EXHIBIT 18
EXECUTION COPY
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Agreement") dated November 7,
2005, together with the releases herein, is made and entered into by and between
NBC Universal, Inc. ("NBCU") and Xxxxxx Communications Corporation ("Xxxxxx").
The term "Parties" shall refer collectively to all of the parties to this
Agreement.
WHEREAS NBCU filed an action against Xxxxxx in the Delaware Court
of Chancery (the "Chancery Court") on August 19, 2004 (the "Chancery Court
Action") seeking declaratory relief and asserting breach of contract with
respect to the Cost of Capital Dividend Rate provision of the September 15, 1999
Certificate of Designation governing Xxxxxx'x 8% Series B Convertible
Exchangeable Preferred Stock (the "COD");
WHEREAS NBCU filed a First Amended Complaint in the Chancery Court
Action on September 28, 2004, and Xxxxxx filed an Answer and Counterclaim on
October 14, 2004, seeking declaratory relief with respect to certain of NBCU's
redemption rights under the COD and the Investment Agreement between National
Broadcasting Company, Inc. ("NBC") and Xxxxxx, dated September 15, 1999 (the
"Investment Agreement");
WHEREAS the Parties filed motions for judgment on the pleadings
with respect to the claims in the Chancery Court Action, which were denied in
one respect and granted in all other respects by the Chancery Court, including
that the Chancery Court granted judgment on the pleadings in NBCU's favor with
respect to the proper Cost of Capital Dividend Rate under the COD, and whereas
Xxxxxx has sought to appeal that ruling to the Supreme Court of Delaware;
WHEREAS the Chancery Court Action is currently stayed but remains
pending;
WHEREAS NBCU commenced an arbitration proceeding against Xxxxxx
with the American Arbitration Association on May 12, 2005 (the "Arbitration
Proceeding") seeking damages for alleged breaches of Section 6.7 of the
Investment Agreement and Section 10(d) of
the Network Sales Agreement between NBC and Xxxxxx, dated November 19, 1999 (the
"Network Sales Agreement"), as well as seeking damages and declaratory relief
pursuant to allegations that Xxxxxx wrongfully attempted to terminate the
Network Sales Agreement, the National Agreement between NBC and Xxxxxx, dated
July 16, 2001 (the "National Sales Agreement"), and the Joint Sales Agreements,
which were entered into by NBC and Xxxxxx for various local television markets
(the "JSAs") pursuant to three letter agreements, dated September 15, 1999,
between NBC and Xxxxxx in respect of joint sales of advertising and other joint
services by NBC, Xxxxxx and their respective affiliates (the "Letter
Agreements") (collectively, the Network Sales Agreement, National Sales
Agreement, the JSAs and the Letter Agreements are referred to herein as the
"Sales Agreements");
WHEREAS Xxxxxx filed an Answer in the Arbitration Proceeding
denying NBCU's allegations and asserting that NBCU is entitled to no relief in
the Arbitration Proceeding; and
WHEREAS the Arbitration Proceeding is stayed but remains pending:
NOW, THEREFORE, in consideration of the mutual obligations and
promises contained herein, as well as in consideration of the execution and
delivery of the Master Transaction Agreement, by and among NBCU, Xxxxxx, and
other parties, dated November 7, 2005 (the "Master Transaction Agreement") and
the other agreements to be executed and delivered by the Parties pursuant to the
Master Transaction Agreement, the Parties agree as follows:
1. The Parties agree to voluntarily dismiss, with prejudice, all
claims, counterclaims, and demands asserted in the Chancery Court Action.
Simultaneously with the execution of this Agreement, the Parties shall exchange
a signed stipulation of dismissal with
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prejudice of the Chancery Court Action in the form attached hereto as Exhibit A.
NBCU shall file the stipulation with Chancery Court on the business day
following the execution of this Agreement.
2. The Parties agree to voluntarily dismiss, with prejudice, all
claims, counterclaims, and demands asserted in the Arbitration Proceeding.
Simultaneously with the execution of this Agreement, the Parties shall exchange
a signed stipulation of dismissal of the Arbitration Proceeding in the form
attached hereto as Exhibit B. NBCU shall submit the stipulation to the American
Arbitration Association on the business day following the execution of this
Agreement.
