Relief Laws" means the Bankruptcy Code of the United
 States of America, as amended from time to time, and all other applicable
 liquidation, conservatorship, bankruptcy, assignment for the benefit of
 creditors, moratorium, rearrangement, receivership, insolvency,
 reorganization, or similar debtor relief laws from time to time in effect
 affecting the rights of creditors generally.

     "Default" means any event or circumstance which, with the passing
of time, giving of notice, or both would become an Event of Default.

     "Default Rate" means a fluctuating rate per annum equal to the
 Base Rate plus the Applicable Amount, if any, plus 2%.

     "Designated Deposit Account" means a deposit account to be
 maintained by Borrower with BofA, as from time to time designated by
 Borrower by written notification to the Administrative Agent.

     "Distribution" means, with respect to any shares of capital stock or
 any warrant or option to purchase an equity security or other equity
 security  issued by a Person, (a) the retirement, redemption, purchase, or
other  acquisition for Cash or for Property by such Person of any such
 security, (b) the declaration or (without duplication) payment by such
 Person of any dividend in Cash or in Property on or with respect to any
 such security, (c)  any Investment by such Person in the holder of 5% or
 more of any such  security if a purpose of such Investment is to avoid
 characterization of the  transaction as a Distribution and (d) any other
 payment in cash or Property by such Person constituting a distribution
 under applicable laws with  respect to such security.

     "Dollar Equivalent" means, as of any date, (a) as to any amount
denominated in Dollars, the amount thereof at such time, and (b) as to any
 amount denominated in an Offshore Currency, the equivalent amount in
 Dollars based upon the Spot Rate for the purchase of Dollars with such
 Offshore Currency on such date.

     "Dollars" and the sign "$" means dollars in lawful currency of the
United States of America.

          "EBITDA" means, as of any date of determination, or
 Borrower and its Significant Subsidiaries on a consolidated basis,
 determined in accordance with Generally Accepted Accounting Principles,
 an amount equal to the sum of, without duplication, for the preceding four
-quarter period ending on the date of determination (a) such Person's net
income (or net loss), (b) less the net income attributable to joint ventures

<PAGE>

 and Subsidiaries less than 100% owned, plus, without duplication, (c) cash
 actually received by Borrower or its Significant Subsidiaries from joint
 ventures and Subsidiaries less than 100% owned which is not a return on
 capital or results from an extraordinary gain plus (d) all depreciation
 expense, lease expense (excluding operating leases but including Capital
 Lease and Synthetic Lease expense), interest expense, and amortization
 expense of intangibles of any kind to the extent included in the
 determination of such net income (or loss), plus (e) provisions for income
 taxes as set forth in Borrower's consolidated income statement, plus (f)
 noncash compensation in the form of stock award grants; provided,
 however, that net income (or loss) shall be computed for these purposes
 without giving effect to extraordinary losses or extraordinary gains.  The
 EBITDA of any Significant Subsidiary acquired by Borrower during the
 prior four fiscal quarters may be included.

     "Eligible Assignee" means (a) a financial institution organized
 under the laws of the United States, or any state thereof, and having a
 combined capital and surplus of at least $100,000,000; (b) a commercial
 bank organized under the laws of any other country which is a member of
 the Organization for Economic Cooperation and Development (the
 "OECD"), or a political subdivision of any such country, and having a
 combined capital and surplus of at least $100,000,000, provided that such
 bank is acting through a branch or agency located in the United States; (c) a
 Person that is primarily engaged in the business of commercial banking and
 that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of a Person of which a
 Bank is a Subsidiary, or (iii) a Person of which a Bank is a Subsidiary and
 (d) another Bank.

     "Employee Benefit Plan" means "employee benefit plan" as that
 term is defined in Section 3(3) of ERISA.

     "ERISA" means the Employee Retirement Income Security Act of
 1974, as amended from time to time in effect.

     "Event of Default" has the meaning provided for in Section 8.1.

     "Existing Credit Agreement" means that certain Credit Agreement
 dated as of December 2, 1994, as amended, between Borrower and Bank of
 America National Trust and Savings Association.

     "Extension of Credit" means (a) the Borrowing of any Loans, (b)
 the Conversion or Continuation of any Loans or (c) the issuance, renewal,
 increase continuation, amendment or other credit action with respect to any
 Letter of Credit, including the Banks acquiring a participation in such
 Letters of Credit (collectively, the "Extensions of Credit").

     "Federal Funds Rate" means, for any day, the rate set forth in the
 weekly statistical release designated as H.15(519), or any successor
 publication, published by the Federal Reserve Bank of New York (including
 any such successor, "H.15(519)") on the preceding Business Day opposite
 the caption "Federal Funds (Effective)"; or, if for any relevant day such
rate is not so published on any such preceding Business Day, the rate for
 such day will be the arithmetic mean as determined by the Administrative
 Agent of the rates for the last transaction in overnight Federal funds
 arranged prior to 9:00 a.m. (New York City time) on that day by each of
 three leading brokers of Federal funds transactions in New York City
 selected by the Administrative Agent.

<PAGE>

     "Fixed Charge Coverage Ratio means, for Borrower and its
 Subsidiaries on a consolidated basis, determined in accordance with
 Generally Accepted Accounting Principles, the ratio of (a) Free Available
 Cash Flow for the four immediately preceding fiscal quarters to (b) Interest
 Expense for the four immediately preceding fiscal quarters plus the current
 portion of Funded Indebtedness (including without limitation the current
 portion of Capital Leases and Synthetic Leases) excluding the Convertible
 Subordinated Note plus all pro forma Distributions for the immediately
 following four fiscal quarters.

     "FRB" means the Board of Governors of the Federal Reserve
 System or any governmental authority succeeding to its functions.

     "Free Available Cash Flow" means, as of any date of determination,
for Borrower and its Significant Subsidiaries on a consolidated basis,
 determined in accordance with Generally Accepted Accounting Principles,
 the sum of, without duplication, for the preceding four quarter period
 ending on the date of determination (a) EBITDA, less (b) cash income
 taxes payable and less (c) maintenance capital expenditures (which shall
 exclude capital expenditures relating to any Property made within 12
 months of the acquisition of such Property or the Person owning such
 Property).  The Free Available Cash Flow of any Significant Subsidiary
 acquired by Borrower during the prior four fiscal quarters may be included.

     "Funded Indebtedness" means, for any period, for Borrower and its
Subsidiaries on a consolidated basis, determined in accordance with
 Generally Accepted Accounting Principles, an amount equal to the sum of,
 without duplication:

               (a) all Indebtedness for borrowed money
 (excluding Indebtedness of  Non-Recourse Joint Ventures) plus

               (b) the principal portion of all Capital Leases and
Synthetic Leases plus

               (c) indebtedness arising under acceptance
 facilities and the face amount of all letters of credit issued for the
 account  of such Person and, without duplication, all drafts drawn
thereunder plus

               (d) all Guaranty Obligations less

               (e) amounts held as cash, cash equivalents and
 marketable securities determined in accordance in Generally Accepted
 Accounting Principles less $3,500,000.

     "FX Trading Office" means the Foreign Exchange Trading Center
#5752, Los Angeles, California, of BofA, or such other of BofA's offices as
 BofA may designate from time to time.

     "Generally Accepted Accounting Principles" means generally
accepted accounting principles as in effect from time to time, including,
 without limitation, applicable statements, bulletins and interpretations
 issued by the Financial Accounting Standards Board and bulletins, opinions,
 interpretations and statements issued by the American Institute of Certified
 Public Accountants or its committees.

<PAGE>

     "Governmental Authority" means (a) any international, foreign,
 federal, state, county or municipal government, or political subdivision
 thereof, (b) any governmental or quasi-governmental agency, central bank
 or comparable authority, authority, board, bureau, commission, department,
 instrumentality or public body, or (c) any court or administrative tribunal
of competent jurisdiction.

     "Guarantors" means each Subsidiary of Borrower (individually a
 "Guarantor") that is a guarantor under the Guaranty or becomes a guarantor
 thereunder pursuant to Section 6.8.

     "Guaranty" means the Subsidiary Continuing Guaranty
 substantially in the form of Exhibit D hereto, either as originally executed
 or as the same may from time to time be supplemented, modified, amended,
 renewed, extended or supplanted.

     "Guaranty Obligation" means, as to any Person, any (a) guarantee
 by that Person of Indebtedness of, or other obligation performable by, any
 other Person or (b) assurance, agreement, letter of responsibility, letter
 of awareness, undertaking or arrangement given by that Person to an
 obligee of any other Person with respect to the performance of an
 obligation by, or the financial condition of, such other Person, whether
 direct, indirect or contingent, including any purchase or repurchase
 agreement covering such obligation or any collateral security therefor, any
 agreement to provide funds (by means of loans, capital contributions or
 otherwise) to such other Person, any agreement to support the solvency or
 level of any balance sheet item of such other Person or any "keep-well" or
 other arrangement of whatever nature given for the purpose of assuring or
 holding harmless such obligee against loss with respect to any obligation of
 such other Person; provided, however, that the term Guaranty Obligation
 shall not include endorsements of instruments for deposit or collection in
 the ordinary course of business.  The amount of any Guaranty Obligation
 shall be deemed to be an amount equal to the stated or determinable amount
 of the related primary obligation, or portion thereof, covered by such
 Guaranty Obligation or, if not stated or determinable, the maximum
 reasonably anticipated liability in respect thereof as determined by the
 Person in good faith.

     "Hollywood Digital Acquisition" means the acquisition of certain
 assets and the assumption of certain liabilities of Hollywood Digital Limited
 Partnership, a Delaware limited partnership, by Todd-AO HD, Inc., a
 California corporation.

     "Indebtedness" means, as to any Person, at a particular time, all
 items which would, in conformity with Generally Accepted Accounting
 Principles, be classified as liabilities on a balance sheet of such Person
 as at such time (excluding deferred compensation, deferred taxes, trade
 accounts, programming liabilities and other accounts payable incurred in
 the ordinary course of business in accordance with past practice), but in any
 event including, without duplication, (a) indebtedness arising under
 acceptance facilities and the face amount of all letters of credit issued
for the account of such Person and, without duplication, all drafts drawn
 thereunder, (b) all liabilities secured by any Lien on any property owned
by such Person even though it has not assumed or otherwise become liable
 for the payment thereof, (c) any withdrawal liability incurred under ERISA
 by such Person (or, if such Person is Borrower, a Commonly Controlled

<PAGE>

 Entity) to a Multiemployer Plan, (d) all obligations of such Person as
 lessee under leases which have been or should be, in accordance with
 Generally Accepted Accounting Principles, recorded as Capital Lease
 Obligations, (e) indebtedness relating to Synthetic Leases; and (f) all
 Guaranty Obligations of such Person in respect of any of the foregoing.

     "Interest Expense" means interest expense as determined in
 accordance with Generally Accepted Accounting Principles.

     "Interest Payment Date" means, (a) with respect to any Base Rate
 Loan, the last Business day of each calendar quarter and the Maturity Date,
 and (b) with respect to any other type of Loan, (i) any date that such Loan
is prepaid in whole or in part, (ii) the Maturity Date, and (iii) the last
day of each Interest Period applicable to, or the maturity of, such Loan;
 provided, however, that if any Interest Period or the maturity of any such
 Loan exceeds three months or 90 days, interest shall also be paid on the
 date(s) that fall, as applicable, three, six or nine months, or 90, 180
or 270 days, respectively, after the beginning of such Interest Period shall
 also be Interest Payment Dates.

     "Interest Period" means, with respect to any Borrowing of an
 Offshore Rate Loan or a CD Rate Loan, a period commencing on the
 Borrowing Date thereof (or the date of the expiration of the then current
 Interest Period with respect to any outstanding Offshore Rate Loans or CD
 Rate Loans) to (1) with respect to a Borrowing of Offshore Rate Loans, a
 date 1, 2, 3, 6 or 9 months (and, until the BofA Tranche Termination Date,
 other periods of time up to 9 months, subject to such other periods being
 available to each Bank in its sole discretion), in each case only to the
extent Dollar deposits or deposits in the applicable Offshore Currency of
 such duration are generally available in the applicable offshore interbank
 market, and (2) with respect to a Borrowing of CD Rate Loans, a date 30,
 60, 90, 180 or 270 days thereafter (or such other day as may be agreed upon
 by Borrower and the Administrative Agent and the Banks), subject in all
 cases to the following:

               (a)   (i) If any Interest Period with respect to
 CD Rate Loans would otherwise end on a day which is not a Business Day,
 that Interest Period shall be extended to the next succeeding Business Day;
 and (ii) If any Interest Period with respect to Offshore Rate Loans would
 otherwise end on a day which is not an Offshore Rate Business Day, that
 Interest Period shall be extended to the next succeeding Offshore Rate
 Business Day, unless the result of such extension would be to extend such
 Interest Period into another calendar month, in which event such Interest
 Period shall end on the immediately preceding Business Day;

               (b)  no Interest Period for Loans shall extend
 beyond any Reduction Date if the effect of establishing such an Interest
 Period would be that the aggregate unpaid principal amount of all Loans
 having Interest Periods ending after such Reduction Date would exceed the
 amount permitted to be outstanding after such Amortization Date;

               (c)  no Interest Period for a Loan shall extend
 beyond the Maturity Date;

               (d)  each Interest Period with respect to CD Rate
 Loans shall be selected and conducted, and may vary in regard to the length
 of period in accordance with the practices and customs of banking

<PAGE>

 institutions in connection with certificates of deposit purchased in New
 York, New York by dealers in certificates of deposit was from time to time
 in effect;

               (e)  each Interest Period with respect to Offshore
 Rate Loans shall be interpreted, and may vary in regard to the length of
 period, in accordance with the customs and practices of the international
 inter-bank markets;

               (f)  the first Interest Period for any CD Rate Loans or for any 
 Offshore Rate Loans shall commence on the date of such Borrowing, and each 
 succeeding Interest Period (if any) for such Loans shall commence on the last
 day of the preceding Interest Period; and

               (g)  No Interest Period commencing prior to
 the BofA Tranche Termination Date may end after the BofA Tranche
 Termination Date.

     "Investment" means, when used in connection with any Person, any
 investment by or of that Person, resulting in less than 100% of the
 ownership of such Person, whether by means of purchase or other
 acquisition of stock or other securities of any other Person or by means
of a loan, advance creating a debt, capital contribution, guaranty or other
 debt or equity participation or interest in any other Person, including any
 partnership and joint venture interests of such Person.  The amount of any
 Investment shall be the amount actually invested, without adjustment for
 subsequent increases or decreases in the value of such Investment.
 "Investments" shall not include Acquisitions.

     "Issuing Bank" means Bank of America National Trust and Savings
 Association.

     "Lending Office" means, as to any Bank, the office or offices of
 such Bank specified as its "Lending Office" or "Domestic Lending Office"
 or "Offshore Lending Office", as the case may be, on Schedule 10.6, or
 such other office or offices as such Bank may from time to time notify
 Borrower and the Administrative Agent.

     "Letter of Credit" means any standby or commercial letter of credit
 issued by the Issuing Bank under Section 2.3.

     "Letter of Credit Application" means an application for issuances
 of, or amendments to, letters of credit as shall at any time be in use at the
 Issuing Bank.

     "Letter of Credit Usage" means, as at any date of determination, the
 undrawn face amount of outstanding Letters of Credit plus the aggregate
 amount of all drawings under the Letters of Credit honored by the Issuing
 Bank and not theretofore reimbursed by Borrower or converted into Loans.

     "Leverage Ratio" means the ratio of Funded Indebtedness to
 EBITDA; provided, however, that for purposes of determining the
 Applicable Amount only, the Convertible Subordinated Notes shall not be
 included in Funded Indebtedness; provided, further, that for purposes of
 determining compliance with Section 7.6 in connection with any
 Acquisition, not more than 80% of the EBITDA of (a) any Person being so

<PAGE>

 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.

     "Lien" means any mortgage, pledge, lien, security interest,
 conditional sale or other title retention agreement or other similar
 encumbrance.

     "Loan" means (a) a Loan of any type made to Borrower by any
 Bank in accordance with its Pro Rata Share pursuant to Section 2.1 or (b)
 the Offshore Rate Loan continued by BofA pursuant to Section 2.1A.


     "Loan Documents" means, collectively, this Agreement, the Notes,
 the Guaranty, the Collateral Documents, any Request for Extension of
 Credit, any Letter of Credit Application, any Compliance Certificate and
 any other agreements of any type or nature hereafter executed and delivered
 by Borrower or any of its Subsidiaries or Affiliates to the Administrative
 Agent, the Issuing Bank or to any Bank in any way relating to or in
 furtherance of this Agreement, in each case either as originally executed or
 as the same may from time to time be supplemented, modified, amended,
 restated, extended or supplanted.

     "Maturity Date" means December 31, 2002 as such date may be
 extended from time to time pursuant to Section 2.12.

     "Minimum Amount" means, with respect to each of the following
 actions, the following amounts set forth opposite such action (a reference to
 "Minimum Amount" shall also be deemed a reference to the multiples in
 excess thereof set forth below):

                         Minimum
                         Multiples
               Minimum   in excess of
Type of Action      Amount         Minimum Amount

Borrowing of,
prepayment of
or Conversion into,
Base Rate Loans           $  250,000    $  100,000

Borrowing of,
prepayment of
or Continuation of,
Offshore Rate Loans
and CD Rate Loans            $1,000,000 $  500,000
Reduction in        $1,000,000     $1,000,000
Commitments
Assignments          $5,000,000

     "Multiemployer Plan" means a Plan which is a multiemployer plan
 as defined in Section 4001(a)(3) of ERISA.

     "Net Worth" means net worth as determined in accordance with
 Generally Accepted Accounting Principles.

<PAGE>

     "Non-Recourse Joint Venture" means a joint venture which is less
 than 100% owned by Borrower or any Subsidiary having only Indebtedness
 which is non recourse to Borrower and its Subsidiaries, other than such
 joint venture.  For purposes of this definition, Indebtedness shall be
deemed non recourse only if the creditor thereon has no direct or indirect
 recourse to Borrower, any of its Subsidiaries (other than such joint
 venture) or their respective assets (other than by reasons of a Guaranty
 Obligation entered into in connection therewith and otherwise permitted by
 Section 7.1(g)), whether by means of a judicial foreclosure or otherwise,
 except for customary exceptions for fraud, misrepresentation,
 misappropriation of funds, waste, criminal liability and environmental
 liability.

     "Note" means the promissory note made by Borrower to a Bank
 evidencing the Loans made by such Bank, substantially in the form of
 Exhibit C, either as originally executed or as the same may from time to
 time be supplemented, modified, amended, renewed, extended or
 supplanted (collectively, the "Notes").

     "Notice of Assignment and Acceptance" means a Notice of
 Assignment and Acceptance substantially in the form of Exhibit F.

     "Obligations" means all present and future obligations of every
 kind or nature of Borrower or any Subsidiary at any time and from time to
 time owed to the Administrative Agent, any Bank, any Person entitled to
 indemnification, or any one or more of them, under any one or more of the
 Loan Documents, whether due or to become due, matured or unmatured,
 liquidated or unliquidated, or contingent or noncontingent, including
 obligations of performance as well as obligations of payment, and including
 interest that accrues after the commencement of any proceeding under any
 Debtor Relief Law by or against Borrower or any Subsidiary or Affiliate of
 Borrower.

     "Offshore Currency" means English Pounds Sterling, French
 Francs or Deutsche Marks.

     "Offshore Currency Commitment" means, for each Bank, such
 Bank's undertaking to make Loans to Borrower or to participate in Letter of
 Credit Usage denominated in Offshore Currencies in an aggregate principal
 amount not exceeding 50% of the Dollar Equivalent of such Bank's
 Commitment, as the same may be reduced pursuant to the terms of this
 Agreement (collectively, the "Offshore Currency Commitments").  The
 Offshore Currency Commitments are part of, and not in addition to, the
 combined Commitments.

     "Offshore Currency Loan" means an Offshore Rate Loan
 denominated in an Offshore Currency.

"Offshore Rate" means, for any Interest Period, with respect to Offshore
 Rate Loans comprising part of the same Borrowing, the per annum rate of
 interest (rounded upward to the next 1/16th of 1%) determined by the
 Administrative Agent as follows:

Offshore Rate = (LIBOR)/(1.00 - Eurodollar Reserve Percentage)

Where,

<PAGE>

"Eurodollar Reserve Percentage" means for any day for any Interest Period
 the maximum reserve percentage (expressed as a decimal, rounded upward
 to the next 1/100th of 1%) in effect on such day (whether or not applicable
 to any Bank) under regulations issued from time to time by the FRB for
 determining the maximum reserve requirement (including any emergency,
 supplemental or other marginal reserve requirement) with respect to
 Eurocurrency funding (currently referred to as "Eurocurrency liabilities");
 and
"LIBOR" means for each Interest Period the rate of interest per annum
 determined by the Administrative Agent to be the arithmetic mean (rounded
 upward to the next 1/16th of 1%) of the rates of interest per annum notified
 to the Administrative Agent by BofA as the rate of interest at which dollar
 deposits in the approximate amount of the amount of the Loan to be made
 or Continued as, or Converted into, an Offshore Rate Loan by BofA and
 having a maturity comparable to such Interest Period would be offered to
 major banks in the London interbank market at their request at
 approximately 11:00 a.m. (London time) two Business Days prior to the
 first day of such Interest Period.  The determination of the Eurodollar
 Reserve Percentage and the Offshore Base Rate by the Administrative
 Agent shall be conclusive in the absence of manifest error.

     "Offshore Rate Loan" means a Loan that bears interest based on
 the Offshore Rate, and may be an Offshore Rate Loan denominated in
 Dollars or in an Offshore Currency.

     "Overnight Rate" means, for any day, (a) in the case of amounts
denominated in Dollars, the Federal Funds rate and (b) for any amount
 denominated in an Offshore Currency, the rate of interest per annum at
 which overnight deposits in such Offshore Currency, in an amount
 approximately equal to the amount with respect to which such rate is being
 determined, would be offered for such day by Bank of America's principal
 office in London to major banks in the London or other applicable offshore
 interbank market.

     "PBGC" means the Pension Benefit Guaranty Corporation created
 by Section 4002(a) of ERISA, or any Governmental Authority succeeding
 to the functions thereof.

     "Person" means an individual, a partnership, a corporation
 (including a business trust), a joint stock company, a trust, an
 unincorporated association, a joint venture or any other entity of any type
 whatsoever, or any government or any agency or political subdivision
 thereof.

     "Plan" means (a) with respect to Borrower, any plan described in
 Section 4021(a) of ERISA and not excluded pursuant to Section 4021(b)
 thereof, under which Borrower or any Commonly Controlled Entity has
 contributed, and (b) with respect to any other Person, any employee benefit
 plan or other plan established or maintained by such Person for the benefit
 of such Person's employees and to which Title IV of ERISA applies.

     "Plan Administrator" has the meaning assigned to the term
 "administrator" in Section 3(16)(a) of ERISA.

     "Plan Sponsor" has the meaning assigned to the term "plan
 sponsor" in Section 3(16)(B) of ERISA.

<PAGE>

     "Pledge Agreement" means the Pledge Agreement, given by
 Borrower in favor of the Administrative Agent substantially in the form of
 Exhibit E hereto, either as originally executed or as the same may from time
 to time be supplemented, modified, amended, renewed, extended or
 supplanted.

     "Principal Stockholders" means Marshall Naify, Robert Naify and
 Salah Hassanein.

     "Prohibited Transaction" has the respective meanings assigned to
 that term in Section 4975 of the Code and in Section 406 of ERISA.

     "Property" means all types of real, personal, tangible, intangible or
 mixed property.

     "Pro Rata Share" means, with respect to each Bank, the percentage
 of the combined Commitments set forth opposite the name of that Bank
 under "Pro Rata Share" on Schedule 2.1.

     "Quarterly Payment Date" means each February 28, May 31,
 August 31 and November 30.

     "Reduction Amount" means, with respect to any Reduction Date,
 the amount necessary to reduce the then applicable combined Commitments
 to the level set forth below opposite that Reduction Date, expressed as a
 percentage of the combined Commitments in effect on the initial Reduction
 Date:

                    Maximum Percent
                    of Combined
                    Commitments
Reduction Date(2)   Remaining

November 30, 2000    93.75%
February 28, 2001    87.50%
May 31, 2001               81.25%August 31, 2001          75.00%
November 30, 2001    68.75%February 28, 2002       62.50%
May 31, 2002               56.25%
August 31, 2002            50.00%
 December 31, 2002             0%

"Reduction Date" means each of the dates set forth under
 "Reduction Date" in the definition of "Reduction Amount;" provided,
 however, that if the Maturity Date has been extended pursuant to Section
 2.12, each Reduction date shall be concurrently extended for the same
 period of time.

     "Reportable Event" means a "reportable event" described in
 Section 4043(b) of ERISA as to which the 30 day notice period has not
 been waived.

     "Request for Extension of Credit" means a written request
substantially in the form of Exhibit A duly completed and signed by a
 Responsible Officer, or a telephonic request followed by such a written
 request, in each case delivered to the Administrative Agent by Requisite
 Notice.

<PAGE>

     "Requisite Banks" means (a) as of any date of determination if the
 Commitments are then in effect, Banks having in the aggregate 51% or
 more of the combined Voting Pro Rata Share then in effect and (b) as of
 any date of determination if the Commitments have then been terminated
 and there are Loans or Letters of Credit outstanding, Banks holding Loans
 and Letter of Credit Usage (giving effect to the risk participations set
forth in Section 2.1A(b)) aggregating 51% or more of the aggregate
outstanding principal amount of the Loans and Letter of Credit Usage.

     "Requisite Notice" means, unless otherwise provided herein, (a)
 irrevocable written notice to the intended recipient or (b) irrevocable
 telephonic notice to the intended recipient, promptly followed by a written
 notice to such recipient.  Such notices shall be (i) delivered or made to
 such  Person at the address, telephone number or facsimile number set forth
on Schedule 10.6 or as otherwise designated by such Person by Requisite
 Notice to the Administrative Agent and (ii) if made by Borrower, given or
 made by a Responsible Officer.  Any written notice shall be in the form, if
 any, prescribed in the applicable section herein and may be given by
 facsimile provided such facsimile is promptly confirmed by a telephone call
 to such recipient.

     "Requisite Time" means, with respect to any of the actions listed
 below, the time set forth opposite such action (all times are California
time):

     Action                    Time          Date

     Borrowing of,        8:00 a.m.     Relevant Date
     prepayment of
     or Conversion into,
     Base Rate Loans

     Borrowing of,       10:00 a.m.     3 Business Days
     Continuation of,                   prior to
     prepayment of or                   relevant date
     Conversion into
     Offshore Rate Loans

     Borrowing of,       10:00 a.m.     2 Business Days
     Continuation of,                   prior to
     prepayment of or                   relevant date
     Conversion into
     CD Rate Loans

     Letter of Credit    10:00 a.m.     5 Business Days
     Action              prior to
                 action

     Voluntary   10:00 a.m.    2 Business Days
     Reduction                 prior to
     of Commitments                  reduction date


     Funds made     11:00 a.m.     Relevant date
     available by Banks or Borrower to
     Administrative Agent

<PAGE>

     "Responsible Officer" means the President, Chief Financial Officer
 or Controller of Borrower.

