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EXHIBIT 10.23
EXHIBIT 2(A)
FORM OF NOTE
[attached]
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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED
UNLESS THE COMPANY HAS RECEIVED A WRITTEN OPINION FROM COUNSEL IN FORM
AND SUBSTANCE SATISFACTORY TO THE COMPANY STATING THAT SUCH TRANSFER IS
BEING MADE IN COMPLIANCE WITH ALL APPLICABLE FEDERAL AND STATE
SECURITIES LAWS.
HORIZON PERSONAL COMMUNICATIONS, INC.
13% SENIOR SUBORDINATED PROMISSORY NOTE
DUE FEBRUARY 14, 2001
$13,000,000 Charlotte, North Carolina
February 15, 2000
FOR VALUE RECEIVED, the undersigned, HORIZON PERSONAL COMMUNICATIONS,
INC., an Ohio corporation (the "Company"), promises to pay to the order of FIRST
UNION INVESTORS, INC., a North Carolina corporation, or its registered assigns
(the "Holder"), the principal sum of Thirteen Million and No/100 Dollars
($13,000,000) on February 14, 2001, with interest thereon from time to time as
provided herein.
1. BRIDGE NOTE PURCHASE AGREEMENT; CONVERSION AGREEMENT. This
senior subordinated promissory note (this "Note") is the Note issued pursuant to
the Bridge Note Purchase Agreement, dated as of the date hereof (as the same may
be amended, supplemented or otherwise modified from time to time, the "Purchase
Agreement"), between the Company and the purchaser named therein, and the Holder
is subject to the terms and entitled to the benefits of this Note, the Purchase
Agreement and the Conversion Agreement and may enforce the agreements of the
Company contained herein and therein and exercise the remedies provided for
hereby and thereby or otherwise available in respect hereto and thereto.
Capitalized terms used herein without definition have the meanings assigned
thereto in the Purchase Agreement.
2. INTEREST. Subject to the terms and conditions hereof, the
Company promises to pay interest on the principal amount of this Note at the
rate of 13% per annum, payable quarterly in arrears on May 15, 2000, August 15,
2000, November 15, 2000, and February 14, 2001 (each date upon which interest
shall be so payable, an "Interest Payment Date"), beginning on May 15, 2000.
Interest on this Note shall accrue from the date of issuance until repayment of
the principal and payment of all accrued interest and premium in full, shall be
computed on the basis of a 364-day year and shall be paid, at the Company's
option, by (i) wire transfer of immediately available funds to an account
designated by the Holder or (ii) the issuance of additional Notes of like tenor
to the Holder in the amount of interest payable on such date in substantially
the form attached hereto.
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Notwithstanding the foregoing provisions of this Section 2, but subject to
applicable law, upon the occurrence and during the continuance of an Event of
Default, the principal of and overdue interest on this Note shall bear interest,
at the election of the Holder, from the date of the occurrence of such Event of
Default until such Event of Default is cured or waived, payable on demand in
immediately available funds, at the rate of 15% per annum.
3. OPTIONAL PREPAYMENT.
(a) Subject to Section 6 and the terms of the Conversion
Agreement, upon notice given to the Holder as provided in Section 3(b),
the Company, at its option, may at any time prepay all or any portion
of this Note, by paying an amount equal to the outstanding principal
amount of this Note, or the portion of this Note called for prepayment,
together with interest accrued and unpaid thereon to the date fixed for
prepayment, and all other amounts due under this Note and the Purchase
Agreement.
(b) Subject to Section 6 and the terms of the Conversion
Agreement, the Company shall give written notice of prepayment of this
Note or any portion thereof pursuant to Section 3(a) not less than 10
nor more than 20 days prior to the date fixed for such prepayment. Upon
the giving of notice of prepayment by the Company, the Company
covenants and agrees that it will prepay, on the date therein fixed for
prepayment, this Note or the portion hereof so called for prepayment,
by paying an amount equal to the outstanding principal amount hereof or
the portion hereof so called for prepayment together with interest
accrued and unpaid thereon to the date fixed for such prepayment, and
all other amounts due under this Note and the Purchase Agreement.