3. NBCU, for itself as well as for its present and former agents,
parents, affiliates, subsidiaries, divisions, units, partners, shareholders,
officers, directors, employees, contractors, predecessors, successors, assigns,
assignors, and attorneys, whether or not acting in such capacity, (collectively,
the "NBCU Releasors") hereby releases and forever discharges Xxxxxx and its
respective present and former agents, parents, affiliates, subsidiaries,
divisions, units, partners, shareholders, officers, directors, employees,
contractors, predecessors, successors, assigns, assignors, and attorneys,
whether or not acting in such capacity, (collectively, the "Xxxxxx Releasees")
from any and all claims, counterclaims, demands, controversies, actions, causes
of action, obligations, liabilities, costs (including any court or statutory
costs), attorneys' fees, and damages, in law or equity, that have been or could
have been brought related to the facts alleged in the Chancery Court Action
and/or the Arbitration Proceeding, whether known or unknown; provided, however,
(a) that nothing in this Agreement shall be construed to release, bar, alter, or
affect the rights or obligations of the Parties, or any party, under any
agreement, and shall not release, bar, alter, or affect any litigation or
arbitration
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claim, based on conduct, facts, or injuries occurring after the date of the
execution of this Agreement; and (b) that the Sales Agreements shall remain in
full force and effect, provided that the obligations of the Parties thereunder
have been and shall continue to be suspended unless the Parties thereto mutually
agree in writing to revoke such suspension.
4. Xxxxxx, for itself and for its present or former agents,
parents, affiliates, subsidiaries, divisions, units, partners, shareholders,
officers, directors, employees, contractors, predecessors, successors, assigns,
assignors, and attorneys, whether or not acting in such capacity, (collectively,
the "Xxxxxx Releasors") hereby releases and forever discharges NBCU and its
present and former agents, parents, affiliates, subsidiaries, divisions, units,
partners, shareholders, officers, directors, employees, contractors,
predecessors, successors, assigns, assignors, and attorneys, whether or not
acting in such capacity, (collectively, the "NBCU Releasees") from any and all
claims, counterclaims, demands, controversies, actions, causes of action,
obligations, liabilities, costs (including any court or statutory costs),
attorneys' fees, and damages, in law or equity, that have been or could have
been brought related to the facts alleged in the Chancery Court Action and/or
the Arbitration Proceeding, whether known or unknown; provided, however, (a)
that nothing in this Agreement shall be construed to release, bar, alter, or
affect the rights or obligations of the Parties, or any party, under any
agreement, and shall not release, bar, alter, or affect any litigation or
arbitration claim, in each case, based on conduct, facts, or injuries occurring
after the date of the execution of this Agreement; and (b) that the Sales
Agreements shall remain in full force and effect, provided that the obligations
of the Parties thereunder have been and shall continue to be suspended unless
the Parties thereto mutually agree in writing to revoke such suspension. On the
business day following the execution of this Agreement, Xxxxxx and NBCU shall
send a letter to the Federal
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Communication Commission ("FCC") in the form attached hereto as Exhibit C,
advising the FCC that the Arbitration Proceeding has been voluntarily dismissed
by the Parties, withdrawing its prior filings with the FCC concerning the Sales
Agreements, stating that the Sales Agreements remain in full force and effect,
although the obligations of the Parties thereunder have been suspended, and
advising the FCC that the Parties have resolved any dispute regarding the Sales
Agreements. The Parties agree that (x) the execution and delivery of the Sales
Agreements and the performance by the parties of their obligations thereunder
were intended not to create an attributable interest for NBCU in any station
affiliated with or owned, operated or controlled by Xxxxxx, (y) NBCU's efforts
to enforce its rights under the Sales Agreements did not create any such
attributable interest and (z) neither NBCU nor Xxxxxx shall make any statements
in the future to the FCC or any third party, in writing or otherwise,
inconsistent with or contrary to the foregoing.
5. The Parties each agree to bear their own costs, including, but
not limited to, attorney's fees, arbitrator fees, administrative fees, and
filing fees associated with the Chancery Court Action, the Arbitration
Proceeding, and the execution and delivery of this Agreement.