     "Significant Subsidiary" means any Subsidiary of Borrower (a)
 having at any time now or hereafter a net book value in accordance with
 Generally Accepted Accounting Principles or, if greater, fair market value
 (as reasonably determined by Borrower) exceeding 5% of the consolidated
 assets of Borrower and its Subsidiaries or (b) that Borrower wishes to
 include in calculating the covenants in Sections 7.11 and 7.12.

     "Spot Rate" for a currency means the rate quoted by BofA as the
 spot rate for the purchase by BofA of such currency with another currency
 through its FX Trading Office at approximately 8:00 a.m. (San Francisco
 time) on the date two Business Days prior to the date as of which the
 foreign exchange computation is made.

     "Subsidiary" means any Person (whether now existing or hereafter
 organized or acquired) of which Borrower owns, directly or indirectly, more
 than fifty (50%) of the securities or other equity interests or which
 Borrower otherwise controls (collectively "Subsidiaries").

     "Synthetic Lease" means, with respect to any Person, (a) a so-
called synthetic lease, or (b) an agreement for the use or possession of
 property creating obligations which do not appear on the balance sheet of
 such Person but which, upon the insolvency or bankruptcy of such Person,
 may be characterized as the Indebtedness of such Person (without regard to
 accounting treatment).

     "Tangible Net Worth" means the gross book value, on a
 consolidated basis, of Borrower's assets (exclusive of goodwill, patents,
 trademarks, trade names, copyrights, deferred charges and other like
 intangibles) less all liabilities (including accrued and deferred income
taxes and subordinated indebtedness).

     "type" of Loan means (a) a Base Rate Loan, (b) an Offshore Rate
Loan with an Interest Period of one, two, three, six or nine months
 thereafter, or (c) a CD Rate Loan with an Interest Period of 30, 60, 90, 180
or 270 days thereafter, in each case as selected by Borrower in the Request
 for Extension of Credit relating thereto.

     "Voting Pro Rata Share" means, with respect to each Bank, the
percentage of the combined Commitments set forth opposite the name of
that Bank under "Voting Pro Rata Share" on Schedule 2.1.

     1.2  Currency Equivalents Generally.  For all purposes of this
 Agreement (but not for purposes of the preparation of any financial
 statements delivered pursuant hereto), the equivalent in any Offshore
 Currency or other currency of an amount in Dollars, and the equivalent in
 Dollars of an amount in any Offshore Currency or other currency, shall be
 determined at the Spot Rate from time to time as of any date for which the
 Administrative Agent determines the Dollar Equivalent of Offshore
 Currency Loans, including, without limitation (a) any date on which a
 Borrowing of an Offshore Currency Loan is requested and made, (b) on the
 date a Letter of Credit in an Offshore Currency is requested and Issued, (c)
 the last Business Day of each month, and (d) any other date selected by the
 Administrative Agent from time to time in its sole discretion.

<PAGE>

     1.3. Accounting Terms.  All accounting terms not specifically
 defined herein shall be construed in accordance with Generally Accepted
 Accounting Principles.  When used herein, the term "financial statements"
shall include the notes and schedules thereto, but need not include such
notes or schedules when used in reference to such statements of any Person
as of any date other than the end of a fiscal year of such Person.

     1.4  Rounding.  Any financial ratios required to be maintained
 by Borrower pursuant to this Agreement shall be calculated by dividing the
 appropriate component by the other component, carrying the result to one
 place more than the number of places by which such ratio is expressed in
 this Agreement and rounding the result up or down to the nearest number
 (with a round-up if there is no nearest number) to the number of places by
 which such ratio is expressed in this Agreement.

     1.5. Exhibits and Schedules.  All Exhibits and Schedules to this
 Agreement, either as originally existing or as the same may from time to
 time be supplemented, modified or amended, are incorporated herein by
 this reference.  A matter disclosed on any Schedule shall be deemed
 disclosed on all Schedules.

     1.6  Miscellaneous Terms.   The term "or" is disjunctive; the
term "and" is conjunctive.  The term "shall" is mandatory; the term "may"
 is permissive. The term "including" is by way of example and not limitation.

Section 2 COMMITMENTS; INTEREST, FEES, PAYMENT
PROCEDURES

     2.1  The Commitments.
(a)  Subject to the terms and conditions set forth in this
Agreement, each Bank severally agrees, to make, Convert and Continue
Loans on a revolving basis from time to time from the date hereof until the
 Maturity Date as Borrower may request; provided, however, that (i) the
 aggregate unpaid principal amount of each Bank's Loans and Letter of
 Credit Usage at any one time outstanding shall not exceed such Bank's
 Commitment, (ii) the aggregate unpaid principal amount of all Loans and
 Letter of Credit Usage at any one time outstanding shall not exceed the
 combined Commitments, and (iii) the aggregate unpaid principal amount of
 all Offshore Currency Loans and Letter of Credit Usage denominated in
 Offshore Currencies at any one time outstanding shall not exceed the
 combined Offshore Currency Commitments.  Subject to the foregoing and
 other terms and conditions hereof, Borrower may borrow, Convert,
 Continue, prepay and reborrow Loans as set forth herein without premium
 or penalty.  Offshore Currency Loans may be requested only as Offshore
 Rate Loans.

     (b)  Loans made by each Bank shall be evidenced by one or
 more loan accounts or records maintained by such Bank in the ordinary
 course of business.  Upon the request of any Bank made through the
 Administrative Agent, such Bank's Loans may be evidenced by one or more
 Notes, instead of or in addition to loan accounts.  (Each such Bank may
 endorse on the schedules, if any, annexed to its Note(s) the date, amount
 and maturity of its Loans and payments with respect thereto.)  Such loan
 accounts, records or Notes shall be conclusive absent manifest error of the
 amount of such Loans and payments thereon.  Any failure so to record or
 any error in doing so shall not, however, limit or otherwise affect the
 obligation of Borrower to pay any amount owing with respect to the Loans.

<PAGE>

     2.1A BofA Tranche Loan; Risk Participations.
(a)  Subject to the terms and conditions set forth in this Agreement,
 BofA shall continue to solely fund the $6,000,000 Offshore Rate Loan
 outstanding under the Existing Credit Agreement as the BofA Tranche
 Loan hereunder until the BofA Tranche Termination Date, on which date
 the BofA Tranche Loan shall mature.  The BofA Tranche Loan may not be
 Continued or Converted after the Closing Date.  Except as aforesaid, the
 BofA Tranche Loan shall be deemed an Offshore Rate Loan for all
 purposes hereunder.  Except for the BofA Tranche Loan, all Extensions of
 Credit shall be made in accordance with each Bank's Pro Rata Share as set
 forth in Schedule 2.1(a) until the BofA Tranche Termination Date.

(b)  On the Closing Date, and simultaneously with each Extension of
 Credit thereafter, each Bank shall be deemed to have purchased a risk
 participation in each other Bank's outstanding Loans (including the BofA
 Tranche Loan) and Letter of Credit Usage such that, after giving effect
 thereto, each Bank's share of all outstanding Loans and Letter of Credit
 Usage shall equal its Pro Rata Share as set forth in Schedule 2.1(b).  Upon
 and during the continuation of any Event of Default, any Bank may demand
 that each other Bank promptly provide its purchase price for the risk
 participation it has purchased hereunder.  The obligation of each Bank to so
 provide its purchase price to BofA shall be absolute and unconditional and
 shall not be affected by the occurrence of an Event of Default or any other
 occurrence or event.  Subject to Section 2.1A(c), on the BofA Tranche
 Termination Date, such participations shall terminate.

(c)  On the BofA Tranche Termination Date, concurrently with
 Borrower paying the BofA Tranche Loan in full, the Commitments shall,
 provided no Default or Event of Default exists, be adjusted as set forth in
 Schedule 2.1(b) hereto.

     2.2  Borrowings, Conversions and Continuations of Loans.

     (a)  Borrower may irrevocably request a Borrowing, Conversion
 or Continuation of Loans in a Minimum Amount therefor by
 delivering a duly completed Request for Extension of Credit therefor by
 Requisite Notice to the Administrative Agent not later than the Requisite
 Time therefor.  All Borrowings, Conversions or Continuations shall
 constitute Base Rate Loans unless properly and timely otherwise designated
 as set forth in the prior sentence.  Loans may only be Converted into or
 Continued as Loans denominated in the same currency as originally
 borrowed.

     (b)  Promptly following receipt of a Request for Extension of
 Credit, the Administrative Agent shall notify each Bank of its Pro Rata
 Share thereof by Requisite Notice.  If any Bank is unable, in its sole
 discretion and for any reason, to fund an Offshore Currency Loan in a
 requested Offshore Currency, such Request for Extension of Credit shall be
 deemed withdrawn.  In the case of a Borrowing, Borrower may thereupon
 request Loans in another currency.   In the case of a Conversion or
 Continuation, the affected Loans shall become due and payable at the end
 of the Interest  Period therefor.  In the case of a Borrowing of Loans, each
 Bank shall make the funds for its Loan in the currency of such Loans
 available to the Administrative Agent at the Administrative Agent's Office
 not later than the Requisite Time therefor on the Business Day specified in


<PAGE>

 such Request for Extension of Credit.  Upon satisfaction or waiver of the
 applicable conditions set forth in Section 4, all funds so received shall be
 made available to Borrower in like funds received.

     (c)  The Administrative Agent shall promptly notify Borrower
 and the Banks of the Offshore Rate applicable to any Offshore Rate Loan
 upon determination of same.

     (d)  Unless the Administrative Agent and the Requisite Banks
otherwise consent, Loans with no more than six different Interest Rate
 Periods shall be outstanding at any one time.

     (e)  No Loans other than Base Rate Loans may be requested or
continued during the existence of a Default or Event of Default.  During the
 existence of a Default or Event of Default, the Requisite Banks may
 determine that any or all of the then outstanding Loans other than Base
 Rate Loans shall be Converted to Base Rate Loans.  Such Conversion shall
 be effective upon notice to Borrower from the Administrative Agent and
 shall continue so long as such Default or Event of Default continues to
 exist.

     (f)  If a Loan is to be made on the same date that another Loan
in the same currency is due and payable, Borrower or the Banks, as the case
may be, shall make available to the Administrative Agent the net amount of
 funds giving effect to both such Loans and the effect for purposes of this
 Agreement shall be the same as if separate transfers of funds had been
 made with respect to each such Loan.

     (g)  The failure of any Bank to make any Loan on any date
 shall not relieve any other Bank of any obligation to make a Loan on such
 date, but no Bank shall be responsible for the failure of any other Bank to
 so make its Loan.

     2.3  Letters of Credit.  Subject to the terms and conditions hereof, at any
 time and from time to time from the Closing Date through the Maturity Date,
 the Issuing Bank shall issue, supplement, modify, amend, renew, or extend
 such Letters  of Credit  denominated in Dollars or Offshore Currencies under
 the Commitments as Borrower may request; provided, however, that (i) the
aggregate outstanding Letter of Credit Usage shall not exceed $2,500,000 at
 any time, (ii) the aggregate unpaid principal amount of all Loans and Letter
of Credit Usage at any one time outstanding shall not exceed the combined
Commitments, and (iii) the aggregate unpaid principal amount of all
Offshore Currency Loans and Letter of Credit Usage denominated in
Offshore Currencies at any one time outstanding shall not exceed the
combined Offshore Currency Commitments.  Each Letter of Credit shall be
in a form reasonably acceptable to the Issuing Bank.  Unless all the Banks
otherwise consent in a writing delivered to the Administrative Agent, the
term of any Letter of Credit shall not exceed the Maturity Date.

     Borrower may irrevocably request the issuance, supplement,
 modification, amendment, renewal, or extension of a Letter of Credit by
 delivering a duly completed Letter of Credit Application therefor to the
 Issuing Bank, with a copy to the Administrative Agent, by Requisite Notice
 not later than the Requisite Time therefor.  The Administrative Agent shall
 promptly notify the Issuing Bank whether such Letter of Credit Application,
 and the action requested pursuant thereto, conforms to the requirements of

<PAGE>

 this Agreement.  Upon the issuance, supplement, modification, amendment,
 renewal, or extension of a Letter of Credit, the Issuing Bank shall promptly
 notify the Administrative Agent, and the Administrative Agent shall
 promptly notify the Banks, of such action and the amount and terms
 thereof.  Letters of Credit may have automatic extension or renewal
 provisions ("evergreen" Letters of Credit) so long as the Issuing Bank has
 the right to terminate such evergreen Letters of Credit no less frequently
 than annually within a notice period to be agreed upon at the time each such
 Letter of Credit is issued.  This Agreement shall control in the event of any
 conflict with any Letter of Credit Application.

     Upon the issuance of a Letter of Credit, each Bank shall be deemed
 to have purchased a pro rata participation in such Letter of Credit, as from
 time to time supplemented, amended, renewed, or extended, from the
 Issuing Bank in an amount equal to that Bank's Pro Rata Share.  Without
 limiting the scope and nature of each Bank's participation in any Letter of
 Credit, to the extent that the Issuing Bank has not been reimbursed by
 Borrower for any payment required to be made by the Issuing Bank under
 any Letter of Credit, each Bank shall, pro rata according to its Pro Rata
 Share, reimburse the Issuing Bank through the Administrative Agent
 promptly upon demand for the amount of such payment.  The obligation of
 each Bank to so reimburse the Issuing Bank shall be absolute and
 unconditional and shall not be affected by the occurrence of an Event of
 Default or any other occurrence or event.  Any such reimbursement shall
 not relieve or otherwise impair the obligation of Borrower to reimburse the
 Issuing Bank for the amount of any payment made by the Issuing Bank
 under any Letter of Credit together with interest as hereinafter provided.


     Borrower agrees to pay to the Issuing Bank through the
 Administrative Agent an amount equal to any payment made by the Issuing
 Bank with respect to each Letter of Credit within one Business Day after
 demand made by the Issuing Bank therefor, together with interest on such
 amount from the date of any payment made by the Issuing Bank at the
 Default Rate.  The principal amount of any such payment shall be used to
 reimburse the Issuing Bank for the payment made by it under the Letter of
 Credit.  Each Bank that has reimbursed the Issuing Bank for its Pro Rata
 Share of any payment made by the Issuing Bank under a Letter of Credit
 shall thereupon acquire a pro rata participation, to the extent of such
 reimbursement, in the claim of the Issuing Bank against Borrower under
 this Section and shall share, in accordance with that pro-rata
participation, in any payment made by Borrower with respect to such claim.

     If Borrower fails to make the payment required by subsection (d)
 above within the time period therein set forth, in lieu of the reimbursement
 to the Issuing Bank under such subsection, the Issuing Bank may (but is not
 required to), without notice to or the consent of Borrower, instruct the
 Administrative Agent to cause Loans to be made by the Banks in an
 aggregate amount equal to the amount paid by the Issuing Bank with
 respect to that Letter of Credit and, for this purpose, the conditions
 precedent set forth in Section 4 shall not apply.  The proceeds of such
 Loans shall be paid to the Issuing Bank to reimburse it for the payment
 made by it under the Letter of Credit.  Such Loans shall be payable upon
 demand and shall bear interest at the Default Rate.

     Once an evergreen Letter of Credit is issued, Borrower shall not be
 required to annually request that the Issuing Bank permit the renewal

<PAGE>

 thereof.  The Borrower Parties, the Agent and the Banks authorize (but may
 not require) the Issuing Bank to, in its sole discretion, permit the renewal
 such evergreen Letter of Credit if such Letter of Credit could be issued in
 the first instance at such time.

     The obligations of Borrower under this Agreement with respect to
 any Letter of Credit shall be absolute, unconditional and irrevocable and
 shall be performed strictly in accordance with the terms of this Agreement
 and of any application for Letter of Credit, including without limitation,
the following circumstances:


          (i) any lack of validity or enforceability of the Letter of
 Credit, this Agreement, any application for Letter of Credit or any other
 agreement or instrument relating to any of the foregoing;

          (ii) the existence of any claim, setoff, defense or other
 rights that Borrower may have at any time against any beneficiary or
 transferee of the Letter of Credit (or any Person for whom any such
 beneficiary or any such transferee may be acting), the Issuing Bank or any
 other Person, whether in connection with this Agreement or any unrelated
 transaction;

          (iii)  any breach of contract or other dispute between
 Borrower and any beneficiary or transferee of the Letter of Credit (or any
 Person for whom any such beneficiary or any such transferee may be
 acting), the Issuing Bank or any other Person;

          (iv)  any demand, statement, tested telex or any other
 document presented under a Letter of Credit which on its face appears to
 conform with the terms and conditions of the Letter of Credit but proves to
 have been invalid or insufficient for its intended business purpose or to
 have been forged or fraudulent in any respect or to contain any statement
 therein which is untrue or inaccurate in any respect whatsoever; or

          (v)  any delay, extension of time, renewal, waiver,
 compromise or other indulgence or modification granted or agreed to by the
 Issuing Bank, with or without notice to or approval by Borrower, in respect
 to any Letter of Credit.

     Neither the Issuing Bank nor any of its officers or directors shall be
 liable or responsible for:

          (i)  the use that may be made of the Letters of Credit
or for any acts or omissions of the beneficiary or any transferee of the
Letters of Credit in connection therewith;

          (ii)  the validity, sufficiency for their intended business
 purpose or genuineness of documents, or of any endorsements thereon
 which on their face appear to conform to the terms and conditions of the
 Letter of Credit, even if such documents should prove to be in any or all
 respects invalid, insufficient for their intended business purpose,
 fraudulent or forged; or

          (iii)  acceptance of documents that appear on their face to
 conform to the terms and conditions of the Letter of Credit, without
 responsibility for further investigation, regardless of any notice or
 information to the contrary.

<PAGE>

     The Issuing Bank shall be entitled to the same protections accorded
 to the Administrative Agent pursuant to Section 9.7.

 The Uniform Customs and Practice for Documentary Credits, as
 published in its most current version by the International Chamber of
Commerce, shall be deemed a part of this Section and shall apply to all
 Letters of Credit to the extent not inconsistent with applicable law.

     Concurrently with the issuance of each Letter of Credit, Borrower
 shall pay a letter of credit issuance fee to the Issuing Bank, for the sole
 account of the Issuing Bank, in an amount set forth in a letter agreement
 between Borrower and the Issuing Bank.  Borrower shall also concurrently
 pay to the Administrative Agent, for the ratable account of the Banks in
 accordance with their Pro Rata Share, a standby letter of credit fee in an
 amount equal to the Applicable Amount times the face amount of such
 Letter of Credit through the termination or expiration of such Letter of
 Credit.  The letter of credit issuance fee and the standby letter of credit fee
 are nonrefundable.

     On or before the Maturity Date, Borrower shall, if any Letter of
 Credit remains outstanding and partially or wholly undrawn, immediately
 deliver to the Issuing Bank an irrevocable letter of credit from an issuer
 acceptable to the Issuing Bank in its sole discretion, in form and substance
 satisfactory to the Issuing Bank, in a stated amount not less than the Letter
 of Credit Usage.  The Issuing Bank shall hold such letter of credit as
 collateral for Borrower's obligations to reimburse the Issuing Bank for any
 drawings under such Letter of Credit.  The Issuing Bank shall return such
 letter of credit to Borrower upon all of such Letter(s) of Credit having
 expired, becoming void or otherwise become unavailable for further
 drawing, or the face amount thereof being reduced, or after the Maturity
 Date, to the extent any cash collateral has not been applied to such
 drawings, and the Issuing Bank having no further obligation thereunder, as
 the case may be.  The commissions payable with respect to Letters of
 Credit will continue to accrue during any period that collateral is being
 held.

     2.4  Prepayments.

     (a) Upon Requisite Notice to the Administrative Agent not
later than the Requisite Time therefor, Borrower may at any time and from
 time to time voluntarily prepay Loans in the Minimum Amount therefor.
 The Administrative Agent will promptly notify each Bank thereof and of
 such Bank's Pro Rata Share of such prepayment.  Borrower may non ratably
 prepay the BofA Tranche Loan in whole or in part prior to the BofA
 Tranche Termination Date.
     (b) If, at any time (i) Letter of Credit Usage plus the
 outstanding aggregate principal amount of Loans made exceeds the
 combined Commitments, or (ii) the outstanding aggregate principal amount
 of Offshore Currency Loans plus Letter of Credit Usage denominated in
 Offshore Currencies exceed the combined Offshore Currency
 Commitments, in each case whether by reason of the termination or any
 reduction of the Commitments, because of a recalculation of the Dollar
 Equivalent of outstanding Offshore Currency Loans pursuant to Section 1.3
 or otherwise, Borrower shall immediately prepay the Loans and/or deposit
 cash to be held by the Administrative Agent Bank in an interest-bearing
 cash collateral account as collateral for Letter of Credit Usage hereunder in

<PAGE>

 an aggregate amount equal to such excess.

     (c)  Any prepayment of a Loan other than a Base Rate Loan
shall be accompanied by all accrued interest thereon, together with the costs
 set forth in Section 3.6.

     2.5  Voluntary Reduction or Termination of Commitments.
  Upon Requisite Notice to the Administrative Agent not later than the
 Requisite Time therefor, Borrower shall have the right, at any time and
 from time to time, without penalty or charge, upon giving Requisite Notice
 not later than the Requisite Time therefor, to reduce, permanently and
 irrevocably, reduce the Commitments in the Minimum Amount therefor, or
 terminate, the then unused portion of the Commitments, provided that any
 such reduction or termination shall be accompanied by payment of all
 accrued and unpaid commitment fees with respect to the portion of the
 Commitments being reduced or terminated.  The Administrative Agent shall
 promptly notify the Banks of any request for reduction or termination of the
 Commitments under this Section.  Each Bank's Commitment shall be
 reduced by an amount equal to such Bank's Pro Rata Share times the
 amount of such reduction.  Any voluntary reduction in the combined
 Commitments shall become effective on the date requested by Borrower
 and shall be applied against future Reduction Amounts as selected by
 Borrower at time of such reduction.


     2.6  Mandatory Reductions in Commitments.
     (a) The combined Commitments shall automatically and
 ratably be reduced on each Reduction Date by the applicable Reduction
 Amount.  (b) All accrued commitment fees to, but not including the
effective date of each reduction shall be paid on the effective date thereof
 such reduction.
     2.7  Principal and Interest.
     (a)  If not sooner paid, Borrower shall pay, and promises to
pay, the outstanding principal amount of each Loan on the Maturity Date in
 the currency of the Loan.
     (b)  Subject to the subsection (c), Borrower shall pay interest
on the unpaid principal amount of the Loans in the currency of such Loans
 (before and after default, before and after maturity, before and after
 judgment, and before and after the commencement of any proceeding under
 any Debtor Relief Law) from the date borrowed until paid in full (whether
 by acceleration or otherwise) on each Interest Payment Date for each type
 of Loan at a rate per annum equal to the applicable interest rate determined
 in accordance with the definition thereof, plus, if applicable, any
Applicable Amount.

     (c)  If any amount payable by Borrower under any Loan
Document is not paid when due (without regard to any applicable grace
 periods), it shall thereafter bear interest at a fluctuating interest rate
per annum at all times equal to the Default Rate.  Accrued and unpaid
interest on past due amounts (including, without limitation, interest on past
 due interest) shall be compounded monthly, on the last day of each calendar
 month, to the fullest extent permitted by applicable laws and payable upon
 demand.

     2.8  Fees.
      (a)  Commitment Fee.  Borrower shall pay to the Administrative
Agent, for the ratable accounts of the Banks pro rata according to their Pro
 Rata Share, a commitment fee equal to the Applicable Amount times the

<PAGE>

 average daily amount by which the combined Commitments exceed the sum
 of the aggregate unpaid principal Dollar Equivalent amount of each Bank's
 Loans (excluding the BofA Tranche Loan) and Letter of Credit Usage.  The
 commitment fee shall accrue from the Closing Date until the Maturity Date
 and shall be payable quarterly in arrears on each Quarterly Payment Date
 and on the Maturity Date.  The commitment fee shall be calculated
 quarterly in arrears; if there is any change in the Applicable Amount during
 any quarter, the average daily amount shall be computed and multiplied by
 the Applicable Amount separately for each period that such Applicable
 Amount was in effect during such quarter.

      (b) Agency Fees.  Borrower shall pay to the Administrative
Agent an agency fee in such amounts and at such times as heretofore agreed
 upon by letter agreement between Borrower and the Administrative Agent.
 The agency fee is for the services to be performed by the Administrative
 Agent in acting as Administrative Agent and is fully earned on the date
 paid.  The agency fee paid to the Administrative Agent is solely for its own
 account and is nonrefundable.

     (c)  Upfront Fee.  Borrower shall pay to the Administrative
Agent on the Closing Date for the account of each Bank (other than BofA)
 an upfront fee equal to 10 basis points of each Bank's Commitment
 hereunder.  In addition, upon any Bank agreeing to increase its
 Commitment pursuant to Section 2.13, Borrower shall pay to the
 Administrative Agent for the account of such Bank (other than BofA)an
 upfront fee equal to 10 basis points of such Bank's increased Commitment.


      (d) Arrangement Fee.  Borrower shall pay to the
Administrative Agent on the Closing Date for the account of the Arranger an
 arrangement fee as heretofore agreed upon by letter agreement between
 Borrower and the Arranger.
     2.9  Computation of Interest and Fees.  Computation of
interest on Offshore Rate Loans and CD Rate Loans shall be calculated on
 the basis of a year of 360 days and the actual number of days elapsed,
 which results in a higher yield to the Banks than a method based on a year
 of 365 or 366 days, as the case may be, and the actual number of days
 elapsed.  Computation of interest on all other types of Loans and all fees
 under this Agreement shall be calculated on the basis of a year of 365 or
 366 days, as the case may be, and the actual number of days elapsed.
 Interest shall accrue on each Loan for the day on which the Loan is made;
 interest shall not accrue on a Loan, or any portion thereof, for the day on
 which the Loan or such portion is paid.  Any Loan that is repaid on the
 same day on which it is made shall bear interest for one day.
 Notwithstanding anything in this Agreement to the contrary, interest in
 excess of the maximum amount permitted by applicable laws shall not
 accrue or be payable hereunder, and any amount paid as interest hereunder
 which would otherwise be in excess of such maximum permitted amount
 shall instead be treated as a payment of principal.

     2.10 Manner and Treatment of Payments among the Banks,
Borrower and the Administrative Agent.
     (a)  Unless otherwise provided herein, all payments by
 Borrower or any Bank hereunder shall be made to the Administrative Agent
 at the Administrative Agent's Office not later than the Requisite Time for
 such type of payment.  All payments received after such Requisite Time
 shall be deemed received on the next succeeding Business Day.  All

<PAGE>

 payments shall be made in immediately available funds in lawful money of
 the United States of America provided, that payments with respect to
 Offshore Currency Loans shall be made in the applicable Offshore
 Currency.

     (b)  Upon satisfaction of any applicable terms and conditions
set forth herein, the Administrative Agent shall promptly make any amounts
 received in accordance with the prior subsection available in like funds
 received as follows:  (i) if payable to Borrower, by crediting the Designated
 Deposit Account, and (ii) if payable to any Bank, by wire transfer to such
 Bank at the address specified in Schedule 10.6.  The Administrative Agent's
 determination, or any Bank's determination not contradictory thereto, of any
 amount payable hereunder shall be conclusive in the absence of manifest
 error.

