Document:

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EXHIBIT

10.3

This

instrument and the rights and obligations evidenced hereby are subordinate in

the manner and to the extent set forth in that certain Subordination and

Intercreditor Agreement dated as of February 4, 2002 among Purchaser (as

defined below), the Company (as defined below) and LaSalle Bank National

Association, to the indebtedness (including interest) owed by the Company

pursuant to that certain Amended and Restated Credit Agreement dated as of

August 14, 2001 among the Company and LaSalle Bank National Association,

as such Credit Agreement has been and hereafter may be amended, supplemented or

otherwise modified from time to time and to indebtedness refinancing the

indebtedness under that agreement as contemplated by the Subordination and Intercreditor

Agreement; and each holder of this instrument, by its acceptance hereof,

irrevocably agrees to be bound by the provisions of the Subordination and

Intercreditor Agreement.

 

SUBORDINATED PROMISSORY

NOTE

 

	

  $110,000

  	

   

  	

  February 4, 2002

  

 

FOR VALUE RECEIVED, CTN

Media Group, Inc., a Delaware corporation (the “Company”), hereby

promises to pay to the order of U–C Holdings, L.L.C. (“Purchaser”)

the principal sum of

One hundred ten thousand and 00/100 Dollars ($110,000)

 

or such lesser principal

amount then outstanding, together with all accrued and unpaid interest

thereon.  Interest on the principal

amount of this Note will accrue from and including the date hereof to and

including the date such principal amount is paid, at 2.73% per annum or, if

lower, the highest rate established by applicable law (based on a year of 360

days and computed on the number of days actually elapsed).

The Company shall pay the principal amount of $6,111.11 (or such lesser

principal amount then outstanding) to the holder of this Note on the last

business day of each month, together with all accrued and unpaid interest on

the principal amount being repaid, starting as of February, 2002.  On April 30, 2002, in addition to the above

mentioned payment of the principal amount of $6,111.11, the Company shall make

an additional one-time payment in the principal amount of $12,222.22, so that

the total principal amount to be paid by the Company to the holder of this Note

on April 30, 2002 shall be $18,333.33. 

Also, on or before February 15, 2002 the Company shall make an

additional one-time payment in the principal amount of 

 

 

 

$6,111.11 so that

the total principal amount to be paid by the Company to the holder of this Note

for the month of February, 2002 shall be $12,222.22.

The Company may prepay

amounts due on this Note in whole or in part without penalty or premium at any

time.  Any payment of principal by the

Company will be accompanied by all accrued and unpaid interest on the principal

sum being repaid.  The holder of this

Note will note all partial payments of principal and accompanying payments of

interest on the face or reverse side of this Note.  All such prepayments shall be applied to reduce future

installments in order of maturity.

This Note is subject to

the terms and conditions of a Termination and Purchase Agreement dated as of

the date hereof, as amended, by and between Purchaser, Daniel D. Davenport

(“Executive”) and the Company (the “Termination Agreement”),

which agreement (as amended in accordance with its terms) is hereby

incorporated herein in full by reference. 

Except as otherwise indicated herein, capitalized terms used in this

Note have the same meanings set forth in the Termination Agreement.

This instrument is

subject to the terms and conditions of a Subordination and Intercreditor

Agreement (the “Subordination Agreement”) dated as of the date hereof in

favor of LaSalle Bank National Association, which agreement (as amended in

accordance with its terms) is incorporated herein by reference.

In the event of a material

breach, at any time, by Executive of the Termination Agreement or a breach, at

any time, by Executive the Surviving Provisions of the Employment Agreement,

Executive shall not be entitled to receive any amounts owing under this Note

(assuming Executive is the holder of this Note at such time).

This Note shall not be

assignable by Purchaser other than to Executive and, upon such receipt by

Executive, shall inure to the benefit of Executive.  So long as the Subordination Agreement is in effect, this Note

shall not be assignable by Executive, in whole or in part, except in accordance

with Section 2.6 of the Subordination Agreement.  The Company’s obligations hereunder shall be binding upon its

successors and assigns; provided that no assignment (including, without

limitation, by operation of law or otherwise) shall relieve the Company from

its obligations hereunder, which shall remain the primary obligations of the

Company.  Notwithstanding the foregoing,

in the event of Executive’s death, Executive’s heir or legatee shall take the

rights herein granted subject to the terms and conditions hereof.

Subject to the terms of

the Subordination Agreement, if Executive cannot collect this Note without the

assistance of an attorney at law, he shall be entitled to reimbursement of

reasonable attorney’s fees and court costs.

This Note shall be governed by and construed in accordance

with the domestic laws of the State of New York, without giving effect to any

choice of law or conflict of law provision or rule (whether of the State of New

York or any other jurisdiction) that would cause the application of the laws of

any jurisdiction other than the State of New York.

*   *    *    *    *

 

 

2

 

IN WITNESS WHEREOF, the

undersigned has duly executed this Subordinated Promissory Note as of the date

first written above.

	

   

  	

  CTN

  MEDIA GROUP, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Neil H. Dickson

  
	

   

  	

   

  	

   

  
	

   

  	

  Name:  Neil H. Dickson

  
	

   

  	

   

  	

   

  
	

   

  	

  Title:  Chief Operating

  Officer

  
	

   

  	

   

  	

   

  

 

 

3SUBORDINATION AND INTERCREDITOR AGREEMENT

EXHIBIT

10.4

 

 

SUBORDINATION

AND INTERCREDITOR AGREEMENT

 

                THIS SUBORDINATION AND

INTERCREDITOR AGREEMENT (this “Agreement”) is entered into as of this 4th day of

February, 2002, by and among U-C HOLDINGS, L.L.C., a Delaware limited liability

company (“Holdings”),

CTN MEDIA GROUP, INC., f/k/a College Television Network, Inc., a Delaware

corporation (the “Borrower”), and LASALLE BANK NATIONAL

ASSOCIATION, a national banking association, as “Lender” under the Senior

Credit Agreement described below.

 

R E C I T A L S

 

                A.             The Borrower and Senior Lender (as

hereinafter defined) have entered into a certain Amended and Restated Credit

Agreement dated as of August 14, 2001 (as the same may be amended, supplemented

or otherwise modified from time to time, the “Senior Credit Agreement”)

pursuant to which, among other things, Senior Lender has agreed, subject to the

terms and conditions set forth in the Senior Credit Agreement, to make certain

loans and financial accommodations to the Borrower. All of the Borrower’s obligations

to Senior Lender under the Senior Credit Agreement and the other Senior Debt

Documents (as hereinafter defined) are secured by liens on and security

interests in substantially all of the now existing and hereafter acquired real

and personal property of the Borrower (the “Collateral”).

 

                B.            The Borrower’s board of directors

has declared a dividend (the “Dividend”) in the aggregate principal

amount of $110,000 on its outstanding Series A Convertible Preferred Stock,

payment of which Dividend shall be satisfied by the issuance by Borrower of a

subordinated promissory note to Holdings in the aggregate principal amount of

$110,000 (the “Dividend Note”), which will then be transferred pursuant to

and in accordance with the terms and provisions of that certain Termination and

Purchase Agreement (the “Termination Agreement”), dated as of the

date hereof, by and between Holdings, Borrower and Daniel D. Davenport (“Davenport”).

 

                C.            Concurrently herewith Borrower and

Senior Lender are entering into, among other things, a certain Consent and

Waiver (Dividend Note) of even date herewith (the “Consent”) whereby Senior

Lender consents (i) to the issuance by Borrower of the Dividend Note and (ii)

the assignment of the Dividend Note by Holdings to Davenport.

 

                D.           As an inducement to and as one

of the conditions precedent to the agreement of Senior Lender to consummate the

transactions contemplated by the Consent, Senior Lender has required the

execution and delivery of this Agreement by Holdings  and the Borrower in order to

set forth the relative rights and priorities of Senior Lender and Subordinated

Creditor (as hereinafter defined) under the Senior Debt Documents and the

Subordinated Debt Documents (as hereinafter defined).

 

 

 

                NOW,

THEREFORE, in order to induce Senior Lender to consummate the

transactions contemplated by the Consent, in consideration of the premises set

forth above (which are incorporated herein by this reference thereto as though

fully set forth below), and for other good and valuable consideration, the

receipt and sufficiency of which hereby are acknowledged, the parties hereto

hereby agree as follows:

 

1.             Definitions. The following terms shall have the

following meanings in this Agreement:

 

                “Bankruptcy Code”  shall mean Chapter 11 of

Title 11 of the United States Code, as amended from time to time and any

successor statute and all rules and regulations promulgated thereunder.

 

                “Distribution” means, with respect to

any indebtedness, obligation or security, 

(a) any payment or distribution by any Person of cash, securities or

other property, by set-off or otherwise, on account of such indebtedness,

obligation or security, (b) any redemption, purchase or other acquisition of

such indebtedness, obligation or security by any Person or (c) the granting of

any lien or security interest to or for the benefit of the holders of such

indebtedness, obligation or security in or upon any property of any Person.

 

                “Dividend Note”  shall have the meaning set

forth in paragraph B of the Recitals.