6. The execution of this Agreement and the stipulations
contemplated herein shall not be used as, construed as, or deemed to be evidence
of any admission or concession of liability, wrongdoing, damages, facts or law
on the part of any of the Parties.
7. If one or more provisions of this Agreement or the application
thereof to any person or circumstances is determined by a court or agency of
competent jurisdiction to violate any law or regulation, including, without
limitation, any rule or policy of the FCC, or to be invalid, void or
unenforceable to any extent (a "Conflicting Provision"), the Conflicting
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Provision shall have no further force or effect, but the remainder of this
Agreement and the application of the Conflicting Provision to other persons or
circumstances or in jurisdictions other than those as to which it has been held
invalid or unenforceable shall not be affected thereby and shall be enforced to
the greatest extent permitted by law, so long as any such violation, invalidity
or unenforceability does not change the basic economic or legal positions of the
Parties. In such event, the Parties shall negotiate in good faith such changes
in other terms as shall be practicable in order to effect the original intent of
the Parties.
8. This Agreement may not be amended or modified except by a
written instrument signed by or on behalf of all the Parties hereto.
9. The Parties acknowledge that they have been advised by counsel
concerning the contents and effect of this Agreement, that they understand all
of its provisions, and that they are entering into this Agreement knowingly and
voluntarily.
10. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
11. The undersigned persons represent and warrant that they are
duly authorized to sign this Agreement on behalf of the person or entity on
whose behalf they are listed as signing and that they have full and proper
authority to bind such person or entity to all of the terms herein.
12. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
executed and performed within such state, and each party hereby submits to the
jurisdiction of the Chancery Court. In the event the
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Xxxxxxxx Xxxxx does not have jurisdiction over any dispute arising out of this
Agreement, each party hereby submits to the jurisdiction of the United States
District Court for the Southern District of New York, provided that in the event
such court does not have jurisdiction over any dispute arising out of this
Agreement, each party hereby submits to the jurisdiction of the Supreme Court of
the State of New York, New York County. THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER THIS AGREEMENT.
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IN WITNESS WHEREOF, the Parties hereto and their counsel have
caused this Agreement to be duly executed as of the date first above written.
XXXXXX COMMUNICATIONS CORPORATION
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President and Chief Operating
Officer
NBC UNIVERSAL, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
Exhibit A
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
NBC UNIVERSAL, INC., )
)
Plaintiff, )
)
v. ) C.A. No. 650-N
)
XXXXXX COMMUNICATIONS )
CORPORATION, )
)
Defendant. )
STIPULATION OF DISMISSAL WITH PREJUDICE
Pursuant to Chancery Court Rule 41(a)(1), plaintiff NBC Universal, Inc.
and defendant Xxxxxx Communications Corporation hereby dismiss this action, and
all claims and counterclaims asserted therein, with prejudice. Each party shall
bear its own costs and attorneys' fees.
XXXXXXXX XXXX LODGE & HUTZ LLP XXXXXX XXXXXXX ARSHT & XXXXXXX
------------------------------------ ------------------------------------
Xxxxxxx X. Xxxxx, Xx. (Bar No. 2237) Xxxxxxx X. Xxxxxxx (Bar No. 2067)
0000 Xxxxx Xxxxxx Xxxxxx Xxxxx X. Xxxxxxx (Bar No. 3221)
P.O. Box 2207 Xxxxxx Xxxxxxx Arsht & Xxxxxxx
Xxxxxxxxxx, XX 00000 0000 Xxxxx Xxxxxx Xxxxxx
(302) 658-9141 X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxx (000) 000-0000
Xxxx X. Xxxxx
XXXXXXXX & STERLING LLP Xxxxxxx Xxxxx, Esq.
000 Xxxxxxxxx Xxxxxx XXXXXXXX & XXXXX XXX
Xxx Xxxx, XX 00000 000 Xxxx 00xx Xxxxxx
(000) 000-0000 Xxx Xxxx, XX 00000
(000) 000-0000
Attorneys for Xxxxxx Communications
Corporation
Xxxxx X. Xxxxxx
Executive Vice President and
Deputy General Counsel
NBC Universal, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
Attorneys for NBC Universal, Inc.
IT IS SO ORDERED, this ___________ day of ____________________, 2005.
