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EXHIBIT 4.35
LOAN XX. X0000
XXXX XX. X0000
XXXXXX, XXX
XXX OF SUBORDINATION
BEFORE ME, the respective undersigned Notaries Public, and in the
presence of the witnesses hereinafter named and undersigned, personally came
and appeared the parties listed below, who, after being duly sworn, did state:
THIS ACT OF SUBORDINATION (this "Agreement") is made and entered into as
of July 1, 1996, by MCTC COMPANY ("MCTC") and MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY ("Mississippi One"), in favor of COBANK, ACB, formerly known
as the National Bank for Cooperatives ("CoBank").
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, MCTC, Mississippi One and CoBank hereby agree as follows:
SECTION 1. SUBORDINATION OF DEBT. MCTC and Mississippi One agree that
all obligations of Mississippi One to MCTC, whether direct or indirect,
absolute or contingent, secured or unsecured, due or to become due, now
existing or hereafter arising, including, without limitation, that certain
Note, dated July 1, 1996, drawn by Mississippi One to the order of MCTC, in the
face principal amount of $13,000,000 (all such obligations, collectively, the
"Subordinated Debt"), are and shall be subordinate in payment and right of
payment to the prior payment in full of all obligations of Mississippi One to
CoBank, whether direct or indirect, absolute or contingent, secured or
unsecured, due or to become due, now existing or hereafter arising, principal,
interest (accruing both before and after any default by, or insolvency or
bankruptcy of, Mississippi One) or other cost or charge, including, without
limitation, all obligations hereafter arising under that certain Amended and
Restated Continuing Guaranty, dated as of May 15, 1996, as amended by that
certain First Amendment and Supplement to Amended and Restated Continuing
Guaranty, dated as of even date herewith (as so amended and as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Mississippi One Guaranty"), made by Mississippi One for the benefit of CoBank
(all such obligations, collectively, the "CoBank Debt"). For purposes of this
Agreement, the CoBank Debt shall not be deemed to have been paid in full until
all loan agreements between CoBank and Mississippi One or any affiliate of
Mississippi One if, with respect to such affiliate, Mississippi One has
guaranteed the affiliate's obligations under such loan agreements, including,
without limitation, that certain Amended and Restated Loan Agreement, dated as
of May 15, 1996, as amended by that certain First Amendment and Supplement to
Amended and Restated Loan Agreement, dated as of even date herewith, providing
for a loan of up to $32,400,000, and that
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certain Loan Agreement, dated as of May 15, 1996, providing for a loan of up to
$5,000,000, all by and between CoBank and CTC Financial, Inc. (the foregoing
loan agreements, collectively, the "Loan Agreements"), shall have been
terminated and CoBank shall have received irrevocable payment of the CoBank
Debt in immediately available funds or in another manner satisfactory to
CoBank. MCTC agrees not to ask, demand, xxx for, take or receive from
Mississippi One, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment of or collateral for the payment of all
or any of the Subordinated Debt unless or until the CoBank Debt shall be paid
in full and, without the prior written consent of CoBank, will not exercise any
remedies available to it, whether by agreement, law or equity or otherwise, in
respect to the nonpayment of the Subordinated Debt, including, without
limitation, the acceleration of the Subordinated Debt.
SECTION 2. PRIORITIES OF SECURITY INTERESTS.
A. MCTC hereby subordinates any and all security interests or
liens it may now have or hereafter obtain or reserve with respect to any
property or rights of Mississippi One (the "Collateral"), collectively, the
"MCTC Security Interests"), to all security interests and liens now or
hereafter created in favor of CoBank in connection with any of the CoBank Debt,
including, without limitation, the security interest created by that certain
Security Agreement, dated as of September 27, 1994, as amended by that certain
Fisrt Amendment and Supplement to Security Agreement, dated as of May 15, 1996,
and by that Second Amendment and Supplement to Security Agreement, dated as of
even date herewith (as the same may be amended, modified, supplemented,
extended or restated from time to time, the "Security Agreement"), entered into
by Mississippi One for the benefit of CoBank, the lien created by that certain
Deed of Trust, Security Agreement and Fixture Filing, dated as of September 27,
1994, as amended by that certain First Amendment and Supplement to Deed of
Trust, Security Agreement and Fixture Filing, dated as of May 15, 1996, and by
that certain Second Amendment and Supplement to Deed of Trust, Security
Agreement and Fixture Filing, dated as of May 15, 1996 (as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Deed of Trust"), entered into by Mississippi One for the benefit of CoBank,
and the lien created by that certain Mortgage, dated as of even date herewith
(as the same may be amended, modified, supplemented, extended or restated from
time to time, the "Mortgage"), entered into by Mississippi One for the benefit
of CoBank (collectively, the "CoBank Security Interests").