 

                “Enforcement Action” shall mean (a) to

take from or for the account of the Borrower or any guarantor of the

Subordinated Debt, by set-off or in any other manner, the whole or any part of

any moneys which may now or hereafter be owing by the Borrower or any such

guarantor with respect to the Subordinated Debt, (b) to sue for payment of, or

to initiate or participate with others in any suit, action or proceeding

against the Borrower or any such guarantor to (i) enforce payment of or to

collect the whole or any part of the Subordinated Debt or (ii) commence

judicial enforcement of any of the rights and remedies under the Subordinated

Debt Documents or applicable law with respect to the Subordinated Debt, (c) to

accelerate the Subordinated Debt, (d) to exercise any put option or to cause

the Borrower or any such guarantor to honor any redemption or mandatory

prepayment obligation under any Subordinated Debt Document or (e) to take any

action under the provisions of any state or federal law, including, without

limitation, the Uniform Commercial Code, or under any contract or agreement, to

enforce, foreclose upon, take possession of or sell any property or assets of

the Borrower or any such guarantor.

 

                “Family Group” shall mean Davenport’s

spouse and descendants (whether or not adopted) and any trust solely for the

benefit of Davenport, Davenport’s spouse and/or Davenport’s descendants.

 

 

2

 

                “Permitted Assignee” shall mean Daniel

Davenport or any assignee permissible under Section 2.6 hereunder.

 

                “Person”  means any natural person,

corporation, general or limited partnership, limited liability company, firm,

trust, association, government, governmental agency or other entity, whether

acting in an individual, fiduciary or other capacity.

 

                “Proceeding” shall mean any voluntary or

involuntary insolvency, bankruptcy, receivership, custodianship, liquidation,

dissolution, reorganization, assignment for the benefit of creditors,

appointment of a custodian, receiver, trustee or other officer with similar

powers or any other proceeding for the liquidation, dissolution or other

winding up of a Person.

 

                “Refinancing Senior Debt Documents”  shall

mean any financing documentation which replaces the Senior Loan Documents and

pursuant to which the Senior Debt under the Senior Loan Documents are

refinanced, as such financing documentation may be amended, supplemented or

otherwise modified from time to time in compliance with this Agreement.

 

                                                                “Senior

Debt” shall mean all obligations, liabilities and indebtedness

of every nature of the Borrower from time to time owed to Senior Lender under

the Senior Debt Documents, including, without limitation, the principal amount

of all debts, claims and indebtedness, accrued and unpaid interest and all fees,

costs and expenses, whether primary, secondary, direct, contingent, fixed or

otherwise, heretofore, now and from time to time hereafter owing, due or

payable, whether before or after the filing of a Proceeding under the

Bankruptcy Code together with (a) any amendments, modifications, renewals or

extensions thereof to the extent not prohibited by the terms of this Agreement

and (b) any interest accruing thereon after the commencement of a Proceeding,

without regard to whether or not such interest is an allowed claim. Senior Debt

shall be considered to be outstanding whenever any loan commitment under the

Senior Debt Document is outstanding.

 

                “Senior Debt Documents” shall mean the

Senior Loan Documents and, after any refinancing of the Senior Debt under the Senior

Loan Documents, the Refinancing Senior Debt Documents.

 

                                                                “Senior

Default” shall mean any “Event of Default” under the Senior Debt

Documents, or any condition or event that, after notice or lapse of time or

both, would constitute such an Event of Default if that condition or event were

not cured or removed  within any applicable grace or cure period

set forth therein.

 

 

3

 

                “Senior Lender”  shall mean LaSalle Bank

National Association, as Lender under the Senior Credit Agreement, or any

successor or assign thereof.

 

                “Senior Loan Documents”  shall

mean the Senior Credit Agreement and all other agreements, documents and

instruments executed from time to time in connection therewith, as the same may

be amended, supplemented or otherwise modified from time to time.

 

                “Subordinated Creditor” shall mean

Holdings or any Permitted Assignee.

 

                                                                “Subordinated

Debt” shall mean all of the obligations of the Borrower to

Subordinated Creditor evidenced by or incurred pursuant to the Subordinated

Debt Documents.

 

                                                                “Subordinated

Debt Documents” shall mean the Dividend Note, the Termination

Agreement, any other note or instrument now or hereafter issued pursuant to the

Termination Agreement, any guaranty with respect to the Subordinated Debt  and

all other documents, agreements and instruments now existing or hereinafter

entered into evidencing or pertaining to all or any portion of the Subordinated

Debt.

