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EXHIBIT 10.30
DCR COMMUNICATIONS, INC.
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, XX 00000
April 1, 1996
Masa Telecom, Inc.
0000 00xx Xxxxxx, X.X.
Suite 601
Washington, DC 20036
This letter is to acknowledge the agreement of DCR Communications, Inc.
("DCR") to pay Masa Telecom, Inc. ("MTI") a finder's fee in the amount of Five
Million Dollars ($5,000,000) in consideration of the agreement of MTI to
perform each of the following:
A. MTI shall cause a party who has previously loaned funds to DCR that
are convertible into Series A Debentures of DCR or another party introduced by
MTI to DCR which is reasonably acceptable to DCR (the "Investor") to purchase
from DCR Fifteen Million Dollars ($15,000,000.00) of its Series A Debentures,
which sum shall be paid directly by the Investor to the Federal Communications
Commission ("FCC") at the conclusion of the FCC's C-block auction for PCS
licenses (the "Licenses") in which DCR is declared the high bidder of any
Licenses (the "DCR Licenses") in time to be applied to the first five percent
(5%) downpayment due to the FCC within five (5) business days after the
conclusion of the said auction; and
B. Within sixty (60) days after the conclusion of the said auction and
provided that DCR is declared the high bidder of any Licenses, MTI shall also
cause the Investor to deposit the sum of $10,700,000 in an account maintained
at Mitsubishi Bank Trust Company of New York (the "Account"). MTI will notify
DCR of the name and account number of the Account and shall only permit the
disbursement of the principal amount of the funds from the Account in
furtherance of this letter agreement. MTI shall cause the payment to the FCC
on behalf of DCR of such portion of the $10,700,000 as directed in writing from
DCR in time to cover the second five percent (5%) downpayment due the FCC with
respect to the award of any DCR Licenses and simultaneously pay over to DCR the
balance of such sum. When said $10,700,000 is paid out by MTI as hereinafter
provided, DCR shall issue to the Investor payment of $10,700,000 of DCR's
Series A Debentures. In the event the FCC is delayed in awarding DCR Licenses
to DCR due to
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April 1, 1996
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an administrative challenge, MTI shall retain the $10,700,000 in the Account
unless, and until such time as, any DCR Licenses shall be awarded by the FCC to
DCR. In the event the FCC is delayed in awarding all DCR Licenses to DCR due
to a judicial proceeding filed against DCR or the FCC, MTI shall be permitted
to withdraw the $10,700,000 from the Account upon at least three (3) prior
business days' written notice to DCR; provided, however, that within fifteen
(15) days after a judicial determination that permits the FCC to award any DCR
Licenses to DCR, MTI shall cause the sum of $10,700,000 to be redeposited into
the Account. If after such redeposit, the FCC does not issue any DCR Licenses
within thirty (30) days of such redeposit, the amount so redeposited will be
treated as a loan from Investor to DCR subject to all of the terms and
conditions described below with interest accruing on the 30th day after
redeposit. Notwithstanding the right of MTI to withdraw the $10,700,000 from
the Account in the event of a judicial proceeding that delays the award of DCR
Licenses, at DCR's option exercised prior to such withdrawal of funds, it may
require that the Investor loan such $10,700,000 to DCR on a non-recourse basis,
which amount so loaned shall be retained in the Account pending the FCC's
award of any DCR Licenses to DCR. As consideration for such loan, DCR agrees
to pay to the Investor interest on the outstanding balance of such loan at the
rate of 12% per annum; however, DCR shall be entitled to credit against the
amount of any such interest due the amount of interest earned by Investor from
Mitsubishi Bank Trust Company of New York on the amount so loaned during the
period that interest accrues from DCR to the Investor on the amount so loaned.
The loan will be evidenced by a registered promissory note in accordance with
the applicable portfolio debt rules and DCR will grant to the Investor a
security interest in the Account to collateralize the repayment of the amounts
due under such loan. Interest shall begin to accrue on such loan by the
Investor to DCR thirty (30) days after the $10,700,000 has been deposited in
the Account if, as of such 30th day there is litigation pending which prevents
the issuance by the FCC of, or causes the FCC not to issue, any DCR Licenses.
All accrued interest shall be payable on the earlier of the date of the release
of the $10,700,000 from the Account as provided herein or the 1st anniversary
date of the date interest begins to accrue on such loan, and, if the latter,
thereafter on a quarterly basis until distributed in accordance with the terms
of this letter. All interest will be paid to the Investor at a foreign account
designated by MTI. MTI represents to DCR that the Investor is a foreign person
and that the interest payable by DCR to the Investor will not be subject to
withholding and DCR agrees that the entire amount of such interest will be
remitted by DCR to the Investor. MTI's obligation to maintain the Account and
make disbursement from it in accordance with this letter agreement
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April 1, 1996
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shall terminate upon the first to occur of (i) DCR and/or the FCC receiving the
entire $25,700,000 from MTI pursuant to this agreement, (ii) the final
non-appealable determination by a court of competent jurisdiction that the FCC
shall not award to DCR any DCR Licenses, in which event the funds shall be
returned to the Investor and (iii) written notice by DCR to MTI that MTI should
return such funds to the Investor.
If these conditions are met, the finder's fee shall be due and payable to
you on the later of December 31, 1996 or five (5) business days following the
date DCR and/or the FCC receives the entire $25,700,000 from MTI in accordance
with the terms of this agreement. DCR will include in its working capital
budget the payment of the foregoing fee.
MTI's obligation to transfer to the FCC and/or DCR any amounts hereunder
is conditioned upon DCR providing written notice to MTI of the need to transfer
such funds at least three (3) business days prior to the date such funds are to
be so transferred.
MTI agrees to indemnify and hold harmless DCR from all claims, actions,
suits, judgments, costs and expenses arising out of or in connection with a
possible assertion by C.E. Capital, Inc. that it is entitled to a portion of
the aforesaid fee. If you are in agreement with these terms, please so
indicate by signing below.
Very truly yours,
/s/ XXXXXX X. XXXXX
Xxxxxx X. Xxxxx
Chairman of the Board
Agreed this 1st day of April, 1996
MASA TELECOM, INC.
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, President
