Bal/Rivgam L.L.C.
19 Spectacle Lane
Wilton, CT 06897
March 25, 1997
Lynch PCS Corporation G
8 Sound Shore Drive
Greenwich, CT 06830
Gentlemen:
This will confirm the agreement between Bal/Rivgam L.L.C.
("Bal/Rivgam") and Lynch PCS Corporation G ("LPCG") with respect to Bal/Rivgam's
participation in the Federal Communication Commission ("FCC")'s auctions for
licenses for wireless personal communications services ("WCS").
1. LPCG Services. LPCG will provide certain services as follows:
(i) LPCG will be responsible for submitting bids in the WCS auctions on
behalf of Bal/Rivgam, subject to the control and as authorized by Bal/Rivgam;
(ii) LPCG will be responsible, in consultation with Bal/Rivgam, for
recommending certain strategies for any WCS licenses won; and
(iii) LPCG will provide such other ancillary services as agreed to
between LPCG and Bal/Rivgam.
2. Compensation. In return for LPCG's providing such services, Bal/Rivgam
will
(a) reimburse LPCG for all out-of-pocket expenses incurred by LPCG in
connection with providing such services provided Bal/Rivgam is the winning
bidder on any WCS Licenses; and
(b) pay LPCG 5% of the Net Profits of Bal/Rivgam from time to time as
and when realized.
With respect to any capital contributions by Rivgam Communicators, L.L.C.,
("Rivgam") or James Balitsos ("Balitsos"), or any Affiliate of Rivgam or
Balitsos, to Bal/Rivgam up to an aggregate maximum of 25% of the cost (net of
any bidding credits) of WCS Licenses won by Bal/Rivgam in the WCS auctions (the
"Equity Investment"), there shall be deemed to be, for purposes of computing
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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 April
4), compounded annually. Interest, commitment fees and other payments on loans
by Rivgam to Bal/Rivgam (the "Rivgam Loan") pursuant to the Loan Agreement (the
"Rivgam Loan Agreement") dated as of April 4, 1997, shall be deemed to be costs
at the rates stated therein in computing Net Profits, but the special fee (the
"Special Fee") provided for in Section 2.01(e) of the Rivgam Loan Agreement
shall not be deemed to be a cost for purposes of computing Net Profits. Net
Profits shall mean and shall be deemed to be realized at the time of (i) any
profits received by Bal/Rivgam from the sale, directly or directly, of all or a
substantial portion of the assets of Bal/Rivgam (assuming the payment of the
principal and deemed interest expense on the Equity Investment), (ii) any
payments or distributions by Bal/Rivgam, including loans, to the members of
Bal/Rivgam or their Affiliates (other than payments of principal and deemed
interest expense on the Equity Investment, payments (other than the Special
Payment) pursuant to the Rivgam Loan Agreement and payments pursuant to the
Expenses Agreement referred to in the Rivgam Loan Agreement), (iii) the proceeds
from any sale, directly or indirectly, including a merger or similar
transaction, by any members of Bal/Rivgam of any of their interest in Bal/Rivgam
and/or (iv) the proceeds from any sale or transfer of any interest in any member
of Bal/Rivgam, whether by an existing shareholder or an Affiliate, to a person
that is not an Affiliate of Bal/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 Bal/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,
Bal/Rivgam and any members of Bal/Rivgam.
(b) Bal/Rivgam shall not conduct any business other than WCS.
(c) This Agreement shall be construed in accordance with the internal
law of the State of Connecticut (without reference to choice of law provisions).
(d) Any dispute hereunder shall be subject to arbitration in New York
City or Stamford, Connecticut, in accordance with the rules of the American
Arbitration Association.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this
Letter Agreement as of July 31, 1996.
LYNCH PCS CORPORATION G BAL/RIVGAM L.L.C.
By: /s/ Robert E. Dolan /s/ James Balitsos
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Robert E. Dolan James Balitsos
President Managing Director
AGREED TO: RIVGAM COMMUNICATORS, INC.
A member of Bal/Rivgam
By: /s/ illegible
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/s/ James Balitsos
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James Balitsos
A member of Bal/Rivgam
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