PNCBANK
As of November 14, 1996
Associated Investments, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxxx, Comptroller
Re: Amendment and Restatement of $100,000,000 Secured, Discretionary Line
of Credit Letter Agreement
Ladies and Gentlemen:
Reference is hereby made to that certain letter agreement dated February 15,
1995, between PNC Bank, National Association (the "Bank") and Associated
Investments, Inc., a Delaware corporation (the "Borrower"), as previously
amended (the "Original Letter Agreement"), pursuant to which the Bank made
available to the Borrower a discretionary line of credit in the principal amount
of $100,000,000. The Borrower and the Bank have agreed, and by execution of this
letter do agree, to amend and restate the Original Letter Agreement in its
entirety to read as follows:
The Bank has approved a $100,000,000 discretionary line of credit to the
Borrower. The line of credit may be used by the Borrower to fund its general
corporate purposes and to fund intercompany loans by the Borrower to (i) its
parent, The Associated Group, Inc. (the "Parent"), (ii) any direct and indirect
subsidiary of the Parent, and (iii) partnerships of which the Borrower, the
Parent or any direct or indirect subsidiary of the Parent is a partner. Advances
made under the line of credit, if any, shall be due and payable on demand and,
in the absence of demand by the Bank, on the last day of the applicable interest
period; provided, however, that Bank shall provide the Borrower four (4)
business days prior written notice of demand, except in the event of (i)
commencement of a bankruptcy, insolvency or similar proceeding by or against
Borrower or against the Parent, or (ii) acceleration of any other indebtedness
of Borrower for borrowed money, in which event no such notice is required. All
advances made hereunder will bear interest and be subject to the terms and
conditions set forth herein and in an amended and restated discretionary line of
credit demand note (the "Restated Note"), in form and content satisfactory
Associated Investments, Inc.
Page 2
to the Bank. The line of credit will be reviewed by the Bank from time to time
and in any event prior to its expiration on November 30, 1997 (the "Expiration
Date") to determine whether it should be continued or renewed.
This is not a committed line of credit. The Borrower acknowledges and agrees
that advances made under this line of credit, if any, shall be made at the sole
discretion of the Bank. The Bank may decline to make advances under the line,
terminate the line or demand repayment of all outstanding obligations
thereunder, at any time and for any reason without prior notice to the Borrower
except as set forth above in the case of demand. This letter sets forth certain
terms and conditions solely to assure that the parties understand each other's
expectations and to assist the Bank in evaluating the status, on an ongoing
basis, of the line of credit.
In the event the Bank, in its sole discretion, makes an advance(s) hereunder,
then as collateral security therefore the Borrower must cause an amended and
restated pledge agreement (the "Restated Pledge Agreement"), in form and content
satisfactory to the Bank, to be executed and delivered to the Bank, thereby
granting to the Bank a first priority perfected lien in the shares of
Tele-Communications, Inc. Class A common stock (or such other publically traded
stock acceptable to the Bank in its sole discretion) owned by the Borrower (the
"Collateral"), having a market value equal to at least 154% of the amount of
such advance(s) made hereunder. In addition to the execution and delivery of the
Restated Pledge Agreement, Borrower shall also deliver to PNC Bank Delaware, as
bailee for the Bank, the original share certificates evidencing the Collateral,
together with stock powers for each such share certificate (the "Stock Powers"),
duly executed in blank.
Without limiting in any way the discretionary nature of this facility, the
Bank's willingness to consider making advances under this facility is subject to
Borrower's ongoing agreement to:
(a) furnish the Bank with audited annual financial statements of the Parent
within 90 days after the end of the Parent's fiscal year, unaudited quarterly
financial statements of the Parent within 45 days after the end of each fiscal
quarter and such other financial information as the Bank may reasonably request
from time to time, promptly after receipt of each request;
(b) furnish the Bank with Borrower's unaudited quarterly financial statements,
within 45 days after the end of each fiscal quarter;
(c) notify the Bank as soon as practicable following the occurrence of any
default (or event which, with the passage of time or giving of notice or both,
would become a default) under any direct or contingent obligation of Borrower;
Associated Investments, Inc.
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(d) upon the Bank's request, promptly furnish copies of any covenant compliance
certificates prepared in connection with any such obligations; and
(e) upon the Bank's request, promptly furnish the Bank with a report detailing
the market value of the Collateral as of the date of the report.
This letter is governed by the laws of the Commonwealth of Pennsylvania.
Enclosed for execution by Borrower is the Restated Note evidencing this
facility, together with the Restated Pledge Agreement, the Stock Powers and Form
U-1. Please indicate the Borrower's agreement to the terms and conditions of
this letter by having the enclosed copy of this letter executed where indicated
and returning it to me. Prior to the making of any advance hereunder, the
Borrower must (a) deliver to the Bank a duly executed original of (i) the
Restated Note, (ii) the Restated Pledge Agreement, (iii) Form U-1, (iv) a
certified copy of resolutions adopted by Borrower's Board of Directors
authorizing the transactions contemplated by this letter, (v) an incumbency
certificate, (vi) a certified copy of Borrower's Articles of Incorporation and
By-laws, and (vii) an opinion from Borrower's counsel, each document in form and
content satisfactory to the Bank, and (b) deliver to PNC Bank Delaware, as
bailee for the Bank, the Stock Powers and the original share certificates
evidencing the Collateral having a market value equal to at least 154% of the
amount of such requested advance.
We are pleased to offer support for your banking needs and look forward to
working with you.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
Vice President
Communications Banking Division
Associated Investments, Inc.
Page 4
With the intent to be legally bound, the above terms are hereby agreed to and
accepted as of this 14th day of November, 1996.
[CORPORATE SEAL] ASSOCIATED INVESTMENTS, INC.
Attest:___________________________ By: /s/ Xxxxx X. Xxxxxxx
Print Name: ______________________ Print Name: Xxxxx X. Xxxxxxx
Title: ____________________________ Title: Assistant Secretary
