EXECUTION VERSION
CITADEL KENSINGTON GLOBAL STRATEGIES FUND LTD.
CITADEL WELLINGTON LLC
CIG MEDIA LLC
C/O CITADEL INVESTMENT GROUP, L.L.C.
000 X. XXXXXXXX XXXXXX, 00XX XXXXX
XXXXXXX, XXXXXXXX 00000
May 4, 2007
NBC Universal, Inc.
NBC Palm Beach Investment I, Inc.
NBC Palm Beach Investment II, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is hereby made to the Master Transaction Agreement, dated as of
May 4, 2007 (the "Master Agreement"), by and among ION Media Networks, Inc., a
Delaware corporation (the "Company"), NBC Universal, Inc., a Delaware
corporation ("NBCU"), NBC Palm Beach Investment I, Inc., a California
corporation ("NBC Palm Beach I"), NBC Palm Beach Investment II, Inc., a
California corporation ("NBC Palm Beach II" and, together with NBCU and NBC Palm
Beach I, the "NBCU Entities"), and CIG Media LLC, a Delaware limited liability
company ("CIG Media"). All capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Master Agreement.
I. Certain Non-Indemnified Losses.
1. In the event the Company breaches or fails to perform any of its
representations, warranties or covenants contained in Sections 6.07(b) or 10.20
of the Master Agreement and CIG Media incurs any Losses for which CIG Media is
entitled to be indemnified by the Company pursuant to Section 10.22 of the
Master Agreement but for which the Company has not indemnified CIG Media (the
"Non-Indemnified Losses"), the NBCU Entities shall, jointly and severally,
indemnify Citadel Kensington Global Strategies Fund Ltd., Citadel Wellington LLC
and each Person who controls the foregoing (the "Citadel Indemnified Parties"),
from and against 50% of the Non-Indemnified Losses. For purposes of this letter
agreement, the amount of the Non-Indemnified Losses shall not exceed the
aggregate amount that the Citadel Indemnified Parties have invested in CIG Media
in order to consummate the Transaction contemplated by Master Agreement, plus
any direct Losses actually incurred by any of the Citadel Indemnified Parties as
a result of any breach or non-performance by the Company of any representations,
warranties or covenants contained in Sections 6.07(b), 10.20 or 10.22 of the
Master Agreement.
2. If any Citadel Indemnified Party becomes entitled to indemnification
hereunder, it shall give the NBCU Entities prompt notice (the "Indemnification
Notice"), in no event later
than five Business Days after such Citadel Indemnified Party becomes aware of
the Non-Indemnified Losses, which notice shall state the amount of the
Non-Indemnified Losses, if known, the method of computation thereof, and
reasonably specific details of the breach or non-performance by the Company of
the representations, warranties or covenants contained in Sections 6.07(b),
10.20 or 10.22 of the Master Agreement to which the Non-Indemnified Losses are
related; provided, however, that the failure to so notify shall not affect the
Citadel Indemnified Parties' rights under this letter agreement except to the
extent such failure is actually prejudicial to the rights and obligations of the
NBCU Entities, and then only to the degree so prejudiced. The Citadel
Indemnified Parties and NBCU shall jointly control the defense of any Action
with respect to the Non-Indemnified Losses through counsel acceptable to both
parties. Either party may elect to participate in the defense of such Action
with its own counsel at its own expense. Each of the parties shall cooperate
with the other in such defense and, to the extent not privileged, make available
to the other, at their sole cost and expense, all witnesses, pertinent records,
materials and information in such party's possession or under such party's
control relating thereto as is reasonably required in connection with such
Action. Neither party shall settle, permit to be settled, pay, or permit to be
paid, any part of such Action unless the other party consents in writing to such
settlement or payment (which consent shall not be unreasonably withheld.
3. The NBCU Entities acknowledge and agree that the provisions of this
letter agreement are an integral and essential part of the transactions
contemplated by the Master Agreement, that CIG Media, in connection with its
decision to enter into the Master Agreement, has relied, and is relying, on the
NBCU Entities' agreement to pay any amounts pursuant to Paragraph 1 of this
letter agreement as and when due to the Citadel Indemnified Parties, and that
CIG Media would not have entered into the Master Agreement without the benefit
of this letter agreement.
4. The foregoing indemnification provisions set forth in Paragraph 1 of
this letter agreement shall constitute the exclusive remedy of Citadel
Indemnified Parties as against the NBCU Entities at law or in equity with
respect to any breach or non-performance by the Company of any representations,
warranties or covenants contained in Sections 6.07(b), 10.20 or 10.22 of the
Master Agreement.