     (c)  Subject to the definition of "Interest Period," if any
payment to be made by Borrower or any Guarantor shall come due on a day
 other than a Business Day, payment shall instead be considered due on the
 next succeeding Business Day and the extension of time shall be reflected
 in computing interest and fees.

     (d)  Unless Borrower or any Bank has notified the
Administrative Agent prior to the date any payment to be made by it is due,
 that it does not intend to remit such payment, the Administrative Agent
 may, in its discretion, assume that Borrower or the Bank, as the case may
 be, has timely remitted such payment and may, in its discretion and in
 reliance thereon, make available such payment to the Person entitled
 thereto.  If such payment was not in fact remitted to the Administrative
 Agent, then:

          (i)  if Borrower failed to make such payment, each
Bank shall forthwith on demand repay to the Administrative Agent the
 amount of such assumed payment made available to such Bank, together
 with interest thereon in respect of each day from and including the date
 such amount was made available by the Administrative Agent to such Bank
 to the date such amount is repaid to the Administrative Agent at the
 Overnight Rate; and

          (ii) if any Bank failed to make such payment, such
Bank shall on the Business Day following such Borrowing Date make pay to
 the Administrative Agent the amount of such assumed payment made
 available to Borrower, together with interest thereon in respect of each day
 from and including the date such amount was made available by the
 Administrative Agent to Borrower to the date such amount is paid to the
 Administrative Agent at the Overnight Rate.  Nothing herein shall be
 deemed to relieve any Bank from its obligation to fulfill its Commitment
 or to prejudice any rights which the Administrative Agent or Borrower may
have against any Bank as a result of any default by such Bank hereunder.

     2.11 Funding Sources.  Nothing in this Agreement shall be
 deemed to obligate any Bank to obtain the funds for any Loan in any
 particular place or manner or to constitute a representation by any Bank
 that it has obtained or will obtain the funds for any Loan in any particular
 place or manner.

     2.12 Extension of Maturity Date and Reduction Dates.  At the
request of Borrower and with the written consent of all of the Banks (which

<PAGE>

 may be given or withheld in the sole and absolute discretion of each Bank)
 the Maturity Date and each Reduction Date may be extended for one-year
 periods pursuant to this Section, provided no Default or Event of Default
 has occurred and is continuing at the time of such request or at the time of
 such extension.  Not earlier than 45 days prior to the each anniversary of
 the Closing Date occurring prior to the initial Reduction Date, nor later
than any such anniversary date, Borrower may request by Requisite Notice
made to the Administrative Agent (who shall promptly notify the Banks) a
 one year extension of the Maturity Date and corresponding one year
 extension of each Reduction Date.  Such request shall include a certificate
 signed by a Responsible Officer stating that (a) the representations and
 warranties contained in Section 5 (except with respect to any representation
 or warranty which specifically refers to an earlier date) are true and
 correct on and as of the date of such certificate and (b) no Default or
Event of Default has occurred and is continuing.  Each Bank shall, within
 15 Business days of the Administrative Agent delivering such notice to such
Bank, notify in writing the Administrative Agent whether it consents to or
 declines such request.  If a Bank fails to respond, it shall be deemed to
 have declined such request.  The Administrative Agent shall, after
 receiving the notifications from all of the Banks or the expiration of such
 period, whichever is earlier, notify Borrower and the Banks of the results
 thereof.  If all of the Banks have consented, and no Default or Event of
 Default has occurred and is continuing, then the Maturity Date and each
 Reduction Date shall be extended for one year.

     If the Requisite Banks consent to the request for extension, but one
or more Banks declines or is deemed to have declined such request for such
 extension, and the conditions for such an extension could have been
 satisfied but for such Bank(s) declining, Borrower may cause such Bank(s)
 to be removed as a Bank(s) under this Agreement or the Commitments of
 such Banks to be terminated pursuant to Section 10.23, whereupon the
 Maturity Date and each Reduction Date shall be extended for one year upon
 satisfaction of the conditions set forth above.

     2.13 Increase in Commitments.  (a) Borrower may from time to
time request an increase in the combined Commitments up to an aggregate
 $60,000,000 upon Requisite Notice to the Administrative Agent,
 accompanied by such documents evidencing corporate approval thereof as
 the Administrative Agent may reasonably request.  The Administrative
 Agent shall promptly notify each Bank of such request.  Each Bank shall
 have 30 days to respond whether, in its sole discretion, (i) it agrees to
 increase its Commitment by an amount equal to its Pro Rata Share of such
 requested increase, (ii) it agrees to increase its Commitment by an amount
 less than its Pro Rata Share of such requested increase or (iii) it does not
 agree to increase its Commitment.  Any Bank that has not responded within
 the above time period shall be deemed not to have elected not to increase its
 Commitment.

          (b)  To the extent that any Bank declines, or is
 deemed to have declined, to participate in any such increase to the full
 extent of its Pro Rata Share (a "Declining Bank"), the Borrower may
 request, through the Administrative Agent, that one or more other Banks, in
 their sole discretion, further increase their Commitment(s) by the amount of
 the increase declined by the Declining Bank(s).  Borrower shall execute and
 deliver amended Notes, as necessary, and the Administrative Agent shall
 distribute an amended Schedule 2.01 (which shall thereafter be
 incorporated into this Agreement), to reflect any increase in the

<PAGE>

 Commitments and each Bank's Pro Rata Share thereof.

          (c)  In order to make all Bank's interests in any
 outstanding Loans ratable in accordance with any revised Pro Rata Shares
 after giving effect to any increase in the Commitments, Borrower shall pay
 or prepay, if necessary, on the effective date of any such increase, all
 outstanding Loans and pay, to the extent applicable, any amounts due under
 Section 3.6.  Borrower may then reborrow, if it desires to do so, such Loans
 from the Banks in accordance with their revised Pro Rata Shares.  The
 Bank's Pro Rata Shares of Letter of Credit Usage shall also be deemed
 adjusted, on the effective of any such increase, so that each Bank's pro rata
 share thereof is equal to its revised Pro Rata Share.

     2.14 Collateral and Guaranties.  All Obligations shall be
 secured by the Collateral and guarantied by the Guaranty.

     3.1  Taxes.  Each payment of any amount payable by Borrower
 or any Guarantor under this Agreement or any other Loan Document shall
 be made free and clear of, and without reduction by reason of, any
 Applicable Taxes.  To the extent that Borrower or any Guarantor is
 obligated by applicable laws to make any deduction or withholding on
 account of Applicable Taxes from any amount payable to any Bank or the
 Issuing Bank under this Agreement, Borrower or such Guarantor promptly
 notify the Administrative Agent of such fact and shall (a) make such
 deduction or withholding and pay the same to the relevant Governmental
 Authority and (b) pay such additional amount directly to that Bank or the
 Issuing Bank as is necessary to result in that Bank's receiving a net after-
Applicable Tax amount equal to the amount to which that Bank would have
been entitled under this Agreement absent such deduction or withholding.

     3.2  Increased Cost.  If any Bank or the Issuing Bank
determines that any laws have the effect of increasing its cost of agreeing
to make or making, funding or participating in, funding or maintaining any
Loans or Letters of Credit, then Borrower shall, upon demand by such Bank
 or the Issuing Bank (with a copy of such demand to the Administrative
 Agent), pay to the Administrative Agent for the account of such Bank or the
 Issuing Bank additional amounts sufficient to compensate such Bank for
 the amount of such increased cost reasonably allocable to Borrower's
 obligations under this Agreement.  If Borrower so notifies the
 Administrative Agent within five Business Days after any Bank or the
 Issuing Bank notifies Borrower of any demand for compensation, Borrower
 may Convert any relevant outstanding Dollar-denominated Loans of such
 Bank into Base Rate Loans.

     3.3  Capital Adequacy.  If any Bank or the Issuing Bank
determines that any law regarding capital adequacy, or compliance by such
 Bank or the Issuing Bank (or its Lending Office) or any corporation
 controlling the Bank or the Issuing Bank, with any request, guideline or
 directive regarding capital adequacy (whether or not having the force of
 law) of any Governmental Authority not imposed as a result of such Bank's,
 the Issuing Bank's or such corporation's failure to comply with any other
 laws, affects or would affect the amount of capital required or expected to
 be maintained by such Bank, the Issuing Bank, or any corporation
 controlling such Bank or the Issuing Bank and (taking into consideration
 such Bank's, the Issuing Bank's or such corporation's policies with respect
 to capital adequacy and such Bank's or the Issuing Bank's desired return on
 capital) determines in good faith that the amount of such capital is

<PAGE>

 increased, or the rate of return on capital is reduced, as a consequence
of its obligations under this Agreement, then upon demand of such Bank or
the Issuing Bank (with a copy to the Administrative Agent), Borrower shall
 pay to such Bank or the Issuing Bank, from time to time as specified in
 good faith by such Bank or the Issuing Bank, additional amounts sufficient
 to compensate such Bank or the Issuing Bank in light of such
 circumstances, to the extent reasonably allocable to such obligations under
 this Agreement.

     3.4  Illegality.  If any Bank determines that any law has made it
 unlawful, or that any Governmental Authority has asserted that it is
 unlawful, for any Bank or its applicable Lending Office to make, maintain
 or fund Offshore Rate Loans, or materially restricts the authority of such
 Bank to purchase or sell, or to take deposits of, Dollars or the applicable
 Offshore Currency in the applicable offshore interbank market, or to
 determine or charge interest rates based upon the Offshore Rate, then, on
 notice thereof by the Bank to Borrower through the Administrative Agent,
 any obligation of that Bank to make Offshore Rate Loans shall be
 suspended until the Bank notifies the Administrative Agent and Borrower
 that the circumstances giving rise to such determination no longer exist.
 Upon receipt of such notice, Borrower shall, upon demand from such Bank
 (with a copy to the Administrative Agent), prepay or Convert all Dollar
-denominated Offshore Rate Loans of that Bank, either on the last day of the
 Interest Period thereof, if the Bank may lawfully continue to maintain such
 Offshore Rate Loans to such day, or immediately, if the Bank may not
 lawfully continue to maintain such Offshore Rate Loan.  Each Bank agrees
 to designate a different Lending Office if such designation will avoid the
 need for such notice and will not, in the good faith judgment of such Bank,
 otherwise be materially disadvantageous to such Bank.

     3.5  Inability to Determine Rates.  If, in connection with an
Request for Extension of Credit, the Administrative Agent determines that
 (a) deposits in Dollars or the applicable Offshore Currency are not being
 offered to Banks in the applicable offshore interbank market for the
 applicable amount and Interest Period of the requested Loan, (b) adequate
 and reasonable means do not exist for determining the underlying interest
 rate (other than the Base Rate) for the Loans requested therein, or (c) such
 underlying interest rates do not adequately and fairly reflect the cost to
the Banks of funding such Loan, the Administrative Agent will promptly so
 notify Borrower and each Bank.  Thereafter, the obligation of the Banks to
 make or maintain Loans based upon such affected interest rate shall be
 suspended until the Administrative Agent revokes such notice.  Upon
 receipt of such notice, Borrower may revoke any pending Request for
 Extension of Credit for such type of Loan or, failing that, be deemed to
 have converted any such Request for Extension of Credit Dollar
-denominated Loans into a request for Base Rate Loans in the amount
 specified in therein.

     3.6  Breakfunding Costs.  Upon Continuation, Conversion,
payment or prepayment of any Loan other than a Base Rate Loan on a day
 other than the last day in the applicable Interest Period (whether voluntary,
 mandatory, automatic, by reason of acceleration, or otherwise and including
 any such action required under this Section 3), or upon the failure of
 Borrower (for a reason other than the failure of a Bank to make an Loan) to
 borrow, Continue or Convert any Loan other than a Base Rate Loan on the
 date or in the amount specified in any Request for Extension of Credit, then
 Borrower shall, upon demand made by any Bank (with a copy to the

<PAGE>

 Administrative Agent), reimburse each Bank and hold each Bank harmless
 from any loss or expense which the Bank may sustain or incur as a
 consequence thereof, including any such loss or expense arising from the
 liquidation or reemployment of funds obtained by it to maintain such Loan
 or from fees payable to terminate the deposits from which such funds were
 obtained.

     3.7  Matters Applicable to all Requests for Compensation.
     (a)  The Administrative Agent and any Bank, shall provide
reasonable detail to Borrower regarding the manner in which the amount of
 any payment to the Administrative Agent or that Bank, under this Section 3
 has been determined, concurrently with demand for such payment.  The
 Administrative Agent's or any Bank's determination of any amount payable
 under this Section 3 shall be conclusive in the absence of manifest error.

     (b)    For purposes of calculating amounts payable under this
 Section 3 any Loans shall be deemed to have been funded at the applicable
 interest rate set forth in the definition thereof whether or not such Loan
 was, in fact, so funded.

     (c)  All of Borrower's obligations under this Section 3 shall
survive termination of the Commitments and payment in full of all
 Obligations.


Section 4. CONDITIONS
     4.1  Initial Loans, Etc.  The obligation of each Bank to make the
 initial Loan to be made by it, or the obligation of the Issuing Bank to
issue the initial Letter of Credit (as applicable), is subject to delivery
 to the Administrative Agent of the following, in form and substance
satisfactory to the Administrative Agent (unless all of the Banks, in their
 sole and absolute discretion, shall agree otherwise):

     (a)  This Agreement duly executed by Borrower, the Banks
 and the Administrative Agent.

     (b)  The Guaranty duly executed by each Guarantor.

     (c)  The Pledge Agreement duly executed by Borrower and the
 Administrative Agent, together with, within 20 days after the Closing Date,
 all stock certificates representing any Pledged Securities (as defined in
the Pledge Agreement) not already in the possession of the Administrative
 Agent, and signed and undated stock powers for each such certificate.

     (d)  The signed certificate of the President, a Senior Vice
 President, or a Vice President and the Secretary or an Assistant Secretary
of Borrower and each Guarantor, dated as of the Closing Date, certifying as
 to (i) a true and correct copy of resolutions adopted by the Board of
 Directors of Borrower and such Guarantor authorizing the execution,
 delivery and performance by Borrower and such Guarantor of this
 Agreement and all other Loan Documents to which it is a party and (ii) the
 incumbency and specimen signatures of officers of Borrower and each
 Guarantor executing and delivering a Loan Document.

     (e)  Notes executed by Borrower in favor of each Bank
requesting a Note, each in a principal amount equal to that Bank's Pro Rata
 Share.

<PAGE>

     (f)  Written opinions, dated the Closing Date, of Dan R.
 Malstrom, counsel for Borrower and each Guarantor and Greenberg &
 Glusker, special counsel to Borrower and each Guarantor, or of other
 counsel designated by Borrower (which counsel must be satisfactory to the
 Banks).

     (g)  To the extent not previously delivered to BofA or to the
 extent there has been any change therein since being so delivered, (i) a
true and correct copy of the by-laws of Borrower and such Guarantor as in
effect on such date and (ii) a photocopy of the Certificate of Incorporation
 of Borrower and each Guarantor and each amendment, if any, thereto,
 certified by the Secretary of Borrower or such Guarantor as being the
 complete copy of such document as in effect on the date hereof.

     (h)  A certificate signed by a Responsible Officer (i) certifying
that all representations and warranties of Borrower contained in Section 5
 are true and correct, (ii) certifying that Borrower and each Guarantor are
in compliance with all the terms and provisions of the Loan Documents to
which each is a party, (iii) certifying that, after giving effect to the
 initial Loan (or initial Letter of Credit, as applicable), no Default or Event
 of Default exists, and ( iv) setting forth the Leverage Ratio as of the last
 day of the most recently ended fiscal quarter of Borrower based on the
preliminary, unaudited balance shee and income statement of Borrower as
of August 31, 1997 for the Fiscal Year then ended.

     (i)  Payment to the Administrative Agent such fees as are
 required to be paid on or prior to the Closing Date pursuant to Section 2.8.

     (j)  Payment of Attorney Costs of BofA to the extent invoiced
 prior to or on the Closing Date, plus such additional amounts of Attorney
 Costs as shall constitute BofA's reasonable estimate of Attorney Costs
 incurred or to be incurred by it through the closing proceedings (provided
 that such estimate shall not thereafter preclude final settling of accounts
 between Borrower and BofA).

     (k)  Such other evidence as the Administrative Agent or the
Banks may reasonably request to establish the consummation of the
 transactions contemplated hereby, the taking of all proceedings in
 connection herewith and compliance with the conditions set forth in this
 Agreement.

     Any document required or requested pursuant to this Section 4.1
 may be furnished by facsimile transmission provided that original
 documents (where applicable) are furnished within 5 business days after the
 facsimile transmission.

     4.2  Conditions of Lending -- All Loans and all Letters of
Credit.  The obligations of each Bank to make any Extension of Credit are
 subject to the fulfillment of the following conditions precedent:
     (a)  On each Borrowing Date, and after giving effect to the
Loans to be made or Letters of Credit to be issued on each such Borrowing
 Date, except, in the case where the aggregate principal amount of the Loans
 being made or Letters of Credit being issued on such Borrowing Date
 equals or is less than the aggregate principal amount of the Loans maturing
 or Letters of Credit expiring on such Borrowing Date, (i) there shall exist
 no Default or Event of Default and (ii) the representations and warranties

<PAGE>

 contained in this Agreement shall be true, correct and complete in all
 material respects on and as of such date to the extent as though made on
 and as of such date, except with respect to any representation or warranty
 which specifically refers to an earlier date;

     (b)  All documents required by the provisions of this
Agreement to be executed or delivered to the Administrative Agent on or
 before the applicable Borrowing Date shall have been executed and shall
 have been delivered to the Administrative Agent on or before such
 Borrowing Date;

     (c)  the Administrative Agent shall have timely received a duly
completed Request for Extension of Credit or Letter of Credit Application,
 as applicable, by Requisite Notice by the Requisite Time therefor; and

     (d)  the Administrative Agent shall have received, in form and
 substance satisfactory to the Administrative Agent, such other assurances,
 certificates, documents or consents related to the foregoing as the
 Administrative Agent or Requisite Banks reasonably may require.


Section 5.  REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants to the Administrative Agent and
 the Banks that:    5.1  Due Incorporation; Good Standing.  Borrower is a
Delaware corporation duly organized and existing under the laws of
 Delaware, and, to the best of Borrower's knowledge, is properly licensed
 and in good standing in, and where necessary to maintain Borrower's rights
 and privileges has complied with the fictitious name statute of, every
 jurisdiction in which Borrower is doing business.  Each Guarantor is a duly
 organized and existing corporation under the laws of the state of its
 incorporation, and, to the best of Borrower's knowledge, is properly
 licensed and in good standing in, and where necessary to maintain such
 Guarantor's rights and privileges has complied with the fictitious name
 statute of, every jurisdiction in which such Guarantor is doing business.

     5.2  Corporate Power; Authorization.  The execution, delivery
 and performance of this Agreement and each other Loan Document to
 which Borrower is a party are within Borrower's powers, have been duly
 authorized, and are not in conflict with the terms of any charter, bylaw or
 other organization papers of Borrower, or any instrument or agreement to
 which Borrower is a party or by which Borrower is bound or affected.  The
 execution, delivery and performance of each Loan Document to which each
 Guarantor is a party are within such Guarantor's powers, have been duly
 authorized, and are not in conflict with the terms of any charter, bylaw or
 other organization papers of such Guarantor, or any instrument or
 agreement to which such Guarantor is a party or by which such Guarantor
 is bound or affected.

     5.3  Government Action.  No approval, consent, exemption or
 other action by, or notice to or filing with, any Governmental Authority is
 necessary in connection with the execution, delivery, performance or
 enforcement of this Agreement or any other Loan Document to which
 Borrower or a Guarantor is a party, except as may have been obtained and
 certified copies of which have been delivered to the Administrative Agent.

     5.4  No Legal Bar.  There is no law, rule or regulation, nor is

<PAGE>

 there any judgment, decree or order of any court or governmental authority
 binding on Borrower or any Guarantor, which would be contravened by the
 execution, delivery, performance or enforcement of this Agreement or any
 other Loan Document to which Borrower or a Guarantor is a party.

     5.5  Enforceable Obligation.  This Agreement and each other
Loan Document to which Borrower or a Guarantor is a party is a legal, valid
 and binding agreement of Borrower and each Guarantor, enforceable
 against Borrower and each Guarantor in accordance with its terms, and
 Loan Document, when executed and delivered, will be similarly legal, valid,
 binding and enforceable.

     5.6  Ownership of Property; Liens.  Borrower and each
Subsidiary of Borrower has good and marketable title to its properties and
 assets free and clear of all Liens, except for:
     (a)  taxes which have resulted in a Lien but are not yet
delinquent; and
     (b)  Liens permitted under Section 7.2;

and the execution, delivery  or performance of this Agreement and each
 other Loan Document to which Borrower or a Guarantor is a party will not
 result in the creation of any such Lien other than in favor of the
 Administrative Agent and the Banks.

     Litigation.  There are no suits, proceedings, claims or disputes
 pending or, to the knowledge of Borrower or any Subsidiary of Borrower,
 threatened against or affecting Borrower or any Subsidiary or its respective
 properties, the adverse determination of which could affect Borrower's or a
 Guarantor's financial condition or operations, taken as a whole, or could
 impair Borrower's or a Guarantor's ability to perform its obligations
 hereunder or any other Loan Document to which Borrower or a Guarantor
 is a party.

     5.8  No Default.  No event has occurred and is continuing or
 would result from the incurring of obligations by Borrower or any
 Guarantor under this Agreement or any other Loan Document to which
 Borrower or a Guarantor is a party which is a Default, or is, or with the
 passing of time or giving of notice or both would be, an Event of Default.

     5.9  Significant Subsidiaries.  Borrower has only the
Significant Subsidiaries listed on Schedule 5.9, as amended from time to
 time pursuant to Section 6.9.

     5.10 Ownership of Stock.  The Principal Stockholders own
directly or as trustees under trusts established for the benefit of
themselves and/or members of their immediate families, in the aggregate at
least 20% of the capital stock of Borrower and control at least 50% of the
 total voting rights accruing under the capital stock of Borrower; provided,
 that, for purposes of determining compliance with this covenant, each of the
 Principal Stockholders shall be deemed to own shares registered in his
 name (unless he has delegated or otherwise transferred or assigned voting
 rights in such shares) notwithstanding that an existing spouse may be
 deemed to have rights in such shares under applicable community property
 laws.

     5.11 No Conflicting Agreements.  Neither Borrower nor any
 Subsidiary is in default under any agreement to which it is a party or by

<PAGE>

 which it or any of its Property is bound the effect of which could have a
 material adverse effect on the business or operations of Borrower and its
 Subsidiaries, taken as a whole, or could impair Borrower's or a Guarantor's
 ability to perform its obligations hereunder or under any Loan Document to
 which Borrower or any Guarantor is a party.  No provision of (i) the articles
 of incorporation, charter, bylaws, preferred stock or any shareholder
 agreement of Borrower or any Subsidiary, (ii) any existing mortgage or
 indenture, (iii) any other contract or agreement (which is, individually
or in the aggregate, material to the consolidated financial condition,
business or operations of Borrower and its Subsidiaries), (iv) any statute
 (including, without limitation, any applicable usury or similar law), rule
or regulation, and (v) any judgment, decree or order (which is, individually
 or in the aggregate, material to the consolidated financial condition,
business or operations of Borrower and its Subsidiaries), in either case
 binding on Borrower or any Subsidiary or affecting the Property of
 Borrower or any Subsidiary; conflicts with, or requires any consent under,
 or would in any way prevent the execution, delivery or carrying out of the
 terms of this Agreement or any other Loan Document, and the taking of any
 such action will not constitute a default under, or result in the creation
 or imposition of, or obligation to create, any Lien upon the Property of
Borrower or any Subsidiary pursuant to the terms of any such mortgage,
indenture, contract or agreement (other than any right to setoff or banker's
 lien or attachment that the Banks may have under applicable law).

     5.12 Taxes.  Borrower and each Subsidiary has filed or caused
to be filed all tax returns required to be filed, and has paid, or has made
 adequate provision for the payment of, all taxes shown to be due and
 payable on said returns or in any assessments made against it, and no tax
 liens have been filed and no claims are being asserted with respect to such
 taxes which are required by Generally Accepted Accounting Principles to
 be reflected in the financial statements of Borrower and are not so
 reflected therein. The charges, accruals and reserves on the books of
Borrower and each Subsidiary with respect to all federal, state, local and
 other taxes are considered by the management of Borrower to be adequate,
 and Borrower knows of no unpaid assessment which is due and payable
 against Borrower or any Subsidiary, except (a) those not yet delinquent, (b)
 those not substantial in aggregate amount, (c) such thereof as are being
 contested in good faith and by appropriate proceedings diligently
 conducted, or (d) those involving foreign taxes and assessments which are
 involved in a good faith dispute with respect to tax or other matters.

     5.13 Financial Statements.  Borrower has heretofore delivered
 to the Administrative Agent copies of (a) the preliminary unaudited balance
 sheet and income statement of Borrower as of August 31, 1997 for the
 Fiscal Year then ended and (b) the unaudited consolidated balance sheet of
 Borrower as of May 31, 1997 for the three Fiscal Quarters then ended, and
 the related consolidated statements of operations, shareholder's equity and
 changes in cash flows for periods covered thereby (such statements being
 sometimes referred to herein as the "Financial Statements").  Both Financial
 Statements fairly present the consolidated financial condition and the
 consolidated results of operations of Borrower as of the date and for the
 periods indicated therein, and the Financial Statements have been prepared
 in conformity with Generally Accepted Accounting Principles (except as
 disclosed in the notes thereto).  As of the Closing Date, except (i) as
 reflected in the Financial Statements or in the footnotes thereto, or
 (ii) as otherwise disclosed in writing to the Administrative Agent and the
 Banks prior to the date hereof, neither Borrower nor any Subsidiary has any

<PAGE>

 obligation or liability of any kind (whether fixed, accrued, contingent,
 unmatured or otherwise) which is material to Borrower and the Subsidiaries
 on a consolidated basis and which, in accordance with Generally Accepted
 Accounting Principles consistently applied, should have been recorded or
 disclosed in such Financial Statements and were not, other than those
 incurred in the ordinary course of their respective businesses since the date
 of such Financial Statements.  Since May 31, 1997 Borrower and each
 Subsidiary has conducted its business only in the ordinary course, and there
 has been no adverse change in the financial condition of Borrower and its
 Subsidiaries taken as a whole which is material to Borrower and its
 Subsidiaries on a consolidated basis, except in each case as disclosed in
 writing to the Administrative Agent prior to the Closing Date.

     5.14 Compliance with Applicable Laws.  Neither Borrower nor
 any Subsidiary is in default with respect to any judgment, order, writ,
 injunction, decree or decision of any Governmental Authority which default
 could have a material adverse effect on the financial condition, operations
 or Property of Borrower and its Subsidiaries, taken as a whole, or could
 impair Borrower's or a Guarantor's ability to perform its obligations
 hereunder or under any other Loan Document to which Borrower or any
 Guarantor is a party.  Borrower and each Subsidiary is complying in all
 material respects with all applicable statutes and regulations, including
 ERISA and applicable occupational, safety and health and other labor laws,
 of all Governmental Bodies, a violation of which could have a material
 adverse effect on the financial condition, operations or Property of
 Borrower and its Subsidiaries, taken as a whole, or could impair Borrower's
 or a Guarantor's ability to perform its obligations hereunder or any other
 Loan Document to which Borrower or any Guarantor is a party.

