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EXHIBIT 4.37
SUBORDINATION AGREEMENT
This Subordination Agreement ("Agreement") is made by and between Xxxxxx
X. Xxxxxxx, Xxxxxxx X. Xxxxxxx, XX, Xxxxxxx X. Xxxxxxx, III and Xxxx X. Xxxxxx,
III (all of whom are collectively referred to herein as "Lenders"),
Mississippi-34 Cellular Corporation, a Mississippi corporation ("Company") and
Mercury, Inc., a Louisiana corporation ("MLA").
WHEREAS, Lenders have loaned the Company certain monies as evidences by 6
promissory notes, copies of which are attached hereto ("Subordinated
Obligations");
WHEREAS, the total current outstanding balance owing on the Subordinated
Obligations is $50,000; and
WHEREAS, all of the parties hereto and certain other individual
shareholders of the Company have entered into that certain Securities Purchase
Agreement dated as of November 13, 1992 ("Purchase Agreement") in which MLA has
agreed to purchase 51% of the outstanding stock of the Company.
Now, therefore, in order to induce MLA to enter into the Purchase
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lenders do hereby jointly
and severally agree and covenant as follows:
1. Agreement to Subordinate. All amounts owing by the Company
under or in respect of the Subordinated Obligations are and shall be
subordinate, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of all indebtedness and obligations of the
Company, now or hereafter owing
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by the Company whether for principal, interest, premium fees, expenses or
otherwise (all such obligations and indebtedness being referred to hereinafter
as the "Senior Obligations"). For purposes of this Agreement, the Senior
Obligations shall not be deemed paid in full until the owners or holders of the
Senior Obligations have received full payment in cash. After full payment of
the Senior Obligations, the Company shall make payments on the Subordinated
Obligations only out of cash flow of the Company.
2. No Payment on Subordinated Obligations. None of the Lenders
shall ask, demand, xxx for, take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any manner, and
hereby waive any provision of the Subordinated Obligations requiring payment
of all or any of the Subordinated Obligations, unless and until the Senior
Obligations shall have been paid in full; nor will any Lender transfer, assign,
negotiate or otherwise convey to any person, firm or corporation any interest
in or the whole of the Subordinated Obligations unless and until the Senior
Obligations have been paid and discharged in full.
3. Priority on Distribution. In the event of any distribution,
division or application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any part of the assets or properties
of the Company or the proceeds thereof to creditors of the Company or upon any
indebtedness of the Company, by reason of the liquidation, dissolution or other
winding up of the Company or Company's
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business, or in the event of any sale, receivership, insolvency or bankruptcy
proceedings or assignment for the benefit of creditors, or any proceeding by or
against the Company for any relief under any bankruptcy or insolvency law or
laws relating to the relief of debtors, readjustments of indebtedness,
reorganization, compositions or extensions, then and in any such event any
payment or distribution of any kind or character, either in cash, securities or
other property which shall be payable or deliverable upon or with respect to
any or all indebtedness of the Company to any Lender for or on account, of
the Subordinated Obligations shall be paid or delivered directly to the Company
for application upon the Senior Obligations in such order and manner as the
Company shall elect, whether the Senior Obligations to which such payment may
be applied be then due or not due. Each Lender hereby irrevocably authorizes
the Company to demand, xxx for, collect and receive every such payment or
distribution and to give full acquittances therefore and to file claims and
take such other steps and proceedings, in the Company's name or in the name of
any Lender, or otherwise, as the Company deems suitable for the enforcement of
this Agreement.
4. Lenders' Receipt. Should any payment or distribution or
security or proceeds thereof be received by any Lender upon or with respect to
any indebtedness evidenced by a Subordinated Obligation prior to the
satisfaction in full of all of the Senior Obligations, such Lender shall
deliver the same to the Company in precisely the form received (with any
endorsements necessary to effect collection
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or transfer) for application upon the Senior Obligations and until so
delivered, the same shall be held in trust by the Company as its property. If
a Lender shall fail, neglect or refuse to make any such endorsement or
assignment, the Company or any of its officers are hereby authorized to make
the same.
