Amended and Restated Demand Note [PNC Bank LOGO]
$19,000,000 December 15, 1997
FOR VALUE RECEIVED, ASSOCIATED INVESTMENTS, INC., a Delaware corporation (the
"Borrower"), with an address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, promises to pay ON DEMAND to the order of PNC BANK, NATIONAL
ASSOCIATION (the "Bank"), in lawful money of the United States of America in
immediately available funds at its offices located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Bank may
designate from time to time, the principal sum of NINETEEN MILLION AND 00/100
DOLLARS ($19,000,000) (the "Facility"), together with interest accruing on the
outstanding principal balance from the date hereof, as provided below:
1. Rate of Interest. Amounts outstanding under this Note will bear interest at a
rate per annum which is at all times equal to the Federal Funds Rate plus
seventy (70) basis points (.70%). "Federal Funds Rate" shall mean, for any day,
(i) the interest rate per annum (rounded upward, if necessary, to the nearest
1/100 of 1%) determined by the Bank (such determination to be conclusive absent
manifest error) to be equal to the weighted average of rates on federal funds
transactions among members of the Federal Reserve System arranged by Federal
funds brokers at or about 9:00 a.m. (Philadelphia, Pennsylvania time) on such
day; provided however, that if such day is not a business day, the Federal Funds
Rate for such day shall be such rates for such transactions on the immediately
preceding business day, or (ii) if no such rates shall be quoted by Federal
funds brokers at such time, such other rate (not to exceed one-half of one
percentage point below the Prime Rate, as defined below) as determined by the
Bank in accordance with its usual procedures (such determination to be
conclusive absent manifest error). Interest will be calculated on the basis of
a year of 360 days for the actual number of days in each interest period. In no
event will the rate of interest hereunder exceed the maximum rate allowed
by law.
2. Payment Terms. The outstanding principal balance and accrued but unpaid
interest 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.
(Borrower's parent), or (ii) acceleration of any other indebtedness for borrowed
money of ▇▇▇▇▇▇▇▇, in which event no such notice is required and Bank may make
immediate demand for repayment hereunder. Accrued interest will be due and
payable in the absence of demand on the last day of each fiscal quarter. THE
BORROWER ACKNOWLEDGES AND AGREES THAT THE BANK MAY AT ANY TIME AND IN ITS SOLE
DISCRETION DEMAND PAYMENT OF ALL AMOUNTS OUTSTANDING UNDER THIS NOTE SUBJECT TO
THE PRIOR NOTIFICATION PROVISIONS SET FORTH IN THE FIRST SENTENCE OF THIS
PARAGRAPH.
Any payment of principal or interest under this Note must be received by the
Bank by 2:00 p.m. prevailing Eastern Time on a business day in order to be
credited on such date. If any payment under this Note shall become due on a
Saturday, Sunday or public holiday under the laws of the Commonwealth of
Pennsylvania, such payment shall be made on the next succeeding business day and
such extension of time shall be included in computing interest in connection
with such payment. The Borrower hereby authorizes the Bank to charge the
Borrower's deposit account at the Bank for any payment when due hereunder.
Payments received will be applied to charges, fees and expenses (including
reasonable attorneys' fees), accrued interest and principal in any order the
Bank may choose, in its sole discretion.
3. Default Rate. From and after four (4) business days following written notice
of demand, this Note shall bear interest at a rate per annum (based on a year of
360 days and actual days elapsed) equal to two (2) percentage points above the
Prime Rate but not more than the maximum rate allowed by law (the "Default
Rate"). As used herein, "Prime Rate" shall mean the rate publicly announced by
the Bank from time to time as its prime rate. The Prime Rate is determined from
time to time by the Bank as a means of pricing some loans to its borrowers. The
Prime Rate is not tied to any external rate of interest or index, and does not
necessarily reflect the lowest rate of interest actually charged by the Bank to
any particular class or category of customers. If and when the Prime Rate
changes, the rate of interest on this Note will change automatically without
notice to the Borrower, effective on the date of any such change. The Default
Rate shall continue to apply whether or not judgment shall be entered on this
Note.
4. Prepayment. The indebtedness evidenced by this Note may be prepaid in whole
or in part at any time without penalty.
