EXHIBIT 10.2
DATED: November 24, 1998
DEMAND NOTE
US $10,000,000
1. Advances.
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(a) FOR VALUE RECEIVED, the undersigned, True North Communications Inc. a
Delaware corporation ("Borrower"), hereby unconditionally promises to pay on
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demand to the order of Modem Media Advertising Limited Partnership ("Lender"),
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in lawful money of the United States of America and in immediately available
funds, all amounts owed hereunder. Xxxxxx agrees to advance from time to time
until the Termination Date, such sums as Borrower may request (the "Advances")
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up to an aggregate principal amount equivalent to US $10,000,000 Advances shall
be made in any combination of Allowable Currencies, as specified below, or such
other currencies as may be agreed to by Lender in its sole discretion, and shall
be made in immediately-available funds.
(b) Each Advance made by Lender to Borrower and each payment made by
Borrower in respect of the outstanding principal amount of this Demand Note
shall be evidenced, at Lender's option, either by a notation made by Lender on
the schedule attached hereto or in its books and records; provided that no
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failure on the part of Lender to make any notation shall waive or relieve
Borrower of its obligation to pay any amount from time to time extended
hereunder. Each notation by Xxxxxx on the schedule attached hereto or in its
books and records in respect of the Advances made hereunder shall constitute
conclusive and binding evidence of the amounts outstanding hereunder, absent
manifest error.
(c) Requests for Advances must be received by Xxxxxx in writing or by
telephone (telephone requests must be confirmed in writing) by 10:00 a.m.
Chicago time on a date that Lender and its banks are open for business (a
"Business Day") that shall be in advance of the date the funds are to be
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delivered by at least the number of Business Days specified below.
Allowable Currencies Notice Requirement
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US Dollars 1 Business Day
2. Interest.
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(a) Borrower further promises to pay interest on the outstanding unpaid
principal amount hereof from the date hereof until payment in full hereof at a
fixed rate of 5.75% per annum; provided, however, that upon the occurrence of an
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event of default, such interest rate shall equal the rate described above plus
2%.
(b) All accrued and unpaid interest shall be due and payable to Lender on
the first Business Day of each quarter in immediately available funds or on such
other dates as determined by Lender. If not paid earlier, all accrued interest
hereunder shall be due and payable upon the Termination Date.
(c) All computations of interest shall be made in good faith by Xxxxxx,
and such computations and notices of interest payment dates shall be provided to
Borrower as soon as practicable when Advances are outstanding.
3. Payments. All payments and prepayments of principal and interest and
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any other obligations hereunder shall be made without setoff or counterclaim in
immediately-available funds. Whenever any payment due hereunder shall fall on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall be included in the computation of
interest or fees as the case may be.
4. Prepayments. Borrower may prepay any Advances, in whole or in part, at
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any time, upon 2 Business Days' notice, provided that any additional costs of
borrowing that Lender incurs under its related debt as a result of such
prepayment shall be added to the principal amount outstanding hereunder.
5. Events of Default. An event of default shall occur if (i) Borrower
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fails to pay any obligation when due hereunder or (ii) Borrower shall fail to
pay any material indebtedness (other than indebtedness hereunder) when due
(after the lapse of any applicable grace period) or, in the case of such
indebtedness payable on demand, when demanded (after the lapse of any applicable
grace period), or any event shall occur or condition shall exist and shall
continue for more than the period of grace, if any, applicable thereto and shall
have the effect of causing, or permitting the holder of any such indebtedness or
any trustee or other person acting on behalf of such holder to cause such
material indebtedness to become due prior to its stated maturity or to realize
upon any collateral given as security therefor.
6. Termination. Either party, in its sole discretion may terminate this
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Demand Note on any day hereafter by at least 1 Business Days' written notice to
the other party of the date of termination (the "Termination Date"), and all
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principal outstanding and interest due hereunder shall be immediately due and
payable. Any additional costs of Borrowing that Lender incurs under its related
debt as a result of such termination shall be added to the principal amount
outstanding hereunder.