 

                                                                “Subordinated

Debt Default” shall mean a default in the payment of the

Subordinated Debt or in the performance of any term, covenant or condition

contained in the Subordinated Debt Documents or any other occurrence permitting

Subordinated Creditor to accelerate the payment of all or any portion of the

Subordinated Debt.

 

                                                                “Subordinated

Debt Default Notice” shall mean a written notice from

Subordinated Creditor or the Borrower to Senior Lender pursuant to which Senior

Lender is notified of the occurrence of a Subordinated Debt Default, which

notice incorporates a reasonably detailed description of such Subordinated Debt

Default and which notice expressly states that it is a “Subordinated Debt

Default Notice” hereunder.

 

2.                                      Subordination.

 

                2.1          Subordination

of Subordinated Debt to Senior Debt. The Borrower covenants and

agrees, and each of Subordinated Creditor and any Permitted Assignee by its

acceptance of the Subordinated Debt Documents (whether upon original issue or

upon transfer or assignment) likewise covenants and agrees, notwithstanding

anything to the contrary contained in any of the Subordinated Debt Documents,

that the payment of the Subordinated Debt shall be subordinate and subject, to

the extent and in the manner hereinafter set forth, to the payment of the

Senior Debt. Each holder of Senior Debt, whether such Senior Debt is now

outstanding or hereafter 

 

 

4

 

created, incurred,

assumed or guaranteed, shall be deemed to have acquired Senior Debt in reliance

upon the provisions contained in this Agreement.

 

                2.2          Liquidation, Dissolution, Bankruptcy.

In the event of any Proceeding involving the Borrower:

 

                (a)           All

Senior Debt shall first be indefeasibly paid in full in cash and all

commitments to lend under the Senior Debt Documents shall be terminated before

any Distribution, whether in cash, securities or other property, shall be made

to Subordinated Creditor on account of any Subordinated Debt, except as

expressly set forth in Section 2.3 hereof.

 

                (b)           Any

Distribution, whether in cash, securities or other property which would

otherwise, but for the terms hereof and other than as expressly permitted under

Section 2.3 hereof, be payable or deliverable in respect of the

Subordinated Debt shall be paid or delivered directly to Senior Lender (to be

held and/or applied by Senior Lender in accordance with the terms of the Senior

Debt Documents) until all Senior Debt is indefeasibly paid in full in cash and

all commitments to lend under the Senior Debt Documents shall have been

terminated. Subordinated Creditor irrevocably authorizes, empowers and directs

any debtor, debtor in possession, receiver, trustee, liquidator, custodian,

conservator or other Person having authority, to pay or otherwise deliver all

such Distributions to Senior Lender. Subordinated Creditor also irrevocably

authorizes and empowers Senior Lender, in the name of Subordinated Creditor, to

demand, sue for, collect and receive any and all such Distributions.

 

                (c)           Subordinated

Creditor agrees not to initiate, prosecute or participate in any claim, action or

other proceeding challenging the enforceability, validity, perfection or

priority of the Senior Debt or any liens and security interests securing the

Senior Debt.

 

                (d)           Subordinated

Creditor agrees to execute, verify, deliver and file any proofs of claim in

respect of the Subordinated Debt requested by Senior Lender in connection with

any such Proceeding and hereby irrevocably authorizes, empowers and appoints

Senior Lender its agent and attorney-in-fact to (i) execute, verify, deliver

and file such proofs of claim upon the failure of Subordinated Creditor

promptly to do so prior to 30 days before the expiration of the time to file

any such proof of claim and (ii) vote such claim in any such Proceeding upon

the failure of Subordinated Creditor to do so prior to 15 days before the

expiration of the time to vote any such claim; provided Senior Lender shall

have no obligation to execute, verify, deliver, file and/or vote any such proof

of claim. In the event that Senior Lender votes any claim in accordance with

the authority granted hereby, Subordinated Creditor shall not be entitled to

change or withdraw such vote.

 

 

5

 

                (e)           The

Senior Debt shall continue to be treated as Senior Debt and the provisions of

this Agreement shall continue to govern the relative rights and priorities of

Senior Lender and Subordinated Creditor even if all or part of the Senior Debt

or the security interests securing the Senior Debt are subordinated, set aside,

avoided, invalidated or disallowed in connection with any such Proceeding, and

this Agreement shall be reinstated if at any time any payment of any of the

Senior Debt is rescinded or must otherwise be returned by any holder of Senior

Debt or any representative of such holder.

 

                2.3          Subordinated

Debt Payments. 