     5.15 Governmental Regulations.  Neither Borrower nor any
 Subsidiary is subject to any statute or regulation which regulates the
 incurring by Borrower of indebtedness for borrowed money, except for
 applicable usury laws.

     5.16 Property.  Borrower and each Subsidiary has good and
 valid title to, or good and valid leasehold interests in, all of its
Property, title to (or leasehold interest in) which is material to Borrower
and its Subsidiaries taken as a whole, subject to no Liens, except such
 thereof as are not prohibited by the terms of this Agreement.

     5.17 Federal Reserve Regulations.  Borrower is not engaged
 principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any margin stock
 within the meaning of Regulation U of the Board of Governors of the
 Federal Reserve System, as amended.  No part of the proceeds of the Loans
 will be used, directly or indirectly, for a purpose which violates any law,
 rule or regulation of any Governmental Authority, including, without
 limitation, the provisions of Regulations G, T, U, or X of said Board, as
 amended.

     5.18 No Misrepresentation.  No representation or warranty
contained herein or in any document to be executed and delivered in
 connection herewith and no certificate or report furnished or to be
 furnished by Borrower or any Subsidiary in connection with the
 transactions contemplated hereby, contains or will contain a misstatement
 of material fact, or omits or will omit to state a material fact required
 to be stated in order to make the statements herein or therein contained

<PAGE>

 (taken as a whole) not misleading in the light of the circumstances under
 which made.

     5.19 Plans.  From and after the Closing Date, each Plan
 established, maintained or participated in by Borrower and each Subsidiary
 shall be in material compliance with the applicable provisions of ERISA
 and the Code, and Borrower and each Subsidiary shall file all material
 reports required to be filed by ERISA and the Code with respect to any
 Plan.  Borrower and each Subsidiary shall meet all material requirements
 imposed by ERISA and the Code with respect to the funding of all Plans.
 Since the effective date of ERISA, there have not been, nor are there now
 existing, any events or conditions which would permit any Plan to be
 terminated by the PBGC under circumstances which would cause Borrower
 to incur a material liability under Title IV of ERISA.  Since the effective
 date of ERISA, no Reportable Event has occurred with respect to any Plan
 and no Plan has been terminated in whole or in part, other than the Plan
 established by Todd-AO Studios East, Inc. and its predecessor,
 Trans/Audio, Inc., that was terminated at the time of acquisition of such
 company by Borrower.  No withdrawals from any Plans have occurred
 which could subject Borrower or any of its Subsidiaries to any material
 liability.

     5.20 Investment Company Act.  Borrower is not an "investment
company" or a company "controlled" by an "investment company," within
 the meaning of the Investment Company Act of 1940, as amended.
     5.21 Public Utility Holding Company Act.  Borrower is not a
 "holding company," or a "subsidiary company" of a "holding company," or
 an "affiliate" of a "holding company" or of a "subsidiary company" of a
 "holding company," within the meaning of the Public Utility Holding
 Company Act of 1935, as amended.

     5.22  Security Interests.  Upon the execution and delivery of the
 Pledge Agreement, the Pledge Agreement will create a valid first priority
 security interest in the Pledged Collateral and upon delivery of the Pledged
 Collateral to the Administrative Agent (or its designee) all action
necessary to perfect the security interest so created has been taken and
 completed.

Section 6  AFFIRMATIVE COVENANTS
      Borrower covenants and agrees that so long as the Commitments
 shall remain available, and until the full and final payment of all
 indebtedness incurred hereunder, it will, and will cause each of its
 Subsidiaries to, unless the Requisite Banks waive compliance in writing:

     6.1  Financial and Other Information.  Deliver to the
 Administrative Agent:
     (a) As soon as available but no later than 60 days after the end
 of each of the first three fiscal quarters of Borrower the unaudited
 consolidated balance sheet of Borrower and its Subsidiaries as at the end of
 such fiscal quarter, and the unaudited consolidated statement of income and
 retained earnings and of changes in cash flow of Borrower and its
 Subsidiaries for such fiscal quarter and that portion of the fiscal year
ending with such quarter, certified by a Responsible Officer of Borrower as
 being prepared in accordance with Generally Accepted Accounting
 Principles and complete and correct and fairly presenting the financial
 condition and results of operations of Borrower and its Subsidiaries;

<PAGE>

     (b)  as soon as available but no later than 120 days after the
 end of each of its fiscal years, a complete copy of an audit report of
 Borrower and its Subsidiaries which shall include at least the consolidated
 balance sheet of Borrower and its Subsidiaries as of the close of such year,
 and the consolidated statement of income and retained earnings and of
 changes in cash flows of Borrower for such year, prepared in accordance
 with Generally Accepted Accounting Principles and fairly presenting
 Borrower's financial position and results of operations, certified by
 Deloitte-Touche, or other independent public accounting firm of recognized
 national standing selected by Borrower and satisfactory to the
 Administrative Agent and the Requisite Banks.  Such certificate shall not be
 qualified or limited because of restricted or limited examination by such
 accountant of any material portion of Borrower's records;

     6.2  Certificates, Notices and Other Information.  Deliver to the
 Administrative Agent in form and detail satisfactory to the Agent and the
 Requisite Banks, with sufficient copies for each Bank:
     (a) Concurrently with the financial statements required
 pursuant to Sections 6.1(a) and 6.1(b), a Compliance Certificate signed by a
 Responsible Officer; and

     (b) such other statements, lists of property and accounts,
 budgets, forecasts or reports as the Administrative Agent may reasonably
 request.

     6.3  Prompt Notice.  Immediately give written notice to the
 Administrative Agent of:

     (a)  all litigation affecting Borrower or any of its Subsidiaries
 as a defendant and where the amount claimed in a single litigation action is
 in excess of $500,000 or when the aggregate amount claimed in all
 litigation actions is in excess of $1,000,000;

     (b)  any substantial dispute which may exist between Borrower
 and any Governmental Authority;

     (c)  any proposal by any public authority to acquire the assets
 or business of Borrower or to compete with Borrower;


     (d)  any Event of Default or Default; and

     (e)  any other matter which has resulted or might result in a
 material adverse change in Borrower's financial condition or operations or
 impairment in Borrower's or a Guarantor's ability to perform its obligations
 hereunder or any other Loan Document to which Borrower or any
 Guarantor is a party.

     6.4  Maintain Existence.  Except as permitted by Section 7.3,
 maintain and preserve its existence and all rights, privileges and
franchises now enjoyed, and keep all its properties in good working order
 and condition.

     6.5  Payment of Obligations.  Pay all obligations, including tax claims,
 when due, except such as may be contested in good faith by appropriate
 proceedings and Borrower has established reserves on its books which are
 reasonable and adequate.

<PAGE>

     6.6  Compliance With Legal Requirements.  At all times
 comply with all laws, rules, regulations, orders and directions of any
 Governmental Authority having jurisdiction over it or its business.

     6.7  Insurance.  Maintain and keep in force on all of its
 property such insurance as is normal for the industry in which Borrower
 conducts its business and is satisfactory to the Requisite Banks as to
 amount, nature and carrier covering fire damage (including use and
 occupancy), public liability, product liability, property damage and
 workers' compensation, and deliver to the Administrative Agent upon
 request a schedule certified to be correct by a Responsible Officer of
 Borrower setting forth all insurance in force as of the date of such schedule.

     6.8  Books and Records.  Maintain adequate books, accounts
 and records in accordance with Generally Accepted Accounting Principles,
 and permit employees or agents of the Administrative Agent at any
 reasonable time and as often as may reasonably be desired to inspect its
 properties, and to examine or audit its books, accounts and records and
 make copies and memoranda thereof and to discuss the business,
 operations, properties and financial and other conditions of Borrower and
 its Subsidiaries with officers of Borrower.

     6.9  Future Significant Subsidiaries; Pledges of Stock.  Cause
 any of present or future Significant Subsidiaries (other than Non-Recourse
 Joint Ventures) (as soon as any such future Significant Subsidiary becomes
 a Significant Subsidiary of Borrower) that is not a Guarantor to (a) execute
 and deliver to the Administrative Agent a continuing guaranty in form and
 substance satisfactory to the Administrative Agent, together with
 documentation of the type set forth in Sections 4.1(d), 4.3(g) and 4.3(h) as
 to such Significant Subsidiary, or (b) if pre-existing Indebtedness of any
 new Significant Subsidiary prohibits such a guaranty, such a guaranty given
 by a foreign Significant Subsidiary would be taxable, Borrower will instead
 pledge all its equity interests in such new Significant Subsidiary (or as
 much as it can without such pledge being taxable) pursuant to the Pledge
 Agreement or a supplement thereto, together with delivery of the Pledged
 Collateral accompanied by appropriate stock powers endorsed in blank.
 Borrower shall notify the Administrative Agent of the creation or
 acquisition of any new Significant Subsidiary, and Schedule 5.9 shall be
 deemed amended by the addition of such new Subsidiary (whether or the
 Administrative Agent distributes a reviewed Schedule 5.9).

     6.10 Use of Proceeds.  Use the proceeds of the Loans for
 general working capital and general corporate purposes and acquisitions.

     6.11 Exchange of Convertible Subordinated Notes.  Not later
 than November 20, 1997, Borrower shall cause the holders of the
 Convertible Subordinated Notes having an aggregate principal amount not
 exceeding $9,239,071 to be exchanged for Convertible Subordinated Notes
 having an aggregate principal amount not exceeding $8,400,000.

Section 7 NEGATIVE COVENANTS
     Borrower covenants and agrees that, so long as the Commitments
 shall remain available, and until full and final payment of all indebtedness
 incurred hereunder, without the prior written consent of the Requisite
 Banks, it will not, and will not permit any Subsidiary to:
     7.1  Limitation On Indebtedness.  Incur or suffer to exist any
 indebtedness for borrowed money, or become liable as a surety, guarantor,

<PAGE>

 accommodation endorser, or otherwise for or upon the obligation of any
 other person, firm or corporation; except for:

     (a)  the acquisition of goods, supplies or merchandise on
 normal trade credit;

     (b)  Indebtedness incurred on or before the Closing Date listed
 on Schedule 7.1 and any extension, renewal, refunding and refinancing
 thereof; provided that after giving effect to such extension, renewal,
 refunding or refinancing the principal amount thereof is not increased;

     (c)  Indebtedness of Non-Recourse Joint Ventures not exceeding,
 together with Investments permitted under Section 7.5(b), $50,000,000 in
 the aggregate at any time outstanding;

     (d)  Indebtedness consisting of Capital Leases and related to
 Synthetic Leases not exceeding $25,000,000 in the aggregate outstanding at
 any time;

     (e)  intercompany obligations of Borrower or any Guarantor
 otherwise permitted hereunder;

     (f)  the Convertible Subordinated Notes; and

     (g)  other Indebtedness, including purchase-money financing,
 not exceeding $10,000,000 in the aggregate outstanding at any time.

     7.2  Limitation On Liens.  Create, assume or suffer to exist any
 Lien on or of any of its property, real or personal, whether now owned or
 hereafter acquired, except for:

     (a) Liens for current taxes, assessments or other governmental
 charges which are not delinquent or remain payable without any penalty or
 the validity of which is contested in good faith by appropriate proceedings
 upon stay of execution of the enforcement thereof;
     (b) Liens securing Indebtedness permitted by Section 7.1(c);
 provided such Liens are on and limited to the assets of the joint venture
 incurring such Indebtedness;

     (c) Liens securing Indebtedness permitted by Section 7.1(g);
 provided such Liens are on and limited to the capital assets acquired,
 constructed or financed with the proceeds of such Indebtedness;

     (d) Liens in connection with Capital Leases permitted by Section
 7.1(d); provided such Liens are on and limited to the assets of the subject
of such Capital Leases; and

     (e)  Liens in connection with equipment leases not exceeding
 $250,000 in the aggregate at any time which were assumed in connection
 with the Hollywood Digital Acquisition, and any extension, renewal,
 refunding and refinancing thereof; provided that after giving effect to such
 extension, renewal, refunding or refinancing the principal amount thereof is
 not increased.

     7.3  Liquidation, Merger, etc.  Liquidate or dissolve, or enter
 into any consolidation, merger, partnership, joint venture or other
 combination, or sell, lease or dispose of its business or assets as a whole or

<PAGE>

 such as in the opinion of the Requisite Banks constitute a substantial
 portion thereof except:
(a)  mergers and consolidations of a Subsidiary of Borrower
 into Borrower or a Subsidiary (with Borrower or its Subsidiary as the
 surviving entity) or of Borrower or Subsidiaries of Borrower with each
 other, provided that Borrower and each of such Subsidiaries have executed
 such amendments to the Loan Documents as the Administrative Agent may
 reasonably determine are appropriate as a result of such merger; and

     (b)  a merger or consolidation of Borrower or any Subsidiary
 with any other Person, provided that (i) either (A) Borrower or its
 Subsidiary is the surviving entity, or (B) the surviving entity is a
 corporation organized under the laws of a State of the United States of
 America or the District of Columbia and, as of the date of such merger or
 consolidation, expressly assumes, by an appropriate instrument, the
 Obligations of Borrower or its Subsidiary, as the case may be, and (ii)
 giving effect thereto on a pro-forma basis, no Default or Event of Default
 exists or would result therefrom.

     7.4  Disposition of Assets.  Dispose, nor permit any of its
 Subsidiaries to dispose, of any of its assets or enter into any sale and
 leaseback agreement covering any of its fixed or capital assets; except that
 Borrower and its Subsidiaries may dispose of assets no longer used or
 useful in the business of Borrower or such Subsidiary, if the net book value
 of such asset is not in excess of $2,000,000.

     7.5  Limitation on Investments.  Make any Investments,
 except:  (a)  Investments in cash, cash equivalents and marketable
 securities (as defined in accordance with Generally Accepted Accounting
 Principles); provided that the aggregate value of all marketable securities
 not rated at least investment grade by a rating agency of national standing
 shall not at any time exceed one-third of the total value of all such cash,
 cash equivalents and marketable securities;

     (b)  Investments in foreign joint ventures located in the United
 Kingdom, Spain, France or Germany engaged in businesses providing post
 production services for film, television, transmission and related media,
 provided, that Borrower's and its Subsidiaries' share of such investments,
 together with Indebtedness permitted under Section 7.1(c), shall not exceed
 $50,000,000 in the aggregate at any time outstanding valued at cost;

     (c)  Investments in other Persons not exceeding  $10,000,000
 in the aggregate at any time outstanding;

     (d)  Investments in or loans to Guarantors that are 100%
 owned directly or indirectly by Borrower; and

     (e)  loans to officers of Borrower not exceeding $150,000 in
 the aggregate outstanding at any time;

provided that in all cases (i) no Default or Event of Default has occurred
 under this Agreement or will occur after giving effect to any such
 acquisition, (ii) any rights to repayment of any loans are pledged to the
 Administrative Agent and the Banks on terms and conditions satisfactory to
 Administrative Agent and the Banks, and (iii) Borrower shall not cause,
 permit or suffer any restrictions on dividends, distributions or other
 upstreaming of money to Borrower by any Subsidiary now owned or


<PAGE>

 hereafter acquired by Borrower.

     7.6  Limitation on Acquisitions.  Make any Acquisition unless
 (a) prior to completing such Acquisition, Borrower delivers to the
 Administrative Agent a Compliance Certificate demonstrating that, after
 giving effect to such Acquisition, Borrower would be in compliance with
 Sections 7.10, 7.11 and 7.12 on a pro forma basis and (b) no Default or
 Event of Default has occurring or is continuing or would result from such
 Acquisition.
     7.7  Contracts.  Enter into, or permit any of its Subsidiaries to
 enter into, any contracts, leases, indentures, or other agreements except in
 the ordinary course of its business as presently conducted, except for
 Acquisitions and Investments permitted by Section 7.5(c).

     7.8  Business Activities.  Engage in, or permit any of its
 Subsidiaries to engage in, any business activities or operations
substantially different from or unrelated to businesses providing post
 production and transmission services for film, television and related media,
 except for Investments permitted by Section 7.5(c).

     7.9  Compliance with ERISA.  (a) Terminate, within the
 meaning of Title IV of ERISA, any Plan so as to result in any material
 liability to the PBGC, (b) engage in any "prohibited transaction" (as
defined in Section 4975 of the Internal Revenue Code of 1986, as amended)
 involving any Plan that would result in material liability for an excise
tax or civil penalty in connection therewith, (c) incur or suffer to exist
 any material "accumulated funding deficiency" (as defined in Section 302
 of ERISA), whether or not waived, involving any Plan, or (d) allow or
 suffer to exist any event or condition, which could have a material adverse
 effect on Borrower and its Subsidiaries, taken as a whole, or could impair
 Borrower's or a Guarantor's ability to perform its obligations hereunder or
 any other Loan Document to which Borrower or any Guarantor is a party.

     7.10 Minimum Tangible Net Worth.  Permit Tangible Net
 Worth at any time to be less than the sum of (a) $25,000,000 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
 subsequent to May 31, 1997, 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.
     7.11 Fixed Charge Coverage Ratio.  Permit at any time the
 Fixed Charge Coverage Ratio to be less than 1.25 to 1.00.
     7.12 Leverage Ratio.  Permit at any time the Leverage Ratio to
 exceed 3.00 to 1.00.
     7.13 No Restrictions on Upstreaming Cash from Significant
 Subsidiaries.  Permit any restrictions on any Significant Subsidiary directly
 or indirectly upstreaming cash to Borrower.

Section 8 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

     8.1  Events of Default.  The occurrence of any of the following
 events shall constitute an Event of Default hereunder:
     (a)  Borrower or any Guarantor shall fail to pay, any principal
 when due, whether at maturity, on demand, upon acceleration or otherwise;

 or  (b)  Borrower or any Guarantor shall fail to pay, when due,
 any amount of interest, fees, expenses, indemnity payments or any other

<PAGE>

 amount payable by Borrower or any Guarantor to the Administrative Agent
 or any Bank under this Agreement within 10 days of the date when such
 amounts are due, whether at maturity, on a specified date, on demand, upon
 acceleration or otherwise; or

     (c)  Any representation or warranty hereunder or any other
 Loan Document or in connection with any transaction contemplated hereby
 or in any financial statement furnished to the Administrative Agent shall
 prove to have been false or misleading in any material respect when made
 or when deemed to have been made; or

     (d)  Borrower shall breach or default under Section 4.1(c),
 6.11, 7.10, 7.11 or 7.12; or

     (e)  Borrower or any Guarantor shall breach, or default under,
 any other term, condition, provision or covenant contained in this
 Agreement or any other Loan Document and such breach or default is not
 remedied to the Requisite Bank's satisfaction within 30 days after the
 occurrence thereof; or

     (f)  Borrower or any of its Subsidiaries institutes or consents
 to the institution of any proceeding under a Debtor Relief Law relating
to it or to all or any material part of its Property, or is unable or admits
 in writing its inability to pay its debts as they mature, or makes an
 assignment for the benefit of creditors; or applies for or consents to the
 appointment of any receiver, trustee, custodian, conservator, liquidator,
 rehabilitator or similar officer for it or for all or any material part
 of its Property; or any receiver, trustee, custodian, conservator,
 liquidator, rehabilitator or similar officer is appointed without the
 application or consent of that Person and the appointment continues
 undischarged or unstayed for 60 calendar days; or any proceeding under a
 Debtor Relief Law relating to any such Person or to all or any part of its
 Property is instituted without the consent of that Person and continues
 undismissed or unstayed for 60 calendar days; or

     (g)  All, or such as in the opinion of the Requisite Banks
 constitutes substantially all, of the property of Borrower or any Guarantor
 shall be condemned, seized or appropriated; or

     (h)  Any breach or default shall occur under any other
 agreement or agreements involving the borrowing of money or the
 extension of credit where the principal amount outstanding under such
 agreement or agreements is in the amount of $100,000 or more, and under
 which Borrower or any Subsidiary may be obligated as borrower or
 guarantor, if such default consists of the failure to pay any indebtedness
 when due or if such default permits or causes (or upon a lapse of time or
 notice or both would permit or cause) the acceleration of any indebtedness
 or the termination of any commitment to lend; or

     (i)  The Principal Stockholders shall cease to own, either
 directly or as trustees under trusts established for the benefit of
themselves  and/or members of their immediate families, in the aggregate at
 least 20% of the capital stock of Borrower or the voting rights accruing
 under the shares issued by Borrower shall cease to be 50% controlled by
 the Principal Stockholders, either directly or as trustees under trusts
 established for the benefit of themselves and/or members of their
 immediate families; provided, that for purposes of determining whether an

<PAGE>

 Event of Default has occurred under this Section 8.1(i), each Principal
 Stockholder shall be deemed to own shares registered in his name (unless
 he has delegated or otherwise transferred or assigned voting rights in such
 shares) notwithstanding that an existing spouse may be deemed to have
 rights in such shares under applicable community property laws; provided,
 further, that no Event of Default shall be deemed to have occurred by virtue
 of the death of any Principal Stockholder; or

     (j)  The occurrence of (i) a Reportable Event with respect to,
 or the institution of proceedings to have a trustee appointed to administer
or to terminate, any Plan, which Reportable Event or institution of
 proceedings is likely to result in the termination of such Plan and such
 termination could have a material adverse effect upon the business
 operations, assets or financial condition of Borrower and its Subsidiaries,
 taken as a whole, or could impair Borrower's or a Guarantor's ability to
 perform its obligations hereunder or under any other Loan Document to
 which Borrower or any Guarantor is a party, and the continuance of the
 same unremedied for 30 Business Days after notice of such Reportable
 Event pursuant to Section 4043 of ERISA is given or such proceedings are
 instituted, as the case may be or (ii) provided, however, that such event
 shall automatically be deemed to have a materially adverse effect upon
 Borrower and its Subsidiaries, taken as a whole, or could impair Borrower's
 or a Guarantor's ability to perform its obligations hereunder or under any
 other Loan Document to which Borrower or any Guarantor is a party, if a
 "prohibited transaction" described in Section 406 of ERISA or 4975(c) of
 the Internal Revenue Code of 1986, as amended, or a notice of intention to
 terminate a Plan under Section 4041 of ERISA shall have been filed; or a
 notice shall be received by the plan administrator of a Plan that the PBGC
 has instituted proceedings to terminate such Plan or appoint a trustee to
 administer such Plan; or Borrower or any Subsidiary shall withdraw from a
 Plan; or a trustee will be appointed by a United States District Court to
 administer any Plan with vested unfunded liabilities; or

     (k)  The occurrence of any event which Requisite Banks
 believes could have a material adverse effect upon Borrower and its
 Subsidiaries, taken as a whole, or could impair Borrower's or a Guarantor's
 ability to perform its obligations hereunder or under any other Loan
 Document to which Borrower or any Guarantor is a party; or

     (l)  Borrower or any Guarantor defaults under any term, covenant
 or agreement in the Guaranty or the Pledge Agreement; or the Guaranty or
 the Pledge Agreement is for any reason partially (including with respect to
 future advances) or wholly revoked or invalidated, or otherwise ceases to be
 in full force and effect in accordance with its terms, or Borrower or any
 Guarantor contests in any manner the validity or enforceability thereof or
 denies that it has any further liability or obligation thereunder.

     8.2  Remedies Upon Event of Default.  Without limiting any
other rights or remedies of the Administrative Agent or the Banks provided
 for elsewhere in this Agreement, or the other Loan Documents, or by
 applicable law, or in equity, or otherwise:
     (a)  Upon the occurrence, and during the continuance, of any
 Event of Default other than an Event of Default described in Section 8.1(f):
          (i)   the Commitments and all other obligations of the
 Administrative Agent or the Banks and all rights of Borrower and any
 Guarantor under the Loan Documents shall be suspended without notice to
 or demand upon Borrower, which are expressly waived by Borrower,

<PAGE>

 except that all of the Banks or the Requisite Banks, as required hereunder,
 may waive an Event of Default or, without waiving, determine, upon terms
 and conditions satisfactory to the Banks or Requisite Banks, as the case
 may be, to reinstate the Commitments and make further Extensions of
 Credit, which waiver or determination shall apply equally to, and shall be
 binding upon, all the Banks;

          (ii)  the Issuing Bank may, with the approval of the
 Administrative Agent on behalf of the Requisite Banks, demand immediate
 payment by Borrower of an amount equal to the aggregate amount of all
 outstanding Letters of Credit to be held by the Issuing Bank in an interest
bearing cash collateral account as collateral hereunder; and

          (iii) the Requisite Banks may request the
 Administrative Agent to, and the Administrative Agent thereupon shall,
 terminate the Commitments and/or declare all or any part of the unpaid
 principal of all Loans, all interest accrued and unpaid thereon and all other
 amounts payable under the Loan Documents to be forthwith due and
 payable, whereupon the same shall become and be forthwith due and
 payable, without protest, presentment, notice of dishonor, demand or
 further notice of any kind, all of which are expressly waived by Borrower.

     (b)  Upon the occurrence of any Event of Default described in
 Section 8.1(f):

          (i)   the Commitments and all other obligations of the
 Administrative Agent or the Banks and all rights of Borrower and any
 Guarantor under the Loan Documents shall terminate without notice to or
 demand upon Borrower, which are expressly waived by Borrower, except
 that all the Banks may waive the Event of Default or, without waiving,
 determine, upon terms and conditions satisfactory to all the Banks, to
 reinstate the Commitments and make further Extensions of Credit, which
 determination shall apply equally to, and shall be binding upon, all the
 Banks;

          (ii)  an amount equal to the aggregate amount of all
 outstanding Letters of Credit shall be immediately due and payable to the
 Issuing Bank without notice to or demand upon Borrower, which are
 expressly waived by Borrower, to be held by the Issuing Bank in an
 interest-bearing cash collateral account as collateral hereunder; and

          (iii) the unpaid principal of all Loans, all interest
 accrued and unpaid thereon and all other amounts payable under the Loan
 Documents shall be forthwith due and payable, without protest,
 presentment, notice of dishonor, demand or further notice of any kind, all
 of which are expressly waived by Borrower.

     (c)  Upon the occurrence of any Event of Default, the Banks
 and the Administrative Agent, or any of them, without notice to (except as
 expressly provided for in any Loan Document) or demand upon Borrower,
 which are expressly waived by Borrower (except as to notices expressly
 provided for in any Loan Document), may proceed (but only with the
 consent of the Requisite Banks) to protect, exercise and enforce their
 rights and remedies under the Loan Documents against Borrower and any
 Guarantor and such other rights and remedies as are provided by law or
 equity.

