SETTLEMENT AGREEMENT
--------------------
This Agreement is made this 9th day of November, 1996, by and among EZ
Pittsburgh, Inc. ("EZ"), Allegheny Communications Group, Inc. ("ACGI"), and
ACGI's officers, directors, and shareholders who have individually executed
this Agreement below (the "ACGI Principals") (collectively, the "Parties").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, EZ is the applicant for renewal of the license of radio
broadcast station WBZZ(FM), in Pittsburgh, Pennsylvania, (FCC File No.
BRH-910401C2) (the "EZ Application") and ACGI has filed a competing
application for a construction permit specifying the channel for which
WBZZ(FM) is seeking renewal of license (FCC File No. BPH-910628MC) (the "ACGI
Application");
WHEREAS, because the EZ and ACGI Applications are mutually exclusive with
each other, they have been designated for comparative hearing in MM Docket
No. 93-88 (the "WBZZ Hearing") to determine which application should be
granted;
WHEREAS, no issues have been added in the WBZZ Hearing to determine
whether EZ possesses the basic qualifications to receive a grant of the EZ
Application;
WHEREAS, the Parties wish to avoid further costly and lengthy
proceedings before the Federal Communications Commission (the "Commission" or
"FCC") and possibly the courts, as well as
2
the burden that such proceedings impose upon the personnel and resources of
the Commission, the courts, and the Parties;
WHEREAS, the Parties believe that this Agreement will be in the public
interest in that it will assist in resolving the WBZZ Hearing;
WHEREAS, the Parties pledge mutual cooperation in effectuating the goals
of this Agreement; and
WHEREAS, the obligations of the Parties hereunder are subject to the
prior approval of the Presiding Judge and/or the Commission or its Mass Media
Bureau and subject to satisfaction of the conditions specified herein.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the Parties agree as follows:
1. Within one business day after the date hereof, EZ and ACGI will
file this Agreement with the Presiding Administrative Law Judge in the WBZZ
Proceeding together with a joint request for its approval (the "Joint
Request"), which EZ's counsel shall draft subject to approval by ACGI's
counsel. The Joint Request shall include a request that the Presiding Judge
either
(a) approve this Agreement, with any necessary waiver of the
FCC's rules to permit EZ or its designated purchaser to acquire
the stock of ACGI for $4.5 million as set forth in Paragraph 2,
contingent upon and subject to the following conditions:
(i) dismissal of the ACGI Application with prejudice; and
3
(ii) grant of the EZ Application; or
(b) immediately certify to the full Commission the question
whether Section 73.3523 of the FCC's rules should be waived to permit
approval of this Agreement, and, upon issuance of such waiver, the
Presiding Judge or the Commission, as appropriate, shall take the
steps note in (a).
The Joint Request shall include (i) specific requests that the ACGI
Application be dismissed and the EZ Application be granted upon approval of
this Agreement by the FCC and (ii) any other information or documents
required by the FCC.
2. Within five business days after release of a final order or orders
approving the Agreement, authorizing payment by EZ to ACGI of $4.5 million,
dismissing the ACGI Application, and granting the EZ Application, EZ or its
designated purchaser will acquire the stock of ACGI for $4.5 million by wire
transfer or certified check. The term "final order" shall mean an order that
is no longer subject to further administrative or judicial review. No later
than 20 days after release of an order or orders approving the Agreement,
authorizing EZ to purchase the stock of ACGI for $4.5 million, dismissing the
ACGI Application and granting the EZ Application, EZ shall deposit the $4.5
million in escrow pursuant to a mutually acceptable escrow agreement, which
shall provide that all interest shall be payable to EZ.
4
3. Beginning upon the execution of this Agreement, and continuing
while this Agreement is in effect, neither EZ nor ACGI shall file any
pleading, conduct any discovery, or make any written or oral request to the
Presiding Judge, or take any other action in the WBZZ Hearing, except for (i)
the filing of the Joint Request and such further filings as may be necessary
to obtain grant of such request; (ii) such filings as are specifically
requested by written order of the Presiding Judge, the Mass Media Bureau, the
General Counsel, or any other part of the Commission; and (iii) such filings
as may be required in the renewal proceeding in order to prevent dismissal of
the ACGI Application prior to approval of this Agreement, in light of FCC
rulings such as a ruling lifting the current freeze; provided, however, that
the parties shall use their best joint efforts to avoid or defer any such
filings so long as the Agreement is pending before the FCC for approval.
