exv10w1







Exhibit 10.1




SETTLEMENT AGREEMENT AND RELEASE



This settlement agreement and release (the “Settlement Agreement and Release”) dated as of July 15,
2009, is made by and between ION Media Networks, Inc. (“ION”) and RHI Entertainment Distribution,
LLC (“RHI”).



WHEREAS,
ION and RHI are parties to that certain license agreement, dated December 1, 2007 (the
“Agreement”), pursuant to which RHI licensed to ION certain programs for broadcast on ION’s
television network, and ION provided to RHI the exclusive right to air such programming during
certain time periods on ION’s television network, on the terms and conditions set forth therein;



WHEREAS,
on May 19, 2009, ION and certain of its affiliates (collectively, the “Debtors”) each filed
a petition under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the
United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”);



WHEREAS,
on June 8, 2009, ION commenced an adversary proceeding against RHI in the Bankruptcy Court
(Adv. Pro. No. 09-01268 (JMP) (referred to herein as the “Lawsuit”), alleging that RHI breached the
Agreement in a number of respects;



WHEREAS, RHI denies the allegations in the Complaint and intends to assert certain affirmative
defenses and counterclaims against ION;



WHEREAS, following the commencement of the Lawsuit, ION and RHI engaged in settlement
communications concerning the alleged breach of the Agreement by RHI as well as certain claims that
RHI allegedly believes it has against ION; and



WHEREAS, the signatories to this Settlement Agreement and Release desire to resolve fully and
finally all of the disputes and claims they have or may have that arise out of or relate in any way
to the Agreement, the Lawsuit, and each party’s claims against the other, without any admission of
liability or wrongdoing;



NOW, THEREFORE, in consideration of the promises herein made and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby mutually
agreed as follows:





	 	1.	 	This Settlement Agreement and Release will become effective on the date (the
“Effective Date”) that is two (2) business days following the date on which the Bankruptcy
Court enters an order approving this Settlement Agreement and Release, provided RHI has
made the Settlement Payment provided for in paragraph 2 below. If the Bankruptcy Court
declines to approve this Settlement Agreement and Release, then the entire Settlement
Agreement and Release shall be null and void.




 









 






	 	2.	 	In consideration of the rights and releases herein granted, RHI shall pay Two Million
Five Hundred Thousand Dollars ($2,500,000) to ION (the “Settlement Payment”) no later than
the Effective Date by wire transfer to an account designated in writing by ION. The
Settlement Payment is made in compromise of all amounts allegedly owed by each party to the
other pursuant to the Agreement, including all Annual Minimum Guarantee payments (as
defined in the Agreement), accounts receivable for cumulative advertising sales, and
certain minimum advertising, marketing and promotion expenditures in connection with RHI
Programming.
	 
	 	 	 	ION will be solely responsible for any and all tax liabilities associated with the
Settlement Payment, and RHI makes no representation or warranty of any kind regarding
same.
	 
	 	3.	 	RHI and ION will retain for their own accounts all monies they have collected from
advertising sales under the Agreement through and including June 30, 2009. Any monies
collected by RHI from advertising sales under the Agreement after June 30, 2009 but prior to
the Effective Date, will be paid by RHI to ION on the Effective Date. All such monies
collected by RHI during any calendar month after the Effective Date (including any checks
dated prior to, but received after, June 30, 2009) will be paid to ION no later than the
15th day of the month following the calendar month in which the money was
collected. ION shall continue to retain for its own account any monies it collects from
advertising sales under the Agreement after June 30, 2009.
	 