<PAGE>

     (d)  The order and manner in which the Banks' rights and
 remedies are to be exercised shall be determined by the Requisite Banks in
 their sole discretion, and all payments received by the Administrative Agent
 and the Banks, or any of them, shall be applied first to Attorney Costs
 incurred by the Administrative Agent or any Bank, and thereafter paid pro
 rata to the Banks in the same proportions that the aggregate Obligations
 owed to each Bank under the Loan Documents bear to the aggregate
 Obligations owed under the Loan Documents to all the Banks, without
 priority or preference among the Banks.  Regardless of how each Bank may
 treat payments for the purpose of its own accounting, for the purpose of
 computing Borrower's Obligations hereunder, payments shall be applied
 first, to the costs and expenses of the Administrative Agent and the Banks,
 as set forth above, second, to the payment of accrued and unpaid interest
 due under any Loan Documents to and including the date of such
 application (ratably, and without duplication, according to the accrued and
 unpaid interest due under each of the Loan Documents), and third, to the
 payment of all other amounts (including principal and fees) then owing to
 the Administrative Agent or the Banks under the Loan Documents. No
 application of payments will cure any Event of Default, or prevent
 acceleration, or continued acceleration, of amounts payable under the Loan
 Documents, or prevent the exercise, or continued exercise, of rights or
 remedies of the Banks hereunder or thereunder or at laws or in equity.


     Section 9
     THE ADMINISTRATIVE AGENT
     9.1  Appointment and Authorization; Administrative Agent.  (a)
Each Bank hereby irrevocably (subject to Section 9.9) appoints, designates
 and authorizes the Administrative Agent to take such action on its behalf
 under the provisions of this Agreement and each other Loan Document and
 to exercise such powers and perform such duties as are expressly delegated
 to it by the terms of this Agreement or any other Loan Document, together
 with such powers as are reasonably incidental thereto.  Notwithstanding any
 provision to the contrary contained elsewhere in this Agreement or in any
 other Loan Document, the Administrative Agent shall not have any duties
 or responsibilities, except those expressly set forth herein, nor shall the
 Administrative Agent have or be deemed to have any fiduciary relationship
 with any Bank, and no implied covenants, functions, responsibilities,
 duties, obligations or liabilities shall be read into this Agreement or any
 other Loan Document or otherwise exist against the Administrative Agent.
  Without limiting the generality of the foregoing sentence, the use of the
 term "agent" in this Agreement with reference to the Administrative Agent
 is not intended to connote any fiduciary or other implied (or express)
 obligations arising under agency doctrine of any applicable law.  Instead,
 such term is used merely as a matter of market custom, and is intended to
 create or reflect only an administrative relationship between independent
 contracting parties.

          (b The Issuing Bank shall act on behalf of the Banks with
 respect to any Letters of Credit Issued by it and the documents associated
 therewith until such time and except for so long as the Administrative
 Agent may agree at the request of the Requisite Banks to act for such
 Issuing Bank with respect thereto; provided, however, that the Issuing Bank
 shall have all of the benefits and immunities (i) provided to the
 Administrative Agent in this Section 9 with respect to any acts taken or
 omissions suffered by the Issuing Bank in connection with Letters of Credit
 Issued by it or proposed to be Issued by it and the application and

<PAGE>

 agreements for letters of credit pertaining to the Letters of Credit as
 fully as if the term "Administrative Agent", as used in this Section 9
, included the Issuing Bank with respect to such acts or omissions, and (ii)
 as additionally provided in this Agreement with respect to the Issuing Bank.

     9.2  Delegation of Duties.  The Administrative Agent may execute
 any of its duties under this Agreement or any other Loan Document by or
 through agents, employees or attorneys-in-fact and shall be entitled to
 advice of counsel concerning all matters pertaining to such duties.  The
 Administrative Agent shall not be responsible for the negligence or
 misconduct of any agent or attorney-in-fact that it selects with reasonable
 care.

     9.3  Liability of Administrative Agent.  None of the Administrative
 Agent-Related Persons shall (i) be liable for any action taken or omitted to
 be taken by any of them under or in connection with this Agreement or any
 other Loan Document or the transactions contemplated hereby (except for
 its own gross negligence or willful misconduct), or (ii) be responsible in
 any manner to any of the Banks for any recital, statement, representation or
 warranty made by Borrower or any Subsidiary or Affiliate of Borrower, or
 any officer thereof, contained in this Agreement or in any other Loan
 Document, or in any certificate, report, statement or other document
 referred to or provided for in, or received by the Administrative Agent
 under or in connection with, this Agreement or any other Loan Document,
 or the validity, effectiveness, genuineness, enforceability or sufficiency
 of  this Agreement or any other Loan Document, or for any failure of
 Borrower or any other party to any Loan Document to perform its
 obligations hereunder or thereunder.  No Administrative Agent-Related
 Person shall be under any obligation to any Bank to ascertain or to inquire
 as to the observance or performance of any of the agreements contained in,
 or conditions of, this Agreement or any other Loan Document, or to inspect
 the properties, books or records of Borrower or any of Borrower's
 Subsidiaries or Affiliates.

     9.4  Reliance by Administrative Agent.  (a) The Administrative
 Agent shall be entitled to rely, and shall be fully protected in relying,
 upon any writing, resolution, notice, consent, certificate, affidavit,
 letter, telegram, facsimile, telex or telephone message, statement or other
 document or conversation believed by it to be genuine and correct and to
 have been signed, sent or made by the proper Person or Persons, and upon
 advice and statements of legal counsel (including counsel to Borrower),
 independent accountants and other experts selected by the Administrative
 Agent. The Administrative Agent shall be fully justified in failing or
 refusing to take any action under this Agreement or any other Loan
 Document unless it shall first receive such advice or concurrence of the
 Requisite Banks as it deems appropriate and, if it so requests, it shall
 first be indemnified to its satisfaction by the Banks against any and all
 liability and expense which may be incurred by it by reason of taking or
 continuing to take any such action.  The Administrative Agent shall in all
 cases be fully protected in acting, or in refraining from acting, under this
 Agreement or any other Loan Document in accordance with a request or
 consent of the Requisite Banks and such request and any action taken or
 failure to act pursuant thereto shall be binding upon all of the Banks.

          (b)  For purposes of determining compliance with the
 conditions specified in Section 4.1, each Bank that has executed this
 Agreement shall be deemed to have consented to, approved or accepted or

<PAGE>

 to be satisfied with, each document or other matter either sent by the
 Administrative Agent to such Bank for consent, approval, acceptance or
 satisfaction, or required thereunder to be consented to or approved by or
 acceptable or satisfactory to the Bank.

     9.5  Notice of Default.  The Administrative Agent shall not be
 deemed to have knowledge or notice of the occurrence of any Default or
 Event of Default, except with respect to defaults in the payment of
 principal, interest and fees required to be paid to the Administrative Agent
 for the account of the Banks, unless the Administrative Agent shall have
 received written notice from a Bank or Borrower referring to this
 Agreement, describing such Default or Event of Default and stating that
 such notice is a "notice of default".  The Administrative Agent will notify
 the Banks of its receipt of any such notice.  The Administrative Agent shall
 take such action with respect to such Default or Event of Default as may be
 requested by the Requisite Banks in accordance with Section 8; provided,
 however, that unless and until the Administrative Agent has received any
 such request, the Administrative Agent may (but shall not be obligated to)
 take such action, or refrain from taking such action, with respect to such
 Default or Event of Default as it shall deem advisable or in the best
 interest of the Banks.

     9.6  Credit Decision.  Each Bank acknowledges that none of the
 Administrative Agent-Related Persons has made any representation or
 warranty to it, and that no act by the Administrative Agent hereinafter
 taken, including any review of the affairs of Borrower and its Subsidiaries,
 shall be deemed to constitute any representation or warranty by any
 Administrative Agent-Related Person to any Bank.  Each Bank represents
 to the Administrative Agent that it has, independently and without reliance
 upon any Administrative Agent-Related Person and based on such
 documents and information as it has deemed appropriate, made its own
 appraisal of and investigation into the business, prospects, operations,
 property, financial and other condition and creditworthiness of Borrower
 and its Subsidiaries, and all applicable bank regulatory laws relating to
 the transactions contemplated hereby, and made its own decision to enter
 into this Agreement and to extend credit to Borrower hereunder.  Each
 Bank also represents that it will, independently and without reliance upon
 any Administrative Agent-Related Person and based on such documents
 and information as it shall deem appropriate at the time, continue to make
 its own credit analysis, appraisals and decisions in taking or not taking
 action under this Agreement and the other Loan Documents, and to make
 such investigations as it deems necessary to inform itself as to the
 business, prospects, operations, property, financial and other condition
 and creditworthiness of Borrower.  Except for notices, reports and other
 documents expressly herein required to be furnished to the Banks by the
 Administrative Agent, the Administrative Agent shall not have any duty or
 responsibility to provide any Bank with any credit or other information
 concerning the business, prospects, operations, property, financial and
 other condition or creditworthiness of Borrower which may come into the
 possession of any of the Administrative Agent-Related Persons.

     9.7  Indemnification of Administrative Agent.  Whether or not the
 transactions contemplated hereby are consummated, the Banks shall
 indemnify upon demand the Administrative Agent-Related Persons (to the
 extent not reimbursed by or on behalf of Borrower and without limiting the
 obligation of Borrower to do so), pro rata, from and against any and all
 Indemnified Liabilities; provided, however, that no Bank shall be liable for

<PAGE>

 the payment to the Administrative Agent-Related Persons of any portion of
 such Indemnified Liabilities resulting solely from such Person's gross
 negligence or willful misconduct.  Without limitation of the foregoing, each
 Bank shall reimburse the Administrative Agent upon demand for its ratable
 share of any costs or out-of-pocket expenses (including Attorney Costs)
 incurred by the Administrative Agent in connection with the preparation,
 execution, delivery, administration, modification, amendment or
 enforcement (whether through negotiations, legal proceedings or otherwise)
 of, or legal advice in respect of rights or responsibilities under, this
 Agreement, any other Loan Document, or any document contemplated by
 or referred to herein, to the extent that the Administrative Agent is not
 reimbursed for such expenses by or on behalf of Borrower.  The
 undertaking in this Section shall survive the payment of all Obligations
 hereunder and the resignation or replacement of the Administrative Agent.

     9.8  Administrative Agent in Individual Capacity.  BofA and its
 Affiliates may make loans to, issue letters of credit for the account of,
 accept deposits from, acquire equity interests in and generally engage in
 any kind of banking, trust, financial advisory, underwriting or other
 business with Borrower and its Subsidiaries and Affiliates as though BofA
 were not the Administrative Agent or the Issuing Bank hereunder and
 without notice to or consent of the Banks.  The Banks acknowledge that,
 pursuant to such activities, BofA or its Affiliates may receive information
 regarding Borrower or its Affiliates (including information that may be
 subject to confidentiality obligations in favor of Borrower or such
 Subsidiary) and acknowledge that the Administrative Agent shall be under
 no obligation to provide such information to them.  With respect to its
 Loans, BofA shall have the same rights and powers under this Agreement
 as any other Bank and may exercise the same as though it were not the
 Administrative Agent or the Issuing Bank.

     9.9  Successor Administrative Agent.  The Administrative Agent
may, and at the request of the Requisite Banks shall, resign as
 Administrative Agent upon 30 days' notice to the Banks.  If the
 Administrative Agent resigns under this Agreement, the Requisite Banks
 shall appoint from among the Banks a successor administrative agent for
 the Banks which successor administrative agent shall be approved by
 Borrower.  If no successor administrative agent is appointed prior to the
 effective date of the resignation of the Administrative Agent, the
 Administrative Agent may appoint, after consulting with the Banks and
 Borrower, a successor administrative agent from among the Banks.  Upon
 the acceptance of its appointment as successor administrative agent
 hereunder, such successor administrative agent shall succeed to all the
 rights, powers and duties of the retiring Administrative Agent and the term
 "Administrative Agent" shall mean such successor administrative agent and
 the retiring Administrative Agent's appointment, powers and duties as
 Administrative Agent shall be terminated.  After any retiring Administrative
 Agent's resignation hereunder as Administrative Agent, the provisions of
 this Section 9 and Sections 10.3 and 10.11 shall inure to its benefit as
 to any actions taken or omitted to be taken by it while it was Administrative
 Agent under this Agreement.  If no successor administrative agent has
 accepted appointment as Administrative Agent by the date which is 30 days
 following a retiring Administrative Agent's notice of resignation, the
 retiring Administrative Agent's resignation shall nevertheless thereupon
 become effective, the Administrative Agent shall continue to hold any
 Collateral in its possession and the Banks shall perform all of the duties
 of the Administrative Agent hereunder until such time, if any, as the

<PAGE>

Requisite Banks appoint a successor agent as provided for above.
 Notwithstanding the foregoing, however, BofA may not be removed as the
 Administrative Agent at the request of the Requisite Banks unless BofA
 shall also simultaneously be replaced as "Issuing Bank" hereunder pursuant
 to documentation in form and substance reasonably satisfactory to BofA.

     9.10 Proportionate Interest in any Collateral.  The
Administrative Agent, on behalf of all the Banks, shall hold in accordance
 with the Loan Documents all items of any collateral or interests therein
 received or held by the Administrative Agent.  Subject to the Administrative
 Agent's and the Banks' rights to reimbursement for their costs and expenses
 hereunder (including Attorney Costs incurred by the Administrative Agent
 or a Bank) and subject to the application of payments in accordance with
 Section 2), each Bank shall have an interest in the Banks' interest in the
 Collateral or interests therein in the same proportions that the aggregate
 Obligations owed such Bank under the Loan Documents bear to the
 aggregate Obligations owed under the Loan Documents to all the Banks,
 without priority or preference among the Banks.

     9.11  Foreclosure on Collateral.  In the event of foreclosure or
enforcement of the Lien created by any of the Collateral Documents, title to
 the Collateral covered thereby shall be taken and held by the Administrative
 Agent (or an Affiliate or designee thereof) pro rata for the benefit of the
 Banks in accordance with their Pro Rata Share and shall be administered in
 accordance with the standard form of collateral holding participation
 agreement used by the Administrative Agent in comparable syndicated
 credit facilities.


Section 10
MISCELLANEOUS
     10.1 Cumulative Remedies; No Waiver.  The rights, powers,
 privileges and remedies of the Administrative Agent and the Banks
 provided herein or other Loan Document are cumulative and not exclusive
 of any right, power, privilege or remedy provided by laws or equity.  No
 failure or delay on the part of the Administrative Agent or any Bank in
 exercising any right, power, privilege or remedy may be, or may be deemed
 to be, a waiver thereof; nor may any single or partial exercise of any
 right, power, privilege or remedy preclude any other or further exercise
 of the same or any other right, power, privilege or remedy.  The terms and
 conditions of Section 9 are inserted for the sole benefit of the
 Administrative Agent and the Banks; the same may be waived in whole or
 in part, with or without terms or conditions, in respect of any Loan or
 Letter of Credit without prejudicing the Administrative Agent's or the
 Banks' rights to assert them in whole or in part in respect of any other Loan.

     10.2 Amendments; Consents.  No amendment, modification,
 supplement, extension, termination or waiver of any provision of this
 Agreement or any other Loan Document, no approval or consent
 thereunder, and no consent to any departure by Borrower or any Guarantor
 therefrom, may in any event be effective unless in writing signed by the
 Requisite Banks (and, in the case of any amendment, modification or
 supplement of or to any Loan Document to which Borrower is a party,
 signed by Borrower and, in the case of any amendment, modification or
 supplement to Section 9, signed by the Administrative Agent), and then
 only in the specific instance and for the specific purpose given; and,
 without the approval in writing of all the Banks, no amendment,

<PAGE>

 modification, supplement, termination, waiver or consent may be effective:

     (a)  To amend or modify the principal of, or the amount of
principal, principal prepayments or the rate of interest payable on, any
 Loan, or the amount of the Commitment or the Pro Rata Share of any Bank
 (except as contemplated by Section 2.13) or the amount of any commitment
 fee payable to any Bank, or any other fee or amount payable to any Bank
 under the Loan Documents or to waive an Event of Default consisting of
 the failure of Borrower to pay when due principal, interest or any
 commitment fee;

     (b)  To postpone any date fixed for any payment of principal
 of, prepayment of principal of or any installment of interest on, any Loan
 or any installment of any commitment fee, or to extend the term of the
 Commitment, or to release the Guaranty;

     (c)  To amend the provisions of the definition of "Requisite
 Banks", Sections 4 or 9 or this Section;

     (d)  To release any material portion of the Collateral (except as
 otherwise expressly provided in any Loan Document); or

     (e)  To amend any provision of this Agreement that expressly
 requires the consent or approval of all the Banks.

Any amendment, modification, supplement, termination, waiver or consent
 pursuant to this Section shall apply equally to, and shall be binding upon, all
 the Banks and the Administrative Agent.

     10.3 Attorney Costs, Expenses and Taxes.  Borrower shall pay
 within five Business Days after demand, accompanied by an invoice
 therefor, the reasonable costs and expenses of the Administrative Agent in
 connection with the negotiation, preparation, syndication, execution and
 delivery of the Loan Documents (subject to any limitations set forth in a
 letter agreement between Borrower and the Arranger entered into prior to
 the Closing Date) and any amendment thereto or waiver thereof.  Borrower
 shall also pay on demand, accompanied by an invoice therefor, the
 reasonable costs and expenses of the Administrative Agent and the Banks
 in connection with the refinancing, restructuring, reorganization (including
 a bankruptcy reorganization) and enforcement or attempted enforcement of
 the Loan Documents, and any matter related thereto.  The foregoing costs
 and expenses shall include filing fees, recording fees, title insurance
 fees, appraisal fees, search fees, and other out-of-pocket expenses and
 Attorney Costs incurred by the Agent or any Bank, and independent public
 accountants and other outside experts retained by the Administrative Agent
 or any Bank, whether or not such costs and expenses are incurred or
 suffered by the Administrative Agent or any Bank in connection with or
 during the course of any bankruptcy or insolvency proceedings of Borrower
 or any Subsidiary thereof.  Such costs and expenses shall also include the
 administrative costs of the Administrative Agent reasonably attributable to
 the administration of this Agreement and the other Loan Documents.
 Borrower shall pay any and all Applicable Taxes and all costs, expenses,
 fees and charges payable or determined to be payable in connection with
 the filing or recording of this Agreement, any other Loan Document or any
 other instrument or writing to be delivered hereunder or thereunder, or in
 connection with any transaction pursuant hereto or thereto, and shall
 reimburse, hold harmless and indemnify the Administrative Agent and the

<PAGE>

 Banks from and against any and all loss, liability or legal or other expense
 with respect to or resulting from any delay in paying or failure to pay any
 such tax, cost, expense, fee or charge or that any of them may suffer or
 incur by reason of the failure of Borrower or any Guarantor to perform any
 of its Obligations.  Any amount payable to the Administrative Agent or any
 Bank under this Section shall bear interest from the second Business Day
 following the date of demand for payment at the Default Rate.

     10.4 Nature of Banks' Obligations.  The obligations of the
 Banks hereunder are several and not joint or joint and several.  Nothing
 contained in this Agreement or any other Loan Document and no action
 taken by the Administrative Agent or the Banks or any of them pursuant
 hereto or thereto may, or may be deemed to, make the Banks a partnership,
 an association, a joint venture or other entity, either among themselves or
 with Borrower or any Affiliate of Borrower.  Each Bank's obligation to
 make any Loan pursuant hereto is several and not joint or joint and several,
 and in the case of the initial Loan only is conditioned upon the performance
 by all other Banks of their obligations to make initial Loans.  A default by
 any Bank will not increase the Pro Rata Share attributable to any other
 Bank.  Any Bank not in default may, if it desires, assume in such proportion
 as the nondefaulting Banks agree the obligations of any Bank in default, but
 is not obligated to do so.  The Administrative Agent agrees that it will use
 its best efforts either to induce the other Banks to assume the obligations
 of a Bank in default or to obtain another Bank, reasonably satisfactory to
 Borrower, to replace such a Bank in default.

     10.5 Survival of Representations and Warranties.  All
 representations and warranties contained herein or in any other Loan
 Document, or in any certificate or other writing delivered by or on behalf
 of any one or more of the Borrower Parties to any Loan Document, will
 survive the making of the Loans hereunder and the execution and delivery
 of any Notes, and have been or will be relied upon by the Administrative
 Agent and each Bank, notwithstanding any investigation made by the
 Administrative Agent or any Bank or on their behalf.

     10.6 Notices.  Except as otherwise expressly provided in the
 Loan Documents, all notices, requests, demands, directions and other
 communications provided for therein shall be given by Requisite Notice and
 shall be effective as follows:

                       Effective on earlier of
     Mode of Delivery  actual receipt and:

     Courier                 On scheduled delivery date

     Facsimile         When transmission complete

     Mail              Fourth Business Day after
                       deposit in U.S. mail

     Personal delivery       When received

     Telephone         When answered

provided, however, that notice to the Administrative Agent pursuant to
 Section 2 or 9 shall not be effective until actually received by the
 Administrative Agent.  The Administrative Agent and any Bank shall be

<PAGE>


 entitled to rely and act on any notice purportedly given by or on behalf of
 Borrower or a Guarantor even if such notice (i) was not made in a manner
 specified herein, (ii) was incomplete, (iii) was not preceded or followed by
 any other notice specified herein, or (iv) the terms of such notice as
 understood by the recipient varied from any subsequent related notice
 provided for herein.  Borrower shall indemnify the Administrative Agent
 and any Bank from any loss, cost, expense or liability as a result of
relying on any notice permitted herein.

     10.7 Execution of Loan Documents.  Unless the Administrative
 Agent otherwise specifies with respect to any Loan Document, (a) this
 Agreement and any other Loan Document may be executed in any number
 of counterparts and any party hereto or thereto may execute any
 counterpart, each of which when executed and delivered will be deemed to
 be an original and all of which counterparts of this Agreement or any other
 Loan Document, as the case may be, when taken together will be deemed to
 be but one and the same instrument and (b) execution of any such
 counterpart may be evidenced by a telecopier transmission of the signature
 of such party.  The execution of this Agreement or any other Loan
 Document by any party hereto or thereto will not become effective until
 counterparts hereof or thereof, as the case may be, have been executed by
 all the parties hereto or thereto.

     10.8 Binding Effect; Assignment.

     (a)  This Agreement and the other Loan Documents to which
 Borrower is a party will be binding upon and inure to the benefit of
 Borrower, the Administrative Agent, each of the Banks, and their respective
 successors and assigns, except that, Borrower may not assign its rights
 hereunder or thereunder or any interest herein or therein without the prior
 written consent of all the Banks.  Each Bank represents that it is not
 acquiring its Loans with a view to the distribution thereof within the
 meaning of the Securities Act of 1933, as amended (subject to any
 requirement that disposition of such Loans must be within the control of
 such Bank).  Any Bank may at any time pledge its Note or any other
 instrument evidencing its rights as a Bank under this Agreement to a
 Federal Reserve Bank, but no such pledge shall release that Bank from its
 obligations hereunder or grant to such Federal Reserve Bank the rights of a
 Bank hereunder absent foreclosure of such pledge.

     (b)  From time to time following the Closing Date, each Bank
 may assign to one or more Eligible Assignees all or any portion of its Pro
 Rata Share; provided that (i) such assignment, if not to a Bank or an
 Affiliate of the assigning Bank, shall be consented to by Borrower at all
 times other than during the existence of an Event of Default and the
 Administrative Agent (which approval of Borrower shall not be
 unreasonably withheld or delayed), (ii) a copy of a Notice of Assignment
 and Acceptance shall be delivered to the Administrative Agent, (iii) except
 in the case of an assignment to an Affiliate of the assigning Bank, to
 another Bank or of the entire remaining Commitment of the assigning Bank,
 the assignment shall not assign a Pro Rata Share equivalent to less than the
 Minimum Amount therefor, and (iv) the effective date of any such
 assignment shall be as specified in the Notice of Assignment and
 Acceptance, but not earlier than the date which is five Business Days after
 the date the Administrative Agent has received the Notice of Assignment
 and Acceptance.  Upon acceptance by the Administrative Agent of such
 Notice Assignment and Acceptance, the Eligible Assignee named therein

<PAGE>

 shall be a Bank for all purposes of this Agreement, with the Pro Rata Share
 therein set forth and, to the extent of such Pro Rata Share, the assigning
 Bank shall be released from its further obligations under this Agreement.
  Borrower agrees that they shall execute and deliver upon request (against
 delivery by the assigning Bank to Borrower of any Note) to such assignee
 Bank, one or more Notes evidencing that assignee Bank's Pro Rata Share,
 and to the assigning Bank if requested, one or more Notes evidencing the
 remaining balance Pro Rata Share retained by the assigning Bank.

     (c)  By executing and delivering a Notice of Assignment and
 Acceptance, the Eligible Assignee thereunder acknowledges and agrees
 that: (i) other than the representation and warranty that it is the legal
 and beneficial owner of the Pro Rata Share being assigned thereby free and
 clear of any adverse claim, the assigning Bank has made no representation
 or warranty and assumes no responsibility with respect to any statements,
 warranties or representations made in or in connection with this Agreement
 or the execution, legality, validity, enforceability, genuineness or
 sufficiency of this Agreement or any other Loan Document; (ii) the
 assigning Bank has made no representation or warranty and assumes no
 responsibility with respect to the financial condition of Borrower or the
 performance by Borrower of the Obligations; (iii) it has received a copy of
 this Agreement, together with copies of the most recent financial statements
 delivered pursuant to Section 6.1 and such other documents and
 information as it has deemed appropriate to make its own credit analysis
 and decision to enter into such Assignment and Acceptance; (iv) it will,
 independently and without reliance upon the Administrative Agent or any
 Bank and based on such documents and information as it shall deem
 appropriate at the time, continue to make its own credit decisions in taking
 or not taking action under this Agreement; (v) it appoints and authorizes
 the Administrative Agent to take such action and to exercise such powers
 under this Agreement as are delegated to the Administrative Agent by this
 Agreement; and (vi) it will perform in accordance with their terms all of the
 obligations which by the terms of this Agreement are required to be
 performed by it as a Bank.

     (d)  After receipt of a completed Notice of Assignment and
 Acceptance, and receipt of an assignment fee of $2,500 from such Eligible
 Assignee, the Administrative Agent shall, promptly following the effective
 date thereof, provide to Borrower and the Banks a revised Schedule 10.6
 giving effect thereto.

     (e)  Each Bank may from time to time grant participations to
 one or more banks or other financial institutions (including another Bank)
 in a portion of its Pro Rata Share; provided, however, that (i) such Bank's
 obligations under this Agreement shall remain unchanged, (ii) such Bank
 shall remain solely responsible to the other parties hereto for the
 performance of such obligations, (iii) the participating banks or other
 financial institutions shall not be a Bank hereunder for any purpose except,
 if the participation agreement so provides, for the purposes of Section 3
 (but only to the extent that the cost of such benefits to Borrower does not
 exceed the cost which Borrower would have incurred in respect of such
 Bank absent the participation) and Section 10.9 (subject to Section 10.10),
 (iv) Borrower, the Administrative Agent and the other Banks shall continue
 to deal solely and directly with such Bank in connection with such Bank's
 rights and obligations under this Agreement, (v) the participation shall not
 restrict an increase in the Commitment or in the granting Bank's Pro Rata
 Share, so long as the amount of the participation interest is not affected

<PAGE>

 thereby and (vi) the consent of the holder of such participation interest
 shall not be required for amendments or waivers of provisions of the Loan
 Documents other than those which (A) extend the Maturity Date as to such
 participant or any other date upon which any payment of money is due to
 such participant, (B) reduce the rate of interest owing to such participant,
 any fee or any other monetary amount owing to such participant or (C)
 reduce the amount of any installment of principal owing to such participant.