Notwithstanding anything in this Agreement or the Senior Loan Documents

to the contrary and subject to Section 2.2 above, Borrower shall be

entitled to make regularly scheduled payments of principal and interest on the

Dividend Note in accordance with the express terms thereof and Subordinated

Creditor shall be entitled to reimbursement of reasonable attorney’s fees and

court costs (if any) in accordance with the express terms of the Dividend Note.  Subject to Section 2.4 below,

all other payments on the Subordinated Debt are hereby prohibited without the

prior written consent of the Senior Lender.

 

2.4          Subordinated

Debt Standstill Provisions.  Until the

Senior Debt is indefeasibly paid in full in cash and all commitments to lend

under the Senior Debt Documents shall be terminated, if an Event of Default (as

defined in the Senior Credit Agreement) under the Senior Debt Documents has

occurred and is continuing and the Senior Lender has accelerated the Senior

Debt, and the Senior Lender shall have provided written notice to the

Subordinated Creditor thereof, Subordinated Creditor shall not, without the

prior written consent of Senior Lender, take any Enforcement Action with

respect to the Subordinated Debt during the time that such Event of Default is

continuing; provided that, Senior Lender hereby agrees that it shall not

accelerate the Senior Debt solely for the purpose of preventing Subordinated

Creditor from taking an Enforcement Action in accordance with the terms of this

Agreement.  Notwithstanding the

foregoing, Subordinated Creditor may file proofs of claim against the Borrower

in any Proceeding involving the Borrower. 

Any Distributions or other proceeds of any Enforcement Action obtained

by Subordinated Creditor in violation of the foregoing prohibition shall in any

event be held in trust by it for the benefit of Senior Lender and promptly paid

or delivered to Senior Lender in the form received until such time that such

Event of Default has been cured or waived and is no longer continuing.  Notwithstanding the foregoing, until the

Senior Debt is indefeasibly paid in full in cash and all commitments to lend

under the Senior Debt Documents shall be terminated, Subordinated Creditor shall

not file, join in the filing of, induce others to file, or cooperate in the

filing of, an involuntary bankruptcy petition against the Borrower.

 

                2.5          Incorrect

Payments. If any Distribution on account of the Subordinated

Debt not permitted to be made by the Borrower or accepted by Subordinated

Creditor under this Agreement is made and received by Subordinated Creditor,

such Distribution shall not be 

 

 

6

 

commingled with any of the assets of Subordinated

Creditor, shall be held in trust by Subordinated Creditor for the benefit of

Senior Lender and shall be promptly paid over to Senior Lender for application

(in accordance with the Senior Debt Documents ) to the payment of the Senior

Debt then remaining unpaid, until all of the Senior Debt is paid in full.

 

                2.6          Sale, Transfer or other Disposition

of Subordinated Debt.

 

(a)   Other

than (i) the assignment and transfer of the Dividend Note from Holdings to

Davenport and (ii) any assignment or transfer of the Dividend Note by

will, pursuant to the laws of descent and distribution, or to a member of

Davenport’s Family Group, Subordinated Creditor shall not sell, assign, pledge,

dispose of or otherwise transfer all or any portion of the Subordinated Debt or

any Subordinated Debt Document.

 

(b)           Notwithstanding the foregoing, the

subordination effected hereby shall survive any sale, assignment, pledge,

disposition or other transfer of all or any portion of the Subordinated Debt in

violation of the foregoing prohibition, and the terms of this Agreement shall

be binding upon the successors and assigns of Subordinated Creditor, as

provided in Section 9 hereof.

 

                2.7          Legends. Until the termination of this Agreement in

accordance with Section 15 hereof, Subordinated Creditor will cause to be

clearly, conspicuously and prominently inserted on the face of the Dividend

Note and any other Subordinated Debt Document, as well as any renewals or

replacements thereof, the following legend:

 

                “This instrument and the rights and obligations

evidenced hereby are subordinate in the manner and to the extent set forth in

that certain Subordination and Intercreditor Agreement (the “Subordination

Agreement”) dated as of February 4, 2002 among U-C Holdings, L.L.C., a Delaware

limited liability company (“Holdings”), CTN Media Group, Inc., f/k/a College

Television Network, Inc., a Delaware corporation (the “Borrower”) and LaSalle

Bank National Association (“Senior Lender”), to the indebtedness (including

interest) owed by the Borrower pursuant to that certain Amended and Restated Credit

Agreement dated as of August 14, 2001 among the Borrower and Senior Lender, as

such  Credit

Agreement has been and hereafter may be amended, supplemented or otherwise

modified from time to time and to indebtedness refinancing the indebtedness

under that agreement as contemplated by the Subordination Agreement; and each

holder of this instrument, by its acceptance hereof, irrevocably agrees to be

bound by the provisions of the Subordination Agreement.”