(c) Subject to Section 6 and the terms of the Conversion
Agreement, all optional prepayments under Section 3 of this Note shall
be applied first to all costs, expenses, indemnities and other amounts
payable hereunder and under the Purchase Agreement, then to payment of
default interest, if any, then to payment of accrued interest and
thereafter to payment of principal in the pro rata order of the
scheduled maturities thereof.
4. MANDATORY PREPAYMENTS.
(a) Subject to Section 6 and the terms of the Conversion
Agreement, if, at any time while this Note is outstanding, any of the
following events occurs (each such event, a "Mandatory Prepayment
Event"), then, at the option of the Holder, the Company shall make a
mandatory prepayment of this Note in whole or in part at the time of
such Mandatory Prepayment Event:
(i) the consummation of any Organic
Change;
(ii) the consummation of an Initial
Public Offering; or
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(iii) the consummation of a Permanent
Financing; provided, however, that
neither the Company's issuance of
debt securities constituting
Permitted Senior Debt nor the
Company's issuance of equity
securities in a private placement
which yields gross proceeds in an
aggregate amount of less than
$20,000,000 shall constitute a
Permanent Financing for purposes of
this Section 4(a)(iii).
(b) Subject to Section 6 and the terms of the Conversion
Agreement, the Company shall give written notice to the Holder of any
of the Mandatory Prepayment Events described in this Section 4 not less
than 15 nor more than 60 days prior to the proposed closing date
thereof describing in reasonable detail such transaction and the
proposed closing date. Upon receipt of such notice, the Holder shall
have a period of 10 days in which to notify the Company in writing of
the principal amount of this Note or portion thereof to be prepaid. The
parties agree that the amount to be prepaid by the Company shall not
exceed the aggregate amount of proceeds received by the Company in
connection with the occurrence of an event under Section 4(a)(i) or
Section 4(a)(iii). Upon receipt of such written notice from the Holder,
the Company covenants and agrees it will prepay, on the closing date of
such transaction, this Note or the portion thereof subject to
prepayment by paying an amount equal to the outstanding principal
amount hereof subject to prepayment together with interest accrued and
unpaid thereon. Each such prepayment shall be applied as provided in
Section 4(d) hereof.
(c) Subject to Section 6 and the terms of the Conversion
Agreement, if, at any time while this Note is outstanding, a Change of
Control occurs (a "Change of Control Event"), then, at the option of
the Holder, the Company shall make a mandatory prepayment of this Note
in whole or in part at the time of such Change of Control Event.
Subject to Section 6, the Company shall give written notice to the
Holder of the Change of Control Event described in this Section 4 not
less than 15 nor more than 45 days prior to the proposed closing date
thereof describing in reasonable detail such transaction and the
proposed closing date. Upon receipt of such notice, the Holder shall
have a period of 10 days in which to notify the Company in writing of
the principal amount of this Note or portion thereof to be prepaid.
Upon receipt of such written notice from the Holder, the Company
covenants and agrees it will prepay, on the closing date of such
transaction, this Note or the portion thereof subject to prepayment by
paying an amount equal to the outstanding principal amount hereof
subject to prepayment together with interest accrued and unpaid thereon
and a prepayment premium equal to 1% of the outstanding principal
amount of the Note. Each such prepayment shall be applied as provided
in Section 4(d) hereof.
(d) Subject to Section 6 and the terms of the Conversion
Agreement, all optional prepayments under Section 4 of this Note shall
be applied first to all costs, expenses,
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indemnities and other amounts payable hereunder and under the Purchase
Agreement, then to payment of default interest, if any, then to payment
of accrued interest and thereafter to payment of principal in the pro
rata order of the scheduled maturities thereof.