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7. Acceleration under Certain Circumstances without Demand. In the event
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that (a) Borrower shall become insolvent or bankrupt or shall cease payment on
its debts as they mature or shall make an assignment for the benefit of
creditors, (b) a trustee, receiver or liquidator shall be appointed for Borrower
for a substantial part of its property or (c) bankruptcy, reorganization,
arrangement, insolvency or similar proceedings shall be instituted by or against
Borrower under the laws of any jurisdiction, the indebtedness evidenced by this
Demand Note shall immediately and automatically become and be due and payable,
without any requirement that demand be made hereunder by any person and without
any requirement that notice, presentment, protest or notice of dishonor of any
type be given, all of which are expressly waived by Borrower.
8. Fees and Expenses. All fees and expenses related to the enforcement of
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Xxxxxx's obligations hereunder shall be paid, immediately upon demand, by
Xxxxxxxx.
9. Representation and Warranties. Borrower represents and warrants to
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Lender that (a) this Demand Note constitutes the legal, valid and binding
obligation of Borrower enforceable against it in accordance with its terms, (b)
the execution, delivery and performance by Borrower of this Demand Note are
within its corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official, and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of its
Certificate of Incorporation or By-laws or of any agreement, judgment,
injunction, order, decree or other instrument binding upon it and (c) the
proceeds of each advance or loan made by Lender to Borrower and evidenced by
this Demand Note shall be used by Borrower for general working capital purposes
and shall not be used by Borrower to purchase or acquire, or to refinance any
indebtedness extended to facilitate the purchase or acquisition of, the capital
stock of or any other equity interest in any other person.
10. Assignment. This Demand Note may not be assigned by Borrower except
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pursuant to the operation of law.
11. Effect of Delay or Omission. No delay or omission of Lender in
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exercising any right or remedy hereunder shall constitute a waiver of any such
right or remedy.
12. Waivers. Xxxxxx and Borrower severally waive presentment for payment,
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demand, protest and notice of dishonor and all other demands or notices in
connection with the delivery, acceptance, endorsement, performance, default or
enforcement of this Demand Note.
13. Governing Law. This Demand Note shall be governed by and construed in
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accordance with the laws of the State of Illinois without reference to conflicts
of law rules.
14. Notices. All notices and other communications required or permitted
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to be given hereunder shall be in writing (or by telephone and confirmed in
writing) and shall be deemed to have been duly given if delivered by hand or
sent by courier or certified mail, return receipt requested or by telecopy to
the parties at the addresses set forth opposite their signature
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hereon or such other address as either party shall have last designated by
notice to the other party. All notices and communications shall be deemed to
have been received (a) upon receipt if delivered by hand, facsimile or waiver or
(b) on the third Business Day after the date of mailing if mailed as provided
above.
THIS NOTE REPLACES AND SUPERSEDES THAT CERTAIN $3,000,000 DEMAND NOTE DATED
MAY 26, 1998 MADE BY BORROWER TO THE ORDER OF THE LENDER.
BORROWER:
TRUE NORTH COMMUNICATIONS INC.
Address: By: /s/ Xxxxxxx X. Xxxxxx
000 Xxxx Xxxx Xxxxxx ----------------------------------
Chicago, Illinois 60611 Its: V.P., Treasurer
Attention: Treasurer ---------------------------------
LENDER:
MODEM MEDIA ADVERTISING LIMITED
PARTNERSHIP
Address: By: /s/ Xxxxxx X. X'Xxxxxxx
400 Nyala Farms ---------------------------------
Westport, Connecticut 06880
It: Vice President
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Schedule to Demand Note
of
True North Communications Inc. dated November 24, 1998
Amount of Principal Unpaid Principal Notation Made
Date Amount of Loan Paid Balance By
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11/24/98 $2,500,000 - $2,500,000
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11/24/98 $2,000,000 - $4,500,000
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