5. No Proceedings. So long as any of the Senior Obligations remain
unpaid, no Lender shall commence, or join with any creditor in commencing, any
proceeding referred to in Section 3 above.
6. Lenders' Receipts. All payments or distributions upon or with
respect to the Subordinated Obligations which are received by a Lender contrary
to the provisions of this Agreement shall be received in trust for the benefit
of the Company, shall be segregated from other funds and property held by the
Lender and shall be forthwith paid over to the Company 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 Senior Obligations.
7. Additional Borrowings. At any time and from time to time,
without notice to any Lender, the Company may enter into any agreement or
agreements with other lenders creating new or additional debt, extend and renew
the payment of any debt for any term or terms, take and release collateral
and/or security, accept and receive payments upon the Senior Obligations,
grant indulgences and compromise claims and do anything generally with respect
to the
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Senior Obligations without in any manner impairing or altering any right or
remedy conferred upon the Company or intended to be conferred upon the Company
under the terms of this Agreement.
8. Rights of Subrogation. No payment or distribution by the
Company on the Senior Obligations shall entitle any Lender to exercise any
rights or subrogation in respect thereof until the Senior Obligations have been
paid in full.
9. Legend; Further Assurances. Each Lender and the Company will
cause each instrument evidencing the Subordinated Obligations to be endorsed
with the following legend:
This Note and the indebtedness evidenced hereby is subordinated in
right of payment to the prior payment in full of the Senior
Obligations (as defined in the Subordination Agreement hereinafter
referred to) pursuant to, and to the extent provided in, that
certain Subordination Agreement dated as of November 20, 1992
executed by the maker hereof and the payee named herein in favor of
maker.
Each Lender and the COmpany will each, at its expense and at any time and from
time to time, promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable or
that the Company may reasonably request, in order to protect any right or
interest granted or purported to be granted in this Agreement or to enable the
Company to exercise and enforce its rights and remedies hereunder.
10. Representations and Warranties. Each Lender represents and
warrants as follows:
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a. The maximum aggregate principal amount of the Subordinated
Obligations does not exceed $50,000 and no default exists in respect of any
such Subordinated Obligation.
b. Lenders own the Subordinated Obligations now outstanding free and
clear of any lien, security interest, charge or encumbrance.
c. This Agreement constitutes a legal, valid and binding obligation of
Lender, enforcable in accordance with these terms.
11. Amendments. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by any Lender or the Company herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Company and MLA, and then such waiver, amendment or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
12. Termination. This Agreement shall terminate upon the
termination of that certain Option Agreement of even date hereof between the
parties hereto and certain other shareholders of the Company ("OPTION
AGREEMENT") unless MLA acquires a majority interest in the common stock of the
Company pursuant to the Option Agreement or unless there is a breach by the
Sellers (as defined in the Option Agreement) of that certain Repurchase
Agreement of even date hereof between the parties hereto and certain other
shareholders of the Company.
13. Waiver. Any waiver, forbearance, failure or delay by the
Company in exercising any right, power or remedy, simultaneous or later shall
not preclude the further, simultaneous or later
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excise thereof, and every right, power and remedy of the Company shall continue
in full force and effect until such right, power or remedy is specifically
waived in writing executed by the Company and MLA. The remedies herein
provided are cumulative and non-exclusive of any remedies provided by law.
14. Legal Fees. If any party to this Agreement shall employ legal
counsel to protect his or its rights hereunder or to enforce any term or
provision herein, then the party not prevailing in any such action shall pay
the prevailing party all of his or its reasonable attorneys fees and expenses
incurred in such action.
