Exhibit 10.22


 


SECOND
AMENDMENT TO CREDIT AND SECURITY AGREEMENT


 


This
Second Amendment to Credit and Security Agreement (“Amendment”) is entered into
as of November 6, 2009, by and between REAL
D, a California corporation (“Borrower”) and City National Bank, a national banking
association (“CNB”).


 


RECITALS


 


A.            Borrower and CNB are parties
to that certain Credit and Security Agreement, dated as of July 26, 2007,
as amended by that certain First Amendment to Credit and Security Agreements
dated as of August 18, 2009 (collectively, the “Credit Agreement”).


 


B.            Borrower and CNB desire to
supplement and amend the Credit Agreement as hereinafter set forth.


 


NOW, THEREFORE,  the parties agree as
follows:


 


1.                                      Definitions.  Capitalized
terms used in this Amendment without definition shall have the  meanings set
forth in the Credit Agreement.


 


2.                                      Amendments.  The Credit
Agreement is amended as follows:


 


2.1                               Section 1.47
is amended in its entirety to provide as follows:


 


“1.47                  ‘Revolving
Credit Commitment” means CNB’s commitment to make the Revolving Credit
Loans in the aggregate principal amount outstanding at any one time of up to (a) Fifteen
Million Dollars ($15,000,000.00) if the minimum number of Screens is less than
3,300, (b) Twenty Million Dollars ($20,000,000) if the minimum number of
Screens equals or exceeds 3,300 but are less than 3,450, and (c) Twenty
Five Million Dollars ($25,000,000.00) if the minimum number of Screens equals
or exceeds 3,450.”


 


2.2                               New Sections
1.61 and 1.62 are added to the Credit Agreement to provide as follows:


 


“1.61  ‘Term Loan Fee’ is
$100,000.00.


 


1.62   ‘Term Loan Commitment’ is
$10,000,000.00.”


 


2.3                               Section 2.1
is amended in its entirety to provide as follows:


 


“2.1                         Revolving Credit Loans.  Subject to the
terms of this Agreement, CNB agrees to make loans (“Revolving Credit Loans”)
from time to time to Borrower, from the date of this Agreement up to but not
including the Termination Date, at such times as Borrower may request, up to
the amount of the Borrowing Base. The Revolving Credit Loans may be repaid and
reborrowed at any time up to the Termination Date; provided, however, that the
aggregate unpaid principal amount of outstanding Revolving Credit Loans will at
no time exceed the Borrowing Base.


 


2.1.1                     Interest.  The Revolving Credit
Loans will bear interest from


 


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disbursement
until due (whether at stated maturity, by acceleration on otherwise) at an
annual rate equal to, at Borrower’s option, either (a) for a Revolving
LIBOR Loan (as defined below), the LIBOR Interest Rate plus four and
one-quarter percent (4.25%), or (b) for a Revolving Prime Loan (as defined
below), the fluctuating Prime Rate plus two and three-quarters percent (2.75%).
Interest on the Loans and other charges incurred under this Agreement will
accrue daily and be payable (a) except in respect of a Revolving LIBOR
Loan, quarterly in arrears, commencing on October 1, 2009, and on the
first day of January, April and July thereafter; (b) if a
Revolving LIBOR Loan, on the last day of each Interest Period therefore and
upon any prepayment thereof (to the extent accrued on the amount prepaid); and (c) at
the Termination Date. A Revolving Credit Loan tied to the LIBOR Interest Rate
is called a “Revolving LIBOR Loan,” and a Revolving Credit Loan tied to the
Prime Rate is called a “Revolving Prime Loan.” A Revolving Credit Loan will be
a Revolving Prime Loan any time it is not a Revolving LIBOR Loan.


 


2.1.3                     Payment for
Amounts Exceeding Borrowing Base.  Borrower will,
immediately upon demand, repay the amount by which the unpaid principal amount
of Borrower’s Loan Account exceeds the amount CNB has agreed to lend under Section 2.1.
The portion of the Revolving Credit Loans exceeding the Borrowing Base (“Overadvance”)
will bear additional interest of three percent (3.0%) per year over the rate
set forth in Section 2.1.1 for Revolving Prime Loans.”


 


2.4                               Sections 2.2.1
and 2.2.2 of the Credit Agreement are amended in their entirety to provide  as follows:


 


“2.2.1               Procedure
for LIBOR Loans.  Borrower may
request that a Loan be a LIBOR Loan, if herein allowed (including conversion of
a Prime Loan to a LIBOR Loan, or continuation of a LIBOR Loan as a LIBOR Loan
upon the expiration of the Interest Period). Borrower’s request will be irrevocable,
will be made to CNB, orally or in writing, no earlier than two (2) Business
Days before and no later than 1:00 p.m. Pacific Time on the date the LIBOR
Loan is to be made, and will specify the Interest Period, the amount of the
LIBOR Loan, and such other information as CNB requests. If Borrower fails to
select a LIBOR Loan in accordance herewith, the Loan will be a Prime Loan, and
any LIBOR Loan will be deemed a Prime Loan upon expiration of the Interest
Period.