 

3.             Modifications.

 

 

7

 

                3.1          Modifications to Senior Debt

Documents.  Senior Lender

may at any time and from time to time without the consent of or notice to

Subordinated Creditor, without incurring liability to Subordinated Creditor and

without impairing or releasing the obligations of Subordinated Creditor under

this Agreement, change the manner or place of payment or extend the time of

payment of or renew or alter any of the terms of the Senior Debt, or amend in

any manner any agreement, note, guaranty or other instrument evidencing or

securing or otherwise relating to the Senior Debt.

 

                3.2          Modifications to Subordinated Debt

Documents.  Until the

Senior Debt has been indefeasibly paid in full in cash and all lending

commitments under the Senior Debt Documents have terminated, and

notwithstanding anything to the contrary contained in the Subordinated Debt

Documents, Subordinated Creditor shall not, without the prior written consent

of Senior Lender, agree to any amendment, modification or supplement to the

Subordinated Debt Documents.

 

4.             Representations and Warranties.

                4.1          Representations

and Warranties of Holdings. 

Holdings hereby represents and warrants to Senior Lender that as of the

date hereof: (a) Holdings is a limited liability company duly formed and

validly existing under the laws of the State of Delaware; (b) Holdings has

the power and authority to enter into, execute, deliver and carry out the terms

of this Agreement, all of which have been duly authorized by all proper and

necessary action; (c) the execution of this Agreement by Holdings will not

violate or conflict with the organizational documents of Holdings, any material

agreement binding upon Holdings or any law, regulation or order or require any

consent or approval which has not been obtained; (d) this Agreement is the

legal, valid and binding obligation of Holdings, enforceable against Holdings

in accordance with its terms, except as such enforceability may be limited by

applicable bankruptcy, insolvency, reorganization, moratorium or similar laws

affecting the enforcement of creditors’ rights generally and by equitable

principles; (e) Holdings is the sole owner, beneficially (other than with

respect to Davenport) and of record, of the Subordinated Debt Documents and the

Subordinated Debt; and (f) the Subordinated Debt is, and at all times

prior to the termination of this Agreement shall remain, an unsecured

obligation of the Borrower.

 

                4.2          Representations and Warranties of Senior Lender. 

Senior Lender hereby represents and warrants to Subordinated Creditor

that as of the date hereof: (a) Senior Lender is a national banking

association; (b) Senior Lender has the power and authority to enter into,

execute, deliver and carry out the terms of this Agreement, all of which have

been duly authorized by all proper and necessary action; (c) the execution of

this Agreement by Senior Lender will not violate or conflict with the

organizational documents of Senior Lender, any material agreement binding upon

Senior Lender or any law, regulation or order or require any consent or

approval which has not been obtained; and (d) this Agreement is the legal,

valid and 

 

 

8

 

binding obligation of Senior Lender, enforceable

against Senior Lender in accordance with its terms, except as such

enforceability may be limited by applicable bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting the enforcement of

creditors’ rights generally or by equitable principles.

 

5.             Subordination of Distributions. 

Subordinated Creditor agrees that in the event that all or any part of a

payment made with respect to the Senior Debt is recovered from the holders of

the Senior Debt in a Proceeding or otherwise, any Distribution received by

Subordinated Creditor with respect to the Subordinated Debt at any time after

the date of the payment that is so recovered shall be deemed to have been

received by Subordinated Creditor in trust as property of the holders of the

Senior Debt and Subordinated Creditor shall forthwith deliver the same to the

Senior Lender for the benefit of the Senior Lender for application to the

Senior Debt until the Senior Debt is paid in full. A Distribution made pursuant

to this Agreement to Senior Lender which otherwise would have been made to

Subordinated Creditor is not, as between the Borrower and Subordinated

Creditor, a payment by the Borrower to or on account of the Senior Debt.

 

6.             Modification. Any modification or waiver of any

provision of this Agreement, or any consent to any departure by any party from

the terms hereof, shall not be effective in any event unless the same is in

writing and signed by Senior Lender and Subordinated Creditor, and then such

modification, waiver or consent shall be effective only in the specific

instance and for the specific purpose given. Any notice to or demand on any

party hereto in any event not specifically required hereunder shall not entitle

the party receiving such notice or demand to any other or further notice or

demand in the same, similar or other circumstances unless specifically required

hereunder.

 

7.             Further Assurances. Each party to this Agreement promptly

will execute and deliver such further instruments and agreements and do such

further acts and things as may be reasonably requested in writing by any other

party hereto that may be necessary or desirable in order to effect fully the

purposes of this Agreement.