B. The subordinations and priorities specified herein apply
irrespective of (i) the time or order of attachment or perfection of the
security interests or liens, (ii) the time or order of filing any financing
statements with respect to the security interests or liens or the time or order
of filing or recording any other documents evidencing the security interests or
liens or the time or order of the delivery or taking of possession of any of
the Collateral, (iii) the time of giving or failure to give notice of the
acquisition of such security interests or liens, (iv) the date
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on which any of the Subordinated Debt or CoBank Debt arises, or (v) any
priority granted by any principle of law or any statute.
C. The proceeds resulting from the enforcement of or the
realization on the MCTC Security Interests and all other proceeds received by
MCTC in respect of the MCTC Security Interests, including, without limitation,
insurance and condemnation proceeds, will be dealt with in such a way as to
give effect to the provisions of this Agreement and the priorities created and
established hereby.
SECTION 3. PROCEEDS HELD IN TRUST. In the event that MCTC shall
receive any proceeds from the sale, liquidation, casualty, condemnation or
other disposition of or realization on any Collateral or as a result of the
MCTC Security Interests at any time prior to the payment in full of the CoBank
Debt, then it shall hold such proceeds in trust for CoBank and shall promptly
pay over the same to CoBank for the application to the CoBank Debt.
SECTION 4. AGREEMENTS OF MCTC. MCTC covenants and agrees that CoBank
may possess, sell, lease or otherwise dispose of or realize on the Collateral
in any manner or order that CoBank, in its sole and absolute discretion,
chooses and without regard to the MCTC Security Interests therein, and MCTC
hereby waives any right it may have to require CoBank to marshal assets or any
similar right. Nothing contained in this Agreement shall in any way limit the
rights and remedies of CoBank under the Mississippi One Guaranty, the Security
Agreement, the Deed of Trust, the Mortgage, or under any other agreement or
instrument evidencing or relating to the CoBank Debt or the CoBank Security
Interests, or under applicable law. MCTC agrees that it will not commence, or
join with any creditor other than CoBank in commencing, any bankruptcy or
insolvency proceeding against Mississippi One. MCTC shall not transfer,
assign, pledge, encumber, negotiate or otherwise convey to any person any
interest in the Subordinated Debt unless MCTC shall have received the prior
written consent of CoBank. MCTC shall promptly notify CoBank of the creation
of any Subordinated Debt and of any payments on any of the Subordinated Debt.
SECTION 5. IN FURTHERANCE OF SUBORDINATION. MCTC agrees as follows:
A. Upon any distribution of all or any of the assets of
Mississippi One to its creditors upon the dissolution, winding up, liquidation,
arrangement or reorganization of Mississippi One, whether in any bankruptcy,
insolvency, arrangement, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshaling of the assets
and liabilities of Mississippi One or otherwise, any payment or distribution of
any kind (whether in cash, property or securities) which otherwise would be
payable or deliverable upon or with respect to the Subordinated Debt shall be
paid or delivered directly to CoBank for application (in the case of cash) to
or as collateral (in the case of non-cash
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property or securities) for the payment or prepayment of the CoBank Debt until
the CoBank Debt shall have been paid in full.