     10.9 Right of Setoff.  If an Event of Default has occurred and is
 continuing, the Administrative Agent or any Bank but in each case only
 with the consent of the Requisite Banks) may exercise its rights under
 Section 9 of the Uniform Commercial Code and other applicable laws and,
 to the extent permitted by applicable laws, apply any funds in any deposit
 account maintained with it by Borrower and/or any Property of Borrower in
 its possession against the Obligations.

     10.10 Sharing of Setoffs.  Each Bank severally agrees that if it,
 through the exercise of any right of setoff, banker's lien or counterclaim
 against Borrower, or otherwise, receives payment of the Obligations held by
 it that is ratably more than any other Bank, through any means, receives in
 payment of the Obligations held by that Bank, then, subject to applicable
 laws: (a) the Bank exercising the right of setoff, banker's lien or
 counterclaim or otherwise receiving such payment shall purchase, and shall
 be deemed to have simultaneously purchased, from the other Bank a
 participation in the Obligations held by the other Bank and shall pay to the
 other Bank a purchase price in an amount so that the share of the
 Obligations held by each Bank after the exercise of the right of setoff,
 banker's lien or counterclaim or receipt of payment shall be in the same
 proportion that existed prior to the exercise of the right of setoff,
 banker's lien or counterclaim or receipt of payment; and (b) such other
 adjustments and purchases of participations shall be made from time to
 time as shall be equitable to ensure that all of the Banks share any payment
 obtained in respect of the Obligations ratably in accordance with each
 Bank's share of the Obligations immediately prior to, and without taking
 into account, the payment; provided that, if all or any portion of a
 disproportionate payment obtained as a result of the exercise of the right
 of  setoff, banker's lien, counterclaim or otherwise is thereafter
 recovered from the purchasing Bank by Borrower or any Person claiming
 through or succeeding to the rights of Borrower, the purchase of a
 participation shall be rescinded and the purchase price thereof shall be
 restored to the extent of the recovery, but without interest.  Each Bank
 that purchases a participation in the Obligations pursuant to this Section
shall from and after the purchase have the right to give all notices, requests,
 demands, directions and other communications under this Agreement with
 respect to the portion of the Obligations purchased to the same extent as
 though the purchasing Bank were the original owner of the Obligations
 purchased.  Borrower expressly consent to the foregoing arrangements and
 agree that any Bank holding a participation in an Obligation so purchased
 may exercise any and all rights of setoff, banker's lien or counterclaim with
 respect to the participation as fully as if the Bank were the original owner
 of the Obligation purchased.

     10.11 Indemnity by Borrower.  Borrower agrees to indemnify, save
 and hold harmless the Administrative Agent and each Bank and their
 respective Affiliates, directors, officers, agents, attorneys and employees
 (collectively the "Indemnitees") from and against: (a) any and all claims,
 demands, actions or causes of action (except a claim, demand, action, or

<PAGE>

 cause of action for Bank Taxes) if the claim, demand, action or cause of
 action arises out of or relates to any act or omission (or alleged act or
 omission) of Borrower, its Affiliates or any of their officers, directors or
 stockholders relating to the Commitment, the use or contemplated use of
 proceeds of any Loan, or the relationship of Borrower and the Banks under
 this Agreement; (b) any administrative or investigative proceeding by any
 Governmental Authority arising out of or related to a claim, demand, action
 or cause of action described in subsection (a) above; and (c) any and all
 liabilities, losses, costs or expenses (including Attorney Costs) that any
 Indemnitee suffers or incurs as a result of the assertion of any foregoing
 claim, demand, action or cause of action; provided that no Indemnitee shall
 be entitled to indemnification for any loss caused by its own gross
 negligence or willful misconduct or for any loss asserted against it by
 another Indemnitee.

     10.12 Nonliability of the Banks.  Borrower acknowledges and
 agrees that:
     (a)  Any inspections of any Property of Borrower made by or
 through the Administrative Agent or the Banks are for purposes of
 administration of the Loan only and Borrower is not entitled to rely upon
 the same (whether or not such inspections are at the expense of Borrower);

     (b)  By accepting or approving anything required to be
 observed, performed, fulfilled or given to the Administrative Agent or the
 Banks pursuant to the Loan Documents, neither the Administrative Agent
 nor the Banks shall be deemed to have warranted or represented the
 sufficiency, legality, effectiveness or legal effect of the same, or of any
 term, provision or condition thereof, and such acceptance or approval
 thereof shall not constitute a warranty or representation to anyone with
 respect thereto by the Administrative Agent or the Banks;

     (c)  The relationship between Borrower and the Administrative
 Agent and the Banks is, and shall at all times remain, solely that of
 borrowers and lenders; neither the Administrative Agent nor the Banks
 shall under any circumstance be construed to be partners or joint venturers
 of Borrower or its Affiliates; neither the Administrative Agent nor the
 Banks shall under any circumstance be deemed to be in a relationship of
 confidence or trust or a fiduciary relationship with Borrower or its
 Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates;
neither the Administrative Agent nor the Banks undertake or assume any
 responsibility or duty to Borrower or its Affiliates to select, review,
inspect, supervise, pass judgment upon or inform Borrower or its Affiliates
 of any matter in connection with their Property or the operations of
 Borrower or its Affiliates; Borrower and its Affiliates shall rely entirely
 upon their own judgment with respect to such matters; and any review,
 inspection, supervision, exercise of judgment or supply of information
 undertaken or assumed by the Administrative Agent or the Banks in
 connection with such matters is solely for the protection of the
 Administrative Agent and the Banks and neither Borrower nor any other
 Person is entitled to rely thereon; and

     (d)  The Administrative Agent and the Banks shall not be
 responsible or liable to any Person for any loss, damage, liability or claim
 of any kind relating to injury or death to Persons or damage to Property
 caused by the actions, inaction or negligence of Borrower and/or its
 Affiliates and Borrower hereby indemnify and hold the Administrative
 Agent and the Banks harmless from any such loss, damage, liability or

<PAGE>

 claim.

     10.13 No Third Parties Benefited.  This Agreement is made for the
 purpose of defining and setting forth certain obligations, rights and duties
 of Borrower, the Administrative Agent and the Banks in connection with
 the Loans, and is made for the sole benefit of Borrower, the Administrative
 Agent and the Banks, and the Administrative Agent's and the Banks'
 successors and assigns.  Except as provided in Sections 10.8 and 10.11, no
 other Person shall have any rights of any nature hereunder or by reason
 hereof.

     10.14 Further Assurances.  Borrower and its Subsidiaries shall, at
 their expense and without expense to the Banks or the Administrative
 Agent, do, execute and deliver such further acts and documents as any
 Bank or the Administrative Agent from time to time reasonably requires for
 the assuring and confirming unto the Banks or the Administrative Agent of
 the rights hereby created or intended now or hereafter so to be, or for
 carrying out the intention or facilitating the performance of the terms of
 any Loan Document.

     10.15 Integration.  This Agreement, together with the other Loan
 Documents and any letter agreements referred to herein, comprises the
 complete and integrated agreement of the parties on the subject matter
 hereof and supersedes all prior agreements, written or oral, on the subject
 matter hereof.  In the event of any conflict between the provisions of this
 Agreement and those of any other Loan Document, the provisions of this
 Agreement shall control and govern; provided that the inclusion of
 supplemental rights or remedies in favor of the Administrative Agent or the
 Banks in any other Loan Document shall not be deemed a conflict with this
 Agreement.  Each Loan Document was drafted with the joint participation
 of the respective parties thereto and shall be construed neither against nor
 in favor of any party, but rather in accordance with the fair meaning
 thereof.

     10.16 Failure to Charge Not Subsequent Waiver.  Any decision by
 the Administrative Agent or any Bank not to require payment of any
 interest (including Default Interest), fee, cost or other amount payable
 under any Loan Document, or to calculate any amount payable by a
 particular method, on any occasion shall in no way limit or be deemed a
 waiver of the Administrative Agent's or such Bank's right to require full
 payment of any interest (including Default Interest), fee, cost or other
 amount payable under any Loan Document, or to calculate an amount
 payable by another method that is not inconsistent with this Agreement, on
 any other or subsequent occasion.

     10.17 Governing Law.  Except to the extent otherwise provided
 therein, each Loan Document shall be governed by, and construed and
 enforced in accordance with, the local laws of California.

     10.18 Severability of Provisions.  Any provision in any Loan
 Document that is held to be inoperative, unenforceable or invalid as to any
 party or in any jurisdiction shall, as to that party or jurisdiction, be
 inoperative, unenforceable or invalid without affecting the remaining
 provisions or the operation, enforceability or validity of that provision
 as to any other party or in any other jurisdiction, and to this end the
 provisions of all Loan Documents are declared to be severable.
     10.19 Headings.  Section headings in this Agreement and the other

<PAGE>

 Loan Documents are included for convenience of reference only and are not
 part of this Agreement or the other Loan Documents for any other purpose.
     10.20 Time of the Essence.  Time is of the essence of the Loan
 Documents.
     10.21 Foreign Banks and Participants.  Each Bank, and each holder
of a participation interest herein, that is a "foreign corporation,
 partnership or trust" within the meaning of the Code shall deliver to the
 Administrative Agent, within 20 days after the Closing Date (or after
 accepting an assignment or receiving a participation interest herein) two
 duly signed completed copies of either Form 1001 (relating to such Person
 and entitling it to a complete exemption from withholding on all payments
 to be made to such Person by Borrower pursuant to this Agreement) or
 Form 4224 (relating to all payments to be made to such Person by Borrower
 pursuant to this Agreement) of the United States Internal Revenue Service
 or such other evidence (including, if reasonably necessary, Form W-9)
 satisfactory to Borrower and the Administrative Agent that no withholding
 under the federal income tax laws is required with respect to such Person.
  Thereafter and from time to time, each such Person shall (a) promptly
 submit to the Administrative Agent such additional duly completed and
 signed copies of one of such forms (or such successor forms as shall be
 adopted from time to time by the relevant United States taxing authorities)
 as may then be available under then current United States laws and
 regulations to avoid, or such evidence as is satisfactory to Borrower and
 the Administrative Agent of any available exemption from, United States
 withholding taxes in respect of all payments to be made to such Person by
 Borrower pursuant to this Agreement and (b) take such steps as shall not be
 materially disadvantageous to it, in the reasonable judgment of such Bank,
 and as may be reasonably necessary (including the re-designation of its
 Lending Office, if any) to avoid any requirement of applicable laws that
 Borrower make any deduction or withholding for taxes from amounts
 payable to such Person.  If such Persons fails to deliver the above forms or
 other documentation, then the Administrative Agent may withhold from any
 interest payment to such Person an amount equivalent to the applicable
 withholding tax imposed by Sections 1441 and 1442 of the Code, without
 reduction.  If any Governmental Authority asserts that the Administrative
 Agent did not properly withhold any tax or other amount from payments
 made in respect of such Person, such Person shall indemnify the
 Administrative Agent therefor, including all penalties and interest and
 costs and expenses (including Attorney Costs) of the Administrative Agent.
  The obligation of the Banks under this subsection shall survive the
 payment of all Obligations and the resignation or replacement of the
 Administrative Agent.

     10.22     Amendment and Restatement of Existing Credit
 Agreement.

          (a)  This Agreement amends and restates the Existing Credit
 Agreement.  Loans and letters of credit outstanding under the Existing
 Credit Agreement shall be deemed to continue as Loans and Letters of
 Credit outstanding hereunder.

          (b)  BofA hereby sells, effective as of the Closing
 Date, a portion of its Obligations outstanding under the Existing Agreement
 (but excluding the BofA Tranche Loan) sufficient to result in all Banks
 having outstanding Obligations equal to their Pro Rata Shares.  Each other
 Bank hereby purchases and assumes from BofA, without recourse, such
 portion of BofA's Obligations.  BofA represents and warrants to each New

<PAGE>

 Lender that it is the legal and beneficial owner of the Obligations sold
 hereunder and that such obligations are free and clear of any adverse
 claim.  Other than as provided above, BofA does not make any
representation or warranty or assume any responsibility with respect to the
 Existing Credit Agreement or any other instrument or document furnished
 pursuant thereto, the financial condition of Borrower, or the performance or
 observance by the Borrower thereunder or hereunder.

          (c)  In order to facilitate the foregoing assignments,
 Borrower shall pay or prepay all Loans outstanding under the Existing
 Credit Agreement on the Closing Date (except the BofA Tranche Loan) and
 pay, to the extent applicable, any amounts due under Section 3.6.  Borrower
 shall concurrently reborrow, if it desires to do so, the amount so paid or
 prepaid as Loans hereunder from the Banks in accordance with their Pro
 Rata Shares.

     10.23  Removal of a Bank; Reduction in Commitments.  Under any
 circumstances set forth in this Agreement providing that Borrower shall
 have the right to remove a Bank as a party to this Agreement, such Bank
 shall, upon notice from Borrower, execute and deliver a Notice of
 Assignment and Acceptance covering that Bank's Pro Rata Share of the
 Commitments in favor of such Eligible Assignee as Borrower may
 designate, subject to (a) payment in full by such Eligible Assignee of all
 principal, interest and fees owing to such Bank through the date of
 assignment and (b) delivery by such Eligible Assignee of such appropriate
 assurances and indemnities (which may include letters of credit) as such
 Bank may reasonably require with respect to its participation interest in
 any  Letters of Credit then outstanding.  Alternatively, Borrower may
 reduce the Commitments (and, for this purpose, the Minimum Amounts for
 Commitment reductions shall not apply) by an amount equal to that Bank's
 Pro Rata Share of the Commitments, pay and provide to such Bank the
 amounts, assurances and indemnities described in (a) and (b) above and
 release such Bank from its Pro Rata Share of the Commitments.

     10.24 Waiver of Right to Trial by Jury.  EACH PARTY TO THIS
 AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
 TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
 ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY
 WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
 DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH
 RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS
 RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
 OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
 CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
 HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
 DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY
 COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
 THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
 COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
 EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO
 THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     10.25 Purported Oral Amendments.  BORROWER EXPRESSLY
ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN
 DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE
 PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED,
 BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH

<PAGE>

 SECTION 10.2. BORROWER AGREES THAT THEY WILL NOT RELY
 ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR
 ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF
 THE Administrative Agent OR ANY BANK THAT DOES NOT COMPLY
 WITH SECTION 10.2 TO EFFECT AN AMENDMENT,
 MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT
 OR THE OTHER LOAN DOCUMENTS.



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement
 to be executed as of the date first above written.


     THE TODD-AO CORPORATION,
     a Delaware corporation


     By:
             W.R. Strickley
           Senior Vice President and
            Chief Financial Officer


     BANK OF AMERICA NATIONAL TRUST
     AND SAVINGS ASSOCIATION, as Administrative Agent


     By:
                Janice Hammond
               Vice President


     BANK OF AMERICA NATIONAL TRUST
     AND SAVINGS ASSOCIATION, as Issuing Bank and a Bank


     By:
               Matthew Koenig
               Vice President


     UNION BANK OF CALIFORNIA, N.A.


     By:
     Name:
     Title:


     SOCIETE GENERALE


     By:
     Name:
(Signatures continue)    Title:

<PAGE>

     SANWA BANK CALIFORNIA


     By:
     Name:
     Title:

     EXHIBIT A


     REQUEST FOR EXTENSION OF CREDIT



     Date:


To:  Bank of America National Trust and
     Savings Association, as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain First Amended and Restated
Credit Agreement dated as of October 20, 1997 among  The Todd-AO
 Corporation, a Delaware corporation (the "Borrower"), the banks from time
 to time party thereto, and Bank of America National Trust and Savings
 Association, as Administrative Agent and Issuing Bank (as extended,
 renewed, amended or restated from time to time, the "Agreement;" the
 terms defined therein being used herein as therein defined).

     The undersigned hereby requests (select one):

           A Borrowing of Loans

           A Conversion or Continuation of Loans

     1.   On                     ,

     2.   In the amount of                         .
                      [currency and amount of Loan
requested]

     3.   Comprised of                       .
                        [type of Loan requested]

     4.   If applicable: with an Interest Period of         months/days.

     The foregoing request complies with the requirements of Section
2.1 of the Agreement.  If the aggregate principal amount of the Loans being
 requested or Letters of Credit being requested to be issued is more than the
 aggregate principal amount of the Loans maturing or Letters of Credit
 expiring on the Borrowing Date, the undersigned hereby certifies that the
 following statements are true on the date hereof, and will be true on the
 above date, before and after giving effect and to the application of the
 proceeds therefrom:

<PAGE>

          (a) no Default or Event of Default exists; and

          (b the representations and warranties contained in this
 Agreement are true, correct and complete in all material respects on and as
 of such date to the extent as though made on and as of such date, except
 with respect to any representation or warranty which specifically refers to
 an earlier date.


                         THE TODD-AO CORPORATION



                         By:

                         Title:


     EXHIBIT B


     COMPLIANCE CERTIFICATE



                          Financial
     Statement Date:                  ,


To:  Bank of America National Trust and
     Savings Association, as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain First Amended and Restated
 Credit Agreement dated as of October 20, 1997 among The Todd-AO
 Corporation, a Delaware corporation (the "Borrower"), the banks from time
 to time party thereto, and Bank of America National Trust and Savings
 Association, as Administrative Agent and Issuing Bank (as extended,
 renewed, amended or restated from time to time, the "Agreement;" the
 terms defined therein being used herein as therein defined).

     Reference is made to that certain First Amended and Restated
 Credit Agreement dated as of October 20, 1997 among The Todd-AO
 Corporation, a Delaware corporation (the "Borrower"), the banks from time
 to time party thereto, and Bank of America National Trust and Savings
 Association, as Administrative Agent and Issuing Bank (as extended,
 renewed, amended or restated from time to time, the "Agreement;" the
 terms defined therein being used herein as therein defined).

     The undersigned Responsible Officer hereby certifies as of the date
 hereof that he/she is the                       of Borrower, and that,
 as such, he/she is authorized to execute and deliver this Certificate to the
 Administrative Agent on the behalf of Borrower, and that:

     1.   Attached as Schedule 1 hereto are either (a) the financial
 statements required under Section 6.1(a) of the Agreement as of the above


<PAGE>

 date, or (b) the financial statements required under Section 6.1(b) of the
 Agreement as of the above date, with the required opinion of Deloitte
-Touche, or other independent public accounting firm of recognized national
 standing selected by Borrower and satisfactory to the Administrative Agent
 and the Requisite Banks, which financial statements fairly present in
 accordance with Generally Accepted Accounting Principles (subject to
 ordinary, good faith year-end audit adjustments) the financial position and
 the results of operations of Borrower and its Subsidiaries on a consolidated
 basis.

     2.   The undersigned has reviewed and is familiar with the
 terms of the Agreement and has made, or has caused to be made under
 his/her supervision, a detailed review of the transactions and conditions
 (financial or otherwise) of Borrower during the accounting period covered
 by the attached financial statements.

     3.   To the best of the undersigned's knowledge, Borrower,
 during such period, has observed, performed or satisfied all of its
 covenants and other agreements, and satisfied every condition in the Credit
 Agreement to be observed, performed or satisfied by Borrower, and the
 undersigned has no knowledge of any Default or Event of Default.

     4.   Borrower has performed all its obligations hereunder and
 under (a) any instrument or agreement to which Borrower is a party or
 under which Borrower is obligated, under which the failure to perform
 could materially impair the financial condition or operations of Borrower,
 and (b) any judgment, decree or order of any court or governmental
 authority binding on Borrower.

     5.  No significant change in senior management has occurred (or if
 such change has occurred, attached is a description of what steps have been
 taken to compensate therefore).

     6.   The following financial covenant analyses and information
 set forth on Schedule 2 attached hereto are true and accurate on and as of
 the date of this Certificate.


     IN WITNESS WHEREOF, the undersigned has executed this
 Certificate as of                       ,       .


                         THE TODD-AO CORPORATION


                         By:
                         Name:
                         Title:

     Date:                    ,
     For the fiscal quarter/year
     ended                   ,

     SCHEDULE 2
     to the Compliance Certificate
     ($ in 000's)

<PAGE>

I.    Section 7.5 - Limitation on Investments.

     A.   Investments in foreign joint ventures
          the United Kingdom, Spain, France or
          Germany engaged in related businesses:  $

     B.   Indebtedness permitted under
          Section 7.1(d):     $

     C.   Total (Lines I.A. + I.B.):    $


          Line I.C not to exceed $50,000,000

     D.   Investments in other Persons: $

          Line I.D not to exceed $10,000,000


II.    Section 7.10 - Minimum Tangible Net Worth.

     A.   Tangible Net Worth:

          1.   Consolidated gross book Value
               of assets:     $

          2.   Goodwill, patents, trademarks,
               trade names, copyrights, deferred
               charges and other like intangibles:     $

          3.   All liabilities (including accrued
               and deferred income taxes and
               subordinated indebtedness):   $

     B.   Tangible Net Worth (Line II.A.1 -
          Line II.A.2 - Line II.A.3):   $

     C.   50% of consolidated net income computed
          on a cumulative basis for each of the
          elapsed fiscal quarters ending after
          May 31, 1997 (no deduction for
          quarterly losses):  $

     D.   100% of net proceeds of any equity
          issued after the Closing Date:     $

     E.   Total (Lines II.C + II.D + $25,000,000: $

          Minimum requirement:  Line II.B to be greater than
          Line II.E


III.  Section 7.11 - Fixed Charge Coverage Ratio.

     A.   Free Available Cash Flow for the four immediately preceding
 fiscal quarters ("Subject Period"):

<PAGE>

          1.   EBITDA of Borrower and its Significant
               Subsidiaries or Subject Period: (5)
               a.   Net income (and loss) for
                   Subject Period (excluding
               extraordinary losses or
               extraordinary gains:     $

          b.  Net income attributable to joint ventures and Subsidiaries
              less than 100% owned which is not a return on capital or results
                      from an extraordinary gain: $   without duplication:

          c.  Cash actually received by  Borrower from joint ventures and
                   Subsidiaries less than 100% owned:  $

               d.   Depreciation expense, lease expense
                   (excluding operating leases but including
                   Capital Lease and Synthetic Lease expense),
                   interest expense, and amortization
                   expense of intangibles of any kind
                   to the extent included in the
                   determination of such net income
                   (or loss): $

               e.   Provisions for income taxes as set
                   forth in Borrower's consolidated
                   income statement:    $

               f.  Noncash compensation in the form
                   of stock award grants:    $

               g.  EBITDA (Line 1a-1b+1c+1d+1e+1f):    $

          2.   Cash income taxes payable:    $

          3.   Maintenance capital expenditures:  $

          4.   Total Free Available Cash Flow
               (Lines A.1.g-A.2-A.3):   $

     B.   Interest Expense for Subject Period:    $

     C.   Current Portion of Funded Indebtedness
          (including current portion of Capital
          Leases and Synthetic Leases but excluding
          Convertible Subordinated Note):    $

     D.   Pro forma Distributions for following
          four fiscal quarters:    $

     E.   Total (Lines B+C+D):     $

     F.   Fixed Charge Coverage Ratio (Line III.A4 (
          Line III.E):        to 1

          Minimum required ratio:  1.25 to 1

<PAGE>

IV.   Section 7.12 - Leverage Ratio.

     A.   Funded Indebtedness:

          1.   Indebtedness for borrowed money
               (excluding Non Recourse Joint
               Venture Indebtedness):   $

          2.   Principal portion of Capital Leases:    $

          3.   Synthetic Leases:   $

          4.   Acceptances and letters of credit: $

          5.   Guaranty Obligations:    $

          6    Total (Lines IV.A.1+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): (5

     C.   Leverage Ratio (Line IV.8 ( Line IV.B):            to 1
          Maximum permitted ratio: 3.00 to 1

V.    Leverage Ratio for Determining Applicable Amount.
     A.   Funded Indebtedness (Line IV.A.8)
          (excluding Convertible Subordinated Debt):$

     B.   EBITDA (Line III.A.1.g): $

     C.   Leverage Ratio for Determining Applicable
          Amount (Line V.A ( Line V.B):      to 1


     EXHIBIT C

     FORM OF NOTE



               October 20, 1997


     FOR VALUE RECEIVED, the undersigned (the "Borrower"),
 hereby promises to pay to the order of                       (the "Bank"),
 on the Maturity Date (as defined in the Credit Agreement referred to
 below) the principal amount of $                , or such lesser principal
 amount of Loans (as defined in the Credit Agreement referred to below)
 payable by Borrower to the Bank on the Maturity Date under that certain
 First Amended and Restated Credit Agreement dated as of October 20,

<PAGE>

 1997 among The Todd-AO Corporation, a Delaware corporation
 ("Borrower"), the banks from time to time party thereto, and Bank of
 America National Trust and Savings Association, as Administrative Agent
 and Issuing Bank (as extended, renewed, amended or restated from time to
 time, the "Agreement;" the terms defined therein being used herein as
 therein defined).

     Borrower promises to pay interest on the unpaid principal amount
 of each Loan from the date of such Loan until such principal amount is paid
 in full, at such interest rates, and payable at such times as are specified in
 the Credit Agreement.

     All payments of principal and interest shall be made to the
 Administrative Agent for the account of the Bank in United States dollars in
 immediately available funds at Administrative Agent's Payment office.

     If any amount is not paid in full when due hereunder, such unpaid
 amount shall bear interest, to be paid upon demand, from the due date
 thereof until the date of actual payment (and before as well as after
 judgment) computed at the per annum rate set forth in the Credit
 Agreement.

     This Note is one of the "Notes" referred to in the Credit
 Agreement.  Reference is hereby made to the Credit Agreement for rights
 and obligations of payment and prepayment, events of default and the right
 of the Bank to accelerate the maturity hereof upon the occurrence of such
 events.

     Borrower, for itself, its successors and assigns, hereby waives
 diligence, presentment, protest and demand and notice of protest, demand,
 dishonor and non-payment of this Note.

     Borrower agrees to pay all collection expenses, court costs and
 Attorney Costs (whether or not litigation is commenced) of Bank which
 may be incurred in connection with the collection or enforcement of this
 Note.

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
 IN ACCORDANCE WITH THE LAWS OF THE STATE OF
 CALIFORNIA.