 


2.2.2                     Availability of LIBOR Loans.  Notwithstanding
anything herein to the contrary, each LIBOR Loan must be in the minimum amount
of $500,000.00 and increments of $100,000.00. Borrower may not have more than
five (5) Revolving LIBOR Loans outstanding and five (5) Term LIBOR
Loans outstanding at any one time under this Agreement. Borrower may have Prime
Loans and LIBOR Loans outstanding simultaneously.”


 


2.5                               Section 2.3.2
of the Credit Agreement is amended in its entirety to provide as follows:


 


“2.3.2.
Mandatory Prepayment.  Subject to the provisions of Section 2.6,
Borrower agrees that on the Initial Public Offering Date, or in the event of a


 


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Change
in Control, Borrower will repay in full the Obligations. In addition, if at any
time the Backlog is less than three (3) times the outstanding aggregate
principal balance of the Loans, Borrower shall prepay to CNB fifty percent
(50%) of each Paid Admission Based Payment, Release Based Payment and Scheduled
License Payment due and received by Borrower under License Agreements until
such time as the Backlog equals or exceeds three (3) times the outstanding
aggregate principal balance of the Revolving Credit Loans. All prepayments
under this section shall be applied first to the Revolving Credit Loans
outstanding and then to the outstanding balance of the Term Loan.”


 


2.6                               A new Section 2.7
is added to the Credit Agreement to provide as follows:


 


“2.7                         Term Loan.  No later than November 6,
2009, CNB agrees to make, upon Borrower’s request, a term loan (“Term Loan”) to
Borrower in the amount of the Term Loan Commitment, the proceeds of which Term
Loan shall be used by Borrower for working capital, capital expenditures and
general corporate purposes, as well as to refinance existing indebtedness. The
Term Loan will be evidenced by a promissory note (“Term Note”), consistent with
the terms of this Agreement, in the form attached hereto as Exhibit B.


 


2.7.1                     Interest on
Term Loan.  The Term Loan
will bear interest from disbursement until due (whether at stated maturity, by
acceleration on otherwise) at a rate equal to, at Borrower’s option, either (a) for
a Term LIBOR Loan (as defined below), the LIBOR Interest Rate plus seven and
one-half percent (7.5%) per year, or (b) for a Term Prime Loan (as defined
below), the fluctuating Prime Rate plus five percent (5.0%) per year. Interest
on the Term Loan will accrue daily and be payable (a) except in respect of
a Term LIBOR Loan, quarterly in arrears, commencing on January 1, 2010,
and on the first day of April, July and October thereafter; (b) if
a Term LIBOR Loan, on the last day of each Interest Period therefore and upon
any prepayment thereof (to the extent accrued on the amount prepaid); and (c) at
the Termination Date. That portion of the Term Loan tied to the LIBOR Interest
Rate is called a “Term LIBOR Loan,” and that portion of the Term Loan tied to
the Prime Rate is called a “Term Prime Loan.” The Term Loan will be a Term
Prime Loan any time it is not a Term LIBOR Loan.


 


2.7.2                     Payment of
Term Loan.  Subject to the
Mandatory Prepayment in Section 2.3.2 hereof, all unpaid principal and
interest will be due and payable in full on December 31, 2010, or on the
Termination Date, whichever first occurs.”


 


3.                                      Existing Agreement.  Except as
expressly amended herein, the Credit Agreement shall remain in full force and
effect, and in all other respects is affirmed.


 


4.                                      Conditions Precedent.  This Amendment
shall become effective upon the fulfillment of all of the following conditions
to CNB’s satisfaction:


 


4.1                               CNB shall have
received this Amendment duly executed by Borrower;


 


4.2                               CNB shall have
received a separate Continuing Guaranty from and executed by each of  the Guarantors
guarantying repayment of all Obligations of Borrower to CNB; and


 


4.3                               CNB shall have
received the Term Loan Fee equal to $100,000.00.


 


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5.                                      Counterparts.  This Amendment
may be executed in any number of counterparts, and all such counterparts taken
together shall be deemed to constitute one and the same instrument.


 


6.                                      Governing Law.  This Amendment
and the rights and obligations of the parties hereto shall be construed in
accordance with, and governed by the laws of the State of California.


 


IN WITNESS WHEREOF, the parties have executed
this Amendment as of the day and year first above written.


 


	
  “Borrower”

  	
  REAL
  D,

  
	
   

  	
  a California
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael V. Lewis

  
	
   

  	
   

  	
  Michael V. Lewis, Chairman and Chief

  
	
   

  	
   

  	
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  “CNB”

  	
  City
  National Bank, a
  national

  
	
   

  	
  banking association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Aaron Cohen

  
	
   

  	
   

  	
  Aaron Cohen, Senior Vice President

  



 


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