15. Notices. All notices and other communications provided for
herein shall be in writing, duly signed and shall be delivered by hand, by
certified mail postage prepaid return receipt requiested, by confirmed
facsimile transmission or by overnight delivery service to the respective party
at the following address or to such other address as each party may hereafter
designate in writing in accordance with the provisions of this section:
Xxxxxx X. Xxxxxxx
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Xxxxxxx X. Xxxxxxx, XX
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
(000) 000-0000
Xxxxxxx X. Xxxxxxx, III
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
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Xxxx X. Xxxxxx, III
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Mercury, Inc.
CM Tower
Xxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Mississippi-34 Cellular Corporation:
CM Tower
Xxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
All such notices and other communications shall be deemed to have been duly
delivered and received (a) on the date of delivery by hand, (b) two days
following prepaid deposit with an overnight delivery service, (c) on the date
of receipt (as shown on the return receipt) if mailed by certified mail postage
prepaid return receipt requested, or (d) one day after confirmed facsimile
transmission, as the case may be.
16. Entire Agreement; Severability. This Agreement and the Purchase
Agreement set forth the entire understanding of the parties hereto concerning
the subordination of the Subordinated Obligations and supersede all previous
agreements and understandings among them concerning such matters. If any
provisions of this Agreement shall be held invalid or unenforceable, this
Agreement shall be construed as if not containing those provisions, and the
rights and obligations of the parties hereto shall be construed and enforced
accordingly.
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17. Continuing Agreement. This Agreement is a continuing agreement
of subordination and the Company may, from time to time and without notice to
the Lenders, borrow money and make other financial arrangements in reliance
hereon. This Agreement shall be binding upon and inure to the benefit of the
Company and each Lender and their respective successors and assigns, until the
Subordinated Obligations shall have been paid in full.
18. Governing Law. This Agreement shall be governed by and
construed in accordance with, the internal laws of the State of Mississippi.
19. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Witness our signatures on the dates indicated below to be effective as of
November 20, 1992.
Date: 11/19/92 /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
Date: 11/19/92 /s/ XXXXXXX X. XXXXXXX, XX
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Xxxxxxx X. Xxxxxxx, XX
Date: 11/19/92 /s/ XXXXXXX X. XXXXXXX, III
-------- -------------------------------------------
Xxxxxxx X. Xxxxxxx, III
Date: 11/19/92 /s/ XXXX X. XXXXXX, III
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Xxxx X. Xxxxxx, III
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MISSISSIPPI-34 CELLULAR CORPORATION
Date: 11/19/92 By: /s/ XXXXXXX X. XXXXXXX, III
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Xxxxxxx X. Xxxxxxx, III,
President
MERCURY, INC.
Date: 11/19/92 By: /s/ XXXXXXX X. XXXXXXX, XX.
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Xxxxxxx X. Xxxxxxx, Xx.
Xxxxxxxx/XXX
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XXXXXXXXXXX 00
X/X - XXXX XXXX STOCKHOLDERS
ACCT 4-100-2530-000
SHAREHOLDER AMOUNT
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Xxxxxx X. Xxxxxxx 8,000.00 was 16,500
Xxxxxxx X. Xxxxxxx, XX 14,000.00 was 17,500
Xxxxxxx X. Xxxxxxx, III 14,000.00 was 17,500
Xxxx X. Xxxxxx, III 14,000.00 was 25,000
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50,000.00
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Shareholders of Mississippi 34 Cellular Corporation
Mercury Inc. 51%
Xxxxx Xxxxxx 25%
Xxxxxx Cable Vision
000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
X.X. Xxxxxx, Xx. 1.8%
Young, Scanlan, Xxxxxxx
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Xxxxxx Xxxxxxx 3.3%
000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx, III 5.7%
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxx Xxxxxxx 1.8%
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx, III 5.7%
0000 Xxxx Xxx Xxxxx
Xxxxxxx, XX 00000
Xxxx X. Xxxxxx, III 5.7%
Cotton Communications
0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx X-000
Xxxxxxx, XX 00000