4. (a) Beginning on the date of execution of this Agreement, and
continuing for a period of ten (10) years thereafter, neither ACGI, nor the
ACGI Principals, nor any of ACGI's subsidiaries or affiliates, nor any
person or entity commonly controlled or otherwise subject to the control of
any ACGI Principal, ACGI or any subsidiary or affiliate thereof (collectively
the "ACGI Parties"), shall file, or encourage, induce or pay any other
person or entity to file, any document with the Commission (including, but
not limited to, any petition to deny, informal objection or mutually
exclusive application)
5
(excluding documents filed in proceedings generally applicable to the
broadcast industry as a whole) that opposes the grant of any application to
which EZ or any subsidiary or affiliate thereof is a party, or any entity
with which EZ had, has, or will have a then-current agreement to provide
programming for more than 15% of the broadcast time of a broadcast station
between (i) the date of filing of the EZ Application; and (ii) the date ten
(10) years from the date of execution of this Agreement.
(b) This paragraph 4 does not prohibit the ACGI Parties from
filing with the Commission a declaratory statement in good faith bringing
relevant information to the Commission's attention, so long as the statement
does not object, formally or informally, to the grant of an application.
5. This Agreement shall become null and void and the Parties shall
have no further obligation to each other if the Joint Request is denied,
or, if within six (6) months of the date of this Agreement, this Agreement is
not approved, the ACGI Application is not dismissed, and the EZ Application
is not granted.
6. The Parties, and their principals, represent and warrant that they
have carefully read and fully understand this Agreement, that they execute
this document voluntarily as their own free act and deed, with full knowledge
of its significance, effects, and consequences.
6
7. This Agreement will be executed in identical counterpart copies,
each of which shall be deemed an original, but all of which together shall
constitute a single instrument.
8. Recognizing that this Agreement is expressly subject to the
approval of the Presiding Judge and the need for the Presiding Judge's, the
Mass Media Bureau's, and/or the Commission's approval prior to the
implementation of all its terms, the Parties shall cooperate with each other
and with the Commission by expeditiously providing to each other or to the
Commission, or both, as the case may be, all additional information that may
be necessary or appropriate to comply with Section 73.3523 of the
Commission's Rules. The Parties agree to provide the Commission in a timely
manner with such information as it reasonably requests. The Parties further
agree to use all reasonable efforts in the preparation and filing of all
documents that may be necessary or appropriate to reach the results
contemplated by this Agreement. Further, neither party shall confer with the
Hearing Branch of the Mass Media Bureau concerning this Agreement without the
presence or participation by telephone of the other Party. Each party shall
bear its own expenses for the preparation of this Agreement and all
documents incidental thereto.
9. No Party or its officers, directors, shareholders, agents,
employees, affiliates, related companies and entities, successors, and
assigns, shall, except as specified in this paragraph or as consented to in
writing by the other Party,
7
divulge to the public any terms of this Agreement or any negotiations or
discussions among the Parties relating thereto. Notwithstanding the
foregoing, nothing in this Paragraph is intended to preclude any Party, or
any officer, director, shareholder, employee, affiliate, related company or
entity, successor or assign, from disclosing to the public the fact of the
filing of this Agreement with the Commission and/or the fact(s) that this
Agreement contemplates (i) the dismissal of the ACGI Application and (ii) the
grant of the EZ Application. The Parties agree to consult with each other
concerning any publicity as to this Agreement while this Agreement is in
effect. This confidentiality provision shall not prohibit any Party, or its
officers, directors, shareholders, agents, employees, affiliates, related
companies and entities, successors, and assigns, from complying with a
subpoena or disclosing information otherwise required by law or offered in
response to or reasonably connected with other governmental requests or
judicial proceedings.