5. Other Loan Documents. This Note is issued in connection with (i) the Letter
Agreement between the Bank and the Borrower, dated as of December 12, 1997, (ii)
the Amended and Restated Pledge Agreement executed by the Borrower in favor of
the Bank, dated as of November 15, 1996, as amended, and (iii) the other
documents referred to in the Letter Agreement, the terms of which are
incorporated herein by reference (as such documents may be amended, modified,
renewed or restated from time to time, the "Loan Documents"), and is secured by
the property described in the Loan Documents.
6. Right of Setoff. In addition to all liens upon and rights of setoff against
the money, securities or other property of the borrower given to the Bank by
law, the Bank shall have, with respect to the Borrower's obligations to the Bank
under this Note and to the extent permitted by law, a contractual possessory
security interest in and a contractual right of setoff against, and the Borrower
hereby assigns, conveys, delivers, pledges and transfers to the Bank all of the
Borrower's right, title and interest in and to, all deposits, moneys, securities
and other property of the Borrower now or hereafter in the possession of or on
deposit with, or in transit to, the Bank whether held in a general or special
account or deposit, whether held jointly with someone else, or whether held for
safekeeping or otherwise, excluding, however, (a) all IRA, ▇▇▇▇▇, and trust
accounts, and (b) any of Borrower's custody accounts with PNC Bank Delaware
(other than the custody account containing the collateral pledged to the Bank as
security for this Note). Every such security interest and right of setoff may be
exercised without demand upon or notice to the Borrower. Every such right of
setoff shall be deemed to have been exercised hereunder without any action of
the Bank, although the Bank may enter such setoff on its books and records at a
later time.
7. Miscellaneous. No delay or omission of the Bank to exercise any right or
power arising hereunder shall impair any such right or power or be considered to
be a waiver of any such right or power, nor shall the Bank's action or inaction
impair any such right or power. The Borrower agrees to pay on demand, to the
extent permitted by law, all costs and expenses incurred by the Bank in the
enforcement of its rights in this Note and in any security therefor, including
without limitation reasonable fees and expenses of the Bank's counsel. If any
provision of this Note is found to be invalid by a court, all the other
provisions of this Note will remain in full force and effect. The Borrower and
all other makers and indorsers of this Note hereby forever waive presentment,
protest, notice of dishonor and notice of non-payment. The Borrower also waives
all defenses based on suretyship or impairment of collateral. This Note shall
bind the Borrower and its heirs, executors, administrators, successors and
assigns, and the benefits hereof shall inure to the benefit of the Bank and its
successors and assigns.
This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the Commonwealth of Pennsylvania. THIS NOTE WILL BE INTERPRETED AND
THE RIGHTS AND LIABILITIES OF THE BANK AND THE BORROWER DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, EXCLUDING ITS CONFLICT OF
LAWS RULES. The Borrower hereby irrevocably consents to the exclusive
jurisdiction of any state or federal court for the county or judicial district
where the Bank's office indicated above is located, and consents that all
service of process be sent by nationally recognized overnight courier service
directed to the Borrower at the Borrower's address set forth herein and service
so made will be deemed to be completed on the business day after deposit with
such courier; provided
1
that nothing contained in this Note will prevent the Bank from bringing any
action, enforcing any award or judgment or exercising any rights against the
Borrower individually, against any security or against any property of the
Borrower within any other county, state or other foreign or domestic
jurisdiction. The Borrower acknowledges and agrees that the venue provided above
is the most convenient forum for both the Bank and the Borrower. The Borrower
waives any objection to venue and any objection based on a more convenient forum
in any action instituted under this Note.
8. Amendment and Restatement. This Note amends and restates, and is in
substitution for, that certain Amended and Restated Discretionary Line of Credit
Note in the principal amount of $100,000,000, payable to the order of the Bank
and dated November 15, 1996 (the "Original Note"), and does not constitute a
novation of the Original Note.
9. Waiver of Jury Trial. THE BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE
BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY
NATURE RELATING TO THE NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE
OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
The Borrower acknowledges that it has read and understood all the provisions of
this Note, including the waiver of jury trial, and has been advised by counsel
as necessary or appropriate.
WITNESS the due execution hereof as a document under seal, as of the date first
written above, with the intent to be legally bound hereby.
[CORPORATE SEAL] ASSOCIATED INVESTMENTS, INC.
Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------ -----------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇ Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------- ---------------------------
Title: Ass't General Counsel Title: Controller
------------------------ --------------------------
Ass't Secretary
2