 

8.             Notices. Unless otherwise specifically provided

herein, any notice delivered under this Agreement shall be in writing addressed

to the respective party as set forth below and may be personally served,

telecopied or sent by overnight courier service or certified or registered

United States mail and shall be deemed to have been given (a) if delivered in

person, when delivered; (b) if delivered by telecopy, on the date of

transmission if transmitted on a business day before 4:00 p.m. (Chicago time)

or, if not, on the next succeeding business day; (c) if delivered by overnight

courier, one business day after delivery to such courier properly addressed; or

(d) if by United States mail, four business days after deposit in the United

States mail, postage prepaid and properly addressed.

 

 

9

 

                Notices shall be addressed as follows:

 

                                If to Holdings:

 

                                U-C Holdings, L.L.C.

                                227 West Monroe Street, Suite 4300

                                Chicago, IL  60606

                                Attention:  Avy H. Stein & Daniel M. Gill

                                Telecopy:  312-422-2424

 

                                With a copy to:

 

                                Kirkland & Ellis

                                200 E. Randolph Street

                                Chicago, IL  60601

                                Attention:  Margaret A. Gibson

                                Telecopy:   312-861-2200

 

                                If to Davenport:

 

                                Daniel D. Davenport

                                120 Lafayette Drive, #11

                                Atlanta, Georgia  30309

 

                                With a copy to:

 

                                D. Denby Davenport, Jr.

                                P.O. 

Box 10267

                                Greenville, South Carolina  29603

                                Telecopy:  (864) 242-9271

 

                                If to the Borrower:

 

                                CTN Media Group, Inc.

                                3350 Peachtree Road, Suite 1500

                                Atlanta, Georgia  30326

                                Attention:   Neil H. Dickson

                                Telecopy:  404-256-9168

 

 

10

 

                                With a copy to:

 

                                Morris,

Manning & Martin, L.L.P.

                                1600 Atlanta Financial Center

                                3343 Peachtree Road, N.E.

                                Atlanta, Georgia  30326

                                Attention:  Lauren Z. Burnham

                                Telecopy:  404-365-9532

 

                                If to Senior Lender:

 

                                LaSalle Bank National Association

                                135 South LaSalle Street

                                Chicago, Illinois 60603

                                Attention:              Charles Corbisiero

                                Telecopy:              (312) 904-4779

 

                                With a copy to:

 

                                Katten Muchin Zavis

                                525 West Monroe Street

                                Chicago, Illinois 60661

                                Attention:              René Ghadimi

                                Telecopy:              (312) 577-8797

 

 

or in any case, to such other address as the party

addressed shall have previously designated by written notice to the serving

party, given in accordance with this Section 8.

 

9.             Successors and Assigns. 

This Agreement shall inure to the benefit of, and shall be binding upon,

the respective successors and assigns of Senior Lender, Subordinated Creditor

and the Borrower.  To the extent

permitted under the Senior Debt Documents, Senior Lender may, from time to

time, without notice to Subordinated Creditor, assign or transfer any or all of

the Senior Debt or any interest therein to any Person and, notwithstanding any

such assignment or transfer, or any subsequent assignment or transfer, the

Senior Debt shall, subject to the terms hereof, be and remain Senior Debt for

purposes of this Agreement, and every permitted assignee or transferee of any

of the Senior Debt or of any interest therein shall, to the extent of the

interest of such permitted assignee or transferee in the Senior Debt, be

entitled to rely upon and be the third party beneficiary of the subordination

provided under this Agreement and shall be entitled to enforce the terms and

provisions hereof to the same extent as if such assignee or transferee were

initially a party hereto.  Any Permitted

Assignee of the Dividend Note (a) shall be entitled 

 

 

11

 

to rely upon and be the third party beneficiary of

this Agreement and (b) shall be subject to the subordination provided

under this Agreement, to the same extent as if such Permitted Assignee were

initially a party hereto.

 

10.          Relative Rights.  This Agreement shall define the relative rights of

Senior Lender and Subordinated Creditor. Nothing in this Agreement shall (a)

impair, as between the Borrower and Senior Lender and as between the Borrower

and Subordinated Creditor, the obligation of the Borrower with respect to the

payment of the Senior Debt and the Subordinated Debt in accordance with their

respective terms or (b) affect the relative rights of Senior Lender or Subordinated

Creditor with respect to any other creditors of the Borrower.

 

11.          Conflict. In the event of any conflict between

any term, covenant or condition of this Agreement and any term, covenant or

condition of any of the Subordinated Debt Documents, the provisions of this

Agreement shall control and govern.

 

12.          Headings. The paragraph headings used in this

Agreement are for convenience only and shall not affect the interpretation of

any of the provisions hereof.