10. It is the intent of the Parties hereto that the obligations
contemplated hereunder comply in all respects with the Communications Act of
1934, as amended, and all applicable rules, regulations, and policies of the
FCC. If any provision of this Agreement shall be declared void, illegal, or
invalid by any governmental authority with jurisdiction thereof, any Party
shall have the right to promptly request a meeting with the other Party in
which case the Parties will use reasonable efforts to reach
8
agreement on lawful substitute provisions in place of said offending
provision so as to effectuate the Parties' intent as expressed herein. In any
event, the remainder of this Agreement shall remain in full force and effect
without such offending provision so long as such remainder substantially
reflects the original agreement of the Parties hereunder.
11. This Agreement is the only agreement among the Parties hereto and
contains all of the terms and conditions agreed upon by the Parties with
respect to the subject matter hereof. This Agreement may not be amended or
modified except by an instrument in writing signed by the Parties. This
Agreement shall be binding upon and inure to the benefit of the Parties,
their officers, directors, shareholders, agents, employees, affiliates,
related companies and entities, successors (including without limitation
American Radio Systems Corporation and its affiliates, upon consummation of
the merger proposed in FCC File Nos. BTCH-961001GG ET SEQ.) and assigns. Each
Party warrants to the others that it has full power and authority to enter
into this Agreement, and to perform its obligations hereunder.
12. This Agreement shall be construed under the laws of the United
States and the Commonwealth of Virginia.
13. The Parties agree that the benefits conferred on the Parties under
this Agreement are unique, and that monetary damages for the breach of this
Agreement would be difficult or impossible to quantify. Therefore, the Parties
stipulate that specific performance shall be appropriate as a remedy for
breach
of this Agreement in addition to other legal or equitable remedies, including
monetary damages, available under this Agreement or under the laws of the
United States and the Commonwealth of Virginia. If any legal action is
brought by either party arising out of or with respect to this Agreement, the
prevailing party shall be entitled to recover, in addition to any other legal
or equitable relief to which it may be entitled, all costs of maintaining,
defending or bringing such action including but not limited to reasonable
attorneys' fees.
14. This Agreement shall be effective upon its execution.
15. ACGI and each of the ACGI Principals hereby jointly and severally
represent and warrant to EZ that (i) the ACGI Principals own all of the
issued and outstanding capital stock of ACGI, and that there are no options,
warrants, or other rights to acquire any equity interest in ACGI; and (ii)
that ACGI has never conducted any business aside from prosecution of the ACGI
Application and has no liabilities, fixed or contingent.
16. ACGI and each of the ACGI Principals hereby jointly and severally
agree to indemnify and hold harmless EZ and its officers, directors, and
affiliates from and against any and all liabilities, claims, damages, and
expenses arising from (i) EZ's (or its designated purchaser's) acquisition or
ownership of the capital stock of ACGI; (ii) any breach by ACGI or the ACGI
Principals of any representation, warranty, or covenant in this Agreement; or
(iii) any claims by any former officers, directors,
10
shareholders, agents, or creditors of ACGI. This indemnification shall
survive any termination of this Agreement.
17. Any notices, requests, statements, or any other communications to be
given hereunder shall be in writing and shall be sent by first class mail,
postage prepaid, to the Parties as follows:
If to EZ:
Mr. Alan Box
EZ Communications, Inc.
10800 Main Street
Fairfax, Virginia 22030
with a copy to:
M. Anne Swanson, Esquire
Koteen & Naftalin, L.L.P.
1150 Connecticut Ave., N.W.
Washington, D.C. 20036
If to Allegheny or the ACGI Principals:
Names and Addresses on Exhibit A
with a copy to:
Gene A. Bechtel, Esquire
Bechtel & Cole, Chartered
1901 L Street, N.W.
Suite 250
Washington, D.C. 20036
or to such other address or to such other person as either party may
designate by notice given in writing. Any notice, request, statement, or
other communication will be deemed to have been given three days after it was
mailed.
11
IN WITNESS WHEREOF, the Parties have affixed their signatures to this
Agreement on the date(s) indicated below.
EZ PITTSBURGH, INC.
Date: November 9, 1996 By Alan Box
---------------- -----------------------------------
Alan Box
President
ALLEGHENY COMMUNICATIONS GROUP, INC.
Date: _______________ By __________________________
Herbert E. Long, Jr.
President
ACGI PRINCIPALS
By __________________________
Herbert E. Long, Jr.