	 	4.	 	RHI and ION hereby acknowledge and agree that, as of the Effective Date, and following
payment of the Settlement Payment, the Agreement shall be terminated and of no further force
or effect and neither shall have any further obligation to the other in connection therewith.
For the avoidance of doubt, as of the Effective Date, RHI, subject to the payment of the
Settlement Payment, shall have no further obligation whatsoever under the Agreement, including
to: (i) provide any RHI Programming (as defined in the Agreement) to ION; (ii) pay any Annual
Minimum Guarantee or other payment to ION (except as provided in paragraph 3 above); (iii)
spend any amount for “off network” marketing, advertising or promotion in connection with RHI
Programming; (iv) spend or cause a third party to spend any amount for “on network”
advertising, marketing or promotion in connection with RHI Programming; or (v) with respect to
any remaining advertising sales “liability” resulting from audience delivery shortfalls,
provide Audience Deficiency Units (“ADU’s”) or other methods such as “cash back” payments to
advertisers who purchased RHI Programming Time Period advertising inventory.
	 
	 	5.	 	For the avoidance of doubt, as of the Effective Date, ION shall have no further obligation or
right to telecast or otherwise exploit RHI Programming. On or before the Effective Date, ION,
at its sole cost and expense, shall return to




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	 	 	 	RHI all masters, sub-masters and other such materials in its possession or control related
to RHI Programming.
	 
	 	6.	 	(a) Except for claims to enforce the terms of, or for any breaches of the warranties
and representations set forth in, this Settlement Agreement and Release, and in consideration
of the Settlement Payment, the sufficiency of which is hereby acknowledged by ION, and of the
covenants set forth herein, ION, and each of the Debtors, on behalf of themselves and their
respective past, present or future general partners, limited partners,
predecessors-in-interest, successors-in-interest, administrators, parents, owners, officers,
shareholders, directors, employees, representatives, licensees, subsidiaries (whether wholly,
partially or indirectly owned), affiliates, divisions, entities, related entities, agents,
attorneys and assigns and each of their respective successors and assigns (hereinafter
collectively the “ION Parties”) hereby release and discharge RHI, and its past, present or
future general partners, limited partners, predecessors-in-interest, successors-in-interest,
administrators, parents, owners, officers, shareholders, directors, employees,
representatives, licensees, subsidiaries (whether wholly, partially or indirectly owned),
affiliates, divisions, entities, related entities, agents, attorneys and assigns and each of
their respective successors and assigns (hereinafter collectively the “RHI Parties”) from any
and all liabilities, actions, claims, causes of action, lawsuits (including, without
limitation, the Lawsuit), debts, dues, sums of money, accounts, reckonings, bills, covenants,
contracts, controversies, agreements, obligations, promises, judgments and demands,
whatsoever, whether known or unknown, contingent or vested, in law or equity, that the ION
Parties ever had, now have or hereafter can, shall or may have from the beginning of time
through and including the Effective Date against the RHI Parties, arising out of, in
connection with, or relating in any way to the Agreement, the negotiation, execution or
delivery thereof, or the transactions, events or occurrences that are the subject matter of
the Lawsuit or any claim or allegation that was or could have been made in the Lawsuit.
	 
	 	 	 	(b) Except for claims to enforce the terms of, or for any breaches of the warranties and
representations set forth in, this Settlement Agreement and Release and of the covenants
set forth herein, RHI, on behalf of itself and its respective past, present or future
general partners, limited partners, predecessors-in-interest, successors-in-interest,
administrators, parents, owners, officers, shareholders, directors, employees,
representatives, licensees, subsidiaries (whether wholly, partially or indirectly owned),
affiliates, divisions, entities, related entities, agents, attorneys and assigns and each
of their respective successors and assigns hereby release and discharge ION, each of its
Debtors, and each of their past, present or future general partners, limited partners,
predecessors-in-interest, successors-in-interest, administrators, parents, owners,
officers, shareholders, directors, employees, representatives, licensees, subsidiaries
(whether wholly, partially or indirectly owned), affiliates, divisions, entities, related
entities, agents, attorneys and




