Intercompany Credit Agreement

Exhibit 10.4


INTERCOMPANY
CREDIT AGREEMENT
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This INTERCOMPANY CREDIT AGREEMENT ("Credit Agreement"), dated as of December 31, 1996, is entered into by and between:


(1) TRUE NORTH COMMUNICATIONS INC. ("Lender"); and


(2) TN TECHNOLOGIES HOLDING INC. ("Borrower").


In consideration of the covenants, conditions and agreements set forth herein, the parties agree as follows:


ARTICLE 1
DEFINITIONS


1.1 "Advance" shall have the meaning given in Section 2.1 of the Credit Agreement.


1.2 "Business Day" shall mean any day on which commercial banks are not authorized or required to close in Chicago, Illinois.


1.3 "Credit Accommodations" shall have the meaning given in Section 2.6.


1.4 "Credit Agreement" shall have the meaning set forth in the opening paragraph of this document.


1.5 "Commitment" shall mean an amount equal to $5,000,000.


1.6 "Default" shall mean any event or circumstance not yet constituting an Event of Default but which, with the giving of any notice or the lapse of any period of time or both, would become an Event of Default.


1.7 "Event of Default" shall have the meaning given to that term in Section 5.1.


1.8 "GAAP" shall mean generally accepted accounting principles and practices as promulgated by the Financial Accounting Standards Board and as in effect in the United States of America from time to time, consistently applied. Unless otherwise indicated in this Credit Agreement, all accounting terms used in this Credit Agreement shall be construed, and all accounting and financial computations hereunder or thereunder shall be computed, in accordance with GAAP.


1.9 "Governmental Authority" shall mean any domestic or foreign national, state or local government, any political subdivision thereof, any department, agency, authority or bureau of any of


the foregoing, or any other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.


1.10 "Indebtedness" of any Person shall mean and include the aggregate amount of, without duplication (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services (other than accounts payable incurred in the ordinary course of business determined in accordance with generally accepted accounting principles), (d) all obligations under capital leases of such Person, (e) all obligations or liabilities of others secured by a lien on any asset of such Person, whether or not such obligation or liability is assumed, (f) all guarantees of such Person of the obligations of another Person; (g) all obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement upon an event of default are limited to repossession or sale of such property), (h) net exposure under any interest rate swap, currency swap, forward, cap, floor or other similar contract that is not entered into in connec tion with a bona fide hedging operation that provides offsetting benefits to such Person, which agree ments shall be marked to market on a current basis, (i) all reimbursement and other payment obligations, contingent or otherwise, in respect of letters of credit.


1.11 "LIBOR Rate" shall mean the rate per annum, rounded up to the nearest .01%, at which U.S. dollar deposits are offered in the London interbank market for one month periods as quoted in the "Money Rates" column of The Wall Street Journal on the first Business Day of each calendar month. All computations of such interest shall be based on a year of 360 days and actual days elapsed. Such LIBOR Rate shall remain in effect until it is adjusted on the first Business Day of the following calendar month.


1.12 "Liens" shall mean any mortgage, lien, deed of trust, charge, pledge, security interest or other similar encumbrance.


1.13 "Loan Documents" shall mean and include this Credit Agreement and any other documents, instruments and agreements delivered to Lender in connection with this Credit Agreement.


1.14 "Material Adverse Change" shall mean any material adverse change in the business, financial condition, operations, properties, performance or prospects of the Borrower and its subsidiaries, taken as a whole.


1.15 "Obligations" shall mean and include all Advances, Reimbursement Obligations, debts, liabilities, and financial obligations, howsoever arising, owed by Borrower to Lender of every kind and description (whether or not evidenced by any note or instrument), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising pursuant to the terms of any of the Loan Documents, including, without limitation, all third party charges, fees and


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commissions, duties and taxes and all such other charges which pertain directly or indirectly to the Credit Accommodations.


1.16 "Permitted Liens" means the following:


(a) Liens existing on the date hereof;


(b) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings, provided the same have no priority over any of Lender's security interests;


(c) Liens (i) upon or in any equipment acquired or held by Borrower to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing such equipment within 180 days of its acquisition, or (ii) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and accessions, replacements, substitutions and improvements thereof or thereto, and the proceeds (including insurance proceeds) of such equipment;


(d) Liens on equipment leased by Borrower pursuant to an operating lease in the ordinary course of business (including proceeds thereof and accessions thereto) incurred solely for the purpose of financing the lease of such Equipment;


(e) Leases or subleases and licenses and sublicenses granted to others in the ordinary course of Borrower's business not interfering in any material respect with the business of Borrower, and any interest or title of a lessor, licensor or under any lease or license;


(f) Liens on assets (including the proceeds thereof and accessions thereto) that existed at the time such assets were acquired by Borrower; provided such Liens are not granted in contemplation of or in connection with the acquisition of such asset by Borrower;


(g) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default;


(h) Easements, reservations, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances affecting real property not constituting a Material Adverse Effect;


(i) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of customs duties in connection with the importation of goods;


(j) Liens which constitute rights of set-off of a customary nature or banker's Liens with respect to amounts on deposit, whether arising by operation of law or by contract, in connection with arrangement entered into with banks in the ordinary course of business;


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(k) Liens on insurance proceeds in favor of insurance companies granted solely as security for financed premiums; and


(l) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (a) through (j) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase.


1.17 "Person" shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a Governmental Authority.


1.18 "Reimbursement Obligations" means all debts, liabilities and obligations of every kind and description, howsoever arising, owed by Borrower to Lender (whether or not evidenced by any note or instrument), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising pursuant to the terms of any Credit Accommodation, including, without limitation, all interest, fees, charges, expenses, reasonable attorneys' fees (and expenses) and accountants' fees (and expenses) chargeable to Borrower or payable by Borrower hereunder or thereunder.


1.19 "Termination Date" shall mean the earliest to occur of (i) the first anniversary of the date of this Credit Agreement, (ii) the date the Obligations are made due and payable pursuant to Section 5.2, and (iii) the 90th day following receipt by Borrower of a demand for repayment pursuant to Section 2.8.


ARTICLE 2
ADVANCES AND OTHER CREDIT ACCOMMODATIONS


2.1 Advances. Subject to the terms and conditions of this Credit Agreement, Lender agrees to advance to Borrower from time to time and until the earlier to occur of (i) the Termination Date or (ii) the date of receipt by Borrower of a demand by Lender of a mandatory prepayment under the provisions of Section 2.8 hereof, such sums as Borrower may request (the "Advances") but which shall not exceed, in the aggregate principal amount at any one time outstanding, together with the amount of the Credit Accommodations at such time outstanding, the Commitment. Advances shall be made in lawful currency of the United States of America and shall be made in same day or immedi ately available funds. Each Advance shall be in an amount equal to at least $25,000 or any integral multiple of $10,000 in excess thereof and shall be made one Business Day after written request (or telephonic request confirmed in writing). Subject to the terms and conditions hereof, Borrowe ...