By __________________________
Herbert E. Long III
By __________________________
Lorraine H. Brown
By __________________________
Diane J. Duggin
By __________________________
Eldridge Smith
11
IN WITNESS WHEREOF, the Parties have affixed their signatures to this
Agreement on the date(s) indicated below.
EZ PITTSBURGH, INC.
Date: _______________ By __________________________
Alan Box
President
ALLEGHENY COMMUNICATIONS GROUP, INC.
Date: November 8, 1996 By Herbert E. Long, Jr.
---------------- -----------------------------------
Herbert E. Long, Jr.
President
ACGI PRINCIPALS
By Herbert E. Long, Jr.
-----------------------------------
Herbert E. Long, Jr.
By Herbert E. Long III
-----------------------------------
Herbert E. Long III
By Lorraine H. Brown
-----------------------------------
Lorraine H. Brown
By Diane J. Duggin
-----------------------------------
Diane J. Duggin
By Eldridge Smith
-----------------------------------
Eldridge Smith
12
By William E. Floyd
-----------------------------------
William E. Floyd
By Hazel M. Floyd
-----------------------------------
Hazel M. Floyd
By Alicia Perkins
-----------------------------------
Alicia Perkins
By Odessa Floyd
-----------------------------------
Odessa Floyd
By James Floyd, Sr.
-----------------------------------
James Floyd, Sr.
By William Thompson
-----------------------------------
William Thompson
By Nicholas Perkins
-----------------------------------
Nicholas Perkins
EXHIBIT B
DECLARATION
-----------
I, Alan L. Box, declare under penalty of perjury that the following
statements are true and correct to the best of my knowledge and belief:
1. I am the president and director of EZ Pittsburgh, Inc. ("EZ"),
licensee of WBZZ(FM), Pittsburgh, Pennsylvania. EZ's application for renewal
of its license is pending in FCC File No. BPH-910401C2, and it was designated
for hearing in MM Docket No. 93-88.
2. The Settlement Agreement attached as Exhibit A to the Joint Request
for Approval of Agreement constitutes the entire agreement between EZ and
Allegheny Communications Group, Inc. ("ACGI"). The Agreement provides for
payment of $4.5 million to ACGI. No other consideration will be paid by EZ or
ACGI.
By ALAN L. BOX
-------------------------------
Alan L. Box
Date: 11/12/96
-------------------
EXHIBIT C
DELCARATION
-----------
I, Herbert E. Long, Jr., declare under the penalty of perjury that the
following statements are true and correct to my best knowledge and belief:
1. I am President of Allegheny Communications Group, Inc.
("Allegheny").
2. The application of Allegheny for construction permit for a new FM
broadcast station at Pittsburgh, Pennsylvania (BPH-910628MC), was filed in
1991 and has been prosecuted before the FCC in good faith for the past
approximately five and one-half years. The application was not filed for the
purpose of reaching or carrying out an agreement with any other applicant
regarding the dismissal and withdrawal of its application.
3. The agreement dated November 8, 1996 between Allegheny and EZ
Communications, Inc. sets forth the terms and provisions of the propsed
settlelment between the parties of the comparative hearing on their
respective applications.
HERBERT E. LONG, JR.
------------------------------
Herbert E. Long, Jr.
Washington, D.C.
November 12, 1996
CERTIFICATE OF SERVICE
----------------------
I, Barbara Frank, a secretary in the law firm of Koteen & Naftalin,
hereby certify that I have this 12th day of November, 1996, sent copies of
the foregoing to the following by first class United States mail, postage
prepaid to the following, unless service by hand is otherwise shown:
*/ Honorable Edward Luton
- - - Administrative Law Judge
Federal Communications Commission
Room 225
2000 L Street, N.W.
Washington, D.C. 20554
Robert Zauner, Esquire
Hearing Branch
Federal Communications Commission
Room 7212
2025 M Street, N.W.
Washington, D.C. 20554
Gene A. Bechtel, Esquire
Bechtel & Cole, Chartered
1901 L Street, N.W.
Suite 250
Washington, D.C. 20036
BARBARA FRANK
By------------------------------
Barbara Frank
*/ By Hand
- - -