B. If any proceeding referred to in Clause A above is commenced
by or against Mississippi One after the date hereof, (i) CoBank is hereby
irrevocably authorized and empowered (in its own name or in the name of MCTC),
but shall have no obligation, to demand, xxx for, collect and receive every
payment or distribution referred to in Clause A above and give acquittance
therefor and to file claims and proofs of claim and take such other action
(including, without limitation, voting the Subordinated Debt or enforcing any
security interest or other lien securing payment of the Subordinated Debt) as
it may deem necessary or advisable for the exercise or enforcement of any of
its rights or interests hereunder; and (ii) MCTC shall duly and promptly take
such action as CoBank may request (a) to collect the Subordinated Debt for the
account of CoBank and to file appropriate claims or proofs of claim in respect
of the Subordinated Debt; (b) to execute and deliver to CoBank such powers of
attorney, assignments or other instruments as it may request in order to enable
it to enforce any and all claims with respect to, and any security interests
and other liens securing payment of, the Subordinated Debt; and (c) to collect
and receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the Subordinated Debt.
C. All payments or distributions upon or with respect to the
Subordinated Debt which are received by MCTC prior to the payment or prepayment
in full of the CoBank Debt shall be received in trust for the benefit of
CoBank, shall be segregated from other funds and property held by MCTC and
shall be forthwith paid over to CoBank in the same form as so received (with
any necessary endorsement) to be applied (in the case of cash) to or held as
collateral (in the case of non-cash property or securities) for the payment or
prepayment of the CoBank Debt.
SECTION 6. RIGHTS OF SUBROGATION. MCTC agrees that no payment or
distribution to CoBank pursuant to the provisions of this Agreement shall
entitle MCTC to exercise any rights of subrogation in respect thereof until the
CoBank Debt shall have been paid in full.
SECTION 7. OBLIGATIONS HEREUNDER NOT AFFECTED. The subordination of
the MCTC Security Interests provided hereby, the priority of CoBank Security
Interests in the Collateral as against the MCTC Security Interests in the
Collateral, the rights and interests of CoBank hereunder, and all agreements
and obligations of MCTC under this Agreement, shall remain in full force and
effect irrespective of (i) any lack of validity or enforceability of the
Mississippi One Guaranty or any other agreement or instrument relating to the
CoBank Debt or the CoBank Security
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Interests; (ii) any change, amendment, modification or extension in the time,
manner or place of payment of, or in any other term of, all or any of the
CoBank Debt or the CoBank Security Interests, or any documents evidencing the
CoBank Debt or the CoBank Security Interests, or any other amendment to or
waiver of or any consent to departure from the terms and conditions of the
Mississippi One Guaranty or any other agreement or instrument relating to the
CoBank Debt or the CoBank Security Interests; (iii) any exchange, release or
non-perfection of any collateral for the CoBank Debt, including, without
limitation, the Mississippi One Guaranty, the Security Agreement, the Deed of
Trust or the Mortgage; or (iv) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, MCTC in respect of this
Agreement other than as expressly provided herein, and CoBank shall not be
required to give MCTC notice of any such occurrence.
SECTION 8. WAIVER. Each of MCTC and Mississippi One hereby waives
promptness, diligence, notice of acceptance and any other notice with respect
to any of the CoBank Debt and this Agreement and any requirement that CoBank
protect, secure, perfect or insure any security interest or lien or any
property subject thereto or exhaust any right or take any action against
Mississippi One or any other person or entity or any collateral.
SECTION 9. SUBORDINATED DEBT LEGEND. Mississippi One and MCTC will
cause each instrument evidencing Subordinated Debt to be endorsed with the
following legend:
"The indebtedness evidenced by this instrument is subordinated to
the prior payment in full of the "CoBank Debt" (as defined in the
Act of Subordination hereinafter referred to) pursuant to, and to
the extent provided in that certain Act of Subordination, dated
as of July 1, 1996 by the maker hereof and payee named herein in
favor of CoBank, ACB."
In the case of any Subordinated Debt which is not evidenced by an instrument,
upon CoBank's request, Mississippi One and MCTC shall cause such Subordinated
Debt to be evidenced by an appropriate instrument or instruments endorsed with
the above legend.
SECTION 10. FURTHER ASSURANCES. MCTC and Mississippi One shall do such
further acts and things and execute, deliver, register and file such further
deeds, documents and assurances which may be reasonably required to give full
effect to the intent and purpose of this Agreement. None of the parties hereto
shall take any steps or do anything whereby the priorities provided for herein
may be defeated or impaired.
