AMENDMENT TO LOAN AGREEMENT
AMENDMENT TO LOAN AGREEMENT ("AMENDMENT"), dated as of ___________, 2000,
made by and between HORIZON PERSONAL COMMUNICATIONS, INC. (hereinafter called
the "Borrower"), a corporation existing under the laws of the State of Ohio and
RURAL TELEPHONE FINANCE COOPERATIVE (hereinafter sometimes called the "Lender"
and sometimes called the "RTFC"), a South Dakota cooperative association.
WHEREAS, Borrower was a party to a certain Loan Agreement dated as of
August 29, 1997 (the "1997 Loan Agreement") between itself and RTFC providing
for an extension of credit as evidenced by a secured promissory note designated
OH 803-A-01 in the principal amount of $23,557,965;
WHEREAS, the Borrower is a party to a certain Loan Agreement (the "2000
Loan Agreement") dated ___________________, 2000 by and between itself and RTFC
providing for an extension of credit as evidenced by a secured promissory note
designated OH 803-9002 in the principal amount of $40,500,000; and
WHEREAS, under the terms of the 2000 Loan Agreement, the extension of
credit and advancement of funds called for in the 2000 Loan Agreement is
conditioned upon the amendment of certain terms and conditions of the 1997 Loan
Agreement;
NOW THEREFORE the parties agree to the following amendments to the 1997
Loan Agreement:
1. Section 1 is amended to add the following definition:
"Annual Operating Cash Flow" for any fiscal year shall mean the sum of
(a) pre-tax income, or deficit, as the case may be (excluding extraordinary
gains, the write-up of any asset and any investment income or loss), (b)
total interest expense (including capitalized, accreted or paid-in-kind
interest), and (c) depreciation and amortization expense, as calculated on
a consolidated basis for the Borrower and all its Subsidiaries, plus any
equity capital raised by the Borrower over and above the corresponding per
annum amounts set forth in Schedule 1, Items 8B and C of of Borrower's 2000
Loan Agreement.
2. Section 6.04 is amended to read as follows:
6.04. Financial Covenants. To operate its business as to achieve on the
last day of each fiscal year ending December 31st, the thresholds set forth
below.
(a) Annual Operating Cash Flow: Borrower shall achieve Annual Operating
Cash Flow as in amounts in excess of:
2000 N/A 2002 $ 6,482,000
2001 N/A 2003 $ 17,902,000
2004 and thereafter $ 29,015,000
(b) Minimum Population Coverage: Borrower shall design and build-out its
PCS network so that the area covered by the Borrower in its markets
(including network and wholesale markets) for which full service is
available to subscribers shall have a population equal to or greater
than the numbers established as of the calendar year-end set forth
below as follows:
2000 2,904,000
2001 3,113,000
2002 and thereafter 3,129,000
(c) Wireless Subscribers: Borrower shall have total wireless subscribers
equal to or greater than the numbers established as follows:
2000 39,000 2002 102,000
2001 70,000 2003 134,000
2004 and thereafter 166,000
(d) Debt Service Coverage Ratio: Borrower shall achieve a DSC of an amount
that exceeds the ratio set forth below:
2000 N/A 2003 1.10:1.0
2001 1.0:1.0 2004 1.10:1.0
2002 1.0:1.0 2005 and thereafter 1.25:1.0
(e) Leverage Ratio: Borrower shall achieve a Leverage Ratio of an amount
not exceeding the ratio set forth below:
2000 N/A 2003 6.0:1.0
2001 N/A 2004 5.0:1.0
2002 10.0:1.0 2005 and thereafter 4.0:1.0
3. Except as expressly amended herein, all other terms and conditions of the
1997 Loan Agreement remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Amendment under seal as of the date first above written.
HORIZON PERSONAL COMMUNICATIONS, INC.
By: _________________________________
Title: ______________________________
Attest: _____________________________
Secretary
RURAL TELEPHONE FINANCE COOPERATIVE
By: ________________________________
(SEAL) Title: Assistant Secretary-Treasurer
Attest: _____________________________
Assistant Secretary-Treasurer