Rivgam Communicators, L.L.C.
1 Corporate Center at Rye
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, XX 00000-0000
August 12, 1996
Xxxxx PCS Corporation G
0 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Gentlemen:
This will confirm the agreement between Rivgam Communicators, L.L.C.
("Rivgam") and Xxxxx PCS Corporation G ("LPCG") with respect to Xxxxxx's
participation in the Federal Communications Commission ("FCC")'s D and E block
auctions for licenses for personal communications services ("PCS").
1. LPCG Services. LPCG will provide certain services as follows:
(i) LPCG will be responsible for submitting bids in the D and E Block
auctions on behalf of Xxxxxx, subject to the control and as authorized by
Xxxxxx;
(ii) LPCG will be responsible, in consultation with Xxxxxx, for
recommending operational and financing strategies for any PCS licenses won,
including the establishment of an organization to implement such strategies; and
(iii)LPCG will provide such other ancillary services as agreed to between
LPCG and Rivgam.
2. Compensation. In return for LPCG's providing such services, Rivgam will
(a) reimburse LPCG for all out-of-pocket expenses incurred by LPCG in
connection with providing such services provided Rivgam is the winning bidder
on any PCS Licenses; and
(b) pay LPCG 10% of the Net Profits of Rivgam from time to time as and
when realized.
With respect to any loans or capital contributions by Gabelli Funds, Inc. (or
an Affiliate) to Rivgam up to an aggregate of the cost of PCS Licenses won by
Xxxxxx in the D and E Block auctions (the "Investment"), there shall be deemed
to be, for purposes of computing Net Profits, an interest expense equal to 20%
plus the higher of the prime rate (as set forth in the Wall Street Journal) or
7% (reset annually on each August 12), compounded annually, irrespective of the
actual interest rate thereon. Net Profits shall mean and shall be deemed to be
realized at the time of (i) any profits received by Rivgam from the sale,
directly or indirectly, of all or a substantial portion of the assets of Rivgam
(assuming the payment of the principal and deemed interest expense on the
Investment), (ii) any payments or distributions by Xxxxxx, including loans, to
the members of Rivgam or their Affiliates (other than payments of principal and
deemed interest expense on the Investment), (iii) the proceeds from any sale,
directly or indirectly, including a merger or similar transaction, by any
members of Rivgam of any of their interest in Rivgam and/or (iv) the proceeds
from any sale or transfer of any interest in any member of Rivgam, whether by
an existing shareholder or an Affiliate, to a person that is not an Affiliate
of Rivgam. The term "Affiliate" shall have the meaning in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended. Any recipient of any distributions
or proceeds from sale shall be responsible, in addition to Rivgam, for the
payment of any amounts due under clause (b) above.
3. Other.
(a) The agreement shall be binding on any successors to LPCG, Xxxxxx and
any members of Rivgam.
(b) Rivgam shall not conduct any business other than PCS.
(c) This Agreement shall be construed in accordance with the internal law
of the State of New York (without reference to choice of law provisions).
(d) Any dispute hereunder shall be subject to arbitration in New York City
or Rye, New York, in accordance with the rules of the American Arbitration
Association.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Letter Agreement as of July 31, 1996.
XXXXX PCS CORPORATION G RIVGAM COMMUNICATORS, L.L.C.
By:
Xxxxxx X. Xxxxx
President
AGREED TO: GAMCO INVESTORS, INC.
A member of Rivgam
By:
RIVGAM COMMUNICATORS, INC.
A member of Rivgam
By:
