Exhibit 10.1
EXECUTION VERSION*
FORBEARANCE AGREEMENT
     FORBEARANCE AGREEMENT, dated as of December 23, 2009 (as amended or
modified from time to time, this “Agreement”), among RHI Entertainment, LLC (the
“Borrower”), its subsidiaries party to the Credit Agreement described below as
Guarantors (the “Guarantors”, and together with the Borrower, the “Credit
Parties”), RHI Entertainment Holdings II, LLC (the “Parent”), the Lenders party
to the Credit Agreement described below (the “Lenders”) and JPMorgan Chase Bank,
N.A., as Administrative Agent for the Lenders (in such capacity, the “Agent”)
and as Issuing Bank.
     WHEREAS, the Borrower, the Guarantors, the Parent, the Lenders and the
Agent are parties to a Credit, Security, Guaranty and Pledge Agreement, dated as
of January 12, 2006, as amended and restated on April 13, 2007 (as the same may
have been or may from time to time be further amended, restated, supplemented or
modified from time to time, the “Credit Agreement”).
     WHEREAS, the Specified Defaults described herein either have occurred or
may occur during the Forbearance Period described herein.
     WHEREAS, reference is made to the Hallmark Guaranty and that certain Second
Amended and Restated Program License Agreement dated as of January 1, 2005 (as
amended, supplemented or modified from time to time, the “CMH License
Agreement”) between RHI Entertainment Distribution, LLC, f/k/a Hallmark
Entertainment Distribution, LLC and Crown Media.
     WHEREAS, the Agent has commissioned a recent audit of the Borrower’s
calculations of the Borrowing Base (the “BB Audit”), and the auditor has
concluded that the receivables from Crown Media to RHI which are scheduled to be
paid subsequent to December 31, 2009 (“Post-12/31/09 Crown Receivables”) should
not be eligible for the 100% Advance Rate provided for under clause (iii) of the
Borrowing Base.
     WHEREAS, the Borrower and the Lenders are in disagreement over the
foregoing conclusion reached in the BB Audit.
     WHEREAS, the Borrower has advised the Agent that it may during the
Forbearance Period default in its obligations to pay amounts due under various
Swap Agreements which constitute “Obligations”.
     WHEREAS, the Borrower has requested that the Agent and the Lenders provide
a temporary forbearance from exercising remedies with respect to the Specified
Defaults described herein during the Forbearance Period described herein and
that the Agent and the Lenders provide a temporary waiver of the requirements of
Section 2.10(e) of the Credit Agreement during such Forbearance Period.

 

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     WHEREAS, the Borrower has requested that the Lenders which have entered
into certain Swap Agreements agree to terminate those Swap Agreements as
provided herein and provide a temporary forbearance from exercising remedies
with respect to any non-payment of the amounts owed by the Credit Parties under
such Swap Agreements.
     WHEREAS, the Lenders have agreed, subject to the terms and conditions of
this Agreement, to provide the forbearance and temporary waiver referred to in
the immediately preceding recital.
     WHEREAS, the Borrower has on the date hereof presented the Lenders with a
Borrowing Base Certificate calculated as of November 30, 2009, which reflects a
Borrowing Base that is not sufficient to cover all Loans and L/C Exposure, and
accordingly an Event of Default exists under Sections 2.10(e) and 7(b) of the
Credit Agreement.
     WHEREAS, in order to induce the Agent and the Lenders to agree to such
forbearance and consent, the Credit Parties have agreed to make certain
acknowledgments and enter into certain agreements as hereinafter set forth.
     ACCORDINGLY, the parties hereby agree as follows:
     1. Acknowledgments . The Credit Parties and the Lenders expressly
acknowledge and agree that, effective upon the date of this Agreement,
notwithstanding anything to the contrary in the Credit Agreement, as a result of
the delivery of the most recent Borrowing Base Certificate delivered by the
Borrower to the Administrative Agent on December 23, 2009, an Event of Default
exists under Sections 2.10(e) and 7(b) of the Credit Agreement (without
reference to the one (1) Business Day cure period described in Section 2.10(e)
of the Credit Agreement, which cure period is hereby waived by the Credit
Parties) (which Event of Default is subject to the forbearance and temporary
waiver described below until the expiration or termination of the Forbearance
Period). The Borrower and the Agent acknowledge and agree that, after the date
hereof, no Post-12/31/09 Crown Receivables shall be included under clause
(iii) of the Borrowing Base.
     2. Defined Terms. All capitalized terms not otherwise defined herein are
used as defined in the Credit Agreement. For purposes of this Agreement, the
following defined terms shall have the following meanings:
“Forbearance Period” shall mean the period commencing upon satisfaction in full
of the conditions precedent set forth in Section 7 of this Agreement and ending
upon the earlier of (i) the Stated Expiration Date and (ii) the occurrence of
any Termination Event.
“Specified Default” or “Specified Defaults” shall mean, individually or
collectively, the Defaults or Events of Default listed on Schedule 1 hereto.
“Stated Expiration Date” shall mean 5:00 p.m. (New York City time) on
January 22, 2010.
“Termination Event” shall mean the occurrence of any of the following:

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               (i) the occurrence of any Default or Event of Default under the
Credit Agreement other than a Specified Default;
               (ii) any breach by any Credit Party of any agreement or covenant
contained in this Agreement, including without limitation any commitment made
under Section 6 hereof;
               (iii) any representation or warranty made by any Credit Party in
this Agreement (including without limitation any commitment made under Section 6
hereof) shall cease to be true and accurate in all material respects;
               (iv) any “Default” or “Event of Default” under the Second Lien
Agreement pursuant to which the Second Lien Agent or the “Required Lenders” as
defined under the Second Lien Agreement deliver any notice of default or any
Notice of Intent to Exercise (as defined in the Second Lien Intercreditor
Agreement), regardless of whether any such notice of default or Notice of Intent
to Exercise purports to be based on any occurrence which constitutes a Specified
Default;
               (v) any creditor of any Credit Party or Parent shall commence
involuntary bankruptcy proceedings against such Credit Party or Parent;
               (vi) any failure of any Credit Party to pay any interest on the
Loans (but not on the Termination Amounts described below, it being understood
that non-payment of interest on the Termination Amounts shall not constitute a
Termination Event) or any Commitment Fees, Letter of Credit fronting fees or
Letter of Credit commissions as and when due under the Credit Agreement;
               (vii) the Borrower shall have failed to provide reasonable
cooperation with FTI Consulting, Inc. (“FTI”) or with the Agent or shall have
failed to pay any invoice of FTI or Morgan, Lewis & Bockius LLP by such time as
payment thereof is due in accordance with the November 20, 2009 letter agreement
between Borrower and Agent;
               (viii) any creditor of any Credit Party or Parent shall attempt
to execute a judgment, or shall obtain attachment on any asset of such Credit
Party or Parent or otherwise shall exercise any similar remedy against any asset
of such Credit Party or Parent (but excluding any notice of default or
termination or the commencement of any suit, arbitration or other legal process
which has not developed into an occurrence described before this parenthetical);
or
               (ix) any Credit Party or Parent shall commence a voluntary case
under the Bankruptcy Code or file a proceeding seeking protection under any
other law for the relief of debtors.
     3. Swap Agreement Matters :
          (a) Notwithstanding anything to the contrary in any of the Swap
Agreements described on Schedule 2 to this Agreement (such Swap Agreements,
together with any master agreement schedules, annexes and confirmations and
other documentation relating thereto, the “Specified Swap Agreements”), the
Borrower and each Lender signatory hereto which is

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counter-party to a Specified Swap Agreement (herein, a “Lender Counterparty”)
agrees that each relevant Specified Swap Agreement is hereby terminated (other
than any setoff rights arising thereunder that expressly survive such a
termination) effective on the effective date of this Agreement (unless such
Specified Swap Agreement was previously terminated by separate agreement between
the Borrower and the relevant Lender Counterparty) without any further action by
the parties thereto. As a result, the Borrower has an obligation under each
Specified Swap Agreement to pay to the relevant Lender Counterparty thereto the
amount (the “Termination Amounts”) set forth opposite such Lender Counterparty’s
name on Schedule 2 to this Agreement. The Termination Amounts are accordingly
due and payable (subject to the forbearance described below during the
Forbearance Period) on the date hereof.
          (b) The Borrower has an obligation under each Specified Swap Agreement
to pay to the relevant Lender Counterparty interest on the Termination Amount
relating thereto, which shall accrue at a per annum rate equal to
(notwithstanding any default rate of interest which may be specified as being
payable by the Credit Parties under the relevant Specified Swap Agreements) the
weighted average interest rate applicable from time to time in respect of the
Loans, and shall begin to accrue (with the default rate of interest as described
in Section 5 below) on the date of the termination of the relevant Specified
Swap Agreement as described in Section 3(a) hereof. The Lender Counterparties
and the Credit Parties acknowledge and agree that any such interest on the
Termination Amounts, as well as the Termination Amounts themselves, shall be
paid solely as contemplated by Section 12.2 of the Credit Agreement.
          (c) Each Lender Counterparty signatory hereto shall cause any
transferee of its Specified Swap Agreement to agree in writing to all provisions
of this Agreement applicable to such Specified Swap Counterparty pursuant to
documentation reasonably acceptable to the Agent. Notwithstanding anything to
the contrary in any Specified Swap Agreement, the provisions of this Section 3
may not be amended, waived or otherwise modified without the prior written
consent of the Borrower, the Required Lenders and each party to a Specified Swap
Agreement that is directly affected thereby.
     4. Agreement to Forbear. (a) During the Forbearance Period, subject to the
terms and conditions of this Agreement, (i) the Agent and the Lenders that are
signatories hereto, which Lenders constitute the Required Lenders, hereby agree
to forbear from exercising their rights and remedies as creditors against the
Borrower and the other Credit Parties or Parent that may exist by virtue of any
Specified Defaults (subject to the termination of such forbearance in the event
of any Termination Event, including any Termination Event arising from or out of
a Specified Default (although it is understood that the existence of a Specified
Default shall not in and of itself constitute a Termination Event)) under the
Credit Agreement or under the other Fundamental Documents and (ii) the Lender
Counterparties that are signatories hereto hereby agree to forbear from
exercising their rights and remedies as creditors against the Borrower and (if
applicable) the other Credit Parties with respect to payments on the Termination
Amounts and any interest accruing thereon.
          (b) In addition, solely with respect to the Specified Defaults listed
as Items 1 and 2 appearing on Schedule 1 hereto, the Agent, the Lenders and the
Lender Counterparties signatory hereto agree to temporarily waive, solely during
the Forbearance Period, any Default or Event of Default resulting solely from
any such Specified Defaults. For the avoidance of

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doubt, the temporary waiver contained in the preceding sentence shall terminate
and be of no further force or effect upon any expiration or termination of the
Forbearance Period.
          (c) It is acknowledged and agreed that, from and after the date
hereof, the Borrower shall not be entitled to request any additional Loans or
Letters of Credit until such time as the consent of the Lenders holding at least
66-2/3% of the Revolving Credit Commitments has been obtained. Nothing in this
Agreement shall limit any Lender’s obligation to reimburse the Issuing Bank its
pro rata portion of any payment made by the Issuing Bank after the date hereof
on any Letter of Credit issued prior to the date hereof.
          (d) It is understood and agreed among the Lenders, the Agent and the
Borrower that the Base Cash Flow Schedule and any updated rolling cash flow
schedule delivered as contemplated herein have been or will be, with respect to
factual matters covered therein (but not with respect to the covenants and
agreements contained herein) delivered in anticipation of and as part of
settlement discussions, and as between the Credit Parties, the Agent and the
Lenders, nothing contained therein shall during the Forbearance Period
constitute an admission by any of the Credit Parties as to any inability to pay
their debts as they become due.
          (e) It is understood and agreed among the Lenders, the Agent and the
Borrower that the requirement in Section 6.5(m) of the Credit Agreement that
there be no Default or Event of Default shall be disregarded to the extent the
Borrower complies with Section 6(c)(v) of this Agreement (including that such
payments were included in the Base Cash Flow Statement).
     5. Reservation of Rights . (a) Except as otherwise expressly provided
herein, nothing in this Agreement shall be construed as a waiver of or
acquiescence to any Specified Default, and each of the Specified Defaults which
constitutes a Default or an Event of Default shall continue in existence as such
notwithstanding the agreement of the Agent and the Required Lenders, as set
forth herein, to forbear in the exercise of rights and remedies against any
Credit Party or Parent on the terms and for the period set forth herein. Except
as otherwise expressly provided herein, the execution and delivery of this
Agreement shall not: (i) constitute an extension, modification, suspension or
waiver of any term or aspect of the Credit Agreement or the other Fundamental
Documents; (ii) extend the terms of the Credit Agreement or the due date of any
of the Obligations; (iii) give rise to any obligation on the part of the Agent
or the Lenders to extend, amend, waive or otherwise modify any term or condition
of the Credit Agreement or any of the other Fundamental Documents; or (iv) give
rise to any defenses or counterclaims to the right of the Agent or the Lenders
to compel payment of the Obligations or to otherwise enforce their rights and
remedies under the Credit Agreement and the other Fundamental Documents. During
the Forbearance Period, the Agent and the Lenders may exercise any and all
rights and remedies against any Credit Party or Parent that may exist by virtue
of the occurrence and continuance of any Default or Event of Default other than
the Specified Defaults. Following the Forbearance Period, the Agent and the
Lenders may exercise all rights and remedies against any Credit Party or Parent
that may exist by virtue of the occurrence and continuance of any Specified
Default or any other Default or Event of Default which may arise. The Agent and
the Lenders hereby expressly reserve all of their respective rights and remedies
under the Fundamental Documents and under Applicable Law with respect to the
Specified Defaults and otherwise. Without limiting the foregoing, nothing in
this Agreement shall alter the effect of

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Section 2.8 of the Credit Agreement. The Borrower and the Guarantors acknowledge
and agree that the default rates of interest set forth in Section 2.8 of the
Credit Agreement shall apply from and after the date of this Agreement on all
Loans under the Facility (and that the default rate of interest set forth in
Section 2.8 of the Credit Agreement shall apply to all Termination Amounts from
and after the date of the termination of the relevant Specified Swap Agreement
as determined under Section 3(a) hereof) notwithstanding the forbearance and the
other agreements of the Lenders, the Lender Counterparties and the Agent
described herein unless and until all Events of Default (including without
limitation the Specified Defaults) have been cured or permanently waived (with
such default rate of interest applicable to all periods commencing from the date
hereof until such time at which all such Events of Default are cured or
permanently waived).
          (b) The Borrower, the Agent and the Lenders may, from time to time,
engage in negotiations concerning the Obligations, and such negotiations may be
lengthy and complex. None of the Agent or the Lenders shall have any obligation
to modify, amend and/or restructure the Obligations or any of the Fundamental
Documents in connection with such negotiations or otherwise. Each of the Agent
and the Lenders may terminate such negotiations at any time, in its sole
discretion, with or without notice, and without liability of any kind. None of
the Agent or the Lenders shall have any obligation or liability by virtue of the
commencement, prosecution or termination of negotiations concerning any possible
amendment. None of the Agent or the Lenders shall waive any rights or incur any
liability by negotiation or by the passage of time associated therewith.
          (c) The Borrower acknowledges and agrees that the occurrence of any
non-payment of interest on the Loans would give rise to an immediate Termination
Event and to an additional Event of Default under Section 7(c) of the Credit
Agreement (without reference to the three (3) day grace period described in such
Section, which grace period is hereby waived by the Credit Parties).
          (d) The Borrower acknowledges and agrees that the occurrence of any
non-payment of interest on the Termination Amounts (as described in Item 2 on
Schedule 1 of this Agreement) would give rise to additional Events of Default
under Section 7(c) of the Credit Agreement following the passage of the three
(3) day grace period described in such Section (for the avoidance of doubt, any
such Event of Default would during the Forbearance Period be subject to the
forbearance and temporary waiver provided in Section 4 hereof).
          (e) Additionally, the Borrower acknowledges and agrees that the
Termination Amounts are due and payable, and that an Event of Default exists
under Section 7(c) of the Credit Agreement as a result of the non-payment of
same (without reference to the passage of the three (3) day grace period
described in Section 7(c) of the Credit Agreement, which grace period is hereby
waived by the Credit Parties) (for the avoidance of doubt, such Event of Default
shall during the Forbearance Period be subject to the forbearance and temporary
waiver provided in Section 4 hereof).
     6. Representations, Warranties, Confirmations, and Agreements by Borrower
with respect to Specified Defaults and Other Matters.

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          (a) Each Credit Party hereby represents and warrants to Agent and each
of the Lenders that:
               (i) no Defaults or Events of Defaults other than the Specified
Defaults have occurred and are continuing as of the date hereof or, as of the
date hereof, are expected to occur prior to the Stated Expiration Date;
               (ii) as of the date hereof, the aggregate gross value of all of
the assets of any Subsidiaries which have not become a Credit Party because of
the $250,000 threshold appearing in Section 5.21 of the Credit Agreement, is
approximately $625,000; and
               (iii) Schedule 3 hereto identifies each of the Credit Parties’
and each of their Subsidiaries’ deposit accounts, lists the balances in such
deposit accounts as of December 17, 2009 and specifies whether or not an Account
Control Agreement has been delivered with respect to such deposit account.
          (b) Each Credit Party hereby confirms, acknowledges and agrees that:
               (i) as of December 18, 2009, the principal balance of the
outstanding Loans under the Credit Agreement was at least $514,588,646.70 and
the total L/C Exposure was at least $3,384,990.00, which amounts do not include
interest, fees, expenses and other amounts which are chargeable or otherwise
reimbursable under the Credit Agreement;
               (ii) the Termination Amounts are in the amounts set forth on
Schedule 2 hereto, which amounts do not include interest that will accrue
thereon as described in this Agreement; and
               (iii) all of the Obligations, including the Loans and the
Termination Amounts set forth above, are valid and outstanding and are secured
by the Collateral, and neither any of the Credit Parties nor the Parent has any
rights of offset, defenses, claims or counterclaims with respect to any of the
Obligations.
          (c) Each Credit Party hereby covenants and agrees:
               (i) that it shall cooperate, and that it shall direct its
financial advisors and legal counsel to cooperate, with the Agent, its counsel
and FTI to provide the Agent with information regarding the Borrower and its
Subsidiaries, and their respective assets, as the Agent, its counsel or FTI may
request. Without limiting the generality of the foregoing, Borrower, its counsel
and its financial advisors will meet with the Agent, its counsel and FTI at such
times during regular business hours during the Forbearance Period as may be
requested by the Agent;
               (ii) to, if requested by the Agent, hold update calls during
regular business hours as frequently as the Agent may request among Borrower’s
Chief Financial Officer and Borrower’s financial advisors, the Agent, its legal
counsel and financial advisors and (if requested by the Agent) the Lenders;

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               (iii) that, notwithstanding anything to the contrary in the
Credit Agreement, during the Forbearance Period (and for any other period during
which a Default or Event of Default has occurred and is continuing) it has no
right to retain any Net Proceeds of any Dispositions for the purpose of applying
such proceeds to the acquisition of other assets or properties, and that any
such Net Proceeds received during the Forbearance Period shall be applied within
one (1) Business Day of receipt to prepay the Loans in accordance with
Section 2.10(h) of the Credit Agreement;
               (iv) that during the Forbearance Period, the Borrower will pay on
a timely basis any and all amounts due to the Agent and/or the Lenders and/or
the Agent’s professionals under the Credit Agreement or other Fundamental
Documents, except solely to the extent that any non-payment of the same
constitutes or would constitute a Specified Default;
               (v) that during the Forbearance Period it will not make: (A) any
Investments other than Investments existing or committed to be made on the date
hereof and Investments pursuant to clauses (a), (d) or (f) of Section 6.4 of the
Credit Agreement; or (B) any Restricted Payments other than Restricted Payments
pursuant to Section 6.5(e) of the Credit Agreement, pursuant to Section 6.5(l)
of the Credit Agreement (solely to the extent any such dividend is paid to a
Credit Party) or pursuant to Section 6.5(m) of the Credit Agreement (provided,
that payments may only be made as described in Section 6.5(m) of the Credit
Agreement to the extent that such payments are both (x) paid to or on behalf of
Public Co. in the ordinary course of business and consistent with past practices
and (y) reflected in the Base Cash Flow Statement, but provided further that
requirement that there be no Default or Event of Default shall be disregarded
for purposes of making payments under Section 6.5(m) of the Credit Agreement as
described above);
               (vi) that the provisions of the Credit Agreement and the
Fundamental Documents shall, during the Forbearance Period and following any
expiration or termination thereof unless and until all Events of Default
(including without limitation the Specified Defaults) have been cured or
permanently waived, be interpreted and complied with on the understanding that
one or more Events of Default is in existence, including that each Credit Party
and the Parent will abide by all affirmative and negative covenants under the
Credit Agreement and the other Fundamental Documents on the understanding that
one or more Events of Default are in existence (e.g., in the case of any
covenant that permits the Credit Parties to take an action only in the absence
of an Event of Default, the Credit Parties agree that they shall not take such
action); provided that the requirement in Section 6.5(m) that the be no Default
or Event of Default shall be disregarded to the extent the Borrower complies
with the requirements set forth in clause (v)(B) immediately above;
               (vii) that the Credit Parties will during the Forbearance Period
limit their cash disbursements to those that are materially consistent with the
payments set forth on the 13-week cash flow schedule the cover page of which is
marked as “RHI Entertainment, LLC 13 Week Cash Flow Forecast December 14, 2009 —
March 12, 2010” and the first page of which is marked as “12/22/09 Adjusted
Forecast” which was previously presented to the Agent (such cash flow forecast,
together with the back-up provided along therewith, the “Base Cash Flow
Schedule”) and amounts required to be paid pursuant to Section 6(c)(iv) hereof;
in furtherance of the foregoing, the Credit Parties agree that during the
Forbearance Period they shall not, without

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the written consent of Lenders holding at least 40% of the Total Commitments
(a) make monetary payments that are not reflected in the Base Cash Flow Schedule
in an aggregate amount equal to or in excess of $500,000 prior to the Stated
Expiration Date, (b) with respect to any vendor or creditor which is reflected
in the Base Cash Flow Schedule (whether such vendor or creditor is scheduled
thereon to receive payments prior or subsequent to the Stated Expiration Date
(or both)) make payments that as of any date of determination are in excess of
110% of the amount reflected on the Base Cash Flow Schedule as being payable to
such vendor or creditor through such date of determination, provided that ,
subject always to the following clause (c): (1) this clause (b) shall not limit
the amount of payments of fees and expenses of the financial advisors and
counsel to the Agent during the Forbearance Period or (so long as the payments
are for services rendered rather than to be rendered) payments of fees and
expenses of legal counsel to the Credit Parties during the Forbearance Period
and (2) in the context of payments reflected on the Base Cash Flow Schedule of
less than $50,000, the Credit Parties may pay amounts in excess of the scheduled
payments so long as (A) the total payment does not exceed $50,000 and (B) the
amounts paid to such vendor do not exceed the total amounts reflected on the
Base Cash Flow Schedule as payable to such creditor or vendor or (c) permit
their aggregate payments as of any date of determination to exceed 110% of the
aggregate payments projected in the Base Cash Flow Schedule to be made through
such date of determination;
               (viii) that the Credit Parties shall not permit their aggregate
minimum cash balance at any time to be less than $10,000,000;
               (ix) that the Credit Parties will deliver to Agent by no later
than 6:00 p.m. (New York City time) on each Thursday during the Forbearance
Period:
                    (1) a weekly rolling 13-week update to the Base Cash Flow
Schedule (with the period of such each such update commencing with the preceding
Friday), each of which updates shall (a) be prepared in substantially the same
form (and with substantially the same back-up schedules & information) as the
Base Cash Flow Schedule and (b) show any variances from the projections in the
Base Cash Flow Schedule based on actual results through such update, and
                    (2) reports on the Credit Parties’ accounts receivable and
accounts payable as of the preceding Friday, which reports shall show summary
aging by accounts and shall be in form and substance satisfactory to the Agent
and FTI;
               (x) to, upon request of the Agent, identify on a per-Subsidiary
basis the value of the assets of any Subsidiaries which have not become a Credit
Party, and cause any such non-Credit Party Subsidiaries as the Agent may request
to become a Credit Party by executing and delivering to the Agent an Instrument
of Assumption and Joinder; provided , that the foregoing shall not require any
Controlled Foreign Subsidiary to become a Credit Party if the Administrative
Agent is reasonably satisfied that causing such Subsidiary to be a Credit Party
would result in adverse tax consequences to the Credit Parties disproportionate
to the value of the net assets of each of the Controlled Foreign Subsidiaries on
an entity-by-entity basis (although it is understood that a reduction in tax
loss to the Credit Parties shall not be considered an adverse tax consequence);

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               (xi) to, upon request of the Agent, deliver Account Control
Agreements in form and substance satisfactory to the Agent with respect to each
deposit account listed on Schedule 3 hereto that is maintained with a financial
institution other than the Agent and over which an Account Control Agreement has
not already been delivered;
               (xii) that the Credit Parties will by no later than 5:00 p.m.
(New York City time) on December 31, 2009 provide the Agent with the unaudited
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of, and the related unaudited consolidated statements of income,
stockholders’ equity and cash flows for, the month ending November 30, 2009, and
for the portion of the fiscal year through the end of such month, together with
a certificate signed by an Authorized Officer of the Borrower to the effect that
such financial statements, while not examined by independent public accountants,
reflect, in the opinion of the Borrower, all adjustments necessary to present
fairly in all material respects the financial position of the Borrower and its
Consolidated Subsidiaries as of the end of such month and the results of
operations for such month and year-to-date period then ended in conformity with
GAAP, subject to normal year-end audit adjustments and the absence of footnotes;
               (xiii) that the Credit Parties will, by no later than the Stated
Expiration Date, provide the Agent with the unaudited consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of, and the
related unaudited consolidated statements of income, stockholders’ equity and
cash flows for, the month and fiscal year ending December 31, 2009, together
with a certificate signed by an Authorized Officer of the Borrower to the effect
that such financial statements, while not examined by independent public
accountants, reflect, in the opinion of the Borrower, all adjustments necessary
to present fairly in all material respects the financial position of the
Borrower and its Consolidated Subsidiaries as of the end of such month and the
results of operations for such month and fiscal year then ended in conformity
with GAAP, subject to normal year-end audit adjustments and the absence of
footnotes and subject to any non-cash charges that may result from an impairment
analysis based on, among other things, the most recent valuation of the Library,
which charges are not expected to be estimable by the Stated Expiration Date and
which the Agent and the Lenders acknowledge may be material;
               (xiv) that the Credit Parties will, by no later than 5:00 p.m.
(New York City time) on January 18, 2010, provide the Agent with a preliminary
budget for the 2010 calendar year and a preliminary cash flow projection for the
2010 calendar year, which such cash flow projection shall be presented and
calculated on a “direct” basis, and which such budget and cash flow schedule
shall be in form and substance and shall be supported by such detail as shall be
satisfactory to the Agent and FTI;
               (xv) that the Credit Parties will, by no later than January 8,
2010, deliver an updated draft valuation report relating to the Eligible Library
Amount, which updated report shall be dated as of September 30, 2009 or a
subsequent date which is satisfactory to the Agent;
               (xvi) that the Borrower will comply with all of its covenants and
agreements in that certain Letter Agreement dated as of December 23, 2009
entered into between Borrower and the Administrative Agent by no later than the
required date set forth therein;

10

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               (xvii) that the Credit Parties will not make or offer to make any
payment, prepayment, repurchase or redemption of or otherwise optionally or
voluntarily defease or segregate funds with respect to any Specified Swap
Agreements (except in connection with payment to the Agent which are to be
applied in accordance with Section 12.2 of the Credit Agreement);
               (xviii) that none of the Credit Parties or any of their
Subsidiaries will execute or deliver any written agreement or instrument that
has the effect or intent of preferring or securing any of its creditors (other
than the Agent and the Lenders with respect to the Obligations) such that any
such creditor would by virtue thereof hold a better position as a creditors
rights matter than it holds as of the date hereof, other than any Lien in
respect of obligations under the Second Lien Agreement, including by means of a
supplement to any credit document in respect thereof, solely to the extent such
Lien provides a second-priority lien on assets to the same extent that a Lien is
provided to the Agent on a first-priority basis on the same assets in accordance
with the Credit Agreement and the Intercreditor Agreement; and
               (xix) Upon the exchange by KRH of all of its equity interests in
Holdings for common stock of Public Co. as a result of which Holdings is or
shall become a wholly-owned subsidiary of Public Co. (the “Exchange “)), the
Borrower shall obtain a written acknowledgement from Public Co. that the
Exchange has occurred and that KRH is accordingly no longer entitled to receive
any Tax Distributions, and to the extent the Exchange has not occurred, the
Borrower shall not make any Tax Distributions during the Forbearance Period or
thereafter until such point as no further Events of Default have occurred and
are continuing.
          (d) Each Credit Party and the Parent hereby forever releases the
Agent, each of the Lenders and each of the Lender Counterparties from any and
all liens, claims, interests and causes of action of any kind or nature (each, a
“Claim “) that any Credit Party now has or may hereafter have against the Agent
or any of the Lenders, and hereby agrees to indemnify and hold harmless the
Agent, each of the Lenders and each of the Lender Counterparties for all Claims
that any Person may bring against the Agent or any of the Lenders that (i) arise
under or in connection with the Credit Agreement or any other Fundamental
Documents (and under any Specified Swap Agreement, as applicable) based on facts
existing on or before the date hereof or (ii) arise under or in connection with
this Agreement; provided that the Credit Parties may bring claims or causes of
action solely to enforce the provisions of this Agreement. Each Credit Party and
the Parent hereby reaffirms all of its obligations under the Credit Agreement
and each other Fundamental Document to which it is a party, as well as under
each of the Specified Swap Agreements (as the same are effectively modified by
this Agreement).
The Credit Parties acknowledge and agree that each of the commitments and
agreements contained in this Section 6 shall, except to the extent that the
context clearly states or implies to the contrary, remain in effect
notwithstanding the expiration or termination of the Forbearance Period.
     7. Conditions to Effectiveness . The provisions of Sections 1, 2, 3, 4,
5(c)-(e) and 6 of this Agreement shall not become effective unless and until
each of the following conditions have been satisfied:

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          (a) the Agent shall have received counterparts of this Agreement
executed by the Borrower, each Guarantor (and any entity required to join the
Credit Agreement as a Guarantor pursuant to Section 5.21 of the Credit
Agreement), the Parent, the Agent and the Lenders constituting the Required
Lenders;
          (b) after giving effect to this Agreement, no Event of Default or
Default (with the sole exception of (i) the Specified Defaults or (ii) any
Default or Event of Default arising solely from the inaccuracy of any
representation or warranty contained in the Credit Agreement to the extent that
any such inaccuracy exists solely because of the existence of any Specified
Default) shall have occurred and be continuing;
          (c) the representations and warranties contained in Sections 6(a) and
8 hereof shall be true and correct;
          (d) the Credit Parties shall have provided the Agent with the
unaudited consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of, and the related unaudited consolidated statements
of income, stockholders’ equity and cash flows for, the month ending October 31,
2009, and for the portion of the fiscal year through the end of such month,
together with a certificate signed by an Authorized Officer of the Borrower to
the effect that such financial statements, while not examined by independent
public accountants, reflect, in the opinion of the Borrower, all adjustments
necessary to present fairly in all material respects the financial position of
the Borrower and its Consolidated Subsidiaries as of the end of such month and
the results of operations for such month and year-to-date period then ended in
conformity with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes; and
          (e) all legal matters related to this Agreement shall be satisfactory
to Morgan, Lewis & Bockius, LLP, counsel to the Agent.
     8. Representations and Warranties . Each Credit Party represents and
warrants that before and after giving effect to this Agreement the
representations and warranties contained in the Credit Agreement are true and
correct in all material respects on and as of the date hereof as if such
representations and warranties had been made on and as of the date hereof
(except to the extent (a) that any such representations and warranties
specifically relate to an earlier date and (b) to the extent that any such
representation or warranty would not be true and correct solely because of the
existence of any Specified Default).
     9. Entire Agreement . This Agreement constitutes the entire agreement of
the parties concerning the subject matter hereof and supersedes any prior or
contemporaneous representations or agreements, either oral or written, not
contained herein.
     10. Further Assurances . At any time and from time to time, upon the
Agent’s request and at the sole expense of the Credit Parties, each Credit Party
will promptly and duly execute and deliver any and all further instruments and
documents and take such further action as the Agent reasonably deems necessary
to effect the purposes of this Agreement.
     11. Fundamental Documents . This Agreement shall constitute a Fundamental
Document.

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     12. Full Force and Effect . Except as expressly set forth herein, this
Agreement does not constitute a waiver or a modification of any provision of the
Credit Agreement or a waiver of any Event of Default under the Credit Agreement.
The Credit Agreement and the other Fundamental Documents shall continue in full
force and effect in accordance with the provisions thereof on the date hereof
and are hereby ratified and affirmed. As used in the Credit Agreement, the terms
“Agreement”, “this Agreement”, “herein”, “hereafter”, “hereto”, “hereof”, and
words of similar import, shall, unless the context otherwise requires, mean the
Credit Agreement as modified by this Agreement.
     13. APPLICABLE LAW . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
     14. Counterparts . This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument. Delivery of an executed
counterpart of a signature page of this Agreement by facsimile transmission or
electronic photocopy (e.g., “.pdf”) shall be effective as delivery of a manually
executed counterpart hereof.
     15. Headings . The headings of this Agreement are for the purposes of
reference only and shall not affect the construction of or be taken into
consideration in interpreting this Agreement.
     16. Public/Private Information . Each of the Lenders acknowledges that
information furnished to it pursuant to this Agreement may include material
non-public information concerning the Borrower and its related parties or their
respective securities, and confirms that it has developed compliance procedures
regarding the use of material non-public information and that it will handle
such material non-public information in accordance with those procedures and
applicable law, including federal and state securities laws. All such
information, including requests for waivers and amendments, furnished by the
Borrower pursuant to, or in the course of administering, this Agreement, will be
syndicate-level information, which may contain material non-public information
about the Borrower and its related parties or their respective securities.
Accordingly, each Lender represents to the Borrower and the Agent that it has
identified in its “Administrative Questionnaire” a credit contact who may
receive information that may contain material non-public Information in
accordance with its compliance procedures and applicable law.
[Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the date and year
first above written.

           

BORROWER:

RHI ENTERTAINMENT, LLC
      By:   /s/ William J. Aliber       Name:   William J. Aliber       Title:  
Chief Financial Officer       PARENT:

RHI ENTERTAINMENT HOLDINGS II, LLC
      By:   /s/ William J. Aliber       Name:   William J. Aliber       Title:  
Chief Financial Officer    

Signature Page to RHI Forbearance Agreement

 

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            GUARANTORS:

RHI ENTERTAINMENT DISTRIBUTION, LLC
      By:   /s/ Henry S. Hoberman       Name:   Henry S. Hoberman       Title:  
Exec. V.P., General Counsel & Secretary       RHI ENTERTAINMENT PRODUCTIONS, LLC
      By:   /s/ Henry S. Hoberman       Name:   Henry S. Hoberman       Title:  
Exec. V.P., General Counsel & Secretary       LIBRARY STORAGE, INC.
      By:   /s/ Michael J Scarpelli       Name:   Michael J Scarpelli      
Title:   President & Secretary       RHI INTERNATIONAL DISTRIBUTION, INC.
      By:   /s/ Michael J Scarpelli       Name:   Michael J Scarpelli      
Title:   Vice President & Secretary    

Signature Page to RHI Forbearance Agreement

 

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            LENDERS:

JPMORGAN CHASE BANK, N.A., individually and as Agent
      By:   /s/ Patricia S. Carpen       Name:   Patricia S. Carpen       
Title:   Vice President     

Signature Page to RHI Forbearance Agreement

 

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            Bank of America N.A.,
as Lender
      By:   /s/ David Maiorella       Name:   David Maiorella       Title:  
Senior Vice President    

Signature Page to RHI Forbearance Agreement

 

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            ISRAEL DISCOUNT BANK OF NEW YORK,
as Lender
      By:   /s/ Howard Weinberg         Name:   Howard Weinberg        Title:  
First Senior Vice President              By:   /s/ Mila Rashkovan        
Name:   Mila Rashkovan        Title:   Assistant Vice President     

Signature Page to RHI Forbearance Agreement

 

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            U.S. BANK NATIONAL ASSOCIATION,
as a Lender
      By:   /s/ Shahid Kathrada         Name:   Shahid Kathrada         Title:  
Vice President     

Signature Page to RHI Forbearance Agreement

 

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            CALIFORNIA BANK & TRUST,
as a Lender
      By:   /s/ Leslie Reuter         Name:   Leslie Reuter        Title:  
Senior Vice President     

Signature Page to RHI Forbearance Agreement

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            BANK LEUMI USA
as Lender
      By:   /s/ JACQUES DELVOYE         Name : JACQUES DELVOYE       Title:  
FVP     

Signature Page to RHI Forbearance Agreement

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            JPMorgan Chase Bank, N.A.,
as Lender Counterparty
      By:   /s/ Patricia S. Carpen         Name : Patricia S. Carpen       
Title:   Vice President     

Signature Page to RHI Forbearance Agreement

                                   

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            BANK OF AMERICA, N.A.,
as Lender Counterparty
      By:   /s/ Roger Heintzelman        Name:   Roger Heintzelman       
Title:   Principal     

Signature Page to RHI Forbearance Agreement

 

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            The Royal Bank of Scotland, PLC,
as Lender Counterparty
      By:   /s/ Thomas R. Brawney         Name:   Thomas R. Brawney       
Title:   Senior Vice President     

Signature Page to RHI Forbearance Agreement

 

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SCHEDULE 1
Specified Defaults

1.   Defaults or Events of Defaults arising under Section 2.10(e) of the Credit
Agreement [Borrowing Base non-compliance]

2.   Any Default or Event of Default arising under 7(c) of the Credit Agreement
[Failure to pay other non-principal monetary Obligations] as a result of a
failure to pay any Termination Amount or failure to pay any interest on any such
Termination Amount.