                    THE TODD-AO CORPORATION



                              By:
                              Title:


     EXHIBIT D



     SUBSIDIARY CONTINUING GUARANTY

<PAGE>

To:  BANK OF AMERICA NATIONAL
     TRUST AND SAVINGS ASSOCIATION


     (1)  For valuable consideration, the undersigned corporation
 and partnerships, and the corporations and partnerships becoming a party
 hereto pursuant to Paragraph 16, (collectively, "Guarantors"), jointly and
 severally unconditionally guarantees and promises to pay to BANK OF
 AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
 Administrative Agent ("Administrative Agent"), or order, on demand, in
 lawful money of the United States, any and all indebtedness of The Todd
 AO Corporation ("Borrower") to the Administrative Agent and the Banks
party to that certain First Amended and Restated Credit Agreement dated as
 of October 20, 1997 among Borrower, the banks from time to time party
 thereto ("Banks;" together with the Administrative Agent, the "Guarantied
 Parties"), and Administrative Agent and Issuing Bank (as extended,
 renewed, amended or restated from time to time, the "Agreement;" the
 terms defined therein being used herein as therein defined).  The term
 "indebtedness" is used herein in its most comprehensive sense and includes
 any and all advances, debts, obligations and liabilities of Borrower under
 the Loan Documents, heretofore, now, or hereafter made, incurred or
 created, whether voluntary or involuntary and however arising, whether
 direct or acquired by the Guarantied Parties by assignment or succession,
 whether due or not due, absolute or contingent, liquidated or unliquidated,
 determined or undetermined, and whether Borrower may be liable
 individually or jointly with others, or whether recovery upon such
 indebtedness may be or hereafter become barred by any statute of
 limitations, or whether such indebtedness may be or hereafter become
 otherwise unenforceable.

     (2)  This is a continuing guaranty relating to any indebtedness,
 including that arising under successive transactions which shall either
 continue the indebtedness or from time to time renew it after it has been
 satisfied.  Any payment by a Guarantor shall not reduce such or any other
 Guarantor's maximum obligation hereunder, unless written notice to that
 effect be actually received by the Administrative Agent at or prior to the
 time of such payment.

     (3)  The obligations hereunder are joint and several, and
 independent of the obligations of Borrower, and a separate action or actions
 may be brought and prosecuted against any Guarantor whether action is
 brought against Borrower or any other Guarantor or whether Borrower or
 any other Guarantor be joined in any such action or actions; and Guarantors
 waive the benefit of any statute of limitations affecting their liability
 hereunder.

     (4)  Guarantors authorize the Guarantied Parties, without notice or
 demand and without affecting their liability hereunder, from time to time,
 either before or after revocation hereof, to (a) renew, compromise, extend,
 accelerate or otherwise change the time for payment of, or otherwise
 change the terms of the indebtedness or any part thereof, including increase
 or decrease of the rate of interest thereon; (b) receive and hold security
 for the payment of this Guaranty or the indebtedness guaranteed, and
 exchange, enforce, waive, release, fail to perfect, sell, or otherwise
 dispose of any such security; (c) apply such security and direct the order
 or manner of sale thereof as the Guarantied Parties in their discretion may
 determine; and (d) release or substitute any one or more of the endorsers or

<PAGE>

 guarantors.

     (5)  Guarantors waive any right to require the Guarantied Parties to
 (a) proceed against Borrower or any other Guarantor; (b) proceed against or
 exhaust any security held from Borrower or any other Guarantor; or (c)
 pursue any other remedy in the Guarantied Parties' power whatsoever.
 Guarantors waive any defense arising by reason of any disability or other
 defense of Borrower or any other Guarantor, or the cessation from any
 cause whatsoever of the liability of Borrower or any other Guarantor, or
 any claim that their obligations exceed or are more burdensome than those
 of Borrower or any other Guarantor.  Guarantors waive any right of
 subrogation, reimbursement, indemnification and contribution (contractual,
 statutory or otherwise), including without limitation, any claim or right of
 subrogation under the Bankruptcy Code (Title 11 of the U.S. Code) or any
 successor statute, arising from the existence or performance of this
 Guaranty and Guarantors waive any right to enforce any remedy which the
 Guarantied Parties now have or may hereafter have against Borrower, and
 waive any benefit of and any right to participate in any security now or
 hereafter held by the Guarantied Parties.  Guarantors waive all
 presentments, demands for performance, notices of nonperformance,
 protests, notices of protest, notices of dishonor, and notices of acceptance
 of this Guaranty and of the existence, creation, or incurring of new or
 additional indebtedness.  Without limiting the generality of the foregoing,
 Guarantors hereby expressly waive any and all benefits of California Civil
 Code Sections 2809, 2810, 2819, 2825, 2839 and 2845 through 2850.

     (6)  Guarantors acknowledge and agree that they shall have the sole
 responsibility for obtaining from Borrower such information concerning
 Borrower's financial conditions or business operations as they may require,
 and that the Guarantied Parties have no duty at any time to disclose to
 Guarantors any information relating to the business operations or financial
 conditions of Borrower.

     (7)  To secure all of Guarantors' obligations hereunder, Guarantors
 assign and grant to the Guarantied Parties a security interest in all
 moneys, securities and other property of Guarantors now or hereafter in the
 possession of the Guarantied Parties, and all deposit accounts of Guarantors
 maintained with the Guarantied Parties, and all proceeds thereof.  Upon
 default or breach of any of Guarantors' obligations to the Guarantied
 Parties, the Guarantied Parties may apply any deposit account to reduce the
 indebtedness, and may foreclose any collateral as provided in the Uniform
 Commercial Code and in any security agreements between the Guarantied
 Parties and Guarantors.

     (8)  Any obligations of Borrower to Guarantors, now or hereafter
 existing, including but not limited to any obligations to Guarantors as
 subrogees of the Guarantied Parties or resulting from Guarantors'
 performance under this Guaranty, are hereby subordinated to the
 indebtedness.  Such obligations of Borrower to Guarantors if the
 Administrative Agent so requests shall be enforced and performance
 received by Guarantors as trustees for the Guarantied Parties and the
 proceeds thereof shall be paid over to the Administrative Agent on account
 of the indebtedness of Borrower to the Guarantied Parties, but without
 reducing or affecting in any manner the liability of Guarantors under the
 other provisions of this Guaranty.

     (9)  This Guaranty may be revoked at any time by Guarantors in

<PAGE>

 respect to future transactions, unless there is a continuing consideration
 as to such transactions which Guarantor does not renounce.  Such
 revocation shall be effective upon actual receipt by the Administrative
 Agent at its address set forth in the Agreement of written notice of
 revocation.  Revocation shall not affect any of Guarantors' obligations or
 the Guarantied Parties' rights with respect to transactions which precede
 the Administrative Agent's receipt of such notice, regardless of whether or
 not the indebtedness related to such transactions, before or after
 revocation, has been renewed, compromised, extended, accelerated, or
 otherwise changed as to any of its terms, including time for payment or
 increase or decrease of the rate of interest thereon.  Revocation by any
 other guarantor of Borrower's indebtedness shall not affect any obligations
 of Guarantors.  If this Guaranty is revoked, returned, or canceled, and
 subsequently any payment or transfer of any interest in property by
 Borrower to the Guarantied Parties is rescinded or must be returned by the
 Guarantied Parties to Borrower, this Guaranty shall be reinstated with
 respect to any such payment or transfer, regardless of any such prior
 revocation, return, or cancellation.

     (10)  Where Borrower is a corporation or partnership it is not
 necessary for the Guarantied Parties to inquire into the powers of Borrower
 or of the officers, directors, partners or agents acting or purporting to
 act on Borrower's behalf, and any indebtedness made or created in reliance
 upon the professed exercise of such powers shall be guaranteed hereunder.

     (11)  The Guarantied Parties may, without notice to Guarantors and
 without affecting Guarantors' obligations hereunder, assign the
 indebtedness and this Guaranty, in whole or in part.  Guarantors agree that
 the Guarantied Parties may disclose to any prospective purchaser and any
 purchaser of all or part of the indebtedness any and all information in the
 Guarantied Parties' possession concerning Guarantors, this Guaranty and
 any security for this Guaranty.

     (12)  Guarantors agree to pay to the Administrative Agent, on
 demand, all reasonable Attorney Costs incurred by the Guarantied Parties
 prior to the commencement of any legal action in connection with the
 enforcement of this Guaranty and any instrument or agreement required
 under this Guaranty.  In the event of a legal action, the prevailing party
 shall be entitled to reasonable attorneys' fees (including allocated costs
 for in-house legal services), costs and necessary disbursements incurred in
 connection with such action or proceeding, as determined by the court.

     (13)  This Guaranty shall be governed by and construed according
 to the laws of the State of California, to the jurisdiction of which the
 parties hereto submit.


     (14) Notwithstanding anything to the contrary contained
 herein, each Guarantor's liability pursuant to this Guaranty shall be
 limited to the greater of:  (a) the 'reasonably equivalent value,' received
 by such Guarantor or any of its subsidiaries arising out of the indebtedness
 (including, without limitation, repayment of intercompany or third party
 debt of, investments made in, and capital contributions, advances and loans
 made to, such Guarantor or any of its subsidiaries, directly or indirectly,
 by Borrower or any other subsidiary with, or as a direct or indirect result
 of obtaining, the proceeds of any indebtedness) in exchange for or in
 connection with such Guarantor's guaranty of the indebtedness, and (b)
 95% of the excess of (i) a 'fair valuation' of the amount of the assets and

<PAGE>

 other property of such Guarantor and its subsidiaries taken as a whole as of
 the applicable date of determination of the incurrence of such Guarantor's
 obligations hereunder over (ii) a 'fair valuation' of such Guarantor's and
 its subsidiaries' debts taken as a whole as of such date, but excluding
 liabilities arising under this Guaranty and excluding all liabilities owing
 by such Guarantor and its subsidiaries taken as a whole to Borrower or any
 other Subsidiary or otherwise subordinated to such Guarantor's obligations
 hereunder, it being understood that a portion of such indebtedness owing to
 Borrower shall be discharged on a dollar-for-dollar basis in an amount
 equal to the amount paid by such Guarantor hereunder.  The meaning of the
 terms 'reasonably equivalent value' and 'fair valuation,' and the
 calculations of assets and other property and debts, shall be determined in
 accordance with the applicable federal and California state laws in effect
 on the date hereof governing the determination of the insolvency of a
 debtor and to further the intent of all parties hereto to maximize the
 amount payable by such Guarantor without rendering it insolvent or leaving
 it with an unreasonably small amount of capital in relation to its business,
 in either case, at the applicable date for the determination of the
 incurrence of its obligations hereunder; provided, however, each Guarantor
 agrees, to the maximum extent permitted by law, that 'fair valuation' of
such Guarantor's and its subsidiaries' assets and other properties means the
 fair market sales price as would be obtained in an arms-length transaction
 between competent, informed and willing parties under no compulsion to
 sell or buy or collections thereof obtained in the ordinary course of
 business and 'fair valuation' of its debts means the amount, in light of the
 applicable circumstances, at the time, for which such Guarantor or its
 subsidiaries is liable for matured known liquidated liabilities or would
 reasonably be expected to become liable on contingent or unliquidated
 liabilities as they mature and taking into consideration the nature of any
 such contingency and the probability that liability would be imposed.

     (15)  Each Guarantor represents and warrants for and with respect
 to itself that:

          (a)  Such Guarantor is a corporation duly organized and
 existing under the laws of the state province or country of its
 incorporation, and is properly licensed and in good standing in, and where
 necessary to maintain its rights and privileges have complied with the
 fictitious name statute of, every jurisdiction in which it is doing
 business, except where the failure to be licensed or be in good standing or
 comply with any such statute will not have a material adverse effect on the
 ability of such Guarantor to perform its obligations hereunder or under any
 instrument or agreement required hereunder;

          (b)  The execution, delivery and performance of this
 Guaranty and any instrument or agreement required hereunder are within
 the power of such Guarantor, have been duly authorized by, and are not in
 conflict with the terms of any charter, by-law or other organization papers
 of, such Guarantor;

          (c)  No approval, consent, exemption or other action by, or
 notice to or filing with, any governmental authority is necessary in
 connection with the execution, delivery, performance or enforcement of this
 Guaranty or any instrument or agreement required hereunder;

          (d)  There is no law, rule or regulation, nor is there any
 judgment, decree or order of any court or governmental authority binding

<PAGE>

 on such Guarantor, which would be contravened by the execution, delivery,
 performance or enforcement of this Guaranty or any instrument or
 agreement required hereunder;

          (e)  This Guaranty is a legal, valid and binding agreement
 of such Guarantor, enforceable against such Guarantor in accordance with
 its terms, and any instrument or agreement required hereunder, when
 executed and delivered, will be similarly legal, valid, binding and
 enforceable, except where enforceability thereof may be limited by
 applicable law relating to bankruptcy, insolvency, moratorium or other
 similar laws affecting creditors' rights generally or by the application of
 general principles of equity;

          (f)  There is no action, suit or proceeding pending against,
 or to the knowledge of such Guarantor, threatened against or affecting such
 Guarantor, before any court or arbitrator or any governmental body, agency
 or official which in any manner draws into question the validity or
 enforceability of this Guaranty; and

          (g)  The execution, delivery and performance by such
Guarantor of this Guaranty does not constitute, to the best knowledge of
 such Guarantor, a "fraudulent conveyance," "fraudulent obligation" or
 "fraudulent transfer" within the meanings of the Uniform Fraudulent
 Conveyances Act or Uniform Fraudulent Transfer Act, as enacted in any
 jurisdiction.

     (15) From time to time corporations and partnerships which
become Subsidiaries of Borrower may become a Guarantor by such Person
 and the existing Guarantors executing and delivering a supplement hereto
 substantially in the form of Exhibit A hereto.  Upon the Administrative
 Agent's receipt of a duly executed and delivered supplement, such Person
 shall become a party hereto as though a signatory hereto, with no
 amendment or further action required hereunder, and thereafter, all
 references to Guarantor shall include such additional Person.

     (16) In order to provide for just and equitable contribution
 among the Guarantors, in connection with the execution of this Guaranty,
 the Guarantors agree among themselves that, subject to the other provisions
 of this Guaranty, in the event any Guarantor satisfies some or all of the
 Obligations (a "Funding Guarantor"), the Funding Guarantor shall be
 entitled to contribution from the other Guarantors that have positive net
 worth at the time for all payments made by the Funding Guarantor in
 satisfying the indebtedness, so that each Guarantor that remains obligated
 under this Guaranty at the time that a Funding Guarantor makes a payment
 hereunder (a "Remaining Guarantor") and has a positive net worth at such
 time shall bear a portion of such payment equal to the percentage that such
 Remaining Guarantor's net worth bears to the aggregate net worth of all
 Remaining Guarantors that have positive net worth at the time, in each case
 calculated as of the respective date of payment.


     Executed as of October 20, 1997.


                    TODD-AO STUDIOS EAST INC.
                    TODD-AO VIDEO SERVICES
                    TODD-AO STUDIOS


<PAGE>

                    TODD-AO STUDIOS WEST
                    TODD-AO HD, INC.


                    By:__________________________
                             J.R. DeLang
                            Vice President


     EXHIBIT A TO SUBSIDIARY CONTINUING GUARANTY


     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.

          ____________________, a Subsidiary of
______________, ("Subsidiary") hereby elects to become a Guarantor under
 the Guaranty, and agrees to be bound by all the terms and conditions
 applicable to a Guarantor thereunder as of the date hereof.

          The undersigned Subsidiary hereby represents and
 warrants that the execution, delivery and performance of any Loan
 Documents to which it 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.


          This Certificate of Additional Guarantors is executed by
 the parties hereto as of the date first written above.


          "Subsidiary"




          By:
          Name:
          Title:


     THE GUARANTORS LISTED ON THE SIGNATURE PAGE TO
 GUARANTY AND ON ANY PRIOR ADDITIONAL GUARANTORS

<PAGE>

 SUPPLEMENTS

          By:
          Name:
          Title:


ACKNOWLEDGED:

BANK OF AMERICA NATIONAL TRUST
  AND SAVINGS ASSOCIATION,
  as Administrative Agent


By:
Name:
Title:


     EXHIBIT E


PLEDGE AGREEMENT

     This PLEDGE AGREEMENT ("Agreement"), dated as of October
20, 1997, is made by THE TODD-AO CORPORATION, a Delaware
 corporation (the "Borrower") in favor of BANK OF AMERICA
 NATIONAL TRUST AND SAVINGS ASSOCIATION, as Administrative
 Agent  (the "Administrative Agent") for itself and the Banks party to that
 certain First Amended and Restated Credit Agreement dated as of October
 20, 1997 among The Todd-AO Corporation, a Delaware corporation (the
 "Borrower"), the Banks from time to time party thereto, and the
 Administrative Agent and Issuing Bank (as extended, renewed, amended or
 restated from time to time, the "Credit Agreement").

     RECITAL

     Borrower is required to pledge the Pledged Collateral to the
 Administrative Agent under the terms of the Credit Agreement, all under
 the terms and conditions set forth in this Agreement.

     AGREEMENT

     NOW, THEREFORE, in order to induce the Banks to extend credit
facilities to Borrower under the Credit Agreement, and for other good and
 valuable consideration, the receipt and adequacy of which hereby is
 acknowledged, Borrower hereby represents, warrants, covenants, agrees,
 and pledges as follows:

     1.   Definitions.  Terms defined in the Credit Agreement and
 not otherwise defined in this Agreement shall have the meanings given
 those terms in the Credit Agreement as though set forth herein in full.  The
 following terms shall have the meanings respectively set forth after each:

     "Certificates" means all certificates, instruments or other
 documents now or hereafter representing or evidencing any Pledged

<PAGE>

 Securities.

     "Note" means each promissory note in favor of Borrower from a
 Subsidiary evidencing intercompany obligations owing from such
 Subsidiary to Borrower.

     "Pledge Agreement Supplement" means a supplement in the form
 of Exhibit B hereto.

     "Pledged Collateral" means (i) any and all property of Borrower
 now or hereafter pledged and delivered to the Administrative Agent for and
 on behalf of the Bank, (ii) each Note together with any documentary
 evidence of any collateral therefor and (iii) the Pledged Securities and the
 Certificates representing or evidencing same, and any and all proceeds and
 products of any of the foregoing, and any and all collections, dividends,
 distributions, redemption payments or liquidation payments with respect to
 any of the foregoing, except dividends or distributions actually paid to
 Borrower as permitted under the terms of the Credit Agreement.

     "Pledged Securities" means shares of the capital stock of each
 Subsidiary listed on Exhibit A hereto, as amended or deemed amended
 from time to time by delivery of Pledge Agreement Supplements, which
 shares have the percentage of the voting power of all capital stock of each
 Subsidiary indicated on Exhibit A or such Pledge Agreement Supplements,
any and all securities now  or hereafter issued in substitution, exchange
 or replacement therefor, or  with respect thereto, any and all warrants,
  options or other rights to subscribe to or acquire any additional capital
 stock of Borrower (to the extent such additional capital stock,
 together with that already pledged hereunder, would equal the percentage
 indicated  on Exhibit A or any Pledge Agreement Supplements of the
 voting power of  all such capital stock), and any and all  additional
 capital  stock of such  Subsidiary (to the extent such additional
capital stock, together with  that already pledged hereunder, would
equal the indicated percentage of  the voting power of all such capital
 stock).

     "Subsidiary" means each Subsidiary listed on Exhibit A, as amended 
or deemed amended from time to time by Pledge Agreement Supplements.

2.  Representations and Warranties.  Borrower represents,
warrants and agrees that:  (i) it has good title to the Pledged Collateral,
 free from any liens, leases, encumbrances, defenses or other claims or
restrictions whatsoever; (ii) the security interest in the Pledged Collateral
 created hereby constitutes a first, prior, and indefeasible security
 interest with respect to such shares, and the possession by the
 Administrative Agent of the Certificates representing the Pledged Securities
 will perfect the Administrative Agent's interest therein; (iii) it has the
 right to transfer the Pledged Collateral pursuant to this Agreement without
 restriction, and such shares have been duly and validly pledged to the
 Administrative Agent in accordance with law; (iv) the Pledged Securities
 represent the percentage of ownership indicated on Exhibit A and any
 Pledge Agreement Supplements of the voting power of all capital stock of
 each Subsidiary, and (v) it shall provide such additional endorsements,
 forms and writings and execute all documents and take such other action as
 the Administrative Agent deems necessary to create and perfect a security
 interest in the Pledged Collateral or as the Administrative Agent may at any
 time reasonably request in connection with the administration or

<PAGE>

 enforcement of this Agreement or the administration of the Pledged
 Collateral.

     3.   Creation of Security Interest.

          (a)  Pledge of Pledged Collateral.  Borrower hereby
 pledges to the Administrative Agent and grants to Administrative Agent for
 the benefit of itself and the Banks a security interest in and to all
 Pledged Collateral, together with all products, proceeds, dividends,
 redemption payments, liquidation payments, cash, instruments and other
 property, and any and all rights, titles, interests, privileges, benefits
 and preferences appertaining or incidental to the Pledged Collateral.  The
 security interest and pledge created by this Section 3(a) shall continue in
 effect so long as any Obligation is owed to the Administrative Agent and
 the Banks.

          (b)  Delivery of Certain Pledged Collateral.  Except as
 permitted by Section 4.1(c) of the Credit Agreement, Borrower shall pledge
 and deliver the Pledged Collateral to the Administrative Agent.  After the
 date hereof, additional Pledged Collateral may from time to time be
 delivered to the Administrative Agent by agreement between the
 Administrative Agent and Borrower and in accordance with Section 24.  All
 Pledged Collateral at any time delivered to the Administrative Agent shall
 be in suitable form for transfer by delivery, or shall be accompanied by
 duly executed stock powers or other instruments of transfer or assignment
 undated in blank for each certificate, all in form and substance
 satisfactory to the Administrative Agent.  The Administrative Agent shall
 hold all Pledged Collateral pledged hereunder on behalf of the Banks
 pursuant to this Agreement.

     3.   Security for Obligations.  This Agreement and the pledge
 and security interests granted herein secure the prompt payment, in full in
 cash, and full performance of, all Obligations, whether for principal,
 interest, fees, expenses or otherwise, including, without limitation, all
 Obligations of Borrower now or hereafter existing under this Agreement,
 and all interest that accrues on all or any part of any of the Obligations
 after the filing of any petition or pleading against Borrower, Borrower or
 any other Person for a proceeding under any bankruptcy or debtor relief
 law.

     4.   Further Assurances.  Borrower agrees that at any time, and
 from time to time, at its own expense Borrower will promptly execute,
 deliver and file or record all further financing statements, instruments and
 documents, and will take all further actions, including, without limitation,
 causing Borrower to so execute, deliver, file or take other actions, that may
 be necessary or desirable, or that the Administrative Agent reasonably may
 request, in order to perfect and protect any pledge or security interest
 granted hereby or to enable the Administrative Agent to exercise and
 enforce the Administrative Agent's rights and remedies hereunder with
 respect to any Pledged Collateral and to preserve, protect and maintain the
 Pledged Collateral and the value thereof, including, without limitation,
 payment of all taxes, assessments and other charges imposed on or relating
 to the Pledged Collateral.  Borrower hereby consents and agrees that the
 issuers of, or obligors on, the Pledged Collateral, or any registrar or
 transfer agent or trustee for any of the Pledged Collateral, shall be
 entitled to accept the provisions of this Agreement as conclusive evidence
 of the right of the Administrative Agent to effect any transfer or exercise

<PAGE>

 any right hereunder, notwithstanding any other notice or direction to the
 contrary heretofore or hereafter given by Borrower or any other Person to
 such issuers or such obligors or to any such registrar or transfer agent or
 trustee.

     5.   Voting Rights; Dividends; etc.  So long as no Event of
 Default under the Credit Agreement occurs and remains continuing:

          (a)  Voting Rights.  Borrower shall be entitled to exercise
 any and all voting and other consensual rights pertaining to the Pledged
 Securities, or any part thereof, for any purpose not inconsistent with the
 terms of this Agreement and the Credit Agreement; provided, however, that
 Borrower shall exercise, or shall refrain from exercising, any such right
 if it would result in a Default or an Event of Default.

          (b)  Dividend and Distribution Rights.  Borrower shall be
 entitled to receive and to retain and use only those dividends or
 distributions paid to Borrower as permitted under the terms of the Credit
 Agreement; provided, however, that any and all such dividends or
 distributions received in the form of capital stock shall be, and the
 Certificates representing such capital stock forthwith shall be, to the
 extent required to make the representation in Section 2(b)(iv) true and
 correct after giving effect to such dividend, delivered to the Administrative
 Agent to hold as, Pledged Collateral and shall, if received by Borrower, be
 received in trust for the benefit of the Administrative Agent, be segregated
 from the other property of Borrower, and forthwith be delivered to the
 Administrative Agent as Pledged Collateral in the same form as so received
 (with any necessary endorsements).

     6.   Rights During Event of Default.  When an Event of
 Default has occurred and is continuing:

          (a)  Voting, Dividend, and Distribution Rights.  At the
 option of the Administrative Agent, all rights of Borrower to exercise the
 voting and other consensual rights which it would otherwise be entitled to
 exercise pursuant to Section 5(a), and to receive the dividends and
 distributions which it would otherwise be authorized to receive and retain
 pursuant to Section 5(b), shall cease, and all such rights shall thereupon
 become vested in the Administrative Agent who shall thereupon have the
 sole right to exercise such voting and other consensual rights and to receive
 and to hold as Pledged Collateral such dividends and distributions.  The
Administrative Agent shall give notice thereof to Borrower; provided,
 however, that (i) neither the giving of such notice nor the receipt thereof
 by Borrower shall be a condition to exercise of any rights of the
 Administrative Agent hereunder, and (ii) the Administrative Agent shall
 incur no liability for failing to give such notice.

          (b)  Dividends and Distributions Held in Trust.  All
 dividends and other distributions which are received by Borrower contrary
 to the provisions of the Credit Agreement or this Agreement shall be
 received in trust for the benefit of the Administrative Agent, shall be
 segregated from other funds of Borrower, and forthwith shall be paid over
 to the Administrative Agent as Pledged Collateral in the same form as so
 received (with any necessary endorsements).

          (c)  Irrevocable Proxy.  Borrower hereby revokes all
 previous proxies with regard to the Pledged Securities and appoints the

<PAGE>

 Administrative Agent as its proxyholder to attend and vote at any and all
 meetings of the shareholders of each Subsidiary, and any adjournments
 thereof, held on or after the date of the giving of this proxy and prior to
 the termination of this proxy and to execute any and all written consents of
 shareholders of each Subsidiary on or after the date of the giving of this
 proxy and prior to the termination of this proxy, with the same effect as if
 Borrower had personally attended the meetings or had personally voted its
 shares or had personally signed the written consents; provided, however,
 that the proxyholder shall have rights hereunder only upon the occurrence
 and during the continuance of an Event of Default under the Credit
 Agreement, and that the Administrative Agent shall have instructed the
 proxyholder to exercise voting rights with respect to the Pledged Securities
 or any of them.  Borrower hereby authorizes the Administrative Agent to
 substitute another person as the proxyholder and, upon the occurrence or
 during the continuance of any Event of Default, hereby authorizes and
 directs the proxyholder to file this proxy and the substitution instrument
 with the secretary of the appropriate corporation.  This proxy is coupled
 with an interest and is irrevocable until such time as all Obligations have
 been paid and performed in full.

     7.   Transfers and Other Liens.  Borrower agrees that, except
 as specifically permitted under the Credit Agreement, it will not (i) sell,
 assign, exchange, transfer or otherwise dispose of, or contract to sell,
 assign, exchange, transfer or otherwise dispose of, or grant any option with
 respect to, any of the Pledged Collateral, (ii)  create or permit to exist
 any lien upon or with respect to any of the Pledged Collateral, except for
 liens in favor of the Administrative Agent, or (iii) take any action with
 respect to the Pledged Collateral which is inconsistent with the provisions
 or purposes of this Agreement or the Credit Agreement.