II. Adjustment of Relative Economics between CIG Media and NBCU Entities.
5. In the event the NBCU Entities are required to retain not less than
$250,000,000 aggregated stated liquidation preference of NBCU Series B Preferred
pursuant to Section 2.01(b) following the Exchange Offer Closing or the closing
of the Contingent Exchange, each of CIG Media and the NBCU Entities shall effect
any changes to the terms of the securities of the Company held or to be held by
CIG Media and the NBCU Entities as may be necessary such that the economic
substance of the Transaction to CIG Media and the NBCU Entities shall not in any
manner be adversely affected.
III. Miscellaneous.
6. All notices, requests, demands and other communications hereunder shall
be in writing and shall be given when (and shall be deemed to have been duly
given upon receipt) by
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delivery in person, by overnight courier, by facsimile or by registered or
certified mail (postage prepaid, return receipt requested), to the respective
parties at the following addresses (or such other address for a party as shall
be specified in a notice given in accordance with this Section 6):
If to the NBCU Entities:
NBC Universal, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Xx.
Tel: 000-000-0000
Fax: 000-000-0000
If to the Citadel Indemnified Parties and/or CIG Media:
Citadel Limited Partnership
000 X. Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
7. If CIG Media becomes entitled to indemnification under Section 10.21 of
the Master Agreement, it shall give the NBCU Entities prompt notice, in no event
later than five Business Days after CIG becomes aware of the Losses that entitle
CIG to indemnification under Section 10.21 of the Master Agreement, which notice
shall state the amount of such Losses, if known, the method of computation
thereof, and reasonably specific details of the breach or non-performance by the
NBCU Entities under the Call Agreement, the Escrow Agreements or the Non-Compete
Agreements to which such Losses are related; provided, however, that the failure
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to so notify shall not affect CIG Media's rights under the Master Agreement
except to the extent such failure is actually prejudicial to the rights and
obligations of the NBCU Entities, and then only to the degree so prejudiced.
8. This letter agreement may not be amended or modified except by an
instrument in writing signed on behalf of each of the parties hereto. This
letter agreement and the rights and obligations hereunder (a) shall not be
assignable or transferable by any of the NBCU Entities without the prior written
consent of CIG Media and the Citadel Indemnified Parties and (b) shall not be
assignable or transferable by CIG Media or any of the Citadel Indemnified
Parties without the prior written consent of NBCU Entities. Any attempted
assignment or transfer in violation of this clause shall be null and void and of
no effect. Any Citadel Indemnified Party not a party hereto shall be a third
party beneficiary of this letter agreement with a direct right of enforcement.
9. This letter agreement may be executed in any number of counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties to this agreement and delivered to the other parties.
10. This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflicts
of laws. The parties hereto submit to the exclusive jurisdiction of the federal
and New York State courts located in the Borough of Manhattan of the City of New
York in connection with any dispute related to this letter or any of the matters
contemplated hereby.
11. Each of the parties hereto hereby waives to the fullest extent
permitted by applicable law any right it may have to a trial by jury with
respect to any litigation directly or indirectly arising out of, under or in
connection with this letter agreement. Each of the parties hereto (a) certifies
that no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce that foregoing waiver and (b) acknowledges that it
and the other parties hereto have been induced to enter into this letter
agreement by, among other things, the mutual waivers and certifications in this
Paragraph 11.
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Please acknowledge your agreement to and acceptance of the terms of this
letter agreement by countersigning and returning the enclosed copy of this
letter.
Very truly yours,
CITADEL KENSINGTON GLOBAL
STRATEGIES FUND LTD.
By: Citadel Investment Group, L.L.C.,
its General Partner
By: Citadel Limited Partnership,
its Portfolio Manager
By:
-------------------------------------------
Name:
Title:
CITADEL WELLINGTON LLC
By: Citadel Investment Group, L.L.C.,
its General Partner
By: Citadel Limited Partnership,
its Managing Member
By:
-----------------------------------------
Name:
Title:
CIG MEDIA LLC
By: Citadel Investment Group, L.L.C.,
its General Partner
By: Citadel Limited Partnership,
its Portfolio Manager
By:
------------------------------------------
Name:
Title:
[Signature Page to Indemnification Side Letter]
Agreed to and accepted as of May 4, 2007:
NBC UNIVERSAL, INC.
By:
-------------------
Name:
Title:
NBC PALM BEACH INVESTMENT I, INC.
By:
-------------------
Name:
Title:
NBC PALM BEACH INVESTMENT II, INC.
By:
-------------------
Name:
Title:
[Signature Page to Indemnification Side Letter]