3.   Any Default or Event of Default arising under Section 6.18 of the Credit
Agreement [Covenant against modifications to material contracts that are
materially adverse to the Lenders] as a result of having caused certain
receivables from Crown Media to become Post-12/31/09 Crown Receivables.

4.   Any Default or Event of Default arising solely as a result of the existence
of the Base Cash Flow Schedule or any rolling 13-week update relating thereto or
arising under Section 7(g) of the Credit Agreement as a result of the
implementation thereof.

 

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SCHEDULE 2
Swap Agreements

                                      Date of   Identification   Notional      
  RHI Party   Lender   Swap   Number for   Amount     Termination   Name  
Counterparty   Agreement   Transaction   Swapped     Amount1  
RHI Entertainment, LLC
  JPMorgan Chase Bank, N.A.   04/21/2009   6900149180290   $ 242,500,000     $
12,210,858  
RHI Entertainment, LLC
  Bank of America   04/21/2009   53603426   $ 102,225,000       5,642,000  
RHI Entertainment, LLC
  The Royal Bank of Scotland PLC   04/21/2009   D16256046   $ 90,275,000      
1,730,000  

 

1   To come.

2

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SCHEDULE 3
Deposit Accounts

                                              Balance as         Account        
        of         Control                 December         Agreement Depository
  Account   Credit       17, 2009     Nature of   (“yes” or Institution   Name  
Party?   Account Number   (in $US)     Account   “no”)
JP Morgan Chase
  RHI Entertainment LLC   Yes   304-671096     10,000     Petty Cash   No
JP Morgan Chase
  RHI International Distribution Inc.   Yes   304-689211     —     Collection
Account   No
JP Morgan Chase
  RHI International Distribution Inc.   Yes   304-689254     282,932    
Operating Account   No
JP Morgan Chase
  RHI Entertainment LLC   Yes   314-006591     13,952,722     Operating Account
  No
JP Morgan Chase
  RHI Entertainment LLC   Yes   323-410537     80,318     Insurance / FSA
Account   No
JP Morgan Chase
  RHI Entertainment LLC   Yes   323-047165     25,590     Payroll Account   No
JP Morgan Chase
  RHI Entertainment LLC   Yes   324-330332     —     Collection Account   No
JP Morgan Chase
  RHI Entertainment Distribution LLC   Yes   304-959251     —     Collection
Account   No
JP Morgan Chase
  RHI International Distribution Inc.   Yes   601-893506     —     Checking
Account   No
JP Morgan Chase
  RHI Entertainment LLC   Yes   615-536158     —     Checking Account   No
JP Morgan Chase
  RHI Entertainment Productions LLC   Yes   758-683403     —     Collection
Account   No

3

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                                              Balance as         Account        
        of         Control                 December         Agreement Depository
  Account   Credit       17, 2009     Nature of   (“yes” or Institution   Name  
Party?   Account Number   (in $US)     Account   “no”)
JP Morgan Chase
  Library Storage Inc   Yes   799-760657     —     Checking Account   No
JP Morgan Chase
  Library Storage Inc   Yes   799-760632     14,570     Operating Account   No
American Express
  RHI Entertainment LLC   No   001-011150-8     400,000     CD Account   No
Israel Discount Bank
  RHI Entertainment LLC   Yes   03-49130     250,108     Operating Account   Yes
California Bank & Trust
  RHI Entertainment LLC   Yes   324-0329751     9,469     Operating Account  
Yes
Barclays Bank
  RHI Entertainment Ltd   No   30403261     157,819     Operating Account   No
Commonwealth Bank of Australia
  RHI Entertainment Australia Pty Ltd   No   062-438-1009-6303     56,576    
Operating Account   No
Barclays Bank
  RHI Entertainment Ltd   No   80374636     164     Production Account   No
HVB Hungarian Bank
  DTS Productions Ltd   No   10918000000000 367110017     —     Production
Account   No
HVB Hungarian Bank
  DTS Productions Ltd   No   109180010000000 367110024     —     Production
Account   No
Barclays Bank
  SFR Ltd   No   60655376     —     Production Account   No
Barclays Bank
  SFR Ltd   No   40047678     2,720     Production Account   No
Barclays Bank
  SFR Ltd   No   68372755     —     Production Account   No
Barclays Bank
  SFR Ltd   No   86918211     476     Production Account   No
HVB Hungarian Bank
  RHI Entertainment Kft   No   1091 8001 00000003 68110027     —     Production
Account   No
HVB Hungarian Bank
  RHI Entertainment Kft   No   1091 8001 00000003 68110010     —     Production
Account   No

4

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                                              Balance as         Account        
        of         Control                 December         Agreement Depository
  Account   Credit       17, 2009     Nature of   (“yes” or Institution   Name  
Party?   Account Number   (in $US)     Account   “no”)
Royal Bank of Scotland
  RHI Entertainment LLC   Yes   10154958     —     Production Account   No
JPMorgan Chase
  NGP Holding   No   323-317-014     —     Production Account   No

5