-----------------------------------
Vice Chancellor
(422951; DE)
Exhibit B
[S&S Letterhead]
xxxxxxxxx@xxxxxxxx.xxx November ____, 2005
(000) 000-0000
By Fax
Xxxxxxxx Xxxxxxx
Case Manager
American Arbitration Association
000 Xxxxxx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Re: 13 140 Y 01097 05 - NBC Universal, Inc. X. Xxxxxx Communications
Corporation
----------------------------------------------------------------
Dear Xx. Xxxxxxx:
Please be advised that Claimant NBC Universal, Inc. and Respondent Xxxxxx
Communications Corporation hereby withdraw and dismiss all claims in the
above-referenced arbitration.
Very truly yours,
----------------------------------- ----------------------------------
Xxxxxxx Xxxxxxxx, Esq. Xxxxxxx Xxxxx, Esq.
XXXXXXXX & STERLING LLP XXXXXXXX & XXXXX LLP
000 Xxxxxxxxx Xxxxxx 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attorney for NBC Universal, Inc. Attorney for Xxxxxx Communications
Corporation
cc: Xxxxx Xxxxxx, Esq.
EXHIBIT C
November ____, 2005
The Xxxxxxxxx Xxxxx X. Xxxxxx
Chairman
Federal Communications Commission
The Portals -- 8th Floor
000 00xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Re: Xxxxxx Communications Corporation and NBCU
------------------------------------------
Dear Chairman Xxxxxx:
Xxxxxx Communications Corporation ("PCC") hereby withdraws that series
of letters that PCC filed with the Office of the Chairman on the following
dates: April 28, 2005, May 4, 2005, May 23, 2005, June 22, 2005, and July 21,
0000 (xxx "XXX Xxxxxxxxxxxxxx"). Xxxxxx Management Corporation ("PMC") joins in
this request.(1) In response to the PCC Correspondence, NBC Universal, Inc.
(f/k/a National Broadcasting Company, Inc.) ("NBCU") submitted letters to the
Office of the Chairman on the following dates: May 25, 2005 and June 7, 2005
(the "NBCU Correspondence"). NBCU hereby withdraws the NBCU Correspondence. The
PCC Correspondence and the NBCU Correspondence addressed certain matters arising
under the contractual agreements between PCC and NBCU, which were previously
considered by the Commission in Telemundo Group, Inc., 17 FCC Rcd 6958 (2002).
By letter dated May 23, 2005, PCC advised your office that NBCU had filed with
the American Arbitration Association a request for arbitration regarding the
Parties' rights and responsibilities under the agreements.
Since the filing of the PCC Correspondence and the NBCU Correspondence,
NBCU and PCC have voluntarily dismissed the arbitration proceeding and have
settled their contractual dispute. In addition, the Network Sales Agreement, the
National Sales Agreement and the Joint Sales Agreements between PCC and NBCU
remain in full force and effect, although, at this time, the obligations of the
parties thereunder have been suspended unless the parties thereto mutually agree
in writing to revoke such suspension. Accordingly, there is no reason for any
Commission action regarding those matters, and PCC hereby withdraws the PCC
Correspondence and NBCU hereby withdraws the NBCU Correspondence and PCC and
NBCU hereby request the dismissal of this matter with prejudice.
Please inform the undersigned if any question should arise concerning
this request.
---------------------------
1 PMC is a party to this letter because pursuant to prior Commission consent
(see FCC File Nos. BTTCT-20050817ADH, et seq.), PMC has voting control over the
licensees of the PCC television stations.
XXXXXX COMMUNICATIONS CORPORATION
By:
-------------------------------------
Xxxx X. Xxxxx, Xx., Esq.
Dow, Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx Xxxxxxxxx Xxx., XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Its Counsel
NBC UNIVERSAL, INC.
By:
-------------------------------------
Xxxxxxxx Xxxxx, Esq.
Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxxxxxxx Xxx., XX
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Its Counsel
cc: Commissioner Xxxxxxxx X. Xxxxxxxxx
Commissioner Xxxxxxx X. Xxxxx
Commissioner Xxxxxxxx X. Xxxxxxxxx
Xxxxx Xxxxx, Chief, Media Bureau
Xxxxxx Xxxxxxxxx, Deputy Bureau Chief, Media Bureau