SECTION 11. RIGHTS AND REMEDIES CUMULATIVE. The subordinations and
priorities set forth herein and the rights and remedies of CoBank hereunder are
in addition to, and not in derogation of the rights and remedies of CoBank
under the Uniform Commercial Code of the State of Louisiana and other
applicable law.
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SECTION 12. CONTINUATION OF AGREEMENT. This Agreement shall be a
continuing agreement until the complete termination and release of all of
CoBank Security Interests in the Collateral and the payment in full of all
CoBank Debt. This Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the CoBank Debt is
rescinded or must otherwise be returned by CoBank upon the insolvency,
bankruptcy or reorganization of Mississippi One, Mercury Cellular, Inc., CTC
Financial, Inc., or otherwise, all as though such payment had not been made.
SECTION 13. NOTICES.
All notices to the parties hereto shall be in writing and shall
be delivered in person, telecopied or sent by registered or certified mail to
the following addresses:
If to CoBank, to:
CoBank, ACB
000 Xxxxxxxx Xxxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Rural Utility Banking Group
Fax No: (000) 000-0000
If to MCTC, to:
Mercury Cellular Telephone Company
One Lakeshore Drive, Suite 1495
X.X. Xxx 0000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attn.: Xxxxx Xxxxx; cc: Xxxxxx X. Xxxxxxx
Fax No: (000) 000-0000
If to Mississippi One, to:
Mississippi One Cellular Telephone Company
One Lakeshore Drive, Suite 1495
X.X. Xxx 0000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attn.: Xxxxx Xxxxx; cc: Xxxxxx X. Xxxxxxx
Fax No: (000) 000-0000
or to such other address as may be designated by any party hereto in a written
notice to the other party hereto. All notices hereunder shall be deemed to be
duly given and received on the date of
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delivery if delivered personally, on the date telecopied if telecopied, or on
the third business day after the deposit in the United States Mail if mailed by
prepaid first class registered or certified mail, properly addressed with
appropriate postage paid thereon.
SECTION 14. ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the
entire understanding of the parties with respect to the subject matter hereof.
It may not be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
or discharge is sought.
SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon MCTC, Mississippi One and their respective successors and assigns and
shall inure to the benefit of CoBank and its successors and assigns.
SECTION 16. GOVERNING LAW. This Agreement shall be governed, construed
and enforced in accordance with the laws of the State of Louisiana without
regard for its choice of law rules.
[Signatures on next page]
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THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below, and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
duly authorized officers of the respective parties, after a due reading of the
whole.
At Lake Charles, Louisiana, on July 1, 1996.
MERCURY CELLULAR TELEPHONE COMPANY
By: /s/ XXXXXX XXXXX
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Name: Xxxxxx Xxxxx
-----------------------------------
Title: President
----------------------------------
Attest: /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
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Title: Secretary
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[CORPORATE SEAL]
Witnesses to all signatures:
/s/ XXXXXX XXXX
--------------------------------
Witness
/s/ XXX XXXXXXXX
--------------------------------
Witness
/s/ [ILLEGIBLE]
--------------------------------
Notary Public
My commission expires: lifetime
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[NOTARIAL SEAL]
(Signatures continued on next page)
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Loan Xx. X0000
Xxxx Xx. X0000
(Signatures continued from previous page)
At Lake Charles, Louisiana, on July 1, 1996.
MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------------------
Title: President
----------------------------------
Witnesses to signature:
/s/ XXXXXX XXXX
---------------------------------
Witness
/s/ XXX XXXXXXXX
---------------------------------
Witness
/s/ [ILLEGIBLE]
---------------------------------
Notary Public
My commission expires: litetime
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[NOTARIAL SEAL]
(Signatures continued on next page)
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Loan Xx. X0000
Xxxx Xx. X0000
(Signatures continued from previous page)
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ XXXX XXX XXXXXXX
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Name: Xxxx Xxx Xxxxxxx
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Title: Vice President
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Witnesses to signature:
/s/ XXXXXX XXXXXX
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Witness
/s/ [ILLEGIBLE]
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Witness
/s/ XXXXXXXX X. XXXXXX
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Notary Public
My commission expires: April 25, 1999
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[NOTARIAL SEAL]
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