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	 	 	 	assigns from any and all liabilities, actions, claims, causes of action, lawsuits
(including, without limitation, the Lawsuit), debts, dues, sums of money, accounts,
reckonings, bills, covenants, contracts, controversies, agreements, obligations, promises,
judgments and demands, whatsoever, whether known or unknown, contingent or vested, in law
or equity, that the RHI Parties ever had, now have or hereafter can, shall or may have
from the beginning of time through and including the Effective Date against the ION
Parties, arising out of, in connection with, or relating in any way to the Agreement, the
negotiation, execution or delivery thereof, or the transactions, events or occurrences
that are the subject matter of the Lawsuit or any claim or allegation that was or could
have been made in the Lawsuit or in any counterclaim therein.
	 
	 	7.	 	Within five (5) business days following the Effective Date, counsel for ION and RHI shall
execute and file with the Court a Stipulation of Dismissal, dismissing the Lawsuit with
prejudice. In addition to the Stipulation of Dismissal, the parties to this Settlement
Agreement and Release shall prepare, execute and/or file with the Court any and all other
documents that may be necessary to effectuate the dismissal of the Lawsuit and the approval of
this Settlement Agreement and Release by the Bankruptcy Court. In the event that RHI or any of
its affiliates commences a case under chapter 11 of the Bankruptcy Code within ninety (90)
days after the Effective Date and the bankruptcy court having jurisdiction over any RHI
chapter 11 case determines that the Settlement Payment is subject to avoidance pursuant to
chapter 5 of the Bankruptcy Code, ION’s original claims and RHI’s counterclaims and
affirmative defenses shall be reinstated in full for purposes of RHI’s chapter 11 case, and
all of ION’s and RHI’s rights with respect to the Agreement and the Lawsuit shall be
unaltered as a result of this Settlement Agreement and Release.
	 
	 	8.	 	Neither RHI nor ION will make any public statements regarding the Lawsuit or this Settlement
Agreement and Release other than to say — if asked — that the parties “have resolved their
differences amicably.” The provisions of this Settlement Agreement and Release: (a) have not
been and may not be cited by any party hereto as an admission of any issue of fact or law; and
(b) have not been and may not be used for advertising or promotional purposes. Nothing in this
Settlement Agreement and Release shall prevent the parties from filing public documents
required to fulfill their disclosure or other legal obligations.
	 
	 	9.	 	Neither RHI nor ION will make any disparaging comments about the other for a period of one
year from the Effective Date.
	 
	 	10.	 	Each party hereto warrants and represents that it has all necessary authority to enter into
this Settlement Agreement and Release and to perform all of its obligations under this
Settlement Agreement and Release.






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	 	11.	 	This Settlement Agreement and Release is binding upon and shall inure to the benefit of the
licensees, representatives, employees, transferees, affiliates, divisions, entities, related
entities, subsidiaries, parent corporations, successors and/or assigns of the parties hereto.
Notwithstanding the foregoing, ION, on behalf of itself and the ION Parties, represents that
it has not heretofore assigned or otherwise transferred any claim, demand, or cause of action
that is the subject of this Settlement Agreement and Release.
	 
	 	12.	 	This Settlement Agreement and Release shall be governed by the laws of the State of New York
applicable to contracts made or to be performed in New York, without regard to its conflicts
of law principles. All parties consent to the sole and exclusive personal jurisdiction and
venue in any federal or state court located in the County of New York, and agree that all
disputes or litigation arising out of and/or regarding this Settlement Agreement and Release
shall be submitted to and determined by said courts.
	 
	 	13.	 	All notices under this Settlement Agreement and Release shall be provided by mail, with a
contemporaneous copy by e-mail, and addressed as follows:




If to ION:



ION Media Networks, Inc.

