Exhibit 10.8
CONSOLIDATED COMMUNICATIONS ACQUISITION TEXAS, INC.
000 XXXXX 00XX XXXXXX
XXXXXXX, XX 00000-0000
April 14, 2004
Providence Equity Partners IV Inc.
00 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Applegate & Xxxxxxxx, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000
Gentlemen:
Reference is made to the Second Amended and Restated Homebase Acquisition,
LLC Limited Liability Company Agreement dated as of January 15, 2004 (the "LLC
Agreement") among Homebase Acquisition, LLC, a Delaware limited liability
company ("Homebase"), and affiliates of each of you. Capitalized terms used
herein without definition are used with the meanings ascribed thereto in the LLC
Agreement.
This letter sets forth our agreement that, in consideration of (i) you and
your respective affiliates' unique knowledge and understanding of the RLEC
industry in general and specifically of the business of TXU Communications
Ventures Company ("TXU"), which is being acquired by a subsidiary of Homebase as
contemplated by that certain Stock Purchase Agreement (the "Stock Purchase
Agreement"), dated as of January 15, 2004, by and between Consolidated
Communications Acquisition Texas, Inc. (formerly known as Homebase Acquisition
Texas Corp.) ("CCAT"), and (ii) the consulting, advisory and other professional
services that each of you and your respective affiliates expect to provide to
CCAT and its direct and indirect subsidiaries following completion of the
acquisition of TXU, CCAT agrees to pay a professional services fee of $3,000,000
(the "Services Fee") per calendar year in the aggregate (payable in four equal
quarterly payments of $750,000 each) to you or your respective affiliates or
designees, provided, however, that in no case shall the Services Fee be paid in
cash unless the Consolidated EBITDA (as calculated in accordance with that
certain Credit Agreement, dated as of the date hereof, by and among Homebase,
Consolidated Communications Illinois Holdings, Inc., Consolidated Communications
Texas Holdings, Inc., Consolidated Communications, Inc., CCAT, and the financial
institutions listed on Schedule 2.01 thereto, and Citicorp North America, Inc.,
as administrative agent (as the same may be amended from time to time) or
Xxxxxxx X. Xxxxxxx
Providence Equity Partners, Inc.
Applegate & Xxxxxxxx, Inc.
April 14, 2004
Page 2
corresponding term as defined in any replacement financing facility (the "Credit
Agreement") exceeds $106,000,000 per calendar year as determined by the good
faith calculations of the respective officers CCAT and Consolidated
Communications, Inc. Each of you (or your respective affiliates) shall each
receive one-third of such Services Fee. To the extent payment of the Services
Fee in cash is restricted as provided above or by the terms of the Credit
Agreement or any other debt instrument of Homebase or the Subsidiaries that has
been approved by the Board, such Services Fee will be payable in the form of
additional Class A Preferred Shares (issued at the rate of one Class A Preferred
Share for each $1,000 of Services Fees not paid in cash). In addition, your (and
your respective affiliates') rights to such Services Fees will terminate upon a
public offering of equity securities of PUBCO, CCAT or any other Subsidiary.
[END OF TEXT; THE NEXT PAGE IS THE SIGNATURE PAGE]
2004 Texas Services Fee Letter
Xxxxxxx X. Xxxxxxx
Providence Equity Partners, Inc.
Applegate & Xxxxxxxx, Inc.
April 14, 2004
Page 3
Please acknowledge your agreement to the foregoing by executing this
letter where indicated below.
Sincerely,
CONSOLIDATED COMMUNICATIONS ACQUISITION
TEXAS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, President and Chief
Executive Officer
AGREEMENT ACKNOWLEDGED:
PROVIDENCE EQUITY PARTNERS IV, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Duly Authorized Agent
APPLEGATE & XXXXXXXX, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Duly Authorized Agent
XXXXXXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
------------------------
2004 Texas Services Fee Letter
Xxxxxxx X. Xxxxxxx
Providence Equity Partners, Inc.
Applegate & Xxxxxxxx, Inc.
April 14, 2004
Page 4
Homebase Acquisition, LLC hereby agrees to issue Class A Preferred Shares
in satisfaction of unpaid Services Fees as described above.
HOMEBASE ACQUISITION, LLC
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, President and Chief
Executive Officer
2004 Texas Services Fee Letter
