Exhibit 10.2
MANAGED AFFILIATES
SUBORDINATION AGREEMENT
This is an agreement entered into this 30th day of December 1997, by and
among XXXXX MEDIA COMPANY, L.P. ("BMCLP") and READING RADIO, INC.; TRI-STATE
BROADCASTING, INC.; NORTHERN COLORADO RADIO, INC.; NCR II, INC.; CENTRAL
MISSOURI BROADCASTING, INC.; CMB II, INC.; NORTHLAND BROADCASTING, LLC; XX
XX, INC.; CENTRAL MICHIGAN NEWSPAPERS, INC.; CADILLAC NEWSPAPERS, INC.; CMN
ASSOCIATED PUBLICATIONS, INC.; CENTRAL MICHIGAN DISTRIBUTION CO., L.P.;
CENTRAL MICHIGAN DISTRIBUTION CO., INC.; GLADWIN NEWSPAPERS, INC; GRAPH ADS
PRINTING, INC.; MIDLAND BUYER'S GUIDE, INC.; ST. XXXXX NEWSPAPERS, INC.;
HURON P.S., LLC; HURON NEWSPAPERS, LLC; NCR III, LLC; NCH II, LLC; HURON
HOLDINGS, LLC; NORTHERN COLORADO HOLDINGS, LLC; NORTHLAND HOLDINGS, LLC; CMN
HOLDINGS, INC.; XXXXX RADIO, INC.; and XXXXX NEWSPAPERS, INC. (severally and
collectively, the "Company").
RECITALS
BMCLP and each Company have entered into a management agreement
(severally and collectively the "Administrative Management Agreement")
pursuant to which BMCLP provides certain management services to each Company
as therein provided. BMCLP and each Company now desire to subordinate BMCLP's
right to receive payment under each Administrative Management Agreement as
and to the extent herein provided.
NOW THEREFORE, in consideration of and relying upon the foregoing and
for other valuable considerations, BMCLP and each Company agree as follows:
Section 1.01. Subordination of Liabilities. Each Company and BMCLP for
itself and its successors and assigns, covenants and agrees that the payment
of the management fees and other amounts owed to BMCLP under each
Administrative Management Agreement (the "Subordinated Indebtedness") is
hereby expressly subordinated, to the extent and in the manner hereinafter
set forth, to the prior payment in full in cash of all Senior Indebtedness
(as defined in Section 1.07) or any default under the Managed Affiliate Note
(as defined in Section 1.07). The provisions of this agreement shall
constitute a continuing offer to all persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior
Indebtedness, and such holders are hereby made obligees hereunder the same as
if their names were written herein as such, and they and/or each of them may
proceed to enforce such provisions.
Section 1.02. Company not to Make Payments with Respect to Subordinated
Indebtedness in Certain Circumstances. (a) Upon the maturity of any Senior
Indebtedness (including interest thereon or fees or any other amounts owing
in respect thereof), whether at
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stated maturity, by acceleration or otherwise, all Obligations (as defined in
Section 1.07 of this Annex) owing in respect thereof, in each case to the
extent due and owing, shall first be paid in full in cash, before any
payment, whether in cash, property, securities or other wise, is made on
account of the Subordinated Indebtedness.
(b) The Company may not, directly or indirectly, make any payment of
any Subordinated Indebtedness and may not acquire any Subordinated
Indebtedness for cash or property until all Senior Indebtedness has been paid
in full in cash if any Default or Event of Default under, and as defined in,
the Indenture (as defined in Section 1.07 of this agreement or any default
under the Managed Affiliate Note (as defined in Section 1.07 of this
Agreement) is then in existence or would result therefrom. BMCLP hereby
agrees that, so long as any such Default or Event of Default exists or any
restrictions set forth in any issue of Senior Indebtedness reduces the amount
permitted to be paid in respect of the Subordinated Indebtedness, BMCLP will
not xxx for, or otherwise take any action to enforce the Company's
obligations to pay, amounts owing in respect of the Subordinated Indebtedness.
(c) In the event that notwithstanding the provisions of the
preceding subsections (a) and (b) of this Section 1.02, the Company shall
make any payment on account of the Subordinated Indebtedness at a time when
payment is not permitted by said subsection (a) or (b), such payment shall be
held by BMCLP, in trust for the benefit or, and shall be paid forthwith over
and delivered to, the holders of Senior Indebtedness or their representative
or the trustee under the indenture or other agreement pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, for application prorata to the payment of
all Senior Indebtedness remaining unpaid to the extent necessary to pay all
Senior Indebtedness in full, in cash, in accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
Section 1.03. Subordination to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon
any distribution of assets of the Company upon dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full in cash of all Senior Indebtedness (including,
without limitation, post-petition
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interest at the rate provided in the documentation with respect to the
Senior Indebtedness, whether or not such post-petition interest is an
allowed claim against the debtor in any bankruptcy or similar proceeding)
before BMCLP is entitled to receive any payment on account of the
Subordinated Indebtedness;
(b) any payment or distributions of assets of the Company of any kind
or character, whether in cash, property or securities to which BMCLP would
be entitled except for the provisions of this Annex, shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives, or to the trustee
or trustees under any indenture under which any instruments evidencing any
such Senior Indebtedness may have been issued, to the extent necessary to
make payment in full in cash of all Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 1.03, any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, shall be
received by BMCLP on account of Subordinated Indebtedness before all Senior
Indebtedness is paid in full in cash, such payment or distribution shall be
received and held in trust for and shall be paid over to the holders of the
Senior Indebtedness remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, for application to the payment of such
Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full in cash, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
Section 1.04. Subrogation. Subject to the prior payment in full
in cash of all Senior Indebtedness, BMCLP shall be subrogated to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Subordinated Indebtedness shall be paid in full, and for the
purpose of such subrogation no payments or distributions to the holders of
the Senior Indebtedness by or on behalf of the Company or by or on behalf of
BMCLP by virtue of this Annex which otherwise
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would have been made to BMCLP shall, as between the Company, its creditors
other than the holders of Senior Indebtedness, and BMCLP, be deemed to be
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Annex are and are intended solely or
the purpose of defining the relative rights of BMCLP, on the one hand, and
the holders of the Senior Indebtedness, on the other hand.
Section 1.05. Obligation of the Company Unconditional. Nothing
contained in this Annex or in the Administrative Management Agreement is
intended to or shall impair, as between the Company and BMCLP, the obligation
of the Company, which is absolute and unconditional, to pay to BMCLP the
Subordinated Indebtedness as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the
relative rights of BMCLP and creditors of the Company other than the holders
of the Senior Indebtedness, nor shall anything herein or therein (except to
the extent set forth in this Annex) prevent BMCLP from exercising all
remedies otherwise permitted by applicable law and this Annex upon a default
under the Administrative Management Agreement, subject to the rights, if any,
under this Annex of the holders of Senior Indebtedness in respect of cash,
property, or securities of the Company received upon the exercise of any such
remedy. Upon any distribution of assets of the Company referred to in this
Annex, BMCLP shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of
the liquidating trustee or agent or other person making any distribution to
BMCLP, for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Annex.
Section 1.06. Subordination Rights not Impaired by Aces or
Omissions of Company or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the par, of the Company or by any act or failure
to act in good faith by any such holder, or by any noncompliance by the
Company with the terms and provisions of the Administrative Management
Agreement, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. The holders of the Senior Indebtedness may,
without in any way affecting the obligations of BMCLP with respect hereto, at
any time or from time to time and in their absolute discretion, change the
manner, place or terms of payment of, change or extend the time of payment
of, or renew or
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alter, any Senior Indebtedness or amend, modify or supplement any agreement
or instrument governing or evidencing such Senior Indebtedness or any other
document referred to therein, or exercise or refrain from exercising any
other of their rights under the Senior Indebtedness including, without
limitation, the waiver of default thereunder and the release of any
collateral securing such Senior Indebtedness, all without notice to or assent
from BMCLP.
