Exhibit 10.11
[letterhead of PNC Bank]
December 12, 1997
Associated Investments, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxxx, Comptroller
Ladies and Gentlemen:
Reference is hereby made to that certain letter agreement dated November 14,
1996, between PNC Bank, National Association (the "Bank") and Associated
Investments, Inc., a Delaware corporation (the "Borrower"), pursuant to which
the Bank made available to the Borrower a discretionary line of credit in the
principal amount of $100,000,000 (the "Discretionary Line"). The Bank has
determined to terminate and by execution of this letter the Borrower confirms
and acknowledges its agreement to the termination of, the Discretionary Line,
and the Bank and Borrower have agreed to the substitution therefor of a
$19,000,000 demand loan, on the following terms:
The Bank has approved a $19,000,000 demand loan to the Borrower (the "Demand
Loan"). The Demand Loan shall be used by the Borrower to refinance amounts
currently outstanding under the Discretionary Line, The Demand Loan shall be due
and payable on demand; 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 Associated Group, Inc., its parent (the "Parent"), or
(ii) acceleration of any other indebtedness of Borrower for borrowed money, in
which event no such notice is required. The Demand Loan will bear interest and
be subject to the terms and conditions set forth herein and in an amended and
restated demand note (the "Restated Note"), in form and content satisfactory to
the Bank.
The Demand Loan shall continue to be secured by a first priority perfected lien
on shares of common stock of Tele-Communications, Inc. (or such other publicly
traded stock acceptable to the Bank in its sole discretion) owned by the
Borrower and held by PNC Bank, Delaware, as bailee for the Bank (the
"Collateral"), having a market value equal to at least 154% of the amount
Associated Investments, Inc.
December 12, 1997
Page 2
of the Demand Loan, and pledged as collateral, pursuant to an Amended and
Restated Pledge Agreement dated November 15, 1996 (the "Pledge Agreement"), the
terms of which by execution of this letter are hereby ratified and confirmed.
The Bank's willingness to make the Demand Loan is subject to Xxxxxxxx'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 of the March 31, June 30 and September 30 fiscal quarters 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 Xxxxxxxx's unaudited quarterly financial statements,
within 45 days after the end of each of the first three (3) fiscal
quarters, and furnish the bank with Xxxxxxxx's unaudited annual financial
statements within ninety (90) days after the end of the Borrower's fiscal
year;
(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;
(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 Xxxxxxxx is the Amended and Restated Demand Note
evidencing this facility, together with Federal Reserve 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 making the Demand Loan hereunder, the Borrower must deliver
to the Bank a duly executed original of (i) the Restated Note, (ii) an
acknowledgment by PNC Bank, Delaware, in form and substance acceptable to the
Bank that it holds the Collateral as bailee for the Bank, (iii) stock powers for
each share certificate evidencing the Collateral, duly endorsed to the Bank,
(iv) Federal Reserve Form U-1, (v) a certified copy of resolutions adopted
Associated Investments, Inc.
December 12, 1997
Page 3
by Xxxxxxxx's Board of Directors authorizing the transactions contemplated by
this letter, and (vi) an incumbency certificate.
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
With the intent to be legally bound, the above terms are hereby agreed to and
accepted as of this 12th, day of December, 1997:
[CORPORATE SEAL) ASSOCIATED INVESTMENTS, INC.
Attest: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxx
----------------------------- ---------------------------------
Print Name: Xxxxx X. Xxxx Print Name: Xxxxx X. Xxxxxxx
Title: Ass't General Counsel Title: Controller
Ass't Secretary