5. DEFAULTS AND REMEDIES.
(a) Events of Default. An "Event of Default" shall occur
hereunder if:
(i) the Company shall default in the payment of
the principal of this Note, when and as the same shall become
due and payable, whether at maturity or at a date fixed for
prepayment or by acceleration or otherwise; or
(ii) the Company shall default in the payment of
any installment of interest on this Note, when and as the same
shall become due and payable, and such default shall continue
for a period of three Business Days; or
(iii) the Company shall default in the due
observance or performance of any covenant, condition or
agreement on the part of the Company to be observed or
performed pursuant to Sections 7(f), 7(i), 7(l), 7(g), 8 or 9
of the Purchase Agreement, and such default is not remedied by
the Company or its Subsidiaries or waived by the Holder within
five Business Days after receipt by the Company, its
Subsidiaries or the Parent of written notice from the Holder
of such default; or
(iv) the Company or any of its Subsidiaries shall
default in the due observance or performance of any covenant,
condition or agreement to be observed or performed pursuant to
the terms of this Note or pursuant to the terms of the
Purchase Agreement and such default is not remedied by the
Company or its Subsidiaries or waived by the Holder within 30
days after receipt by the Company, its Subsidiaries or the
Parent of written notice from the Holder of such default; or
(v) any representation, warranty, certification
or statement made by or on behalf of the Company, the Parent
or any of its Subsidiaries in the Purchase Agreement, the
Note, or the other Transaction Documents or in any certificate
delivered pursuant hereto or thereto shall have been incorrect
in any material respect when made; or
(vi) an Event of Default (as defined in the
Credit Agreements) under either of the Credit Agreements
occurs; or
(vii) the Company shall default (as principal or
guarantor) in the payment of any Indebtedness (other than the
Note or the Indebtedness arising under the Credit Agreements)
in an amount, individually or in the aggregate, in excess of
$250,000
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when and as the same shall become due and payable whether at
stated or scheduled maturity, by acceleration or otherwise, or
the Company shall default in the performance or observance of
any covenant, condition or agreement contained in any such
Indebtedness, if, in each case, the effect of such failure to
pay or perform or observe is to cause or permit the holder or
holders thereof to cause such Indebtedness to become or be
declared, to be prepaid, redeemed, purchased or defeased due
prior to its stated maturity; or
(viii) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of
competent jurisdiction seeking (A) relief in respect of the
Company or of a substantial part of its property or assets,
under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (B) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or a similar official for the Company or for a
substantial part of its property or assets, or (C) the winding
up or liquidation of the Company; and such proceeding or
petition shall continue undismissed for 60 days, or an order
or decree approving or ordering any of the foregoing shall be
entered; or
(ix) the Company shall (A) voluntarily commence
any proceeding or file any petition seeking relief under Title
11 of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (B) consent to the institution
of, or fail to contest in a timely and appropriate manner, any
proceeding for the filing of any petition described in
paragraph (viii) of this Section 5(a), (C) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company,
or for a substantial part of its property or assets, (D) file
an answer admitting the material allegations of a petition
filed against it in any such proceeding, (E) make a general
assignment for the benefit of creditors, (F) become unable,
admit in writing its inability or fail generally to pay its
debts as they become due or (G) take any action for the
purpose of effecting any of the foregoing; or
(x) one or more judgments, writs or warrants of
attachment, executions or similar processes for the payment of
money in an aggregate amount in excess of $250,000 (to the
extent not covered by insurance) shall be rendered against the
Company and the same shall remain undischarged for a period of
30 days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of the Company to
enforce any such judgment; or
(xi) any ERISA Event shall have occurred with
respect to a Plan or Multiemployer Plan of the Company or any
of its Subsidiaries and the sum
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(determined as of the date of occurrence of such ERISA Event)
of the amount of its unfunded benefit liabilities, as defined
in Section 4001(a)(18) of ERISA (the "Insufficiency") of such
Plan and the Insufficiency of any and all other Plans of the
Company with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Company and
its ERISA Affiliates related to such ERISA Event) exceeds, or
would be reasonably likely to exceed, $250,000; or
(xii) any Subsidiary Guaranty or any provision
thereof shall cease to be in full force and effect or any
Subsidiary Guarantor or any Person acting by or on behalf of
any Subsidiary Guarantor shall deny or disaffirm any
Subsidiary Guarantor's obligations under the Subsidiary
Guaranty; or
(xiii) any one or more licenses, permits,
accreditations or authorizations of the Company or any of its
Subsidiaries shall be suspended, limited or terminated or
shall not be renewed, or any other action shall be taken, by
any Governmental Authority in response to any alleged failure
by the Company or any of its Subsidiaries to be in compliance
with applicable Requirements of Law, and such action,
individually or in the aggregate, would be reasonably likely
to have a Material Adverse Effect; or
(xiv) there shall occur (A) any uninsured damage
to, or loss, theft or destruction of, any properties of the
Company and its Subsidiaries having an aggregate fair market
value in excess of $250,000 or (B) any labor dispute, act of
God or other casualty that has or would be reasonably likely
to have a Material Adverse Effect.