Section 1.07. Senior Indebtedness. The term "Senior Indebtedness"
shall mean all Obligations (as defined below) of each Company under, or in
respect of, each Note dated December 30, 1997, made by each Company to the
order of Tri-State Broadcasting, Inc. (the "Managed Affiliate Notes") and the
Managed Affiliate Management Agreements dated December 30, 1997, between
each Company and Tri-State Broadcasting, Inc. As used herein, (x) the term
"Indenture" shall mean the Indenture dated as of December 30, 1997 among
BMC, Media, the Subsidiary Guarantors named therein and United States Trust
Company of New York, and (y) the term "Obligation" shall mean any principal,
interest, premium, penalties, fees, expenses, indemnities, and other
liabilities and obligations payable under the documentation governing any
Senior Indebtedness (including interest accruing after the commendement of
any bankruptcy, insolvency, receivership, or similar proceeding, whether or
not such interest is an allowed claim against the debtor in any such
proceeding).
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
XXXXX MEDIA COMPANY, L.P.
By:___________________________
a duly authorized officer
READING RADIO, INC.
By:___________________________
a duly authorized officer
TRI-STATE BROADCASTING, INC.
By:___________________________
a duly authorized officer
NORTHERN COLORADO RADIO, INC.
By:___________________________
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a duly authorized officer
NCR II, INC.
By:___________________________
a duly authorized officer
CENTRAL MISSOURI BROADCASTING, INC.
By:___________________________
a duly authorized officer
CMB II, INC.
By:___________________________
a duly authorized officer
NORTHLAND BROADCASTING, LLC
By: BMC Holdings, LLC, its manager
By: Xxxxx Media Company, LLC, its manager
By: Xxxxx Media Management, Inc.
By:___________________________
a duly authorized officer
XX XX, INC.
By:___________________________
a duly authorized officer
CENTRAL MICHIGAN NEWSPAPERS, INC.
By:___________________________
a duly authorized officer
CADILLAC NEWSPAPERS, INC.
By:___________________________
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a duly authorized officer
CMN ASSOCIATED PUBLICATIONS, INC.
By:___________________________
a duly authorized officer
CENTRAL MICHIGAN DISTRIBUTION CO., L.P.
By:___________________________
a duly authorized officer
CENTRAL MICHIGAN DISTRIBUTION CO., INC.
By:___________________________
a duly authorized officer
GLADWIN NEWSPAPERS, INC.
By:___________________________
a duly authorized officer
GRAPH ADS PRINTING, INC.
By:___________________________
a duly authorized officer
MIDLAND BUYER'S GUIDE, INC.
By:___________________________
a duly authorized officer
ST. XXXXX NEWSPAPERS, INC.
By:___________________________
a duly authorized officer
HURON P.S., LLC
By: Huron Holdings, LLC, its manager
By: BMC Holdings, LLC, its manager
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By: Xxxxx Media Company, LLC, its manager
By: Xxxxx Media Management, Inc.
By:___________________________
a duly authorized officer
HURON NEWSPAPERS, LLC
By: Huron Holdings, LLC, its manager
By: BMC Holdings, LLC, its manager
By: Xxxxx Media Company, LLC, its manager
By: Xxxxx Media Management, Inc.
By:___________________________
a duly authorized officer
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NCR III, LLC
By: NCH II, LLC, its manager
By: BMC Holdings, LLC, its manager
By: Xxxxx Media Management, Inc.
By:___________________________
a duly authorized officer
NCH II, LLC
By: BMC Holdings, LLC, its manager
By: Xxxxx Media Company, LLC, its manager
By: Xxxxx Media Management, Inc.
By:___________________________
a duly authorized officer
HURON HOLDINGS, LLC
By: BMC Holdings, LLC, its manager
By: Xxxxx Media Company, LLC, its manager
By: Xxxxx Media Management, Inc.
By:___________________________
a duly authorized officer
NORTHERN COLORADO HOLDINGS, LLC
By: BMC Holdings, LLC, its manager
By: Xxxxx Media Company, LLC, its manager
By: Xxxxx Media Management, Inc.
By:___________________________
a duly authorized officer
NORTHLAND HOLDINGS, LLC
By: BMC Holdings, LLC, its manager
By: Xxxxx Media Company, LLC, its manager
By: Xxxxx Media Management, Inc.
By:___________________________
a duly authorized officer
CMN HOLDINGS, INC.
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By:___________________________
a duly authorized officer
XXXXX RADIO, INC.
By:___________________________
a duly authorized officer
XXXXX NEWSPAPERS, INC.
By:___________________________
a duly authorized officer