     8.   Administrative Agent Appointed Attorney-in-Fact.
  Borrower hereby irrevocably appoints the Administrative Agent as
 Borrower's attorney-in-fact, with full authority in the place and stead of
 Borrower, and in the name of Borrower, or otherwise, from time to time, in
 the Administrative Agent's sole and absolute discretion to do any of the
 following acts or things:  (a) to do all acts and things and to execute all
 documents necessary or advisable to perfect and continue perfected the
 security interests created by this Agreement and to preserve, maintain and
 protect the Pledged Collateral; (b) to do any and every act which Borrower
 is obligated to do under this Agreement; (c) to prepare, sign, file and
 record, in Borrower's name, any financing statement covering the Pledged
 Collateral; and (d) to endorse and transfer the Pledged Collateral upon
 foreclosure by the Administrative Agent; provided, however, that the
 Administrative Agent shall be under no obligation whatsoever to take any
 of the foregoing actions, and the Administrative Agent shall have no
 liability or responsibility for any act (other than the Administrative
 Agent's own gross negligence or willful misconduct) or omission taken with
 respect thereto.  Borrower hereby agrees to repay immediately upon
 demand all reasonable costs and expenses incurred or expended by the
 Administrative Agent in exercising any right or taking any action under this
 Agreement, together with interest as provided for in the Credit Agreement.

     9.   Administrative Agent May Perform Obligations.  If
Borrower fails to perform any Obligation contained herein, the
 Administrative Agent may, but without any obligation to do so and without
 notice to or demand upon Borrower, perform the same and take such other
 action as the Administrative Agent may deem necessary or desirable to

<PAGE>

 protect the Pledged Collateral or the Administrative Agent's security
 interests therein, the Administrative Agent being hereby authorized
 (without limiting the general nature of the authority hereinabove conferred)
 to pay, purchase, contest and compromise any lien which in the reasonable
 judgment of the Administrative Agent appears to be prior or superior to the
 Administrative Agent's security interests, and in exercising any such powers
 and authority to pay necessary expense, employ counsel and pay Attorney
 Costs.  Borrower hereby agrees to repay immediately upon demand all sum
 so expended by the Administrative Agent, together with interest from the
 date of expenditure at the rates provided for in the Credit Agreement.  The
 Administrative Agent shall be under no duty or obligation to (1) preserve,
 maintain or protect the Pledged Collateral or any of Borrower's rights or
 interest therein, (2) exercise any voting rights with respect to the Pledged
 Collateral, whether or not an Event of Default has occurred or is
 continuing, or (3) make or give any notices of default, presentments,
 demands for performance, notices of nonperformance or dishonor, protests,
 notices of protest or notice of any other nature whatsoever in connection
 with the Pledged Collateral on behalf of Borrower or any other Person
 having any interest therein; and the Administrative Agent does not assume
 and shall not be obligated to perform the obligations of Borrower, if any,
 with respect to the Pledged Collateral.

     10.  Reasonable Care.  The Administrative Agent shall in all
 events (and without restriction on the limitations on liability of the
 Administrative Agent contained herein) be deemed to have exercised
 reasonable care in the custody and preservation of the Pledged Collateral in
 its possession if the Pledged Collateral is accorded treatment substantially
 similar to that which the Administrative Agent accords its own property, it
 being understood that the Administrative Agent shall not have any
 responsibility for (1) ascertaining or taking action with respect to calls,
 conversions, exchanges, maturities, tenders or other matters relative to any
 Pledged Collateral, whether or not the Administrative Agent has or is
 deemed to have knowledge of such matters, or (2) taking any necessary
 steps to preserve rights against any Person with respect to any Pledged
 Collateral.

     11.  Events of Default and Remedies.

          (a)  Rights Upon Event of Default.  Upon the occurrence
and during the continuance of an Event of Default under the Credit
 Agreement, Borrower shall be in default hereunder and the Administrative
 Agent shall have in any jurisdiction where enforcement is sought, in
 addition to all other rights and remedies that the Administrative Agent may
 have under this Agreement and under applicable law or in equity, all rights
 and remedies of a secured party under the Uniform Commercial Code as
 enacted in any such jurisdiction, and in addition the following rights and
 remedies, all of which may be exercised with or without further notice to
 Borrower:

               (i)  to notify each Subsidiary that the Pledge
 Securities have been pledged to the Administrative Agent and that all
 dividends and other payments thereon are to be made directly and
 exclusively to the Administrative Agent; to renew, extend, modify, amend,
 accelerate, accept partial payments on, make allowances and adjustments
 and issue credits with respect to, release, settle, compromise, compound,
 collect or otherwise liquidate, on terms acceptable to the Administrative
 Agent, in whole or in part, the Pledged Collateral and any amounts owing

<PAGE>

 thereon or any guaranty or security therefor; to enter into any other
 agreement relating to or affecting the Pledged Collateral; and to give all
 consents, waivers and ratification with respect to the Pledged Collateral
 and exercise all other rights (including voting rights), powers and remedies
 and otherwise act with respect thereto as if the Administrative Agent were
 the owner thereof;

               (ii)  to enforce payment and prosecute any action
 or proceeding with respect to any and all of the Pledged Collateral and take
 or bring, in the Administrative Agent's name or in the name of Borrower, all
 steps, actions, suits or proceedings deemed by the Administrative Agent
 necessary or desirable to effect collection of or to realize upon the Pledged
 Collateral;

               (iii)  in accordance with applicable law, to take
 possession of and operate or control the Pledged Collateral with or without
 judicial process;

               (iv)   to endorse, in the name of Borrower, all
 checks, notes, drafts, money orders, instruments and other evidences of
 payment relating to the Pledged Collateral;

               (v)   to transfer any or all of the Pledged
 Collateral into the name of the Administrative Agent or its nominee or
 nominees; and

               (vi)   in accordance with applicable law, to
 foreclose the liens and security interests created under this Agreement or
 under any other agreement relating to the Pledged Collateral by any
 available judicial procedure or without judicial process, and to sell,
 assign or otherwise dispose of the Pledged Collateral or any part thereof,
 either at public or private sale or at any broker's board or securities
 exchange, in lots or in bulk, for cash, on credit or on future delivery, or
 otherwise, with or without representations or warranties, and upon such
 terms as shall be acceptable to the Administrative Agent;

all at the sole option of and in the sole discretion of the Administrative
 Agent.

          (b)  Appointment of a Receiver.  Upon the occurrence and
 during the continuance of an Event of Default, the Administrative Agent
 also shall have the right, without notice or demand, either in person, by
 agent or by a receiver to be appointed by a court (and Borrower hereby
 expressly consents upon the occurrence and during the continuance of an
 Event of Default to the appointment of such a receiver), and without regard
 to the adequacy of any security for the Obligations, to take possession of
 the Pledged Collateral or any part thereof and to exercise the proxy granted
 to the Administrative Agent under Section 6(c).  Taking possession of the
Pledged Collateral shall not cure or waive any Event of Default or notice
 thereof or invalidate any act done pursuant to such notice.  The rights,
 remedies and powers of any receiver appointed by a court shall be
 as ordered by said court.

          (c)  Notice of Sale.  The Administrative Agent shall give
 Borrower at least five (5) days' written notice of sale of all or any part of
 the Pledged Collateral.  Any sale of the Pledged Collateral shall be held at
 such time or times and at such place or places as the Administrative Agent

<PAGE>

 may determine in the exercise of its sole and absolute discretion.  The
 Administrative Agent may bid (which bid may be, in whole or in part, in the
 form of cancellation of Obligations) for and purchase for the account of the
 Administrative Agent or any nominee of the Administrative Agent the
 whole or any part of the Pledged Collateral.  The Administrative Agent
 shall not be obligated to make any sale of the Pledged Collateral if they
 shall determine not to do so regardless of the fact that notice of sale of
 the Pledged Collateral may have been given.  The Administrative Agent
 may, without notice or publication, adjourn the sale from time to time by
 announcement at the time and place fixed for sale, and such sale may,
 without further notice, be made at the time and place to which the same was
 so adjourned.

          (d)  Private Sales.  Whether or not any of the Pledged
 Collateral has been effectively registered under the Securities Act of 1933
 or other applicable laws, the Administrative Agent may, in its sole and
 absolute discretion, sell all or any part of the Pledged Collateral at
 private sale in such manner and under such circumstances as the
 Administrative Agent may deem necessary or advisable.  Without limiting
 the foregoing, the Administrative Agent may (i) approach and negotiate
 with a limited number of potential purchasers, and (ii) restrict the
 prospective bidders or purchasers to persons who will represent and agree
 that they are purchasing the Pledged Collateral for their own account for
 investment and not with a view to the distribution or resale thereof.  In
 the event that any of the Pledged Collateral is sold at private sale,
 Borrower agrees that if the Pledged Collateral is sold for a price which the
 Administrative Agent in good faith believe to be reasonable, then (A) the
 sale shall be deemed to be commercially reasonable in all respects, (B)
 Borrower shall not be entitled to a credit against the Obligations in an
 amount in excess of the purchase price, and (C) the Administrative Agent
 shall not incur any liability or responsibility to Borrower in connection
 therewith, notwithstanding the possibility that a substantially higher price
 might have been realized at a public sale.  Borrower recognizes that a ready
 market may not exist for Pledged Collateral which is not regularly traded on
 a recognized securities exchange, and that a sale by the Administrative
 Agent of any such Pledged Collateral for an amount substantially less than
 a pro rata share of the fair market value of the issuer's assets minus
 liabilities may be commercially reasonable in view of the difficulties that
 may be encountered in attempting to sell a large amount of Pledged
 Collateral or Pledged Collateral that is privately traded.

          (e)  Title of Purchasers.  Upon consummation of any sale
 of Pledged Collateral pursuant to this Section 11, the Administrative Agent
 shall have the right to assign, transfer and deliver to the purchaser or
 purchasers thereof the Pledged Collateral so sold.  Each such purchaser at
 any such sale shall hold the Pledged Collateral sold absolutely free from
 any claim or right on the part of Borrower, and Borrower hereby waives (to
 the extent permitted by applicable law) all rights of redemption, stay and
 appraisal which it now has or may at any time in the future have under any
 rule of law or statute now existing or hereafter enacted.  If the sale of all
 or any part of the Pledged Collateral is made on credit or for future
 delivery, the Administrative Agent shall not be required to apply any
 portion of the sale price to the Obligations until such amount actually is
 received by the Administrative Agent, and any Pledged Collateral so sold
 may be retained by the Administrative Agent until the sale price is paid in
 full by the purchaser or purchasers thereof.  The Administrative Agent shall
 not incur any liability in case any such purchaser or purchasers shall fail

<PAGE>

 to pay for the Pledged Collateral so sold, and, in case of any such failure,
 the Pledged Collateral may be sold again upon like notice.

          (f)  Disposition of Proceeds of Sale.  The net cash
 proceeds resulting from the collection, liquidation, sale or other
 disposition of the Pledged Collateral shall be applied, first, to the
reasonable costs and expenses (including Attorney Costs) of retaking,
 holding, storing, processing and preparing for sale, selling, collecting and
 liquidating the Pledged Collateral, and the like; second, to the satisfaction
 of all Obligations in any order that the Administrative Agent may select in
 its sole discretion; and, third, to all other indebtedness secured hereby in
 such order and manner as the Administrative Agent in its sole and absolute
 discretion may determine.

     12.  Other Agreements.  Nothing herein shall in any way
 modify or limit the effect of terms or conditions set forth in any other
 security or other agreement in connection with the Obligations, whether or
 not executed by Borrower, but each and every term and condition hereof
 shall be in addition thereto.

     13.  Covenant Not to Issue Uncertificated Securities.
  Borrower represents and warrants that all of the capital stock of each
 Subsidiary is in certificated form (as contemplated by Division 8 of the
 California Commercial Code), and covenants to the Administrative Agent
 that it will not cause or permit each Subsidiary to issue any capital stock
 in uncertificated form or seek to convert all or any part of its existing
 capital stock into uncertificated form (as contemplated by Division 8 of the
 California Commercial Code).

     14.  Covenant Not to Make Advances not Evidenced by a
 Note.  Borrower represents, warrants and covenants to the Administrative
 Agent that it will not make any advances, investments, loans or other
 transfers of money to a Subsidiary which are not evidenced by a Note, and
 Borrower covenants that it will first deliver any such Note to the
 Administrative Agent as Pledged Collateral hereunder.

     15.  Covenant Not to Dilute Interests of the Administrative
 Agent and the Banks in Pledged Securities.  Borrower represents, warrants
 and covenants that it will not at any time cause or permit Borrower (or any
 corporation whose securities constitute Pledged Collateral) to issue any
 additional capital stock, or any warrants, options or other rights to
 acquire any additional capital stock.

     16.  Failure or Delay Not a Waiver.  No delay or omission by
 the Administrative Agent to exercise any right under this Agreement shall
 impair any such right, nor shall it be construed to be a waiver thereof.  No
 waiver of any single breach or default under this Agreement shall be
 deemed a waiver of any other breach or default.

     17.  Notices.  Any communications between the parties hereto
 or notices or requests provided herein to be given may be given by mailing
 the same, postage prepaid, or by telex or telecopier, to each party at its
 address set forth on the signature pages to the Credit Agreement, or to such
 other addresses as each party may in writing hereafter indicate.  Any
 notice, request or demand to or upon the Administrative Agent shall not be
 effective until received.

<PAGE>

     18.  Successors and Assigns.  This Agreement shall bind and
 inure to the benefit of the parties hereto and their respective successors
 and assigns; provided, however, that Borrower shall not assign this
 Agreement or any of the rights of Borrower hereunder without the prior
 written consent of the Administrative Agent.

     19.  Entire Agreement.  This Agreement and any agreement,
 document or instrument attached hereto or referred to herein integrate all
 the terms and conditions mentioned herein or incidental hereto, and
 supersede all oral negotiations and prior writings in respect to the subject
 matter hereof.  In the event of any conflict or inconsistency between the
 terms, conditions and provisions of this Agreement and any such
 agreement, document or instrument required hereunder, the terms,
 conditions and provisions of this Agreement shall prevail.

     20.  Governing Law.  This Agreement, and any instrument or
 agreement required hereunder, shall be governed by and construed under
 the laws of the State of California.

     21.  Severability of Provisions.  The illegality or enforceability
 of any provision of this Agreement or any instrument or agreement
 required hereunder shall not in any way affect or impair the legality or
 enforceability  of the remaining provisions of this Agreement or any
 instrument or agreement required hereunder.

     22.  Counterparts.  This Agreement and any amendments,
 waivers, consents or supplements may be executed in as many counterparts
 as may be deemed necessary or convenient, and by the different parties
 hereto on separate counterparts, each of which, when so executed, shall be
 deemed an original, but all such counterparts shall constitute but one and
 the same agreement.  This Agreement shall become effective as of the date
 first written above upon the execution of a counterpart by the
 Administrative Agent and Borrower and by delivery thereof, or notice of
 such execution, to Borrower and the Administrative Agent.

     23.  Amendment or Waiver of Agreement.  No amendment or
 waiver of any provision of this Agreement, and no consent with respect to
 any departure by Borrower shall be effective unless the same shall be in
 writing and signed or acknowledged by the Administrative Agent, and then
 any such waiver or consent shall be effective only in the specific instance
 and for the specific purpose for which given.

     24.  Additional Pledged Securities.  The Borrower shall from
 time to time (a) upon obtaining any additional shares of any Issuer or any
 other securities constituting Pledged Securities or (b) when required to
 pledge additional collateral pursuant to Section 6.9 of the Credit
 Agreement, promptly deliver to the Administrative Agent a duly executed
 Pledge Agreement Supplement identifying the additional shares which are
 being pledged, accompanied by duly executed stock powers or other
 instruments of transfer or assignment undated in blank for each certificate,
 all in form and substance satisfactory to the Administrative Agent.  The
 Borrower hereby authorizes the Administrative Agent to attach each Pledge
 Agreement Supplement to this Agreement and agrees that all shares listed
 on any Pledge Agreement Supplement delivered to the Administrative
 Agent shall for all purposes hereunder constitute Pledged Securities.

<PAGE>

     IN WITNESS WHEREOF, Borrower has caused this Agreement to
 be duly executed as of the date first above written.

                         "Borrower"

                         THE TODD-AO CORPORATION,
                         a Delaware corporation


                         By:____________________________
                         Title:_________________________



     EXHIBIT A

     PLEDGED SECURITIES


                        Class of
                        Stock and
Issuer and state or           Stock Certificate Number       of  Percentage of
country of incorporation            No(s).            Shares
      Ownership

Todd-AO Europe Holdings, Ltd.                         66%


     EXHIBIT B

     PLEDGE AGREEMENT SUPPLEMENT



          This Pledge Agreement Supplement, dated as of
 ________________, is delivered pursuant to Section 24 of the Pledge
 Agreement referred to below.  The undersigned hereby agrees that this
 Pledge Agreement Supplement may be attached to the Pledge Agreement,
 dated as of October 20, 1997 (the "Pledge Agreement", the terms defined
 therein and not otherwise defined herein being used as therein defined),
 made by the undersigned to Bank of America National Trust and Savings
 Association as Administrative Agent for the benefit of itself and the Banks
 and that the shares listed on this Pledge Agreement Supplement shall be and
 become part of the Pledged Securities referred to in the Pledge Agreement
 and shall secure all Obligations.  The attached schedule shall be deemed to
 amend Exhibit A to the Pledge Agreement.

     The undersigned agree that the securities listed below shall for all
purposes constitute Pledged Securities and shall be subject to the security
 interest created by the Pledge Agreement.

     The undersigned hereby certifies that the representations and
warranties set forth in Section 2 of the Pledge Agreement are true and
 correct as to the Pledged Securities listed herein on and as of the date
 hereof.

<PAGE>

                    THE TODD-AO CORPORATION


                    By:________________________________
                    Name:______________________________
                    Title:_____________________________

ACKNOWLEDGED:

BANK OF AMERICA NATIONAL TRUST
  AND SAVINGS ASSOCIATION,
  as Administrative Agent


By:__________________________
           Vice President


                       Class of
                       Stock and
Issuer and state or          Stock Certificate Number        of  Percentage of
country of incorporation           No(s).            Shares
     Ownership


     EXHIBIT F



     FORM OF NOTICE OF ASSIGNMENT AND ACCEPTANCE


                     , 19


TO:  Bank of America National Trust and
     Savings Association, as Administrative Agent

Ladies and Gentlemen:


     Reference is made to that certain First Amended and Restated
 Credit Agreement dated as of October 20, 1997 among The Todd-AO
 Corporation, a Delaware corporation (the "Borrower"), the banks from time
 to time party thereto, and Bank of America National Trust and Savings
 Association, as Administrative Agent and Issuing Bank (as extended,
 renewed, amended or restated from time to time, the "Agreement;" the
 terms defined therein being used herein as therein defined).

     1.   We hereby give you notice of, and request your consent to,
 the assignment by     (the "Assignor") to      (the "Assignee") of       %
 of the right, title and interest of the Assignor in and to the Loan
 Documents, including without limitation the right, title and interest of the
 Assignor in and to the Commitment of the Assignor, and all outstanding
 Loans made by it and Letter of Credit Usage  assignment:

<PAGE>

     (a)  the aggregate amount of the Assignor's Commitment is $             ;

     (b)  the Dollar Equivalent of its outstanding Loans is $                ,
 comprised of Loans in the following currencies:

     $                        DM
     PS                       (                 ; and

               (c)  the Dollar Equivalent of its Letter of Credit Usage
 is $                , comprised of Letter of Credit Usage in
 the following currencies:

               $                        DM
               PS                                .

     2.   The Assignee hereby represents and warrants that it has
complied with the requirements of Section 10.3 of the Credit Agreement in
 connection with this assignment.

     3.   The Assignee agrees that, upon receiving your
consent to such assignment and from and after                  ,  the
 Assignee will be bound by the terms of the Loan Documents, with respect
 to the interest in the Loan Documents assigned to it as specified above, as
 fully and to the same extent as if the Assignee were the Bank originally
 holding such interest in the Loan Documents.

     4.   The following administrative details apply to the Assignee:

          (a)  Offshore Lending Office:

               Assignee name:
               Address:

               Attention:
               Telephone:  (   )
               Telecopier: (   )
               Telex (Answerback):

          (b)  Domestic Lending Office:

               Assignee name:
               Address:

               Attention:
               Telephone:  (   )
               Telecopier: (   )
               Telex (Answerback):

          (c)  Notice Address:

               Assignee name:
               Address:


               Attention:
               Telephone:  (   )

<PAGE>

               Telecopier: (   )
               Telex (Answerback):

          (d)  Payment Instructions:

               Account No.:
               Attention:


               Reference:

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
 Notice of Assignment and Acceptance to be executed by their respective duly
 authorized officials, officers or agents as of the date first above mentioned.


                              Very truly yours,

                              [Name of Assignor]


                              By:
                              Title:


                              [Name of Assignee]


                              By:
                              Title:


We hereby consent to the
foregoing assignment.

THE TODD-AO CORPORATION


By:
Name:
Title:


BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
  as Administrative Agent


By:
         Vice President



     SCHEDULE 2.1

<PAGE>

COMMITMENTS
AND PRO RATA SHARES


Schedule 2.1(a)

Prior to BofA Tranche Termination Date


Commitments (excluding BofA Tranche Loan)


               Pro       Pro
               Rata      Rata
      Bank          Commitment     Share     Share

Bank of America
National Trust
and Savings
Association         $19,000,000 43.15%              50.00%


Union Bank of
California, N.A.         10,000,000     22.73        20.00

Sanwa Bank California    10,000,000     22.73        20.00

Societe Generale         5,000,000      11.36        10.00

         TOTAL           $44,000,000          100.00%   100.00%


BofA Tranche Loan

          Pro Rata
         Bank            BofA Tranche Loan        Share

Bank of America National
Trust and Savings
Association $6,000,000        100%




Schedule 2.1(b)

 Commencing on the BofA Tranche Termination Date

                                                         Pro Rata
Bank                                                 Commitment       Share

Bank of America
NationalTrust and
SavingsAssociation                           $25,000,000       50.00%
Union Bank of California, N.A.         10,000,000        20.00
Sanwa Bank California                      10,000,000        20.00

<PAGE>

Societe Generale                                  5,000,000         10.00
 TOTAL                                                $50,000,000      100.00%


SCHEDULE 5.9 SIGNIFICANT SUBSIDIARIES
TODD-AO STUDIOS EAST INC.
TODD-AO VIDEO SERVICES
TODD-AO STUDIOS
TODD-AO STUDIOS WEST
TODD-AO HD, INC.
TODD-AO FILMATICS
TODD-AO EUROPE HOLDINGS, LTD.
TODD-AO UK, LTD

     SCHEDULE 7.1


     EXISTING INDEBTEDNESS



     SCHEDULE 10.6


     OFFSHORE AND DOMESTIC LENDING OFFICES,
     ADDRESSES FOR NOTICES



BORROWER

THE TODD-AO CORPORATION
900 North Seward Avenue
Hollywood, California  90038
Attention:  W.R. Strickley
            Senior Vice President and
            Chief Financial Officer
Telephone:  (213) 962-4050
Telecopier: (213) 466-2327


BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent

Bank of America National Trust
and Savings Association
555 South Flower Street, 11th Floor
Los Angeles, California 90071
Attention:  Janice Hammond
            Vice President
            Agency Management-Los Angeles #20529
Telephone:  (213) 228-9861
Facsimile:  (213) 228-2299


ADMINISTRATIVE AGENT'S PAYMENT OFFICE:

<PAGE>

1850 Gateway Boulevard
Concord, California 94520
Attention:  Rosiland Meshack
Telephone:  (510) 675-8448
Facsimile:  (510) 675-8500

Account No.:
                  Ref: The Todd-AO Corporation
                  Att:  Agency Management Services #5596
                  ABA No. 1210-0035-8

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank

Domestic and Offshore Lending Office:
1850 Gateway Boulevard, Fourth Floor
Concord, California 94520
Attention:  Nona Merritt
Telephone:  (510) 675-7052
Facsimile:  (510) 675-7531

Notices (other than Borrowing notices and Notices of
 Conversion/Continuation) :

Bank of America National Trust and
Savings Association
555 South Flower Street
Los Angeles, California 90071
Attention:  Matthew Koenig
              Vice President
              Credit Products
Telephone:  (213) 228-6375
Facsimile:  (213) 228-2641


BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Issuing Bank

Address for Notices:

International Trade
Banking Division #5655
333 S. Beaudry Ave., 19th Floor
Los Angeles, CA 90017


UNION BANK OF CALIFORNIA, N.A.

Domestic and Offshore Lending Office:
445 South Figueroa Street, G15-075
Los Angeles, CA 90071
Attention:  Aurora Layug
              Account Administrator
Telephone:  (213) 236-5015
Facsimile:  (213) 236-5276

<PAGE>

Notices (other than Borrowing notices and Notices of
 Conversion/Continuation) :

Union Bank of California, N.A.
445 South Figueroa Street, G15-075
Los Angeles, CA 90071
Attention:  Lena Bryant
              Assistant Vice President
Telephone:  (213) 236-7535
Facsimile:  (213) 236-5747

with a copy to:

Union Bank of California, N.A.
445 South Figueroa Street, G15-075
Los Angeles, CA 90071
Attention:  Joseph W. Woolf
              Vice President and Manager
Telephone:  (213) 236-7512
Facsimile:  (213) 236-5747


SOCIETE GENERALE

Domestic and Offshore Lending Office:
2029 Century Park East, Suite 2900
Los Angeles, CA 90067
Attention:  Doris Yun
              Corporate Assistant
Telephone:  (310) 788-7116
Facsimile:  (310) 203-0539

Notices (other than Borrowing notices and Notices of
 Conversion/Continuation) :

Societe Generale, Los Angeles Branch
2029 Century Park East, Suite 2900
Los Angeles, CA 90067
Attention:  Maureen Kelly
              Vice President
Telephone:  (310) 788-7110
Facsimile:  (310) 551-1537


SANWA BANK CALIFORNIA

Domestic and Offshore Lending Office:
15165 Ventura Blvd., Suite 445
Sherman Oaks, CA 91403
Attention:  Christina Eberhard
              Commercial Banking Assistant
Telephone:  (818) 905-0910
Facsimile:  (818) 905-1002

Notices (other than Borrowing notices and Notices of
 Conversion/Continuation):


<PAGE>

Sanwa Bank California
15165 Ventura Blvd., Suite 445
Sherman Oaks, CA 91403
Attention:  Kent Mustari
              Vice President
Telephone:  (818) 905-0910
Facsimile:  (818) 905-1002

Notes:

(1) For purposes of determining the Applicable Amount, the Convertible
 Subordinated Notes shall not be included in calculating the Leverage Ratio.

(2)  An existing Pound sterling-denominated Loan in the principal amount of
 500,000 pounds sterling may be Continued or Converted notwithstanding this
 Minimum  Amount.

(3) See definition of "Reduction Date" for possible extension of Reduction
 Dates.

(4) EBITDA of any Significant Subsidiary acquired by Borrower during the
 prior four fiscal quarters may be included.

 (5) 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.

(6) Subject to Section 2.1A(c).