(b) Acceleration. If an Event of Default occurs under
Section 5(a)(viii) or (ix), then the outstanding principal of and
interest and premium (as determined pursuant to Section 3(c) and
Section 4(d) hereof) on this Note shall automatically become
immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are expressly waived. If any other
Event of Default occurs and is continuing, the Holder by written notice
to the Company, may (subject to Section 6 hereof) declare the principal
of and interest and premium (as determined pursuant to Section 3(c)
hereof) on this Note to be due and payable immediately. Upon any such
declaration of acceleration, such principal, interest and premium shall
become immediately due and payable and, subject to Section 6 hereof,
the Holder shall be entitled to exercise all of its rights and remedies
hereunder and under the Purchase Agreement whether at law or in equity.
6. SUBORDINATION. The Company, for itself and its successors and
assigns, covenants and agrees, and each Holder of this Note, by its acceptance
hereof, shall be deemed to have agreed, that the payment from whatever source of
the indebtedness of the Company evidenced by this Note,
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including the principal hereof and interest and premium hereon, shall only be
subordinate and junior in right of payment to the prior payment in full of the
Permitted Senior Debt of the Company.
7. SUITS FOR ENFORCEMENT. Subject to Section 6, upon the
occurrence and continuance of any one or more Events of Default, the Holder may
proceed to protect and enforce its rights and remedies hereunder by suit in
equity, action at law or by other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in the Purchase
Agreement or this Note or in aid of the exercise of any power granted in the
Purchase Agreement or this Note, or may proceed to enforce the payment of the
Note, or to enforce any other legal or equitable right of the holders of the
Note.
8. REMEDIES CUMULATIVE. No remedy herein conferred upon the
Holder is intended to be exclusive of any other remedy and each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise. To the extent permitted by applicable law, and subject to the notices
required to be provided by the Holder to the Company, the Company and the Holder
waive presentment for payment, demand, protest and notice of dishonor.
9. HOLDER; TRANSFER.
(a) The term "Holder" as used herein shall also include
any transferee of this Note whose name has been recorded by the Company
in the register referred to in Section 9(b). Each transferee of this
Note acknowledges that this Note has not been registered under the
Securities Act, and may be transferred only upon receipt by the Company
of an opinion of counsel, which opinion shall be satisfactory in form
and substance to the Company, stating that this Note may be transferred
without registration under the Securities Act in reliance on an
exemption therefrom.
(b) The Company shall maintain a register in its office
for the purpose of registering the Notes and any transfer thereof,
which register shall reflect and identify, at all times, the ownership
of any interest in the Notes. Upon the issuance of this Note, the
Company shall record the name of the initial purchaser of this Note in
such register as the first Holder. Thereafter, the Company shall duly
record the name of a transferee on such register promptly after receipt
of the opinion referred to in Section 9(a) above.
10. PAYMENTS. All payments and prepayments of principal of and
interest and premium on this Note shall be made in lawful money of the United
States of America.
11. COVENANTS BIND SUCCESSORS AND ASSIGNS. All the covenants,
stipulations, promises and agreements contained in this Note by or on behalf of
the Company shall bind its successors and assigns, whether so expressed or not.
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12. GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of North Carolina regardless of conflicts
of law principles.
13. VARIATION IN PRONOUNS. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
14. HEADINGS. The headings in this Note are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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IN WITNESS WHEREOF, this Note has been executed by the Company by its
duly authorized officer as of the day and year first above written.
HORIZON PERSONAL COMMUNICATIONS, INC.
By:
----------------------------------
Name:
Title:
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