 

13.          Counterparts. This Agreement may be executed in one or

more counterparts, each of which shall be deemed an original, but all of which

together shall constitute one and the same instrument.

 

14.          Severability. In the event that any provision of this

Agreement is deemed to be invalid, illegal or unenforceable by reason of the

operation of any law or by reason of the interpretation placed thereon by any

court or governmental authority, the validity, legality and enforceability of

the remaining provisions of this Agreement shall not in any way be affected or

impaired thereby, and the affected provision shall be modified to the minimum

extent permitted by law so as most fully to achieve the intention of this

Agreement.

 

15.          Continuation of Subordination;

Termination of Agreement. This Agreement shall remain in full force and effect

until the indefeasible payment in full in cash of the Senior Debt and the

termination of all lending commitments under the Senior Debt Documents after

which this Agreement shall terminate without further action on the part of the

parties hereto.

 

16.          Applicable Law. This Agreement shall be governed by and

shall be construed and enforced in accordance with the internal laws of the

State of Illinois, without regard to conflicts of law principles.

 

17.          CONSENT TO JURISDICTION.  EACH OF SUBORDINATED CREDITOR AND THE BORROWER HEREBY

CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE

COUNTY OF COOK, STATE OF 

 

 

12

 

ILLINOIS

AND IRREVOCABLY AGREES THAT, SUBJECT TO SENIOR LENDER’S ELECTION, ALL ACTIONS

OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED

IN SUCH COURTS. EACH OF SUBORDINATED CREDITOR AND THE BORROWER EXPRESSLY

SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY

DEFENSE OF FORUM NON CONVENIENS.  EACH

OF SUBORDINATED CREDITOR AND THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY

AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON IT

BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO

SUBORDINATED CREDITOR AND THE BORROWER AT THEIR RESPECTIVE ADDRESSES SET FORTH

IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE

SAME HAS BEEN POSTED.

 

18.          WAIVER OF JURY TRIAL.   SUBORDINATED

CREDITOR, THE COMPANY AND SENIOR LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO

A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS

AGREEMENT, ANY OF THE SUBORDINATED DEBT DOCUMENTS OR ANY OF THE SENIOR DEBT

DOCUMENTS. EACH OF SUBORDINATED CREDITOR, THE COMPANY AND SENIOR LENDER

ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS

RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS

AGREEMENT AND THE SENIOR DEBT DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON

THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF SUBORDINATED CREDITOR, THE

COMPANY AND SENIOR LENDER WARRANTS AND REPRESENTS THAT EACH HAS HAD THE

OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH

KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

 

 

Balance of Page Intentionally Left

Blank

Signature Page Follows

 

 

13

 

                IN WITNESS WHEREOF, the parties hereto have caused

this Subordination and Intercreditor Agreement to be executed as of the date

first above written.

 

	

   

  	

  SUBORDINATED CREDITOR:

  
	

   

  	

   

  	

   

  
	

   

  	

  U-C

  HOLDINGS, L.L.C.,

  a Delaware limited liability company

  
	

   

  	

   

  	

   

  
	

   

  	

  By: Willis Stein & Partners, L.P.

  
	

   

  	

  Its: Managing Member

  
	

   

  	

   

  	

   

  
	

   

  	

  By: Willis Stein & Partners, L.L.C.

  
	

   

  	

   

  	

  Its: General Partner

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Avy H. Stein

  
	

   

  	

   

  	

  Name: Avy H. Stein

  
	

   

  	

   

  	

  Title: Managing Director

  
	

   

  	

   

  	

   

  
	

   

  	

  BORROWER:

  
	

   

  	

   

  	

   

  
	

   

  	

  CTN

  MEDIA GROUP, INC.,

  a Delaware corporation

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Neil H.

  Dickson

  
	

   

  	

  Name:

  	

  Neil H. Dickson

  
	

   

  	

  Its:

  	

  Chief Operating Officer

  
	

   

  	

   

  	

   

  
	

   

  	

  SENIOR LENDER:

  
	

   

  	

   

  	

   

  
	

   

  	

  LASALLE

  BANK NATIONAL ASSOCIATION, a national banking association, as Senior Lender

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Charles

  Corbisicro

  
	

   

  	

  Name:

  	

  Charles Corbisicro

  
	

   

  	

  Its:

  	

  Vice President

  

 

 

14

(SIGNATURE PAGE TO SUBORDINATION AND INTERCREDITOR

AGREEMENT)

Agreed to and acknowledged by

on this         day

of February, 2002:

 

 

 

	

  /s/ Daniel D.

  Davenport

  
	

  Daniel D. Davenport

  

 

 

15

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