601 Clearwater Park Road

West Palm Beach, Florida 33401

Attn: Brandon Burgess, CEO



With a copy to:



Joshua Sussberg

Kirkland & Ellis LLP

601 Lexington Ave.

New York, NY 10022



If to RHI:



RHI Entertainment Distribution, LLC

1325 Avenue of the Americas, 21st Floor

New York, NY 10019

Attn: Henry S. Hoberman

Executive Vice President, General Counsel

& Secretary



With a copy to:



James Quinn

David Lender




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Weil, Gotshal & Manges

767 Fifth Ave.

Suite 3301

New York, NY 10153





	 	14.	 	If any provision of this Settlement Agreement and Release shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall not affect the
remaining provisions of this Settlement Agreement and Release, all of which shall remain in
full force and effect.
	 
	 	15.	 	This Settlement Agreement and Release embodies the full, complete and entire agreement and
understanding of the parties of all of the terms and conditions with respect to the matters
discussed and supersedes any prior or contemporaneous verbal or written discussions. It is
expressly understood and agreed that this Settlement Agreement and Release may not be altered,
amended, modified, superseded, terminated, canceled, renewed, extended or otherwise changed in
any respect whatsoever except by a written instrument duly executed by the undersigned.
	 
	 	16.	 	This Settlement Agreement and Release shall be deemed to have been written jointly by the
parties. Ambiguities shall not be construed against the interest of any party because that
party drafted all or any part of this Settlement Agreement and Release.
	 
	 	17.	 	The parties to this Settlement Agreement and Release represent that they have read this
Settlement Agreement and Release and know and understand its contents. The parties understand
and expressly agree that this Settlement Agreement and Release has been freely and voluntarily
entered into and that no oral or written representations or promises of any kind, unless
specifically contained in this Settlement Agreement and Release, have been made or relied upon
by any of the parties. The parties acknowledge that they have had the benefit of the advice of
legal counsel before executing this Settlement Agreement and Release.
	 
	 	18.	 	The persons signing this Settlement Agreement and Release on behalf of the parties hereby
represent and warrant that they are duly authorized to execute this Settlement Agreement and
Release on behalf of the entities for which they have signed, and that this Settlement
Agreement and Release is legal, valid and binding on the entities on whose behalf they have
signed.






	 	19.	 	The representations, warranties and covenants contained in this Settlement Agreement and
Release or in any other document delivered hereunder shall survive the execution of this
Settlement Agreement and Release.





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	 	20.	 	No breach of any provision hereof can be waived unless in writing signed by the
waiving party. Waiver of any one breach of any provision hereof shall not be deemed to
be a waiver of any other breach of the same or any other provision hereof.
	 
	 	21.	 	This Settlement Agreement and Release is the result of a compromise and shall not
at any time for any purpose be construed by the parties, their attorneys, or anyone else
as an admission by either party of any liability or responsibility for any damages
allegedly suffered by the other, and the parties further acknowledge that they
specifically disclaim any liability or responsibility for such damages.
	 
	 	22.	 	The parties may execute this Settlement Agreement and Release in separate
counterparts, each of which shall be deemed an original instrument as against the party
who has signed it. Each party’s signature at the bottom hereof will signify acceptance
of, and agreement to, the terms and provisions contained herein. Facsimile copies of this
Settlement Agreement and Release shall have the same force and effect as originals.




IN
WITNESS WHEREOF, the parties hereto have executed this Settlement Agreement and Release on the
date written below.




	 	 	 	 	 
	ACCEPTED AND AGREED:	 	 
	 
	 	 	 	 
	ION MEDIA NETWORKS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jeffrey J. Quinn	 	 
	 

	 	 


	 	 
	 
	Its:

	 	 

Vice President & Treasurer
	 	 
	 
	Date: 7/15/09	 	 
	 
	 	 	 	 
	RHI ENTERTAINMENT DISTRIBUTION, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ Henry S. Hoberman	 	 
	 

	 	 


	 	 
	 
	Its:

	 	 


Henry S. Hoberman
	 	 
	 

	 	Exec. V.P., General Counsel & Secretary	 	 
	 

	 	 	 	 
	Date:

	 	July 15, 2009	 	 







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